As 2015 begins, you should know the following financial figures:
- The % of your assets invested in stocks: One of the biggest factors in your investment returns is the % that you have invested in stocks. It is also a major factor in the level of risk that you desire to take. If you intend to be 50% invested in stocks, are you aware of your current stock allocation? We monitor this on behalf of our clients, so their allocation is in line with their desired investment plan.
- $18,000: amount which can be contributed to most 401(k) and 457 plans for 2015, an increase from $17,500. If you are older than age 50, you can contribute an additional $6,000 above those levels in 2015, which is an increase from $5,500 in 2014.
- FICO Score: You should know what your credit score is, especially if you are planning to purchase a home, want to re-finance a mortgage or obtain a home equity loan. One convenient way to regularly monitor your FICO score is by having a Discover It credit card, as they provide your FICO score on each monthly statement.
- Your current mortgage interest rate: You should check this, as mortgage and refinancing rates have declined significantly in recent weeks. A 30 year fixed rate mortgage may be obtained for below 4%, while a 15 year fixed rate loan and shorter term variable rate loans may be close to 3%. We do not recommend that you pre-pay most mortgage debts, as discussed in this blog post. Click Here
- The number of credit cards that are in your own name. It is important if you are married, that each person have at least one or two major credit cards in their own name, to establish your own individual credit history.
- $5,430,000: the federal estate tax exemption for one person, which is an increase of $90,000 from the 2014 amount of $5,340,000. For a married couple, $10.8 million of assets can pass estate tax free upon death.
- Number of online passwords: I hope this is a large number, as you should NOT be using the same passwords on multiple websites. I strongly encourage you to utilize a password manager app, like 1Password or LastPass, which will make this much easier to manage. See my blog post on this topic. Click Here
- $14,000: the 2015 annual gift tax exclusion amount, which is unchanged from 2014. This is the amount you can gift to any one individual without affecting your federal estate tax exemption. If you are married, a couple can gift $28,000 to a person.
- Up to $300,000: The amount of money which can be contributed into a defined benefit plan for 2015. You can contribute $53,000 into certain defined contribution plans, like profit sharing plans, for 2015. The maximum annual benefit for defined benefit plans is unchanged at $210,000. If you are self-employed, a consultant or own a small business, please contact us to learn about these plans, their significant tax savings and related opportunities.
- The expense ratio of your mutual funds or money managers: In general, academic data shows that lower expense ratios are highly correlated with better long-term performance. We can review your portfolio, to help you understand the cost of your investments.
If you have questions or would like more information about any of these items, please contact us.