WEEKLY TIP

Anyone who wants to avoid or lower probate costs and simplify distribution of their assets after their death would be wise to consider a revocable living trust. These trusts can be modified during the grantor’s lifetime.

WEEKLY TIP

When financing a new car purchase, try applying for a loan before you shop for a vehicle. Preapproval gives you negotiating strength – you can challenge the dealership to beat the financing you have already lined up.

PERSONAL SPENDING SLOWS

Consumers apparently chose saving over spending in the second month of the year. Last week, a Department of Commerce report noted only a 0.1% gain for personal spending in February. That happened even with personal incomes rising 0.4%, nearly matching the 0.5% January advance. In other news concerning personal spending, the Bureau of Economic Analysis raised its estimate of fourth-quarter GDP to a final reading of 2.1% from the previous 1.9%.¹ 

What is it? What kind of benefit could it provide?

Provided by Brower Financial Group

Seemingly everyone has heard of an IRA, but few people know about IRA trusts. Perhaps more people should, for an IRA trust may provide a way to “stretch” IRA assets for decades to benefit multiple generations.

An IRA trust is simply a revocable living trust designed to hold IRA assets.

It will continue to house them after your death, but that will not prevent you from distributing those assets to your heirs. This is because an IRA trust also contains one or more sub-trusts, which can be designated and customized for your beneficiaries.¹

WEEKLY TIP

Does your will or estate plan take your pets into account? If you have no heirs, or if no heirs or family members want the responsibility of caring for them if you die, provisions should be made on their behalf. 

FED HIKES, LEAVES 2017 FORECAST UNCHANGED

As expected, the Federal Reserve raised the target range for the federal funds rate by a quarter-point last week to 0.75-1.00%. “The simple message is, the economy is doing well,” Fed chair Janet Yellen explained to the media following the move. The central bank’s dot-plot table still projects two more rate increases during the balance of 2017, with three rate hikes envisioned for both 2018 and 2019.¹

WEEKLY TIP

When your children turn 18, you lose the legal authority to make financial decisions on their behalf as well as the legal authority to examine their banking and credit card information. If you have a teenager with bad financial habits, this may be worth noting. 

COMPANIES HIRED READILY IN FEBRUARY

U.S. firms added 235,000 net new jobs last month, and the latest Department of Labor employment report showed the largest growth occurring in the construction and education/health care sectors. The DoL also revised January’s job gains upward by 11,000 to 238,000. Payroll expansion has averaged 209,000 per month since December. The headline (U-3) jobless rate ticked down 0.1% to 4.7%, and the total (U-6) jobless rate, counting the underemployed, fell 0.2% to 9.2%.¹

WEEKLY TIP

A National Council on Aging website, benefitscheckup.org, has links to many federal, state, and local programs that help retirees save money on medicines, utilities, health care services, and more. Visit the site to see if you are eligible for them. 

YELLEN: RATE MOVE MAY HAPPEN THIS MONTH

In Chicago Friday, Federal Reserve chair Janet Yellen said that if hiring and inflation indicators continue to meet the central bank’s expectations, an interest rate hike “would likely be appropriate” at its March policy meeting. She also noted that, barring unforeseen events, the pace of tightening in the near term “likely will not be as slow as it was during the past couple of years.” After these statements, the Fed futures market put the chance of a March rate increase at 82%.¹

WEEKLY TIP

Becoming parents heightens the need for an emergency fund. New parents should try to save the equivalent of 3-6 months of income in either bank accounts or conservative, liquid investments

A LITTLE LESS OPTIMISM AMONG CONSUMERS

February’s final University of Michigan consumer sentiment index came in at 96.3, down from its January mark of 98.5, but well above the 91.7 reading of a year earlier. Despite the descent, the index just had its best three months since early 2004.¹ 

FED MINUTES SUGGEST RATE MOVE MAY BE NEAR

At the last Federal Reserve policy meeting, “many participants” in the Federal Open Market Committee felt it “might be appropriate to raise the federal funds rate again fairly soon” if inflation and hiring data are strong enough. Even with that language appearing in the latest FOMC minutes, the CME Group’s FedWatch Tool forecasts just a 22% chance of a quarter-point hike when the FOMC convenes in March. ^2,3

Financially speaking, what do some households do right?

Provided by Brower Financial Group

Why do some households tread water financially while others make progress? Does it come down to habits?

Sometimes the difference starts there. A household that prioritizes paying itself first may end up in much better financial shape in the long run than other households.

Some families see themselves as savers, others as spenders.

The spenders may enjoy affluence now, but they also may be setting themselves up for financial struggles down the road. The savers better position themselves for financial emergencies and the creation of wealth.

WEEKLY TIP

When a divorce settlement requires a party to keep up their life insurance, the insured should go through the underwriting process before signing the agreement. If new coverage cannot be easily obtained, trusts or other estate planning tools can be created in response.

RETAIL SALES ROSE 0.4% in JANUARY

Consumer spending on household electronics and appliances powered this gain. Analysts polled by Reuters had expected a 0.1% advance. Core retail purchases also rose 0.4% last month. The Department of Commerce revised the December increase for retail sales upward to 1.0%. Across the 12 months ending in January, retail sales advanced 5.6%.¹

WEEKLY TIP

Many people stay with the same bank for decades. Online tools now make it easier to compare various banks. If you find your bank’s fees irritating or its ATM network insufficient, you can explore your options.

CONSUMER SENTIMENT SLIPS A BIT

The University of Michigan’s preliminary February index of consumer sentiment came in at a reading of 95.7 Friday, compared with a final January mark of 98.5 (which was a 13-year peak). Economists polled by Bloomberg had expected a slight decline to 98.0. While this was the index’s lowest level in three months, it still topped many of the monthly readings from 2016.¹