The arrival of a newborn is a joyous occasion! Even while emotions are at their peak, though, you shouldn’t neglect the practical aspects. Several steps should be taken to protect the family’s finances, and the sooner the better. If you or someone you know is expecting, these are important factors to keep in mind:
Investment asset classes include precious metals, especially gold. Enthusiasts cite several reasons for including gold in a diversified portfolio. If governments print money to cover increasing obligations, gold may act as an inflation hedge. Moreover, gold can offer a safe haven in times of geopolitical upheaval: in mid-2016, for example, when Great Britain voted to leave the European Union (Brexit) and financial markets were unsettled, the price of gold reached a two-year high. If you decide to allocate some investment dollars to gold, there are many options to choose. The tax treatment can vary, depending on how you invest, and you might be unpleasantly surprised.
A 2016 report from the Society for Human Resource Management found that 78% of surveyed businesses offered wellness benefits to their employees. It’s true that wellness programs are most common in large corporations, but small companies also can offer these benefits and reap the advantages. Generally, wellness programs may improve worker morale and perhaps lead to greater retention of key employees. Direct results might include fewer health-related absences, greater energy, and more on-the-job productivity. Cost reduction also may result, if the company winds up paying less for health insurance and workers’ compensation.
The College Board reports that full-time students at private institutions typically paid almost $44,000 for tuition, fees, room and board during the 2015-2016 academic year. That’s the average, so costs at some private colleges and universities were well over $50,000 per year. Higher education at public schools was much less expensive, but in-state students still spent nearly $20,000 for tuition, fees, room and board, on average. All college costs continue to rise, so younger students probably will pay even more when they arrive on campus.
If you or your child are enrolling in higher education and are now facing tuition costs, you are familiar with the steep price tag. Another post this month discusses the importance of knowing what aid opportunities are available to your family in order to make the actual cost more manageable. The greater the financial aid, the lower the net cost of college.
Business owners may need capital to support growth, and the money in their IRA can be tempting. Nevertheless, the pitfalls can be steep, as illustrated in a recent Tax Court case (Thiessen v. Commissioner, 146 T.C. No. 7 [3/29/16]). Here, the court ruled that because a married couple had entered into prohibited transactions with respect to their IRAs, the assets in the IRAs were deemed to have been distributed, resulting in a huge tax bill.