Author: Service2Client

How to Manage Your Aging Parents’ Finances

How to Manage Parents FinancesTaking over your aging parents’ finances is not easy. But it’s something that can be handled in an organized, compassionate way. Here’s a roadmap that shows how to embrace it and do the right things for everyone involved.

Start the conversation early. Right now, your parents might not need any help. They might be handling everything just fine. But there will come a day when they can’t – and they’ll need your help. The National Institute on Aging recommends that parents give advance written consent to designated family members so they can discuss personal matters with doctors, financial representatives and Medicare officials. If you don’t have this, you’ll be faced with some road blocks. If you open the dialogue now, you’ll circumvent obstacles, as well as get a better feel for what their future needs might be.

Watch for the signs. If you don’t see your parents often, and even if you do, the signs of when you need to step in might be a bit hard to detect. That said, there are some things to look for that will indicate that their needs are changing.

  • Unusual purchases. If you find out that your folks are buying things that don’t match their lifestyle, or entering lots of contests and sweepstakes, then it’s time to speak up. Behavior like this might get out of hand – or worse, they might be getting scammed. Older people are most vulnerable to the vultures out there. 
  • Stacks of unopened mail. Watch for this, as the letters might be unpaid bills and/or solicitations for sweepstakes. Both are problematic.
  • Complaining about money. If your folks seem to be always low on cash, or say “no” to activities that they usually enjoy, talk to them. They might need your help for a number of reasons, whether it’s reconciling accounts or remembering how to pay bills, or if they even paid them.
  • Physical setbacks. Fading vision can impede driving to the bank and arthritis can be painful while writing checks or typing on the keyboard. Whatever ailment your parents might suffer from, this could be a cue that they need your assistance.
  • Memory problems. This is somewhat self-explanatory, but specific things to look for are not knowing what day or year it is, or just forgetting things that your parents once always remembered.

Start slowly. Instead of charging in and announcing that you’re taking control, take baby steps. Maybe offer to write checks for them. Or offer to pay a bill or two. Gradual, gentle steps make them feel more at ease and comfortable with the new way of doing things.

Gather important documents. Things to collect are account numbers, credit card info, birth certificates, insurance policies, deeds and wills. Make sure they’re all current and up-to-date. Put them in a secure location so you’ll have easy access when you need them.

Consider power of attorney. This is key. Even if your parents don’t need your help at the moment, there will come a time when they will. There are several types of POA to consider: financial, medical or general decisions. Unlike written consent, this gives you legal authority to act on their behalf when they’re unable to.

Communicate what’s going on. Once you’ve started to manage your parents’ finances, keep your siblings, as well as theirs, in the loop. This way, if you’re unable to handle something, you can ask for backup support.

Keep your finances separate. It might be the easiest thing to do – mix your parents’ finances with yours – but in the long run, it’s not such a good idea. It can become a slippery slope. Granted, there may be times when your parents need a loan, but for the sake of clarity and personal record-keeping, it’s best not to jeopardize your own retirement and savings goals.

If you need more help, reach out to the National Alliance for Caregiving. As we all know, the circle of life is inevitable. But caring for your parents might be one of the most important things you’ll ever do – and chances are, you’ll want to get it right.

 

Sources

https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/aging-parents-finances

2022 U.S. Tax Legislation Forecast

2022 U.S. Tax Legislation ForecastNo one knows for sure what 2022 will bring in the form of tax legislation, but there is certain to be some action. Top tax analysts think there are several topics that are likely to come up in 2022. Most predict that a lot of potential changes that were discussed but never made much traction in 2021 will be revisited.

Rolling Back Corporate Tax Rates

Back in 2017, then-President Trump’s Tax Cuts and Jobs Acts (TCJA) reduced corporate tax rates. While a bid raise them again failed in 2021, many believe there is a good chance that Democrats will try again in 2022. Most believe a 2022 proposal would try to raise the current 21 percent corporate tax bracket up to between 25 percent and 28 percent, but opinions vary. While most analysts see a push to raise rates, no one predicts a push to go back to pre-2017 rates, which were as high as 35 percent. Republican opposition to any such measure is expected to be strong.

The Billionaire Tax

New spending proposals in 2021 saw the backing of a billionaire tax as a method to help finance them. While no such tax made its way into law during 2021, many analysts believe that a billionaire tax is likely to resurface once again in 2022.

The name is a bit of a misnomer, as the most recent proposals applied to more than just billionaires; they were set to impact taxpayers with more than $1 billion in assets as well as those with over $100 million of income for three years in a row. Under these thresholds, the tax would only impact approximately 700 to 800 people in the United States.

Proposals from 2021 included a controversial provision that is a major deviation from current tax law: taxing unrealized gains. Currently, with few exceptions for professional traders who can elect to mark-to-market for example, tradable assets such as stocks are taxed only on realized gains once the asset is sold. Iterations of the billionaire tax proposed to change this and require such assets to be valued annually and taxed according to the unrealized portion as well. The rationale is that the ultra-wealthy can take loans against their assets and avoid ever selling or realizing the gains – and therefore avoid taxes as well.

Finally, it’s important to note that this particular form of billionaire tax is not the same as a wealth tax. This tax focuses on unrealized gains only and not the taxpayer’s total wealth.

A True Wealth Tax

Another tax law that made its way into the national spotlight during 2021 and is likely to get another try in 2022 is some form of a wealth tax.

Typically, a wealth tax is a flat tax percentage placed on a taxpayer’s total net worth annually; say one percent, for example. Unlike essentially all forms of taxation in the United States, a wealth tax would see someone owing money year-after-year even if they never made any more money.

One of the biggest non-political problems with a wealth tax is logistics. Taxing net worth means that every asset a taxpayer owns needs to be valued annually, including real estate, cash, investments, business ownership and other assets. This creates a huge administrative burden and leaves a lot of room for interpretation between valuation professionals as well.

No analyst foresees any wealth tax proposals applying broadly. Instead, most see it being targeted at the ultra-wealthy – those with a net worth over $50 million. This makes it politically palatable as the vast majority of taxpayers are exempt; however, there are many who oppose any such tax either due to ideological reasons or because they feel it represents a slippery slope to eventually capture more and more taxpayers with lower net worth thresholds.

Tougher Regulations on Cryptocurrency

One of the most unclear areas for potential 2022 tax law proposals involve cryptocurrencies. The reality is that most of Congress simply doesn’t understand the market and the IRS itself is mired in technical rules on how to treat various sectors of the emerging financial arena.

While some analysts predict there will be proposals to differentiate the tax treatment from more traditional assets, others believe the moves will be largely regulatory and focus on compliance and minimizing tax avoidance within the asset class.

Conclusion

Many of the above tax provisions are highly partisan in nature. As a result, it is likely that congressional gridlock will ensue and little if anything will get passed through legislative channels. This leaves many analysts predicting that tax changes, to the extent possible under our system, may see more executive actions than usual. Regardless, with the current economic uncertainty, high inflation and geopolitical instability, the topics above may or may not come up this year. One thing is certain however, taxes won’t be going away or getting any simpler.

What’s the Future for Measuring Employee Performance?

Measuring Employee PerformanceYearly performance evaluations just might be heading out the door, according to a recent WorkHuman Analytics & Research Institute Survey. Findings reveal that these appraisals are less than effective and used less often. Based on select findings, 55 percent of employees responded that yearly evaluations don’t help them become better in their role. Almost as many, 53 percent, indicated that annual reviews recognize an employee’s complete workload. The survey also found that only 54 percent of businesses used annual reviews in 2019, compared to 82 percent of workers saying their employer used annual reviews in 2016.

According to Gallup, only 14 percent of workers responded positively that performance reviews motivated them to get better at their skill set. It also found that among businesses with 10,000 workers, time taken for performance evaluations reduced employee productivity by at least $2.4 million and up to $35 million. It also found that one-third of workers’ output and quality declined.

When it comes to traditional performance reviews, many employees believe they are run by managers with little regard to any employee input whatsoever. However, there are other ways to evaluate an employee: the worker can evaluate themselves; their co-workers can appraise them; or a combination of a self-, peer- and manager-focused assessment.

As Harvard Business Review explains, since traditional performance reviews are mutually stressful for managers and their subordinates, there are a few recommendations to attempt to make it a more productive experience.

The first recommendation is to set initial, mutual expectations for manager and employee. When the year begins, the business’ performance requirements should be detailed for the employee so that expectations are clear. By setting performance objectives with the employee, the manager and business will ensure that employees are answerable for their performance.

The second step is to prepare for the in-person evaluation as it gets closer to the meeting. Two weeks before the in-person evaluation, HBR recommends that workers and managers review their past accomplishments – good, bad, etc. Managers could also ask for objective co-workers’ assessments of the employee’s work to garner different perspectives on their performance.

Before a face-to-face meeting, give the employee the assessment to let them internalize it and let their emotions settle before the discussion. From there, the atmosphere should be established by the manager. When it comes to competent, high performers, managers should keep the reviews on the workers’ accomplishments and progression at the company, along with concerns they might have in their role. For poor performers, putting the focus on accountability and improved results is the recommended route.

Asking employees what’s working and what’s not working can be helpful for both manager and employee. It’s also recommended to point out what specific actions, not generalities, employees should take to keep improving.

Based on the evolution of how and where work is being conducted, it seems that the annual performance review needs to be re-evaluated and updated. Only time will tell how it will change, but based on what’s not working, it will evolve as the workplace moves deeper into the 21st century.

Sources

https://www.workhuman.com/press-releases/White_Paper_The_Future_of_Work_is_Human.pdf

https://hbr.org/2011/11/delivering-an-effective-perfor

Create a Healthcare Plan for Retirement

Create a Healthcare Plan for RetirementIf you pay $250 a month for cable and premium channels, that’s $3,000 a year. Over a 30-year period, the total cost would be $90,000. We don’t tend to think about how much we pay in regular expenses over the long term.

However, that’s how various industry analysts report the cost of healthcare during retirement. Recent estimates for a retiring 65-year-old couple fall between $300,000 and $400,000 to cover healthcare expenses in retirement. At first glance, that’s an intimidating number and implies that pre-retirees need to have this much saved by the time they retire.

Fortunately, when you break down the numbers, that’s not the case. First of all, that estimate includes premiums for Medicare with prescription drug coverage, which are typically deducted from Social Security benefits before they ever hit your bank account. According to T. Rowe Price, Medicare premiums account for 76 percent to 82 percent of most retiree’s healthcare expenses, so a large portion of these costs are paid for outside of your household budget.

The true cost of retiree healthcare expenditures is based on how healthy you remain during retirement. And actually, that’s not necessarily related to savings – it’s more a combination of genetics and peoples’ penchant for healthy living before and during retirement. However, it’s always best to prepare for the worst, so the more money you save and earmark for healthcare expenses, the better off you’ll be.

One way to control your monthly premiums in retirement is to shop and compare Medicare plans each year during open enrollment. It helps to keep a running tab of your out-of-pocket expenses each year so that you can increase your Medicare coverage if your costs start trending higher. Higher coverage might mean higher premiums, but that will lower out-of-pocket costs each year.

The following guide was developed by T. Rowe Price. It estimates how much retirees spend based on different types of Medicare plans using 2021 premiums and data from the Health and Retirement Study (HRS). Among retirees who enroll in either (1) Medicare Parts A, B and D; (2) Medicare Advantage HMO and Drug Plan; or (3) Medicare Parts A, B, D and Medigap:

  • 25 percent will pay less than $500/year in out-of-pocket expenses
  • 50 percent will pay less than $1,200/year in out-of-pocket expenses
  • 25 percent will pay more than $1,900/year in out-of-pocket expenses
  • 25 percent will pay more than $3,900/year in out-of-pocket expenses

As for paying those out-of-pocket expenses, remember that you pay them over time, so it’s not as if you’re paying a large lump sum all at once. One strategy is to fund a savings account with enough money to pay out-of-pocket expenses for the year, based on your prior year’s spending. Then replenish this account each year from other funding sources, such as an annual required minimum distribution (RMD) from a retirement account.

If you have access through your current health plan, pre-retirees can save for healthcare expenses with a health savings account (HSA). Contributions are tax deductible and, over time, you can invest your savings for earnings accumulation. These funds, including investment gains, are never taxed as long as they are used to pay eligible healthcare expenses. The account is particularly useful if you don’t tap it until retirement, when the money can be used to pay for things like dental and vision care, hearing aids, long term care insurance premiums and nursing home costs.

 

Despite those alarming projections about how much healthcare will cost you in retirement, remember that it can be manageable because it is paid out over time. 

Importance of Cloud Accounting Certification

Cloud Accounting CertificationCertifications are not a new thing in the accounting industry. However, with new technology trends, accounting departments are faced with the challenge of taking courses in technology in order to carry out their tasks. Many businesses are ditching desktop-based accounting software and turning to cloud-based software. This requires that the users be well-versed with necessary skills to use the cloud accounting solution.

What is Cloud Accounting?

Among the cloud-based solutions that businesses have adapted is cloud accounting. Cloud accounting has all the functionalities of desktop accounting. However, in cloud accounting all processes are carried out online where the data is stored on cloud servers.

Cloud accounting offers businesses various benefits, such as the ability to access the system anytime and from anywhere as long as there is internet access. It also offers access to real-time information, online payments, latest software versions, easier compliance and scalability, among others. At the same time, cloud accounting solutions also allow remote working.

As businesses strive to gain from the benefits offered by cloud accounting solutions, a new challenge arises: lack of skilled employees. Hence the need to upskill.

Why it is Important to Have Cloud Accounting Certification

As cloud accounting becomes highly adopted, there is no doubt that there will be an increase in demand for certification for individuals as well as for organizations.

For individuals, this is important as it will indicate they have the competence to use the cloud accounting software. This is an added advantage to retaining a job or for individuals looking to take up jobs in the accounting field. Employers also could look for certification as proof that an employee already has skills on the type of cloud systems the business uses.

A certified employee will be able to set up the initial business data on a cloud accounting system. They also will know how to handle daily transactions online such as payments, receipts, and invoices, among other tasks. Other important transactions handled by cloud accounting solutions include bank reconciliations, reporting, payroll administration, and budgeting.

Since cloud accounting uses advanced technology like artificial intelligence, the employees will acquire more advanced skills, including financial analysis and cash flow forecasting.

Certified employees will have a better understanding of security levels in the cloud, considering that security is one of the most important issues to businesses.

Apart from learning new skills, certification will enhance workplace performance, as users will be required to complete courses and exams before getting certified.

Again, employees who upskill are less likely to worry about being replaced and, in any case, new knowledge gives employees a chance to negotiate higher pay.

When it comes to businesses, having certified employees means that they can handle projects or tasks successfully as they have a common understanding of cloud accounting systems. This ensures a business of efficiency and reduced operational costs as it can implement a standardized system. Furthermore, customers prefer working with qualified professionals – and this can be demonstrated through certification.

Since cloud computing is a core competency for businesses today, a certification is not only suitable for bookkeepers and accountants, but also for business owners, managers, CFOs and anyone who will be using cloud accounting solutions.

And with trends such as remote accounting and cloud-based accounting services, the certification helps to become future-ready.

Conclusion

The benefits offered by cloud accounting promise to transform the accounting industry through bookkeeping efficiency and streamlined financial administration, as well as provide real-time information. However, the success of these cloud-based systems depends on the users having the appropriate skills. As new technologies emerge, there is a fear of been replaced. But by upskilling, businesses can attend to clients while employees not only get to retain their jobs, but also offer more value.

8 Ways to Negotiate Medical Bills

Negotiate Medical BillsAccording to statistics from the Society for Human Resource Management (SHRM), employer-budgeted healthcare costs increased to an average of $12,792 per employee in 2021. Employees can help keep employer healthcare costs – and their premiums – down by planning ahead and negotiating fees for service.

Call Before Your Treatment

When you’re busy, sending an email might expedite your request. However, it’s best to stop, take a little time to pick up the phone and talk to a real person. Ask for the hospital’s billing department and get an estimate of how much your procedure might cost. (Write down the name of the person you speak with, plus the day and time.) Send this to your insurance provider to find out what your plan will cover. Then contact the hospital and let them know how much you can afford. When you’re recovering, you’ll have less worry about how to pay.

Offer to Pay in Full Up-Front

If you have the resources to do this, go for it. Consumer Reports estimate that you could save 20 percent off your bill. Ask to speak to someone who has the authority to grant you this deal and again, jot down the details of your call. However, if the treatment is more than you can afford, you might consider medical debt consolidation.

Shop Around for Less Expensive Providers

Insurance companies usually offer cost estimates for treatments. Some companies like UnitedHealthcare and Blue Cross Blue Shield even have cost comparison tools. If your insurance provider doesn’t offer this, try third-party sites like Healthcare Bluebook and GoodRx to shop and compare. Remember that though important, cost should never be the top consideration when deciding on a facility for your healthcare.

Understand What Your Insurance Covers

And what it doesn’t. Ask for a Summary of Benefits and Coverage from your provider to find out exactly what’s what when it comes to coinsurance, deductibles and more. Being prepared is always a good idea.

Ask for an Itemized Bill

After your treatment, you’ll receive an Explanation of Benefits (EOB) from your insurance company. This isn’t a bill and might be updated while your claim is being processed. But the first thing to do when you receive these are to check them for errors – humans make them!

Make Sure Services are In-Network

Before your procedure, check to see that all your labs, anesthesiologists and other services are in-network. Some states prohibit out-of-network providers from charging out-of-network prices when performing care at an in-network setting. Learn about your state’s level of protection at The Commonwealth Fund.

Seek Assistance Programs

Ask your healthcare provider – the hospital or lab’s billing department – about financial assistance and/or charity programs. Thankfully, hospitals have a standard procedure for helping those who are unable to pay their bills. Some hospitals even have discounts for people who don’t have access to medical insurance. You might also ask your provider about medical debt forgiveness. If this is an option, you’ll be asked to share tax returns and other relevant documents. Other resources to help you navigate your healthcare expenses are the Patient Advocate Foundation or the PAN Foundation.

Get on a Payment Plan

Generally, healthcare providers offer no-interest payments and are available to anyone who needs it. Better still, you won’t have to meet eligibility requirements like you would with payment assistance programs. But when setting something like this up, make sure you agree to a plan that you can stick with. Otherwise, your bill might be turned over to a collection agency.

As you know, your health is your most precious asset. Make sure you’re fiscally prepared to care for it.

Sources

https://www.lendingtree.com/personal/how-to-negotiate-medical-bills/

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/health-plan-cost-increases-return-to-pre-pandemic-levels.aspx#:~:text=Budgeted%20health%20care%20costs%20increased,of%205.2%20percent%20from%202020.

Medical Debt Consolidation: Using a Loan to Pay Medical Bills (lendingtree.com)

State Balance-Billing Protections | Commonwealth Fund

Pursuing Voting Rights, Critical Therapies, VA Online Education Benefits and Condemning Forced Labor

John R. Lewis ActFreedom to Vote: John R. Lewis Act(HR 5746) – This act is comprised of two previous bills that were combined and passed in the House using a procedural workaround, then sent to the Senate where it did not pass under current Senate rules. A Senate bipartisan committee is taking action to draft another bill containing components of this one, but it is yet to be seen. This Freedom to Vote Act was designed to expand voting access, standardize voting election laws across the country, and restore provisions of the Voting Rights Act of 1965. Other key provisions include:

  • Making Election Day a federal holiday
  • Online, automatic and same-day voter registration
  • A minimum of 15 days of early voting, including during at least two weekends
  • No-excuse mail voting
  • Ample access to ballot drop boxes
  • Online ballot tracking
  • Streamlined election mail delivery by the USPS
  • Requiring states to accept a wide range of forms of non-photographic ID
  • Restoring voting rights to formerly incarcerated people convicted of felonies
  • Making it harder for states to remove eligible voters from rolls
  • Providing more protections and resources for disabled, overseas and military voters
  • Strengthen voting rights and protections for voters in Native American Indian districts
  • Greater federal protections and oversight for voting in U.S. territories
  • Improve voter registration resources and outreach
  • Reauthorize and strengthen the US Election Assistance Commission
  • Require states to use standardized criteria when drawing new congressional districts
  • Require states to use voter-verifiable paper ballots and conduct post-election audits
  • Strengthen cybersecurity standards for voting equipment
  • Prohibit local election officials from being fired or removed without cause
  • Make interference with voter registration a federal crime, with stricter penalties for the harassment, threats and intimidation of election workers
  • Enhance transparency disclosures for campaign financing
  • Require campaigns to report foreign interference

Accelerating Access to Critical Therapies for ALS Act (HR 3537) – This bill authorizes grant programs to be awarded by the Department of Health and Human Services (HHS) for scientific research utilizing data from expanded access to investigational ALS treatments for individuals who are not otherwise eligible for clinical trials. Furthermore, the Food and Drug Administration (FDA) shall award grants to cover the costs of research and development of drugs that diagnose or treat ALS and other rare neurodegenerative diseases, and publish a five-year action plan to foster the development of drugs that improve or extend the lives of people living with these diseases. The bill was introduced by Rep. Mike Quigley (D-IL) on May 25, 2021, passed in the House on Dec. 8 and in the Senate on Dec. 16. It was signed into law by the president on Dec. 23.

REMOTE Act (HR 5545) – This act was introduced by Rep. David Trone (D-MD) on Oct. 8, 2021. In light of the pandemic and many college classes moving online, Congress passed this bill to ensure veterans making the transition to virtual classes would still receive full benefits. These education benefit protections, which include allowing the VA to make payments or extend eligibility periods for students who can’t participate in school, work-study or vocational rehabilitation programs that were closed as a result of COVID-19, will be extended through June 1. The bill passed in the House on Dec. 8, the Senate on Dec. 15 and was signed into law on Dec. 21.

To ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China do not enter the United States market, and for other purposes. (HR 6256) – The purpose of this legislation is to ban imports produced using forced labor in China, particularly in the Xinjiang Uyghur Autonomous Region. It also expands existing asset- and visa-blocking sanctions for foreign individuals and entities responsible for serious human rights abuses in connection with forced labor. The bill was introduced by Rep. Jim McGovern (D-MA) on Dec 14, 2021. It passed in the House on Dec. 16, the Senate two days later and was enacted by the president on Dec. 23.

Long-Term Investment Opportunities Presented by the Infrastructure Bill

Infrastructure BillIn November, President Biden signed legislative funding that represents the largest transportation spending package in U.S. history. The $1.2 trillion Infrastructure Investment and Jobs Act authorized funding for roads, highways, bridges, public transit systems, utility systems, electrical grids, energy projects and broadband infrastructure.

Because the funding extends over a five-year period, it should not have a major effect on the fiscal deficit. This is not only good news for taxpayers, but also investors. Those long-term investments offer the potential for shareholders to get in on the ground floor of reliable and well-capitalized government projects by hundreds of American companies poised to get the business. The new bill is expected to enhance productivity, innovation, improve labor force participation and have a positive impact on inflation. Overall, the bipartisan bill is expected to help drive economic growth for the foreseeable future.

Local Funding

Because this funding has been long-awaited and is badly needed, infrastructure projects that have been in the planning stages for years can finally take off. Furthermore, the federal funds will be allocated to local public-private partnerships, which enable community job development and enhance local economies.

Transportation Infrastructure

More than $110 billion is directed to repair and rebuild 45,000 bridges, highways and major roads across the country. The funding also focuses on climate change resilience, as well as safety (reduce traffic fatalities) and parity across geographic areas and demographic populations. Industries poised to benefit include:

  • U.S. steel companies
  • Companies that produce aggregate materials (e.g., gravel, crushed stone, sand)
  • Manufacturers of construction, roadbuilding, earthmoving and mining equipment
  • Companies that lease heavy equipment

Broadband Internet

Presently, more than 30 million U.S. residents live in areas with either poor or no broadband access. Particularly during the pandemic, we have learned how important internet access is to keep Americans connected – in jobs, through online education, with community news and resources – not to mention social networks and personal relationships. The new legislation provides $65 billion in funding for broadband infrastructure, particularly in rural communities throughout the country, in an effort to provide universal access to reliable high-speed internet. Investment sectors that should benefit include:

  • Manufacturers of wireless towers
  • Power management companies that supply the electrical components and systems for wind and solar farms to integrate them into the national grid

Water Utility Infrastructure

The bill allocates a $55 billion investment into water infrastructure and the elimination of lead pipes for the 10 million American households and 400,000 schools and childcare centers that currently lack safe drinking water. Investment opportunities include utilities and companies that specialize in:

  • Water distribution
  • Water filtration
  • Flow technology
  • Water treatment/purification
  • Manufacturing pumps, valves and desalination units

Public Transit

Currently, the United States has a repair/replacement backlog of more than 24,000 buses, 5,000 rail cars, 200 stations and thousands of miles of tracks, signals and power systems. To update and expand the nation’s public transit system, $66 billion will go toward passenger rail, $25 billion to upgrade U.S. airports and $17 billion for ports throughout the country. In addition to bolstering the nation’s supply chains and transportation systems, upgrades will focus on reducing emissions and deploying more electrification and other low-carbon technologies. Industry sectors that should benefit include:

  • Railroads
  • Airlines
  • Trucking
  • Marine transportation
  • Delivery services
  • Logistics companies

Sustainable Energy Sources

The infrastructure bill allocates $65 billion toward upgrading the nationwide power infrastructure with new lines for the transmission of renewable, clean energy. Another $7.5 billion is earmarked to install 500,000 electric vehicle (EV) chargers along highway corridors to accommodate the fleet of electric consumer and commercial cars currently in production. Opportunities in sustainable energy investments include:

  • Electric vehicle industry, including government fleets of electric vehicles, such as U.S. mail trucks
  • Companies that build EV charging stations
  • Commodities used in green materials, such as copper (electric vehicles and renewable energy sources use four times more copper than internal combustion vehicles)

Given the breadth of infrastructure opportunities on tap, one way for investors to get exposure across the wide range of industries is to invest in a diversified infrastructure or utility funds (mutual fund or ETF). Through a single, professionally managed investment, investors can spread their capital across a wide spectrum of engineering and construction firms, rail travel companies, electricity providers, water and sewage services, and more.

How to Get Your 2022 Finances in Order

How to Get Your 2022 Finances in OrderBelieve it or not, the New Year is here. If you’re trying to wrap your head around everything that’s ahead, one of the best things you can do is prepare yourself financially. Here are a few tasks you can get started on right away.

Look Back at 2021

Depending on how in-depth you want to go, this could take a couple hours or more. That said, ask yourself these questions: Did you spend as planned? Where do you want to adjust, increase or decrease spending thresholds? What kind of unexpected expenses came up? How did you handle it? Think about what you’ll do for the upcoming year. When it comes to money, the cliché “hindsight is always 20/20” will often ring true.

Tackle Your Debt

If you want 2022 to be the year you become debt free, it can happen. We’re talking about consumer debt, not your mortgage, rent, car payments or any other necessities. A good strategy is to make a list of your credit cards, balances and interest rates. Start with the account balances that are the highest and create a payment plan, then move down the list until you’re finished. Balance transfers to cards with zero interest (for a limited time) are a smart idea, too. Then freeze your spending for 30 days, or however long you need. It might take some time, but these days, financial freedom is well worth it.

Increase Your Retirement Funds

Good news: the maximum contribution limit for your 401(k)s increases by $1,000 in 2022 compared to 2021, for a total of $20,500. If you’re 50 or older, the limit is $27,000, which is great for those closer to retirement. If you can’t max out your contribution, just increasing it by one percent can have an incredible effect. According to calculations from Fidelity Investments, if you’re 35 and earning $60,000, this tiny bump could yield an additional $85,000 to your retirement fund over a 32-year period. That’s equal to putting aside $12 per week (how easy is that?), assuming a 5.5 percent return and consistent salary growth.

Create a Back-Up Plan

This probably isn’t something you want to think about, but it’s necessary should something happen to you. Take few minutes to update your beneficiaries on all your financial accounts, including retirement, investment and benefits accounts. Next, make sure you have a durable power of attorney, someone you trust to take care of all your monetary affairs. After this, designate a health-care proxy or power of attorney, who can speak for you if you become incapacitated. Finally, update your will. Decide who will inherit your assets. If you have children, you can even assign guardians for them. In the long run, if the worst-case scenario unfolds, you’ll save your loved ones a lot of time and trouble.

Carve Out Time for a Life Audit

This task might sound big, but it’s necessary if you want to achieve your dreams – financial or otherwise. Start with a pen or pencil, about 100 sticky notes, a journal and a large space, perhaps a door, board or wall. Turn your phone off, then get started. Look back at your life. Assess where you’ve been, where you are and where you’d like to go, then brainstorm. Do you want to save a certain amount of money this year? Put away some cash for a dream trip? Learn a language? When you think you’ve finished, then organize your goals into three categories: personal, work/career and money. After that, further divide them short-term and long-term goals. Take a photo of your notes and keep it near to remind yourself of what you’re trying to accomplish. More often than not, your dreams involve money, which is directly related to your priorities and how you budget.

Budget for 2022

Now that 2021 is in your rearview mirror (and perhaps you’ve even done a life audit), take what you’ve decided upon and create a budget you can live with. Then, download a budget app to keep you on track. If last year’s budget worked well and you’re already on your way to living your dreams, just hit “repeat.” If not, make necessary changes. That said, no matter the status of your finances, it might be a good idea to increase your emergency fund, given all the uncertainty we’re facing in our world.

If you think about it, taking time in January to look closely at your finances is kind of like going to the doctor for your yearly checkup: You want to make sure there are no red flags you need to address. After all, your fiscal health might be as important as your physical health.

Sources

https://www.cnbc.com/2021/11/17/use-this-checklist-to-get-your-finances-in-order-before-2022.html

https://www.cnbc.com/2020/01/23/why-you-should-increase-your-401k-or-ira-contributions-by-1percent.html

https://www.fidelity.com/viewpoints/retirement/save-more

https://www.nerdwallet.com/ca/personal-finance/resolutions-dealing-with-debt

Raising the Debt Limit, Protecting the Capitol and Prohibiting Foreign Campaign Financing

Raising the Debt Limit, Protecting the Capitol and Prohibiting Foreign Campaign FinancingA joint resolution relating to increasing the debt limit(SJ Res 33) – This legislation was initially introduced on Dec. 14 by Sen. Chuck Schumer (D-NY). It is a joint resolution that authorized an increase to the public debt limit by $2.5 trillion. It passed in the Senate and the House within one day and was enacted into law by the president on Dec. 16.

Capitol Police Emergency Assistance Act of 2021(S 3377) – This bill empowers the chief of the U.S. Capitol Police to unilaterally request the assistance of the D.C. National Guard or Federal law enforcement agencies in emergencies without prior approval from the Capitol Police Board. The legislation was introduced on Dec. 13 by Sen. Amy Klobuchar (D-MN). It passed in the House and the Senate within one day and is currently awaiting signature by the president.

Protecting Our Democracy Act (HR 5314) – This bill is designed to protect American democracy by preventing abuses of presidential power (e.g., requires the president to submit materials relating to certain pardons to Congress, prohibits self-pardons by the president, suspends the statute of limitations for federal offenses committed by a sitting president or vice president); restoring checks, balances, accountability and transparency in government (e.g., requires cause for removal of inspectors general, increases whistleblower protections, requires a candidate for president or vice president to produce 10 years of most recent income tax returns); and preventing foreign interference in U.S. elections (prohibits the acceptance of foreign or domestic emoluments and foreign donations to political campaigns); as well as other purposes.

The bill was introduced by Rep. Adam Schiff (D-CA) on Sept. 21 and passed in the House on Dec. 9. It is currently with the Senate.

No CORRUPTION Act (S 693) – Presently, the Honest Leadership and Open Government Act of 2007 prevents a member of Congress who is convicted of a felony from collecting a government pension. However, they may continue receiving their pension until the completion of legal appeals. This bill alters the conditions of the previous Act to stop pension payments immediately after the original conviction. Should the conviction eventually be overturned, the pension would retroactively pay out lost benefits and resume from that point on. The bill was introduced by Sen. Jacky Rosen (D-NV) on March 10. It passed in the Senate on Dec. 8 and is in the House for consideration.

Federal Rotational Cyber Workforce Program Act of 2021 (S 1097) – This bill was introduced by Sen. Gary Peters (D-MI) on April 13. It passed in the Senate on Dec. 14 and is currently under consideration in the House. The purpose of this legislation is to establish a rotational cyber workforce program. The program will have processes in which to dispatch certain federal employees to work in other cyber positions at other agencies.

Methamphetamine Response Act of 2021 (S 854) – The purpose of this legislation is to designate methamphetamine as an emerging threat as an illicit drug, and directs the Office of National Drug Control Policy to implement a methamphetamine response plan. The bill was introduced by Sen. Diane Feinstein (D-CA) on May 18. It passed in the Senate on Dec. 18 and is currently in the House.