Smarter Bear Newsletter August 2024
For clients and friends of Smarter Bear
A new name for a “credit” card
You are making a mistake if you use your credit card to obtain credit, as in borrowing money to purchase goods and services. The interest rates and fees on outstanding credit card balances are very high - often exceeding 20% APR. Credit cards are useful and allow shopping without carrying large amounts of cash or writing checks. They are much better considered "convenience cards" with the added benefit of points or cash back. Picking the right card to get rewards that you value and match your spending patterns lets you get the most value. But remember convenience, not credit.
Key Estate Planning Documents
Depending on your circumstances, several documents are part of a complete estate plan. Smarter Bear works with Estate Planning Attorneys to make sure your financial plan is well coordinated with your estate plan.
Will (instructions for how your assets will be distributed)
Durable Power of Attorney (appointing someone to act on your behalf in legal/financial matters if you become incapable - sometimes designated as "springing" or coming into force upon your incapacity)
Health Care Proxy (appointing someone to make health care decisions for you if you become incapable)
Living Will (end of life instructions)
Irrevocable Trust (helpful for some people to avoid probate and manage assets for minors or others incapable).
529 accounts have more flexibility
Over the last several years, some of the rules for 529 accounts - previously narrowly targeted to saving and paying for college - have been relaxed. Funds in 529 accounts can now be used for K-12 tuition (up to $10k/year), vocational school tuition, apprenticeships, student loan repayment (up to $10k), and adult continuing education classes. Any leftover funds can be transferred to another qualified beneficiary or contributed to a Roth IRA (up to a lifetime limit of $35k). There are other details to consider with some of these alternatives, and state rules vary with regards to tax exemption at the state level and should be carefully reviewed if you are considering any of these newer options.
Smarter Bear is always available for a free consultation to answer questions and discuss whether our services can help address your needs. You can reach us at smarterbear.net. We also offer no-cost second opinions for DIYers or people working with another investment or financial advisor.
We write our own newsletter, so we know these topics well. Many advisors and firms employ marketing departments, generative AI, or third-party content services to produce their newsletters.
If you know others who would like to be added to our list, feel free to add them at https://smarterbear.substack.com. We aim to write short, helpful, and easy-to-read items on financial topics of interest. We welcome any suggestions for topics to cover in future newsletters.
None of the above is intended as a substitute for tax or legal advice. Your personal situation will determine what's best for you, and we recommend you consult an appropriate professional advisor.