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Jonathan S. Kuttin

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By Jonathan S. Kuttin

When life gets busy, it’s easy to become more passive about managing your bank accounts and credit cards by letting receipts, bills and statements pile up. Even if you regularly keep up with your finances, it can be beneficial to take a fresh look at them. Simplify your financial life with these three strategies:

Go paperless. It’s easier than ever to access financial documents online. Going paperless will not only make your life more efficient and clutter-free, it’s also environmentally friendly.

A good place to start is by requesting electronic statements and opting out of printed ones from the companies who send you regular bills. Consider going paperless with your bank, credit card companies, cell phone and cable providers or your electric company. You’ll then receive an email when your statement or bill is ready each month. This gives you the option to download and store your statements electronically and also to print and file if needed.

If you’re not already enrolled in direct deposit with your employer, make sure to get this set up. It saves a trip to the bank on payday and you get to enjoy the fruits of your labors sooner. While you’re at it, go ahead and request electronic receipts at the store when they’re offered, in lieu of stuffing them in your pockets or purse.

Consolidate where you can. There are several corners of your financial life that can be simplified through consolidation. Retirement accounts are one of those areas. If you’ve worked for several employers during the course of your career, you’ve probably acquired a few retirement accounts along the way. Accumulated assets left in a former employer’s retirement account are still yours, but they sometimes offer less investment flexibility.

If you like the idea of having fewer accounts to keep track of, or if you prefer to actively manage your retirement dollars, consider consolidating stray 401(k) and IRA dollars by rolling them into a centralized retirement account. There’s a lot to consider when it comes to rollovers, so it’s important to weigh all your options carefully. Consider a direct rollover, as withholding tax and tax penalties may apply for cash withdrawals.

Credit cards and debt are two other areas where consolidation may be wise. Is it time to chop up the card that carries a hefty annual fee? Are you carrying a credit card balance that is snowballing due to high interest rates? It may be financially advantageous to pay off the cards with the highest interest rates and either close the account or put it away for emergency-use only. It’s a relief to have fewer cards to manage, along with a plan for extinguishing debt.

Turn to the professionals. As you sort through your financial choices, enlist the right team of professionals to assist you. Helpful professionals may include a tax advisor or accountant, who can provide guidance on how to put you in the best tax situation, and a lawyer who specializes in estate planning. Also, consider consulting a financial advisor who can help you streamline your financial life and accelerate your financial goals by recommending specific strategies based on your individual situation. Each of these professionals can share their expertise with you and help you eliminate unnecessary financial clutter.

Jonathan S. Kuttin is a Private Wealth Advisor with Kuttin-Metis Wealth Management, a private advisory practice of Ameriprise Financial Services, Inc. in Melville. He specializes in fee-based financial planning and asset management strategies and has been in practice for 19 years.

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By Jonathan S. Kuttin

Soon after the wedding is over — and the chaos of planning has subsided — many newlyweds start asking themselves questions related to their financial situation. Should we buy a home? Should we merge accounts? Who pays the electric bill? How much should we be saving for a rainy day? Can we afford to take a trip? It’s smart for newlyweds to take some time to focus on establishing their new financial lives together.

What are the pros and cons of merging finances? How you go about commingling finances is something that all new couples should carefully consider. Some couples merge everything, others prefer to keep things separate, and some choose a combination of the two. The most important factor is that both spouses feel comfortable with the arrangement and that you have a process set up to ensure you pay your bills on time and maximize your finances.

Start by having a conversation about money habits and styles. How have you handled money in the past? Is one of you a spender and the other a saver? If two individuals have very different ways of managing money, keeping some accounts separate and preserving some independence can be a way to maintain a healthy relationship while protecting your joint financial wellness. If you’re on the same page — both savers, for example — togetherness in all things financial can create some efficiency.

In addition to careful budgeting, a good compromise is to have one checking account in which a couple deposits their income and then a separate account for each holding an agreed-upon amount that comes from the shared pool that each spouse can spend as he or she wishes — no questions asked. It’s also important that the couple agree on how much money they will save together and to establish an auto-transfer from the shared pool so that saving is easy and automatic.

Equally critical is for couples who are blending their finances to consider different “what-if” scenarios. Discuss how much each partner would be comfortable spending on things like new furniture, or how they would financially approach an unexpected situation such as a relocation.

How can you ensure you don’t go over budget? Having one joint household budget makes it easier to monitor spending and stay on track. First, create a monthly and annual budget, taking into consideration your income, monthly fixed expenses (like rent or mortgage, utilities, insurance and basics like groceries) and your savings goals. Then determine how much you can afford for discretionary expenses (like clothing, travel and entertainment). If one person is “in charge” of the budget or finances, it is important for the other person to communicate about his or her unplanned purchases. But, even the best laid plans can go astray — be sure to have overdraft protection in place to cover any purchases that fall through the cracks.

Who does what? Communicate openly and often about your money. Financial disagreements or misunderstandings can fester, so making sure you keep the lines of communication open is important. Have a clear process for who does what and when. One individual may have more of a propensity or interest in financial management; if that’s the case and both spouses support that arrangement, it may be the best for your family — but make sure that both parties are informed about their financial situation. It can be helpful to have a set time each month to pay bills, do record keeping, and discuss overall financial issues. Consulting with a financial advisor early in your relationship is another way to create a mutually agreeable plan and to have regular sessions to track your progress toward financial goals and talk about money.

Jonathan S. Kuttin, CRPC®, AAMS®, RFC®, CRPS®, CAS®, AWMA®, CMFC® is a Private Wealth Advisor specializing in fee-based financial planning and asset management strategies and has been in practice for 19 years.

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By Jonathan S. Kuttin

The opportunity for same-sex couples to legally marry has expanded to 37 states and Washington D.C. with more likely on the horizon. The social and emotional benefits of living in a legally recognized union have been widely discussed. But what does legal marriage mean for your finances when you’re a same-sex couple?

There are a number of immediate and long-term benefits.

More protection for your shared assets. With the repeal of Section 3 of the Defense of Marriage Act (DOMA), certain federally mandated financial benefits previously reserved for heterosexual married couples now also apply to legally married same-sex couples. Some pertinent provisions include:

• Marital deduction for gift and estate taxes. Spouses married in a state recognizing same-sex marriages (who are also U.S. citizens) can pass property to one another without incurring gift tax while living and estate tax after death. This provision of tax law is significant because it means bypassing potential gift and estate taxes levied upon nonmarried couples who transfer property or other assets to each other.

• Social Security benefits. If you or your spouse dies, your marriage certificate and the duration of your marriage are used in determining if the surviving spouse will be the beneficiary of the deceased spouse’s Social Security benefits. In some cases, same-sex couples may need to reside in certain states that recognize the marriage. To further protect your Social Security benefits, the Social Security Administration encourages all same-sex couples to apply for benefits to preserve any claim.

• Beneficiary status. Your spouse will be recognized as your beneficiary on your insurance policies, retirement plans and items of property. This is true as long as he or she is your named beneficiary — make sure to update all of your beneficiary designation forms once you’re married. It’s also important to keep in mind that the spousal consent rules for retirement plans that require the spouse to provide written consent if the primary beneficiary named is someone other than the spouse, applies to same-sex married couples.

• Shared work benefits. Many companies provide spouse benefits that have significant value. For example, your marital status may afford you or your spouse reduced cost health and life insurance through an employer.

• Combined household efficiencies. Don’t underestimate the financial benefit of pooling your income and sharing the expense of running a household. While you can cohabit without marriage, your marital status may improve your ability to sign a lease or close on a loan (assuming you both have good credit and contribute income).

• Income tax perk or penalty? Depending on your combined income, and each spouse’s income, your legally recognized same-sex marriage may or may not improve your income tax situation. If one spouse does not work or has a low annual income, your combined income as joint filers may be taxed less than the separate incomes of two single filers. However, if you and your spouse are both high earners, together you may land in a higher tax bracket (or be subject to additional taxes or phase-outs) than you would if you each filed as single individuals, potentially resulting in a larger tax liability from filing jointly.

• Get professional advice. Merging your finances as a legally married same-sex couple can be tricky because of variations in state laws and other legal considerations. A same-sex couple’s marriage may be respected for purposes of some laws but not recognized for purposes of other laws. Your situation may be complicated if you previously utilized trust documents to “work around” inequities before marriage was a viable option.

While you may not be able to avoid a steeper income tax rate as married joint filers, you can employ other strategies to minimize your tax burden and untangle complicated trust work-arounds. Seek out professionals such as a tax advisor, lawyer and financial advisor to work through the complexities that can arise when same-sex couples merge their financial lives. Together you can explore solutions to help build a secure financial future.

Jonathan S. Kuttin, CRPC®, AAMS®, RFC®, CRPS®, CAS®, AWMA®, CMFC® is a Private Wealth Advisor with Kuttin-Metis Wealth Management, a private advisory practice of Ameriprise Financial Services Inc. in Melville, N.Y. He specializes in fee-based financial planning and asset management strategies and has been in practice for 20 years.