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Displaying items by tag: Stephen Kyne
The end of another year is rapidly approaching, and just as you cross items off your checklist and prepare your home for the winter, it’s also important to complete maintenance items to prepare your finances to close-out 2021.
The first order of business is to make sure you’ve made the Required Minimum Distribution (RMD) from your IRAs and other retirement plans for the year. Congress gave a reprieve in 2020, but did not extent that for 2021. If you’re age 72 or older, or have certain inherited retirement accounts, you will need to make minimum distribution by year’s end. The penalty for non-compliance is 50% of the amount you should have distributed, so you’ll want to steer clear of that!
If, like many, you don’t need the RMD to make ends meet, and would prefer not to take any distribution at all, consider donating it to a charity of your choice. The IRS allows you to distribute funds directly from your IRA to a charity, and not pay taxes on the distribution, even if you aren’t eligible to itemize deductions on your federal taxes.
It’s important to note that distributions must go DIRECTLY from your IRA to the charity. In other words, you cannot distribute to yourself, and then write a check to the charity. This can be a great option even if you aren’t subject to RMDs, but are charitably inclined and not eligible to itemize deductions!
The next piece of financial housekeeping will be to begin to gather documents you’ll be needing just after the new year to prepare your taxes. Compile receipts for medical bills, tuition payments, child care and charitable contributions, among others.
While many of us will no longer be able to itemize deductions due to recent tax law changes, there are credits for things like child care and education expenses which you may still be eligible for. For those with large medical bills, mortgage interest, or who have been particularly philanthropic this year, you may still be able to itemize, so it is important to have those receipts handy.
Of note: many families which are accustomed to, and depend on, large tax refunds in the spring may be shocked to find out that those checks may be much smaller than they are used to. This is because Congress changed how child tax credits are paid this year.
Usually, this credit is received at tax time, for the prior year. This year, however, families have been receiving checks each month. No doubt this extra income has been helpful, especially for lower-income families. We feel, though, that the government has done a TERRIBLE job of communicating to these families that their refunds will be lower as a result, and wonder at the net impact on these families’ finances.
When it comes to planning for your retirement, this is the perfect time to evaluate your contribution levels to your retirement plans at work. If you have the ability, and you’re not yet contributing to the maximum levels allowed, consider topping these accounts off to take advantage of the possible tax deduction this year, as well as the ability to simply squirrel as much away for the future as possible. Even if you can’t contribute to the maximum, be sure to at least contribute enough to take advantage of any employer matching contributions.
You may not be aware, but once you reach age 50, you are eligible for higher contribution levels than in prior years. So, if you’ve turned 50 this year, consider increasing your contributions. For 401(k) and 403(b) plans, you can contribute an additional $6,500 to a max of $26,000 from $19,500 for those under 50. For SIMPLE plans, you get to contribute an additional $3,000, up to a max of $16,500. Take advantage of this opportunity to catch-up on contributions you may not have been able to make when you were younger.
The end of the year is a perfect time to review your various forms of insurance, including your home and auto. Take note of various coverage limits and deductibles. If you can, consider a higher deductible in order to save on premium expenses.
Ensure that your homeowners coverage amounts reflect the value of your home. Your home has probably appreciated since you purchased it, but have you increased your coverage limits to keep pace?
An often-overlooked task is to review your beneficiary declarations each year. Families grow, as new members are added, and shrink with death and divorce, which means that beneficiary and Transfer-on-Death declarations can easily become outdated and no longer reflect your true wishes.
Since these declarations are a matter of contract, they will overrule what your Will may say. So, even if you’ve updated your will to exclude an ex-spouse, but you left them as beneficiary on your IRA, your new spouse won’t be able to inherit those assets, but the ex will, and it can’t be challenged in probate.
Your Certified Financial Planner® professional is perfectly suited to help you mark most of these items off your list. Review your beneficiaries, gather tax documents, maximize funding of your various retirement plans, take required distributions, and review your insurance coverage with your advisor each year, to help ensure that your financial plan is well-tuned as you prepare to turn the page on 2021.
Stephen Kyne CFP® is a Partner at Sterling Manor Financial, LLC in Saratoga Springs and Rhinebeck.
Securities offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. Advisory services offered through Sterling Manor Financial, LLC, or Cadaret Grant & Co., Inc., SEC registered investment advisors.
Sterling Manor Financial and Cadaret, Grant are separate entities.
SARATOGA SPRINGS – Local governments around the nation are increasingly seeking ways to curb energy costs, and finally – between improved technologies and federal and state incentives – the reduction of a municipality’s carbon footprint has become both affordable and fiscally appealing. This is very good news for taxpayers, especially in a city like Saratoga Springs, with residents who are committed to lower energy costs without sacrificing environmental conservation and beauty.
The Saratoga Springs City Council has launched two initiatives that will save homeowners, businesses, the City, and ultimately taxpayers significant energy and financial resources in the short and long-term. Additionally, the City has formed a Solar Access Committee to research additional solar energy opportunities.
Solarize Saratoga is a volunteer-driven campaign sponsored by the City of Saratoga Springs, led by Mayor Joanne Yepsen, and New York State to make it easy and affordable for households and small businesses to “go solar” utilizing funds provided by the New York State Energy Research and Development Authority (NYSERDA) as part of the statewide NY-SUN Initiative. Community partners Sustainable Saratoga and Green Conscience Home and Garden have signed on to promote awareness of the campaign.
“The community is coming together to make it easier and more affordable for Saratoga area homeowners and businesses to install solar PV systems,” said Yepsen. Combining the power of community with a smart group purchasing strategy, Solarize helps everyone learn about solar technology, benefits, choices and financing options—together.
The City selected two firms - Apex Solar Power, headquartered in Queensbury, and Hudson Solar, headquartered in Rhinebeck - through a competitive process to install solar PV systems in Saratoga Springs and adjacent communities. They are offering discounted group pricing for those who purchase solar before mid-October through the Solarize Saratoga program.
Homeowners and businesses who sign up for solar installations by October 7 through the program will be able to take advantage of group rates below market prices. The more customers who sign up, the lower the price will be for all participants.
Solarize Saratoga is a nine-month program. The enrollment period began in July 2015, with the last installations wrapping up in December of 2015. For more information, visit www.solarizesaratoga.org.
Spa Solar Park
The City of Saratoga Springs awarded a bid to SunEdison on May 21, 2013 to work with the City to convert the City’s capped Weibel Avenue Landfill into a solar energy production site known as the Spa Solar Park Development.
According to Commissioner of Finance Michele Madigan in a report to the City Council, this is the City’s project, but SunEdison will build, own and maintain a 2 megawatt AC solar array on the City Landfill for an estimated 20 years. The 2MW solar array is estimated to generate electricity equal to about 35-40 percent of the City’s current electricity usage for municipal operations.
Sun Edison’s financial model includes funding from New York State Energy Research and Development Authority’s (NYSERDA), which was received in October 2014 through the Governor’s NY-Sun Competitive PV Program. It also includes funding from the sale of electricity to the City. Since this is a “remote net metering” project, the actual electricity produced by the City’s solar panels will be directed to National Grid, which will provide a monetary credit to the City for amounts generated; the City, in turn, will pay SunEdison for electricity that is directed to National Grid. This payment is governed by a 20-year Power Purchase Agreement (“PPA”), which was approved by the Council in December 2014 and fully executed in January 2015.
“The electricity price the City will pay to SunEdison remains the same over its entire course,” said Madigan. “The City saves money when the PPA price is lower than the National Grid credit amount, which is the anticipated result. Regardless, having a 20-year price allows for long range budget planning, as well as reduces the City’s carbon footprint.”
“There are tremendous opportunities through federal credits or state agencies like NYSERDA that enable local governments to save taxpayer dollars not only on their next electric bill, but for years down the line. We have seen a shift to renewable energy work wonders for private homeowners or local businesses like Stewart’s, and government at all levels should strongly consider this model as a way to save money, green the environment, and reduce our dangerous dependency on fossil fuels,” said U.S. Congressman (N-21) Paul Tonko.
In 2013, Stewart’s Shops announced it would install a 600-kilowatt photovoltaic rooftop solar energy system at its manufacturing and distribution center near Saratoga Springs. Stewart’s took advantage of federal tax credits and a rebate offered through NYSERDA to offset the cost of the $1.5 million project.
According to Stewarts Shops spokeswoman Maria D’Amelia, “It’s doing well, the project is generating about 7 percent of our plant’s electricity needs, saving about $3,000 a month. The only thing that gets a little in the way, which made us slightly under projections, was the bad winter which gave us a bit of a backup with snow covering the panels. Otherwise, it’s been very positive, with very little maintenance, and we are very pleased.”
Solar Access Committee
At the June 2 City Council meeting, Finance Commissioner Michele Madigan announced the formation of a committee to review the solar landscape including advances in science, technology, and how other communities handle solar access in laws and regulations. “I do think there are more things to look at than what we’ve considered so far,” said Madigan.
Saratoga Springs resident Larry Toole chairs the Solar Access Committee. He holds an undergraduate degree in meteorology and is also a board member with Sustainable Saratoga, but makes it clear that he is on the Solar Committee as a Saratoga Springs citizen.
“I’m interested in helping the City best understand the solar landscape in today’s world, anticipating where we might be in the future,” said Toole. “That’s dependent on lots of things, certainly the projected growth in solar is going to be quite significant, such as the signs of global warming initiatives and state and federal regulations of emissions.”
The goal of the committee is to provide context for that, as well as look at best practices regarding solar access rights, solar zoning issues, and other issues that other local governments have addressed. The committee will issue a report with recommendations in a couple of months.
“In phase two of the Spa Solar Park there is potential for the City to add community solar,” said Toole. “This means that businesses and homeowners who do not have properties conducive to solar panels could instead purchase solar power through the Spa Solar Park array, or some other future array.”
Looking into the solar future, Toole sees a day when no trees will be cut back or down to avoid shading solar panels on roofs, no ordinances will need to be changed to manage infill shadowing of neighboring panels, and no homeowner or business will need solar panels on their roofs.
“Historical buildings would even be able to have solar energy,” said Toole. “Everyone would be able to purchase clean energy through a community scale project.”
For that to happen, however, New York State would have to pass legislation that require operational and billing changes in the power industry.
“It’s inevitable that the power industry will have to go through a transformation in the next 20 to 30 years,” said Toole. “If President Obama’s mandate to the industry to reduce greenhouse gases by 32 percent by 2030 survives the courts, they will start owning more utility-scale renewable energy projects as part of their industry portfolio. When we’re 25 years down the road, 80 percent of the energy you buy from National Grid will be clean energy, so there won’t be a need to buy solar panels for rooftops. The power industry’s business model will change, but that has to start with net billing and they won’t do it unless required to by the state.”
Toole said that most indications are that the state is moving toward authorizing a community solar future, and once that happens, Saratoga Springs is likely to jump on board. This scenario is one of many that could be included in the committee’s report to the City.
“I’m excited about the potential of what the committee can do,” said Toole. “We have a good cross section of concerned citizens, businesses, people with expertise in earth science and solar technology, plus support from the City, so hopefully we con provide useful information to incorporate in the future. You combine the ebb and flow between the Solarize Saratoga concept of discounts on rooftop solar, plus City savings on the Spa Solar Park, and add community solar one day, and we still have only begun to see what a solar future for Saratoga can look like.”