October Newsletter | Senior Financial Advisors

The Fiscal Cliff

You may have heard discussions regarding the U.S. approaching a ?Fiscal Cliff? at the end of this year. If you?re a current client of SFA, you heard us start talking about it in June of this year! If Congress doesn?t act, taxes will rise and government spending will shrink starting in January of 2013. These austerity measures could push the U.S. economy into recession in 2013, following Europe?s path.

Many believe this year?s elections could shape the direction of tax policy and government spending for future years; so tax debates are likely to escalate (PLEASE VOTE!!) For our clients who are worried the U.S. cannot continue to run high deficits indefinitely, the fiscal cliff might be welcomed despite it?s extremely aggressive shift toward deficit reduction. However, such abrupt changes almost certainly will have large negative impacts on the economy and the markets, although most everyone agrees that the deficit must be reduced over time.

In the face of these changes, the composition of possible tax increases and their amounts remains uncertain. We are preparing our clients for higher taxes as it?s almost a foregone conclusion that they are on the rise. A solid strategy will address the uncertainly about taxes in the future through an appropriate mix of tactics.

A few considerations include:

• Fully funding tax-deferred investments such as IRAs, 401(k) plans and education savings plans.
• Roth IRA conversions (?bumping the bracket? strategy)
• Moving away from volatile vehicles like stocks and Variable Annuities and into safer strategies such as Indexed Annuities.

Please don?t hesitate to call our office to schedule a time to discuss your current plans and how we can help you make informed, educated decisions in this stressful time. We are always happy to share a cup of coffee and a little information!

~ Larry

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Senior Financial Advisors, Inc. (SFA) is headquartered in the state of Tennessee and is a member of the U.S. Chamber of Commerce and Local Chambers. Senior Financial Advisors is also a company in good standing with the Better Business Bureau and the National Ethics Association. Investment Advisory Services offered through AlphaStar Capital Management, LLC an SEC registered investment advisory firm. Senior Financial Advisors, Inc. and AlphaStar Capital Management are independent entities.

Source: http://www.sfabridge.com/2012/10/11/october-newsletter/

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