About Jerry Maldonado

Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners. His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at: JGM Consulting LLC [email protected] (951)858-0798 Lic#0H33733

Do I Have To Pay Income Tax On These Items?

Individuals who win court awards, or receive proceeds from lawsuit settlements, or receive certain governmental benefits, often question whether the amounts received are taxable or not. The answer to this question typically is, “it depends.” What drives the result usually stems from the specifics of the facts and circumstances.   WHAT GENERALLY ISN’T TAXABLE As it pertains to awards, settlements, and certain government benefits, some income items that aren’t generally taxable include: Income, disability, and death payments received in connection with military or terrorist attacks. Workers’ compensation awards if paid under a workers’ compensation statute. Compensatory awards for “personal injury” or “physical sickness”. Damages you receive for emotional stress caused by the injury or sickness. Damages awarded to reimburse medical care costs due to emotional stress. Disaster relief received under the Disaster Relief & Emergency Assistance Act, provided the relief is for “necessary” expenses, including housing, medical, dental, funeral and other expenses. Awards and damages for replacement or loss of personal property (e.g., a building you own is damaged by someone recklessly driving his/her automobile.)   WHAT GENERALLY IS TAXABLE Some income items that are generally taxable include: Retirement plan benefits received under a worker’s compensation statute. Lost wages or income due to damages from the Gulf Oil spill. Damages from emotional distress that are NOT due to “physical injury” or “physical sickness” Back pay and damages due to emotional distress under a claim under the Civil Rights Act of 1964. Awards for compensation for lost profits or lost wages. Any amounts received as a result of a settlement where the amount represents a “pension right,” i.e., the right to the money is due to contributions not made by you. “Punitive damages” regardless of whether they came from sickness or injury If interest is credited to an award, then the interest is typically taxable. Copyright infringement damages. Any awards or damages due to “interference of business operations.” Note that most employer/ employment-related settlements and damages are considered returns of lost pay or wages. Since wages are taxable as a general income tax principle, these amounts are generally subject to income taxation, as well. Certain amounts received shown to be attributable to medical expenses that were previously reported as itemized tax deductions on one or more previous returns. Legal fees to the extent those fees can be allocated to time spent recovering non-taxable awards (if the award isn’t taxed, then the legal fees can’t be deducted.   TAXABLE OR NOT TAXABLE, IT’S STILL CONFUSING Taxation of settlements, judgments, and certain government benefits is complex. The scenarios listed above are a mere sample and largely dependent on unique facts and circumstances. Consult with your CPA and/or tax and legal advisors.   Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY 2018-53403 Exp. 01/2020 -- About the Author: Jerry Maldonado pecializes in retirement, insurance and tax off-set strategies for professionals and small business owners.  His focus is to [...]

2020-02-21T12:41:41-08:00 By |

Financial Fixes: 5 Tips for Handling Inheritance

Remember that family reunion you wanted to forget? You barely got through it by trading jokes with your great uncle over servings of marshmallow salad. Well, it turns out it was a day to remember for him. In fact, he left you money in his will, and today, a surprise inheritance check arrived. Your first reaction is probably to jump for joy, but what you do next matters a lot. Many people daydream of a windfall as the answer to all their financial problems. However, approximately 70 percent of people who suddenly acquire large amounts money no longer have it a few short years later.[1] Indeed, inheritance can be a turning point, but it depends on how you handle the money from the start. #1: DO TAKE A DEEP, LONG BREATH (LIKE 30-DAYS LONG) It’s common to worry about money, especially if you’re a day-to-day decision maker around finances. Yet, in the event of an unexpected inheritance, the most important thing you can do is hold off on making new purchases. Behavioral psychologist, Dr. Daniel Crosby, notes that when people suddenly acquire money, they tend to spend it quickly. In contrast, we spend our hard-earned cash in slower, more level-headed ways. Give yourself at least 30 days to get used to the idea of your inheritance — without spending any of it. #2: DO MAKE A LIST OF IDEAS FOR HOW TO SPEND THE MONEY You may feel an impulse to buy things. Maybe even a lot of things. But rather than spend any of your inheritance in the first month, channel that impulse through pen and paper. (Or thumbs and phone.) Make a list of all the things you’d like to do with the money, whether it’s an extravagant vacation or adding to your family’s emergency fund. Review this list a few times over the month, and it will help you clarify what you really want. Also, suppose you inherited $50,000. It’s easy to come up with a list of what you could do tomorrow with $50,000, right? Now let’s look at the sum another way: what would you do with $5,000 over ten years? Write down your ideas for this approach as well. #3: DO WORK WITH A FINANCIAL PROFESSIONAL While it’s beneficial to enlist a financial professional’s guidance at any income level, it’s particularly helpful after a cash infusion. A professional can help you create a long-term strategy tailored to your unique financial goals. She will work with you to determine how much money should be saved for a financial cushion, or go toward debt, or finance a dream like starting a business. #4: DO HONOR THE GIVER’S LEGACY One of the best ways to feel good about how you spend an inheritance is to honor the legacy of the person who gifted it. Did your great uncle value education? If so, he’d be pleased to see his gift go toward your student loan payments or your child’s education. Did he love skiing in the Alps? [...]

2020-01-24T12:44:41-08:00 By |

Five Ways to Help Make Your Money Last Longer

The good news is that Americans are living longer these days. The average life expectancy has risen steadily from 49 years in 1900 to 79 years in 2000. Congratulations if you live in Hawaii – your state has the highest life expectancy at 81.5 years! (In the chart, you can see the average for your state.) There are more than 53,000 centenarians (people at least 100 years old) in the U.S. Over 80% of them are women, since women tend to outlive men by about five years.  Want to see 100 candles on your birthday cake?  Longevity strategies include getting enough sleep, adopting a pet, and making friends. Exercise helps too. Researchers say that even moderate activity for 2.5 hours per week may extend your life by 4.5 years! All of us want to look forward to a long life with confidence. How can we make sure our money will last through our retirement years – especially with life expectancy increasing? Here are five tips to help your money grow with you: Start saving now –The U.S. personal savings rate is around 5.3%, according to Bureau of Economic Analysis 2010 data. The time value of money is powerful – the sooner you start or increase savings, the faster you can put it to work for you. Work longer – More older workers are staying employed – some by choice, some by necessity. The longer you have income coming in, the greater your financial resources for retirement. Get strategic – To maintain your current lifestyle during retirement, you will likely need financial resources worth 10 to 20 times your annual salary. That takes a strategic plan focused on developing retirement income solutions that are practical for you. Getting advice from a financial expert is important. Maximize Social Security – If you can delay drawing Social Security benefits until age 65, you may increase your monthly benefit significantly. Get covered – Insurance for medical and long-term care expenses is an important consideration in retirement planning. The average 65-year-old couple with Medicare will likely need $220,000 to cover medical costs in retirement, not including long-term care. -- 2019-85345 Exp. 9/21 About the Author Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners.  His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at: [email protected] www.jgmconsultingllc.com   DISCLAIMERS: This material is intended for general public use to potentially assist you in planning for your future. By providing this material, Guardian/Park Avenue Securities is not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian and its affiliates, subsidiaries, employees, agents, and outside contributors, are not authorized to provide legal, tax, or investment advice in the materials of this website including but not limited to any blogs. The information provided does not [...]

2019-12-05T15:15:31-08:00 By |

The Importance of Protecting Student Athletes

When only 1 percent of collegiate student athletes end up making a living at their athletic craft1, it’s a wonder that financial literacy is not taught to every NCAA athlete. As parents, fans and athletes prepare for yet another exciting collegiate sports season, parents and athletes of all ages should prepare for life beyond athletics. ESPN’s documentary “Broke” shows the dramatic picture of young athletes’ lack of financial knowledge. “Some guys don’t even know how to open a bank account,” noted professional basketball player Jamal Mashburn. When you mix financial illiteracy and the fact that high-performing athletes are more prone to devastating injuries than others, the risks to their financial future are palpable. Luckily, the NCAA recognizes these risks and does offer various forms of insurance for these athletes to protect against potential lost wages due to catastrophic injury.2 Despite the odds being against athletes making it to the big time, parents and schools can do small things to ensure the long-term financial future of those they care about the most.   GOOD CREDIT First and foremost is earning and maintaining good credit. College students aren’t known for making sound financial decisions, and many find themselves saddled with crushing debt from student loans and credit cards. A 2013 nationwide study3 by the private, nonprofit student loan guarantee agency NSLP found nine out of 10 first-year college students scored a “C” or below on financial literacy. Understanding credit is vitally important to good financial habits. Good credit can be built by limiting student loans and making payments on time. It can also mean not rolling up credit card debt. If students do pick up a credit card for incidental expenses, those balances must be paid off each month. Doing so builds good credit and good financial habits.   REMEMBER TO SAVE The average professional athlete retires at 33 and his or her earnings must stretch longer than the average person. And if you’re not one of the “chosen” ones, saving should begin early to prepare for whatever future may come. This saving is less about compounding interest and more about learning to plan and prepare for the unknown. Athletes notoriously view themselves as invincible and saving is part of planning for the unknown. Be it for a broken bone, loss of scholarship or an unplanned car repair, saving is a part of sound financial planning.   STICK TO A BUDGET A budget is the basis of everything; It guides the way to purchases large and small and, when implemented appropriately, provides a clear view of a true financial situation. Student athlete softball player Maria Pandolfo4 attended a financial literacy course at Boston College, to great advantage. “The program taught me how to be smarter with my money and I realized it’s never too early to make a budget,” she said. Before going to college (or deciding which college to attend), students and parents should talk about their budgets: how much school will cost, where that money will come from and [...]

2019-09-20T12:42:21-07:00 By |

Bulletproofing Your Business

First, a riddle: What’s hard to find, difficult to replace, and essential to your competitive edge? The answer: a top-notch, trustworthy, talented executive team. Now, a thought experiment: What would you do if you woke up tomorrow morning and your lead sales person, or your go-to advisor, were to never show up again? Whether they were poached by a competitor or struck by something unexpected, it’s kind of startling to think about, isn’t it? In fact, 71 percent of business owners said they are very dependent on a few key employees.1 That can create additional stress for a business owner, on top of running the business itself, which is particularly relevant to business owners who tend to cluster in the Ambitious Spenders segment.2 If you want to protect your business, and sleep better at night, you need to safeguard your most vital assets: your top people. A smart way to build your team, retain the top performers, and protect your business all at the same time is through two strategic business concepts rooted in life insurance: executive bonus plans and key employee insurance. EXECUTIVE BONUS STRATEGY What is it? While you have most likely thought of rewarding your key people with a cash bonus at the end of the year, there is another incentive for those most valuable to you. That’s where an executive bonus plan comes in. In short, it’s a life insurance policy owned by the employee and purchased in place of a cash bonus. A win for your employees. Executives like these plans for their inherent advantages. First, it provides the employee with death benefit protection. Second, it builds cash value that can be used by the employee. A win for your business. For businesses, this type of executive bonus plan is a smart recruiting and retention tool that is easy to setup and manage. An added benefit, it is tax deductible for the business. There are little to no out-of-pocket expenses and minimal administration on your part. KEY EMPLOYEE INSURANCE What is it? Particularly for small businesses, the death or disability of a valuable employee can be difficult to bear from both an emotional and financial standpoint. In extreme cases, it can even sink the business. Companies can insulate against the loss of key talent with coverage that gets paid out to the business in the event of an employee death. The direct benefit. There’s no easy way to talk about it, but if one of your top performers dies, a cash benefit is paid out in a lump sum. This cash can then be applied to the ongoing operations of the business while you recover from the loss. The indirect benefits. Your business is better positioned in several other ways. First, the policy’s cash value is counted as an asset on your balance sheet and can function like a cash reserve. Second, your creditors and investors can be put at ease just by knowing you have such a strong and clear contingency plan in place. There are also tax [...]

2019-07-26T14:52:07-07:00 By |

Are You at Peak Financial Fitness?

Physical fitness and financial fitness are inextricably linked, says financial advisor Pamela Gilmour. Ignore your health or your wealth, and it can catch up to you. The parallels are striking. When people live an unhealthy life in their 20s, 30s and 40s, the risk of disease and debilitating conditions grows. By the time people reach their 50s, medical care often becomes an expensive necessity. Likewise, those who ignore their finances — keeping credit cards maxed out and living paycheck to paycheck — live with high levels of unhealthy stress. When they reach their 50s and start thinking about retirement, a new reality sets in: They may arrive at retirement without enough to live on. Pamela Gilmour, CEO of Financial Fitness in Towson, Maryland, has been providing financial planning for over 25 years. A golfer, runner and certified Yoga instructor, she defines financial fitness as having the financial means to live the life you want without undue stress. How do you know if you’re financially fit? She says the following warning signs suggest you may need to give your finances the same attention you give to your workouts.  ARE YOU HAVING TROUBLE SLEEPING? “Waking up in the middle of the night is an alert from your subconscious,” Pamela says. You may successfully rationalize an unhealthy financial situation during the day, only to have deep-seated nightmarish anxieties. In fact, in a 2017 survey, 65 percent of Americans reported losing sleep over financial concerns.1 ARE YOU STUCK IN A VICIOUS CREDIT CARD CYCLE? Pamela sees many young adults who fall for the lure of interest-free credit cards as a way to reduce debt. “They have a balance of $10,000 on one card, so they flip it to a new interest-free card with the idea they will pay off that amount without incurring more interest. Instead, they run up more debt on the first card, so they’re in even worse shape.” By the time people reach their 30s, Pamela says they should be paying off their credit cards fully each month. ARE YOU ENGAGING IN EMOTIONAL SPENDING? Just as emotional eating can derail a health-conscious diet, coping with feelings of anxiety, boredom or unhappiness by buying things you can’t afford can seriously damage your finances. One client, after listening to Pamela talk about financial planning, said, “That sounds great, but it won’t work for me — I’m an over-spender.” Pamela replied, “Is that like having an incurable disease? If you keep saying you’re an over-spender, you’re going to be an over-spender.” Working hard to change your habits — to become an under-spender — can help build financial fitness, she says. ARE YOU PASSING-UP GOOD OPPORTUNITIES? An inability to say “yes” to opportunities like sending your child to a top-notch university or buying a beach house with friends — even though you’re making good money — is a warning sign. If you feel you should be able to afford something but can’t, you need to explore why. Taking a tactical approach to personal finances could be [...]

2019-05-31T17:10:52-07:00 By |


Financial planning means something different to everyone. For some, it's about getting by on their paycheck, for others it's about watching the stock market each day. Unfortunately, very few of us feel prepared to meet our ongoing financial obligations and objectives. Worries about money have become one of the greatest anxieties of our day. Because our lives and goals are so different, there is no turn-key solution for managing ones finances and meeting financial goals. We can, however, identify several steps successful people take in planning for and meeting their financial goals. We call these steps "Life Cycle Planning" because each step can be tied to the attainment of certain life defining events that almost everyone goes through. DEVELOPMENT OF HUMAN CAPITAL Human Capital is a person's ability to turn their skills and abilities into a livelihood. The development of these skills and abilities helps us maximize our income potential in a competitive marketplace. In our early years, usually between age 19 and 25, we set ourselves on a course that largely defines our Human Capital potential. Each of us makes an investment in Human Capital, whether we realize it or not. For some this is an investment of time, gaining experience and skills on the job. For others it is an investment in trade school or college. It should also be noted that although our greatest focus on Human Capital development is in our early years, this is an investment we should continue to make and assess throughout our working careers. MANAGEMENT OF EXPENSES, BUDGETING Once our "Human Capital" investment begins to pay dividends in the way of earnings, we must begin to develop and apply management skills to our newfound earnings. Without managing our expenses, our wants and needs will invariably outpace our ability to earn. By implementing some form of budgeting, we can begin to set our sights on saving and meeting our longer term financial objectives. A beginning budget can be as simple as setting aside a predetermined percentage of our earnings each month for saving, spending what is left until it is gone, then spending nothing more until next month. ADEQUATE LIQUIDITY As our budget begins to pay off in a healthy savings account, we begin to wonder how best to apply our limited savings to our unlimited needs and wants. Without exception, the first financial need we should meet is to have an emergency fund. An emergency fund allows us to cover unexpected short term needs using cash instead of leveraging our future earnings through costly loans. As a general rule of thumb, your emergency fund should be adequate to maintain your standard of living for three to six months. ADEQUATE INSURANCE PROTECTION A major disability, the loss of a family breadwinner, a fire in your home, a major medical problem for a family member... the most dramatic emergencies can seldom be planned for through personal saving. Although such tragedies can create devastating individual financial hardship, the financial risk [...]

2019-04-12T19:47:12-07:00 By |

Strategies for Paying Down Student Loans

College was fun. But now the bill has come due. American students have over $1 trillion in student debts. The debt burden college graduates have is a substantial obstacle to personal financial progress, but you likely already know that. There are strategies you may want to consider in lightening the weight. LOOK INTO PUBLIC SERVICE LOAN FORGIVENESS For people working in government, non-profit and other public service jobs, certain federal loans may be forgiven after 10 years of qualifying payments. Many individuals are not even aware that they qualify for the program. VOLUNTEER There are a number of programs, e.g., AmeriCorps, Peace Corps and Military service, whereby such service will accrue a benefit that reduces an outstanding loan balance in an amount that varies with each program INCOME-BASED REPAYMENT PLAN Your payments on eligible federal loans can be capped at a percentage of your income, if you have a partial financial hardship, which is defined as monthly repayment amounts in excess of the level calculated under a 10-year standard repayment plan. If you make such payments and meet other requirements, any remaining balance will be forgiven after 25 years of qualifying repayment. PRE-PAY PRINCIPAL Pre-payment of principal will help lower the lifetime interest costs of a loan. Of course, the challenge for many young workers is that they may not have the cash flow to make pre-payments. Consider ways to raise cash specifically for such pre-payments. Do you still receive birthday and holiday presents? Ask for cash instead. Did you receive a raise, bonus or overtime pay? Direct unexpected cash flow to pre-payments. Student debt can be overwhelming. It may seem, at times, like you’ll never get past it. Don’t despair. Remember, time is in your favor. As you gain work experience, the economy improves and Baby Boomers retire, opportunities for economic advancement will emerge and help you move ahead.   Jerry Maldonado Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners. His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at: JGM Consulting LLC [email protected] (951)858-0798 Lic#0H33733 www.jgmconsultingllc.com

2019-03-01T15:48:28-08:00 By |

Learn, Earn and Retire at Any Age

Millennials are do-it-alls and have-it-alls — in a good way. Research shows they far outpace other generations in focusing on these life priorities:1 Traveling Having a rewarding career Being recognized for accomplishments Enriching their intellectual horizons Looking great In other words, millennials expect to have fulfilling jobs that earn them kudos, but to never rest on their laurels and to always keep learning. Plus, they intend to travel the world while looking fabulous. (Sleep, apparently, is not a priority.) Kidding aside, millennials are rewriting the “life stage” playbook. Rather than compartmentalizing their journey into pre-, mid- and post-career periods, they are blending learning, earning and enjoying life in a continuum. What can the rest of us learn from millennials’ desire to embrace all of life in the moment? FEED YOUR BRAIN We know that learning ties to financial empowerment. College graduates earn approximately $1 million more over their lifetimes than high school graduates — and the gap increases with more education.2 But did you know that being a lifelong learner, as millennials so far tend to be, can also help reduce stress, delay cognitive decline and increase lifespan?3 Take educational tours, listen to TED talks, master a hobby, monitor online courses, read more. Enriching your brain will expand your horizons at any age. WORK TO LIVE Many millennials are opting for “portfolio careers,” amassing skills and experiences to build their value in the employment market or to start their own businesses. It’s a good model to follow. (And here are some ways to build your own career stock, while we’re at it.) The other takeaway is that many millennials say they don’t plan to retire. That philosophy squares with the research:  being engaged with meaningful work as we age is linked to better emotional and physical health.4 When tailoring your own retirement plan, consider ways you can continue to contribute your skills to others. CHILL AND FULFILL The most financially and emotionally confident Americans balance work-life responsibilities.5 Millennials take it even further. They’re not waiting for retirement to live their best lives. Harnessing digital technology, they’re blending the professional and personal in a holistic way to gain greater flexibility over how, where and when they work and play. This sense of control helps them avoid burnout even in demanding roles and drives high fulfillment, with 74 percent of millennials reporting they are satisfied with their lives. No matter where we are on life’s journey, the moment that matters most is right now, and maybe there is an opportunity to learn from the millennial mindset to add greater satisfaction, control and fulfillment to your life.   Jerry Maldonado Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners.  His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at [email protected] JGM Consulting LLC [email protected] (951)858-0798 Lic#0H33733

2019-03-01T15:53:45-08:00 By |