Savant Blog

Savant offers perspective on a variety of topics. Entries range from current events to timeless insights in the world of finance and investments.

06 Jan
January 06, 2016

Community foundations across the country are working hard to improve their local communities, but many people are not aware of how they work or the benefits of partnering with them. Here’s an example of how Savant partnered with the Community Foundation of Northern Illinois (CFNIL) in a guest blog from their president, Jon Bates.

Jon Bates, CFNIL President

In November, Savant Capital Management received the 2015 Best-in-Business IMPACT AwardTM, part of Schwab’s annual IMPACT Awards® program which recognizes excellence in

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04 Jan
January 04, 2016

Ben Franklin once said, “Be at war with your vices, at peace with your neighbors, and let each New Year find you a better man.” The beginning of a new year often leads us to examine our lives and find ways to battle vices.

While many of our goals for the New Year may be physical in nature, there are many parallels between our physical and financial well being. When I think of financial goals, I divide

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24 Nov
November 24, 2015

Yesterday I was in the mood for some good milk on my cereal. You know the kind: the milk that costs more but has that rich flavor. I bought some with a new box of my favorite cereal and returned home to enjoy my breakfast. The second I began to pour, I knew something was wrong. The consistency was off. I looked more closely at the label:
“buttermilk.” How could I have done that? The packaging had looked right;

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17 Nov
November 17, 2015

This is the season of college applications. The season of campus visits, standardized testing, and early admissions. With my oldest being a high school sophomore, I should not be aware of any of this process yet. But my daughter’s email inbox has been inundated over the last several months with communications from over 100 different colleges and universities.

As her parent, I am floored by the intensity and breadth of the marketing process involved in the College Decision. I admire my

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09 Nov
November 09, 2015

Have you asked yourself where your paycheck will come from in retirement? Once taxes  are considered, will it be enough to live the way you want? For most of us, starting and ending our career with the same company is a thing of the past, as are the days of pension checks funding the majority of our retirement.  For better or worse, most of us now bear the responsibility for our own retirement planning and determining how our savings will

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04 Nov
November 04, 2015

My three-year-old daughter was in the checkout line at a craft store with my wife, happily dressed up for the day as a witch. She had a black dress and black hat, plus she was excitedly holding a bouquet of artificial flowers. (After all, it was a craft store!) Another mother and slightly older daughter waited in front of them in the line. The child pointed at my daughter and said in a loud voice, “Look, Mom – that girl’s

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12 Oct
October 12, 2015

When the markets decline, it’s natural to want to sell equities. It’s hard to watch your account values go down and listen to your advisor telling you to be patient. Although selling equities when they are down is a bad decision, there are things you can do to make the most of a downturn. A Roth conversion is one possible way to take advantage of declining markets.

A Roth IRA is a retirement savings vehicle that grows tax-free. Withdrawals are also

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24 Sep
September 24, 2015

You may recognize the phrase above, coined by the London Underground subway system. In London, “mind the gap” simply means to watch carefully as you exit the train to the platform, as there can be a gap between the surfaces. In an articleI read recently, this phrase was used in a different manner. It referred to the gap in age between millennials and baby boomers.

Did you know that by the end of 2015 millennials (people

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15 Sep
September 15, 2015

We have never seen instability like this before; the market is going to crash! When the Housing Bubble burst in late 2007, I was just about to get my driver’s license (some might argue that’s just as scary). When the Dotcom Bubble popped in 2000, I had just mastered multiplication and division tables. For the crash prior to that, Black Monday on October 19, 1987, my parents had not even met. Now that I invest my own money,

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09 Sep
September 09, 2015

June 26, 2015 marked a historic decision when the Supreme Court ruled that same-sex couples have a constitutional right to marry in all states (Obergefell v Hodges). This means that financial benefits available only to traditional married couples can now be enjoyed by couples of the same sex.

Prior to June 26, 2015, same-sex couples could receive Social Security benefits based on a combination of legal factors such as jurisdiction of marriage, residency, and whether there was a non-legal civil arrangement other

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18 Aug
August 18, 2015

You have worked hard, saved and accumulated wealth, and are now entering the years when you can start benefiting from the money you’ve saved as well as government-provided benefits. There are many milestones during this time period, and it may be difficult to keep them all straight.

Here are a few highlights of what you can expect:

Age 59 ½: This is the magic age at which you gain access to all your retirement accounts, including

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10 Aug
August 10, 2015

Our journey through life involves setting goals such as graduating from college, buying home, starting a new business, or traveling the world, and working to accomplish those goals. It’s invigorating to identify a dream and set plan in place to achieve it. The feeling of pride that comes from reaching a new milestone and realizing the fruit of our efforts is one of a kind.

Saving for retirement is a very important life goal but it can

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08 Jul
July 08, 2015

Year-end and spring tax filing seasons are popular times to focus on your finances. A mid-year check doesn’t sound like the ideal way to spend your summer, but it is a great time to take stock of your situation.

Financial health becomes increasingly important as pensions get harder to come by and the future of Social Security is questionable. Early- and mid-career Americans will need to rely on their own savings to support themselves in retirement. Sometimes

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30 Jun
June 30, 2015

In most areas of our lives, the more information we get and the more up-to-the-minute it is, the better we can make decisions. However, in investing the opposite is true, which can sometimes be difficult for us to accept.

I’m not talking about the second-by-second blips on a Bloomberg terminal that traders use to make quick-twitch buys and sells. I’m talking about the news reports, cable TV investment reports, and investing articles that you’re bombarded with on a daily basis. The

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15 Jun
June 15, 2015

As the official first day of summer, June 21st, quickly approaches, many people have travel on their minds and schedules. Many of our clients hope to travel now and in retirement. Planning for a vacation is similar to planning for retirement; it is helpful to start early and be well organized from the beginning. If you are considering a vacation this summer, think about your budget, the timing of the trip, and items that could help make your vacation memorable

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26 May
May 26, 2015

“The desire of gold is not for gold. It is for the means of freedom and benefit.” – Ralph Waldo Emerson.

Radio and TV ads for buying gold tout the “get rich quick” theme and prey on the fears of those concerned about geo-political events. But they don’t talk much about the adverse tax consequences.


By “gold,” the IRS means gold coins, gold bars, or gold bullion. This also includes Exchange

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08 Apr
April 08, 2015

There are two camps among income tax-paying individuals: The one that owes tax upon filing their return and the one that receives a refund (technically, there is a third camp that neither owes nor receives). Tax professionals and financial gurus within each group have their own reasons for believing their camp is the right camp to pitch their tent and start roasting marshmallows. Here are the main arguments from both sides to help you determine if you need

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04 Mar
March 04, 2015

Homeownership is a goal for many Americans, young adults in particular. It is widely believed that residential real estate is a good long-term investment. However, there are numerous factors to consider before purchasing a home.

Cost: Homeownership is a big commitment, and many people take on mortgages they cannot afford. Often, while trying to make the numbers work for a purchase, additional costs like maintenance and property taxes are minimized or forgotten entirely. Alternatively, choosing to rent a home rather than

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11 Feb
February 11, 2015

Was your estate plan drafted five or more years ago? If so, recent changes in the Federal and Illinois estate tax laws should prompt a review and update of that plan.

Effective January 1st of this year, each U.S. citizen can transfer during life or at death up to $5.43 million of property free of Federal estate tax. Transfers in excess of this amount are subject to Federal tax at a flat rate of 40%. For Illinois

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17 Dec
December 17, 2014

If you had the ability to take a refund of your Social Security tax withholding and invest the money yourself, would you do it? What about if the system changed and you were required to contribute your equivalent current withholding to a tax-deferred investment account from the beginning? 

Let’s review question number one first:

Pretend for a moment that you are 22, new to the workforce, and earning $35,000 annually.  The Social Security Administration continues as is during your first 10 years of

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15 Dec
December 15, 2014

I remember reading an article several months ago about a financial advisor paving the way in the industry with her unique rule for taking on new clients.  Essentially, she would only accept new clients preparing for retirement if they were willing to run through her proprietary budgeting process.

The budgeting process that this advisor implemented worked best for new clients that had a goal of retiring in the next year or so.  The goal was for each client to review their

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03 Dec
December 03, 2014

The single most important estate planning document many of us have is a Power of Attorney for Health Care. This document allows us to name a person we trust referred to as an Agent to direct decisions regarding health care, medical treatment, and hospitalization when we are no longer able to make those decisions. Powers of Attorney also often provide authorization to your Agent to require, withhold, or withdraw any type of medical treatment or procedure even though

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25 Nov
November 25, 2014

Inaugurated just after the great inflation of the 1970s, it’s no surprise Ronald Reagan claimed, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” Certainly hyperinflation and stagflation can be trouble for an economy, but moderate inflation is actually a sign of a healthy economy. With that said, even moderate inflation can have a large impact on your purchasing power over the long run.

In the

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20 Oct
October 20, 2014

If some is good, more is better.  While exceptions to this rule certainly exist, I don’t think you will find many people who will argue this stance when it comes to their retirement funds.  In my previous article, “Who Wants To Be a Millionaire?” I discussed how you can use time as a machine to compound wealth. Here are additional steps that can help you work toward a higher return on your 401(k) and propel you closer to your ideal

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07 Oct
October 07, 2014

Buying an automobile and securing financing for the purchase can be a complicated and confusing process. Even if you have a price in mind for the car, there are many pieces to the final package, including financing, trade-in, and rebates. Don’t let a low monthly payment or low interest rate distract you from looking objectively at the various components of the transaction.Here are a few things you can do to avoid regrets after signing on the dotted line.  

Know how much

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01 Oct
October 01, 2014

On the surface converting an IRA account to a Roth account seems to make perfect sense. What a great way to pass on tax free assets to the next generation or even have tax free money that you can take out, at your discretion, during retirement. Before you rush out and convert your IRA to a Roth account, however, let’s take a closer look.

First and foremost, the president included a few proposals in his 2015 budget to

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08 Sep
September 08, 2014

The ALS Ice Bucket Challenge spread like wildfire across social media. And while we saw many young people take the challenge, we have to wonder – did they comprehend the deeper idea behind donating to ALS, or did they just have fun dumping ice water over their heads? This thought led to an array of questions about the value of charitable giving and how to teach it at a young age to ensure it evolves into a habit and not

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05 Sep
September 05, 2014

By now everyone and their brother probably knows the pros of owning a Roth IRA, but what about other options? Yes, there are other ways to build your ideal future! Having a tax-free bucket of money can provide tax planning flexibility in retirement income strategies that allows you to live the retirement lifestyle you’ve always wanted.

While Roth IRAs are important retirement investing tools, they have restrictions on who can fund them in any given year.  For example, high income earners

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15 Aug
August 15, 2014

My interest in the island grew tremendously during the week I visited. On the last day of my vacation, I turned on the TV to check the news, and discovered an interesting trend that is occurring. There was an “invitation only” convention of the wealthiest Americans scheduled for the very next day. I discovered that the island was positioning itself to be a new tax haven in order to woo businesses and wealthy individuals there.  My curiosity had

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18 Jul
July 18, 2014

We chose Puerto Rico as our family’s Spring Break destination this year. My wife, Wendy, and I would be traveling with our two teenage children. We had narrowed it down to Puerto Rico or Washington, D.C., but decided on Puerto Rico mainly because of the late arrival of warm weather to Rockford and a recent article naming Puerto Rico as the top destination for low-cost spring break vacations for families. We were not disappointed as the temperature ranged between 75 and 90

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