The Silent Threat Most Investors Overlook

When it comes to financial planning, conversations often center around market volatility, diversification, or asset allocation.
But there’s another, quieter risk that can do far more long-term damage to your wealth: inflation.

Inflation is the gradual increase in prices for goods and services — the silent erosion of your purchasing power. Over time, it makes every dollar you’ve saved worth less.
You may not feel it day-to-day, but it compounds quietly in the background, often posing a greater risk to your financial future than the stock market ever could.

At Carver Financial Services, we believe inflation is the single biggest risk facing most Americans — and that addressing it should be central to every long-term financial plan.

Inflation: A Bigger Threat Than Market Volatility

Many investors fixate on market risk — the fear that their portfolios will decline during downturns.
Yet history shows that inflation can have a more profound and lasting effect on wealth.

Since the mid-1980s, prices for everyday items have more than tripled:

• A postage stamp cost 22¢ in 1986; today it’s 68¢.
• A gallon of milk cost $1.08 in 1986; now it’s roughly $3.95.

That means basic goods and services cost three to four times more today. If your investments haven’t grown by at least that much, your purchasing power has declined — even if your portfolio balance looks larger on paper.

Your financial plan shouldn’t just aim for growth. It must also keep pace with inflation and taxes, or your real wealth — what your money can actually buy — will shrink over time.

Why Cash and “Safe” Assets Lose Value Over Time

Many people feel safer keeping large amounts of money in CDs, savings accounts, or cash equivalents. While these may protect you from market swings, they don’t protect you from inflation.

For example, if inflation is 3% per year and your savings account earns 1%, you’re effectively losing 2% in purchasing power annually.
Over a decade, that compounds into a significant loss of value — even without touching the principal.

That’s why investing for growth is essential, even in retirement.
To stay ahead of inflation, your assets must grow faster than the rate at which prices — and taxes — rise.

Investing to Stay Ahead of Inflation

The key to combating inflation is to own assets that can grow over time, not ones that simply hold nominal value. Historically, this includes:

• Equities (stocks): Offer long-term growth and dividend potential.
• Real estate: Often rises with or ahead of inflation.
• Commodities and inflation-protected securities: Provide diversification and potential inflation hedges.

However, every investor’s situation is different.
A 70-year-old retiree needing income will have different needs than a 70-year-old focused on legacy or tax minimization. That’s why your portfolio should reflect your personal vision, tax situation, and stage of life.

At Carver Financial Services, we tailor your investment allocation to balance growth, income, and risk — ensuring your strategy evolves as you do.

Longevity Risk: The Inflation Multiplier

We’re living longer than ever before — which makes inflation’s impact even more powerful.
Longevity risk refers to outliving your money, and it’s a growing concern for retirees.

In 1986, the average life expectancy in the U.S. was 74.8 years.
By 2024, it reached 79.25 years — and many people now live well into their 80s, 90s, or beyond.

That’s potentially 20–30 years of retirement to fund — and decades for inflation to compound.
If your plan assumes outdated lifespans or static expenses, you risk running out of money just when you need it most.

To mitigate this, it’s best to plan for a longer life and higher expenses than you expect. A personalized financial plan can help ensure your income and investments grow with you — not against you.

Financial Planning: Your Best Defense Against Inflation

The most effective way to protect against inflation isn’t guessing the next rate hike — it’s having a comprehensive, adaptable financial plan.

A solid plan includes:

• A balanced mix of growth and income assets
• Tax-efficient investing and withdrawal strategies
• Inflation assumptions built into long-term projections
• Regular reviews and adjustments for market and life changes

Our team builds each client’s plan with inflation, longevity, and tax erosion in mind — designing strategies that not only preserve wealth but enhance it in real, inflation-adjusted terms.

Your lifestyle shouldn’t shrink as prices rise. Proper planning keeps your future within reach.

The Bottom Line: Focus on What Really Threatens Your Future

Market volatility may dominate headlines, but inflation is the risk that lasts.
By understanding its impact and aligning your investments accordingly, you can protect your purchasing power, maintain your lifestyle, and preserve your legacy.

At Carver Financial Services, our goal is simple: to help you live your best life possible — now and in the future — by building a plan that grows faster than inflation and adapts to whatever life brings.

If you’re concerned about how inflation could affect your retirement, portfolio, or long-term goals, we’re here to help — with no cost or obligation.

Inflation doesn’t stop. Neither should your plan.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

What’s Really Important? Living with Purpose Beyond Wealth

A New Year, A New Perspective

The New Year is often a time of reflection and goal setting. As we start 2024, we are being inundated with information, the pace of life and of change continues to accelerate and life seems to be more complicated than ever. 

In a world constantly driven by ambition, success and the pursuit of wealth, it’s easy to get lost in the mirage of material riches. Money undeniably holds power and enables a certain level of comfort and security. Yet beneath the surface, there lies a deeper truth: the essence of life transcends just the accumulation of wealth. Our firm is focused on helping people live their best lives — not just accumulate wealth. 

Wealth provides access to opportunities, comforts and a sense of stability. It’s the means to fulfill desires, experience new things and provide for oneself and loved ones. A correlation has been shown between net worth and health. However, pursuing wealth as the sole objective often leads to a tunnel vision that blinds us from the richness of life’s other facets. 

A study conducted jointly by Princeton University and the University of Pennsylvania and published in 2023 found that, on average, higher incomes are associated with ever-increasing levels of happiness. However, the research team found that within that overall trend, an unhappy cohort in each income group shows a sharp rise in happiness up to $100,000 annually and then plateaus. 

The researchers concluded that for most people, higher incomes are associated with greater happiness. The exception is people who are financially well-off but unhappy. In other words, if someone is miserable, more money won’t help. For the least happy group, happiness rises with income until an annual income of $100,000 and then shows no further increase as income grows. For those in the middle range of emotional well-being, happiness increases linearly with income, and for the happiest group, the association actually accelerates above $100,000. 

I have worked in the financial services industry for more than 35 years, with a focus on making people’s lives better. Over these decades, I have seen that in general, when people have a level of wealth that enables them to be free from worry about their cost of living, it creates peace of mind. Beyond a certain level of wealth, however, it’s clear that the happiest people are not the ones with the most material possessions or money.  

True fulfillment emerges from the richness of experiences, relationships, personal growth and the contribution we make to the world. 

1. Experiences Over Possessions

The memories we create, the experiences we cherish and the moments that take our breath away weave  the true tapestry of our lives. While possessions can bring some joy, what really matters are the experiences that remain with us, and often who we share the experiences with.  Travel, learning, hobbies and adventures offer a wealth of memories and personal growth. 

This is why we started hosting client trips and fun events each year. Our goal is to help people have unique experiences and see new places.  We are building a community of people so that clients meet new friends and enjoy experiences they haven’t had before. You can see full list of upcoming trips and events on our website. 

2. Relationships and Connections

The depth and quality of our relationships often define our happiness and well-being. The time we spend nurturing friendships, fostering family bonds and building connections within our communities creates a sense of belonging and purpose. These relationships serve as pillars of support during challenging times and amplify our joy during moments of celebration. 

At Carver Financial, we help connect people every chance we get, from Travel Buddies to the parties and trips just mentioned. You can read about the upcoming events on our website, and I am always happy to discuss these with you. 

3. Personal Growth and Fulfillment

Life’s journey is a canvas for self-improvement and growth. Personal development, pursuing passions and exploring new interests contribute to a sense of fulfillment that transcends just monetary gains. Achieving goals, overcoming obstacles and discovering your true potential add a sense of fulfillment that money alone can’t replicate. 

It’s never too early or too late to acquire new hobbies, interests, or friends.  This is one of the reasons we host unique events and experiences.  

4. Contributing to a Greater Good

The act of giving, whether through time, resources or expertise, carries immense value. Making a positive impact on the lives of others and contributing to causes larger than oneself creates a profound sense of purpose and fulfillment. The joy derived from helping others and making a difference in the world extends far beyond the boundaries of personal wealth. 

We could not fulfill our firm’s core value of making people’s lives better without the support of our clients. Four initiatives we have launched and maintained to contribute to the greater good are: 

• In 1990, we launched our initial food drive. Thirty-three years later, the initiative has provided more than 400,000 meals to families in need. 
• In 1997, we founded the Annual Tim Groves Memorial Charity Golf Event. To date, the event has raised more than $400,000 for local charities, with a focus on helping match those who need bone marrow transplants with donors. 
• In 2013, we began an initiative called Carver Cares to highlight and support local charitable organizations. The goals are to raise awareness about the services available to the community and to help support the organizations monetarily. At selected events throughout the year, local organizations will provide a brief overview of their mission and services. Our company matches any donations to the highlighted organization — up to $4,000 — made in the month following the event. 
• In 2023, we launched the New Beginning Initiative. The previous year, I had reflected on the fact that donating food can and has made a difference, yet we were treating only the symptom, not the root cause of hunger or homelessness. The question was, how to do we fix this? The answer was the New Beginning Initiative. 

The New Beginning Initiative is focused on permanently eliminating hunger and homelessness in Lake Country by helping individuals who want to help themselves. This effort focuses on those who want to work rather than giving handouts. This initiative is here to help those individuals work; earn an income to support themselves and their families; and provide dignity, independence and financial freedom. In turn, employment increases in our county. It benefits all of us with better property values, a more robust community and a higher tax base. 

5. Health and Well-Being

A priceless asset often taken for granted is health — both physical and mental. No amount of wealth can guarantee good health. Investing in self-care, nurturing mental well-being and maintaining a healthy lifestyle are key components of a fulfilling life. Even though a correlation has been shown between better health and net worth in general, there is no guarantee that more wealth will lead to a longer life or better health. Ultimately, it is up to the individual to pursue a healthy lifestyle. 

For most wealth serves as a facilitator rather than the ultimate goal. The pursuit of wealth should ideally align with the pursuit of a life well-lived — one brimming with experiences, meaningful relationships, personal growth, contributions to society and a focus on well-being. This is not easy — if it were, everyone would be happy. 

Life’s true essence lies in finding balance between financial stability and the richness derived from non-material aspects. It’s about appreciating the intangible wealth that surrounds us — the laughter shared, the lessons learned, the love received, and the lives touched. 

Our firm was founded with the idea of making lives better. Our mission involves far more than simply financial planning or growing wealth. We seek to help build a strong, vibrant, well-connected community and enhance each person’s life with experiences, relationships and planning based on their personal vision and values. 

So, as we look forward to the year ahead and navigate an increasingly complex world, let’s remember that while wealth has its place, it’s the richness of life’s other treasures that truly defines the essence of our journey. My team and I wish you all the best for a healthy, happy and fulfilling 2024 and life. Please reach out any time we may be of service in helping you achieve your personal goals or vision and focusing on what’s important.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we do not provide tax or legal advice. You should discuss tax or legal matters with the appropriate professional.

There is a lot of discussion about the Federal Reserve System (the Fed) raising interest rates and speculation on the number of times rates may be increased this year. What are the implications for you, the markets and the economy when rates increase?

What is the Fed?

The Fed is considered the central bank of the United States. It is considered to be one of the most powerful economic institutions in the United States, perhaps the world. Its core responsibilities include setting interest rates, managing the money supply and regulating financial markets. More specifically, it performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. The Federal Reserve’s five-pronged mission is to:

·         Conduct the nation’s monetary policy to promote maximum employment, stable prices and moderate long-term interest rates in the U.S. economy.

·         Promote the stability of the financial system and seek to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad.

·         Promote the safety and soundness of individual financial institutions and monitor their impact on the financial system as a whole.

·         Foster payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments.

·         Promote consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.

The people who make decisions for the Fed are those who make up the Federal Reserve Board of Governors (Board of Governors), the 12 Federal Reserve Banks (Reserve Banks) and the Federal Open Market Committee (FOMC). The term “monetary policy” refers to the actions undertaken by a central bank, like the Fed, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy in the United States.

The Fed’s changes in interest rates impact monetary policy

When the decision makers at the Fed discuss potential rate increases or feel inflation is high or growth is low, they signal, or actually make,  a change in interest rates. This signal, which is simply an announcement of tentative plans to change the rates, can and often does impact markets. This is like when you drive down the road and see a traffic light — green means go, red means stop and yellow means the green light is about to change to red. When the Fed discusses that there is low inflation or growth, it signals that it may lower interest rates. When they discuss inflation, it means they may increase rates.

When the Fed increases interest rates — the cost of borrowing — it makes consumers and companies more cautious about spending. This is how the Fed, in effect, impacts the economy with its decisions about interest rates.

On January 26th, 2022, Jerome H. Powell, the Fed chair, signaled that a rate increase is coming in March. He cited two reasons. First, inflation has been running far above policymakers’ target. In December 2020, inflation increased by 7 percent, the highest annual increase in 40 years. An increased interest rate is expected to bring inflation back down. And second, labor market data suggest that employees are in short supply. Rates have been near-zero since March 2020. Powell did not disclose how many rate increases officials expect to make this year.

By raising interest rates, the Fed is attempting to cool down an economy that is running “too hot.”

The Fed also influences the federal funds rate

The FED also impacts the economy by increasing or decreasing lending rates or reserve requirements of banks.

The Federal Reserve controls the three tools of monetary policy: open-market operations, the discount rate and reserve requirements. The Board of Governors of the Federal Reserve System are responsible for the discount rate and reserve requirements, and the FOMC is responsible for open market operations. Using those three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and, in this way, alters the federal funds rate. That is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates; long-term interest rates; the amount of money and credit; and, ultimately, a range of economic variables, including employment, output and the prices of goods and services.

Two risks to watch out for now

Two of the biggest risks we see for investors today are moving too much money to fixed income due to equity-market volatility and not understanding the impact of inflation, which reduces buying power. These two risks are closely related.

When interest rates rise (often because of increasing inflation), fixed income can lose significant value. We have experienced decreasing interest rates over the past decade that led to stable and often increasing bond prices. As interest rates increase, this trend will reverse; bond prices will decrease.

Inflation reduces buying power, which means a dollar tomorrow will not buy what a dollar today does. As people live longer and do more, it’s critical that their income keep up with inflation. The only way to do this is to own equity. Now, the hottest rate of inflation in four decades, which we just described, has ushered in a wilder era of bond-market volatility, which causes investors to shop for hedges to protect their portfolios.

Economists often measure market volatility using an index called the CBOE (Chicago Board Options Exchange) Volatility Index, called “the VIX.” It represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 index (SPX). It generates a 30-day forward projection of volatility, or how fast prices change. It is an important index in the world of trading and investments because it provides a quantifiable measure of market risk and investors’ sentiments.

As with any index, there is vast fluctuation from one year to the next. For example, as of February 1, 2022, there was a 27.53 percent increase in the VIX. In 2020, there was a 65 percent increase, and in 2018 a 130 percent increase. In 2021, there was a 24 percent decrease in the VIX. In 2019, there was a 45.79 percent decrease, and in 2009, there was a 46 percent decrease.

We will guide you, as always, with prudent long-term planning

Although we can’t predict how many times the Fed may raise interest rates in 2022, the fact is that the amount of increase is more significant than the number of times. For example, three 50 basis point increases (a total of 1.5 percent) is greater than four 25 basis point increases (1 percent). A basis point is 1/100 of 1 percent of interest, or 0.01 percent.

We believe that, as inflation increases, the Fed will continue to signal about interest-rate increases and also increase rates. We could see a “shock and awe” increase, with the smaller increases following. If and when interest rates increase, the prices on long-term bonds will drop.

We believe investors should be cautious about long-term fixed-income holdings and be as intentional about fixed income investing as you are with equities. A properly allocated portfolio, and financial plan, should not depend on speculation. Our process takes into account the fact that we simply don’t know what we don’t know; therefore, we anticipate the unexpected, and we adjust to whatever happens with the Fed, the economy and the markets. We do expect inflation to continue to rise, along with interest rates.

A key to long-term success is taking a proactive approach to monitoring and updating planning and portfolio allocation. This does not mean trying to time markets;  rather it is accounting for economic, tax and personal changes.

We are here to help design, monitor and update your planning. Our team has more than 250 years of combined experience in all market conditions. As we enter a new period of higher inflation, higher interest rates and likely higher taxes, we are here for you. We are happy to answer questions and address any concerns. The current environment will present a good opportunity for those who are prepared to build long-term wealth. Conversely, those who do not have a disciplined and intentional approach may lose significant amounts. As always, your vision is our priority.

________

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc,. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2021. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy at randy.carver@raymondjames.com.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Investing can be an incredibly efficient way to grow your money — but only if you’re consistently smart about it. Over the past three decades Carver Financial Services has been guiding clients to financial well-being we have witnessed decisions that resulted costly mistakes. Now, we all make mistakes; we’re only human. By being aware of them, and by working with us, you can avoid these mistakes and optimize your outcome.

Here are nine of the most common mistakes investors make — along with how we can guide you toward avoiding them.

1. Trying to time the market
   Heeding the adage to “buy low, sell high,” many investors attempt to time the market by waiting to buy when stocks are low, and waiting to sell when stocks are high. However, knowing the exact correct time to buy or sell just isn’t possible, and it can lead to costly mistakes.

In 2021, Bank of America looked at market data going back to 1930. The study found that if an investor missed the S&P 500’s 10 best days each decade, the total return on their investment would stand at 28 percent. If, on the other hand, the investor held steady through the ups and downs, the return would have been a whopping 17,715 percent!

Another study released by University of Michigan Professor H. Nejat Seyhun, examined the market on a daily basis from 1963 to 2004. Professor Seyhun found that in this specific time period 96% of the market’s return happened in only 0.9% of the trading days. So out of the 7,300 days that took place over 41 years, only 135 yielded the majority of invest return. Your odds of guessing the “correct” day to cash out are very low.
Additionally, CNBC publish an article showing what happens if you miss the best 20 days over a 20-year period. Based on their findings and our calculations, if you invested $100,000 on Jan 1, 1998, that money would grow to $177,560 over 20 years. However, if you missed the 20 best days over those 20 years, you actually lost nearly $20,000, ending up with $80,090.
Keep in mind, the market’s best days typically follow the largest drops, meaning panic selling can lead to missed opportunities on the upside.

This is one way in which working with our experienced team can benefit you significantly. Our investment philosophy relies heavily on NOT timing the market. We also do not believe in “buy and hold.” You must take a very proactive approach to re-balancing and reallocating your investments based on your changing needs, market opportunities, and tax law updates.

2. Focusing on how much you make instead of how much you keep
   It’s not how much you make that’s important but how much you keep; net of taxes, fees, and expenses. Our team members are experts at minimizing internal expenses and managing income taxes on a customized basis. Often, people focus on the total return instead of the net — which could still lead to
3. Letting emotions drive your decisions
   “A lot of people with high IQs are terrible investors
   because they’ve got terrible temperaments.
   You need to keep raw, irrational emotion under control.”
   —Charlie Munger

There will always be new challenges along with the return of old ones. The key to investing is avoiding making decisions based on bad information and emotions including fear, greed, and the range of others.

Most investors know it’s unwise to have knee-jerk reactions to market fluctuations, but many find it difficult to avoid that very human tendency. It turns out that our brains are actually hard-wired to react emotionally to information we perceive to threaten us in some way.

Certified financial planner Michael Finke, a professor of wealth management at The American College of Financial Services, explains that there may be a number of psychological biases holding people back from building wealth. He says the part of the brain that allows us to imagine the future doesn’t move as fast as the part that governs emotions. As a result, we might sell off investments just to pacify the emotional part of the brain, instead of thinking ahead.

Finke mentions additional psychological biases that can lead us to make unwise decisions. One is loss aversion. He says the innate desire to avoid any risk that could result in a loss causes many investors to underperform the market. Another is the bandwagon effect, which is following what other people are doing. Finke points to the recent run-up in so-called “meme stocks,” like AMC Entertainment and GameStop, which individual investors flocked to after being prompted by social media. Many lost money amid the volatility.

Working with our experienced team can help you avoid making emotional decisions about your finances. Once we determine what your vision and goals are, we will work to keep you on track for the long term and to weather the inevitable market fluctuations. We are here to guide you on your financial journey and help you achieve your personal vision, whatever that may be.

4. Being impatient
   “The stock market is a device to transfer money
   from the impatient to the patient.”
   —Warren Buffett

A slow and steady approach to portfolio growth can yield greater returns in the long run. History has proven this.

For example, if you had bought Apple stock at the end of 1990, you would have paid 38 cents (split-adjusted) per share. In 1995, 1996 and 1997, the stock was down 18 percent, 34 percent and 37 percent, respectively. Those downturns likely caused many investors to panic and sell. But in 1998, the stock was up 211 percent, and in 1999, it was up 151 percent. If you held on to the stock, the price at the end of March 31, 2021, was $122.15 per share. Your patience would have paid off.

Our Personal Vision Planning Process takes a very international and disciplined approach to investing. We believe that the “buy and hold” strategy is better than market timing; however, it doesn’t take advantage of market volatility. Working with a trusted advisor can help you avoid the instincts, often instigated by impatience, that cause investors to fail. In this regard it’s important to work with a team who is not only technically proficient and has experience; but also understands your personal needs, concerns, and goals.

5. Failing to diversify
   Diversification is the process of investing in a variety of different types of investments so you’re not too exposed to the risks of any one investment. Investors who fail to diversify their portfolios tend to miss out on growth opportunities.

Diversification is such an effective strategy, in fact, that it can increase your overall return without your having to sacrifice something in exchange. In other words, diversification can actually reduce risk without costing you on returns.

6. Hesitating
   “The best time to plant a tree was 30 years ago.
   The second best time is now.”
   —Chinese Proverb
   Just like the tree in the proverb shown above, the best time to invest is early. The longer you leave your investments in place, the more they can grow.

Because of the “magic” of compound interest, time is your friend when investing.
Which means the sooner you start, the better. However, it’s never too late to start investing! The pandemic has prompted a renewed interest in investing. A Schwab survey reports that 15 percent of all current U.S. stock market investors say they first began investing in 2020.

“Compound interest is the eighth wonder of the world.
He who understands it, earns it. He who doesn’t, pays it.”
—Albert Einstein

7. Investing money you might need soon
   Because investments, when they perform well, can boost your assets, it can be tempting to put all your money in them. Yet this can end up costing you if you need money right away for an emergency, and the value is down.

This is another area in which our team can benefit you. We will work with you to put aside an appropriate amount of money in an easy-to-access emergency fund so you don’t need to rely on your investments when you face an emergency or want to make a big-ticket purchase. We can also advise you on lines of credit and other sources of funds for short-term needs that may not impact your portfolio.

8. Ignoring the tax implications of your financial moves
   Taxes are one of the most confusing topics in the world of financial planning. And to make matters worse, state and federal tax laws often change. Our team constantly pursues continuing education to keep up-to-date on the tax laws and other legislation that can affect your portfolio.

One wrong move can have serious tax implications. We encourage you to work with our educated, experienced team to avoid negative tax consequences of financial decisions.

When you work with our team, we will work with you, and your tax expert, to minimize the tax consequences of the investment decisions you make.

9. Having no clear vision for your future

“If you have no destination, you will never get there.”
—Harvey MacKay

We have found that, overwhelmingly, those investors who have a clear picture of what they want in life are more inclined to reach their financial goals than those who have no clear vision.

At Carver Financial Services, our proprietary Personal Vision Planning® process is an all-encompassing approach that ensures we lay the groundwork for a strong and successful investment strategy based on your goals. Often, clients don’t know what is truly important to them. We can help you define this. Your vision for the future serves as your and our road map for the way we invest your money. We want to know what gets you up in the morning and what keeps you up at night — because your vision is our priority, and we are here to help you achieve it. We also believe it’s important to work with a team, rather than an individual. This may provide for a broader knowledge base and continuity in the event one of the team members is no longer available.

Ultimately, the true value we add is being here to listen to you, guide you, advise you and help you chart a course, especially through uncertain times. Often, the most important things we do prevent situations that would have happened if you had not sought help from experts.

Being proactive is always better than being reactive. Understanding what we can and cannot control, and planning accordingly, are keys to success. The value our trusted team of advisors brings to you goes far beyond just good investment advice or peace of mind.

Regardless of what happens, we are here for you. If you have $500,000 or more in investible assets, feel free to reach out to me personally or to our team with questions, or whenever we may be of service. I founded Carver Financial Services more than 30 years ago, with the mission of helping you achieve your personal vision while simplifying your life. We are here to assist you as you navigate both good times and bad on your personal life journey.

---

Randy Carver, CRPC®, CDFA®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc,. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2021. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy at randy.carver@raymondjames.com.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

T

Over the last few years, there has been a pattern of delayed tax reporting due in part to delayed clarification from the IRS and legislation. We expect this to be the case for the 2021 documents. With this in mind, we recommend that while you work on your returns as soon as possible that you wait until April to file your tax return and consider filing for an extension if you anticipate needing the extra time. Please note that even if you file an extension, your full tax payment is due by April 15^th. If you file your taxes and then delayed documents come in, you may need to file an amended return. Raymond James does everything they can get information out in a timely and accurate fashion. The following will give you an idea of when you can expect forms.

Expect Reporting Delays

 Because there are often last-minute corrections and delays, many companies will not mail the first round of 1099s until February this year. The first round of 1099s is expected to be sent between February 15^th and 28^th, 2022.  What the IRS terms “delayed 1099s” will not be sent until March 15^th. Raymond James has told us they will be mailing 1099s as soon as they receive information from investment companies, however, they expect delays.  After March 15, amended 1099s will be mailed as needed. There is no cutoff date for amended forms.

All tax documents are available via the Client Access online portal as soon as they are generated. You may also give your CPA access to these electronic documents by setting up Third-Party Investor Access. Our client concierge team can help you set up Client Access and third-party access if you wish to do so.

It is important to note that certain investment types are prone to income reallocation. It is also important to note how some distributions are reported so that you avoid paying unnecessary tax. This is one reason we recommend working with a CPA. We are happy to provide a referral, if needed.

For example, if you took a Qualified Charitable Distribution (QCD) from your IRA, you do not need to pay tax on this amount. The full distribution is reported on the 1099R – there is no reporting that this is tax exempt. It is suggested that the full distribution is reported on line 15a of the 1040 that on 15b your write, $0 for the taxable amount (if you have no other taxable distributions). It is also suggested that you write ‘QCD’ next to the line to explain why the distribution is tax-exempt. Failure to do this can result in paying taxes that you do not owe.

The other place that we see clients sometimes overpaying tax is by missing the cost basis information and reporting on all proceeds versus just realized capital gains. This is another reason to use an experienced tax preparer or CPA.

Forms You Might Receive

The types of tax forms you receive will depend on the types of investments and income you have. Please note the following:

• Please note that that clients with IRAs that took systematic distributions last year will likely get two 5498’s. With RJ switching custodians, if they had a distribution before and after Sept.,  you may get separate 5498 from each.
• Widely Held Fixed Investment Trusts (WHFITs) — Under the IRS definition, the affected market segments include Unit Investment Trusts (UITs), Royalty Trusts, Commodity Trusts and Mortgage Pools such as Fannie Mae. Trustees of WHFITs are required to report all items of gross income and proceeds on the appropriate Form 1099. The reporting deadline for these items is March 16^th, so you may receive a delayed 1099 (early April) if you own these types of investments. We generally do not work with these types of investments.
• 1099-B— If you receive a 1099-B (“Proceeds from Broker and Barter Exchange Transactions”), please keep in mind that you are responsible for reporting the gain or loss on what you sold, not the entire amount. This means that you are responsible for the difference between what you originally paid for an asset and what you sold it for. We will provide cost-basis information on holdings that we have the data for. If you have transferred an asset or cost basis and it is not showing on your statement, please call our office.
• W-9— You might receive a W-9 form from your mutual fund and/or annuity companies. These are used to confirm and/or update your Social Security number. These are mailed as a matter of routine every few years.
• Nontaxable transactions— You might receive a 1099 for nontaxable transactions such as an IRA rollover or 1035 exchange of an annuity. A 1035 exchange is reported as Code 6 in box 7, a direct rollover to an IRA is reported as Code G in box 7, and a direct rollover to a qualified plan or TSA is reported as Code H in box 7. Receiving one of these 1099s does not necessarily mean you owe taxes, but you should follow the IRS instructions carefully for reporting this type of transaction. You will also receive a 1099 for QCDs, as noted above.
• K-1 forms— Schedule K-1 forms (Partner’s Share of Income, Deductions, Credits, etc.) are issued by partnerships, S-corporations, trusts and estates to report a taxpayer’s prorated share of net income or loss from the entity, along with various separately stated income and deduction items. By law, these forms must be sent by March 15^th following the close of the partnership’s tax year. Therefore, you might not receive your K-1 until late March or even the first week of April.

If you have a question about your tax documents, please give us a call. Tax laws are very complex. Both our office and the Raymond James 1099 Tax Reporting Department can answer many of your questions; however, we are not accountants and cannot provide specific tax or legal advice. We can recommend a qualified Certified Public Account (CPA) if you need assistance in preparing your taxes.

You can also get answers to many of your questions by reading free IRS Publications. You can obtain copies by calling 1-800-TAX-FORM (1-800-829-3676) or by visiting the IRS website at www.irs.gov, where you can also print tax forms.

Important to Note Regarding Scams

 The IRS never demands payment or personal information over the phone or via email. The IRS never asks for a credit card. If you receive such a phone call, it is most likely a scam. The IRS will only contact you in writing via postal mail if there are any questions or issues.

The IRS will never threaten to bring in local police, immigration officers or other law enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.