Frost Focus

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Frost Focus: A quarterly newsletter with personal finance content to keep you on the path to financial freedom. We cover the spectrum of personal money matters – from banking and investing to insurance and taxes – with timely advice you can trust.

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Education Savings: A Closer Look at 529 Plans

Aside from your home, your family’s education may be one of the largest cumulative expenses you ever face. That’s why beginning to plan and save early is important to help you stay in balance with other financial goals. The right investment tools will help ensure your education dollars are working hard for you.

When it comes to achieving long-term investment growth, tax-efficiency and flexibility, most families would be well served by a state-administered 529 education savings plan. One of the biggest benefits of 529s is that earnings accumulated in the plan are not taxable, and withdrawals are tax-free when used for eligible education expenses. While these plans have been around since 1996, several modifications in recent years make them a stronger option than ever.

Whether you’re planning to cover some, or all, of a family member’s education upfront or at a later date, here are a few things to consider:

  1. They’re not just for college. A 529 is a well-known tool to save for tuition and fees associated with college, graduate school or trade school. Thanks to updated regulations issued in 2017, funds in a 529 may be used for a wider range of education-related expenses, including up to $10,000 per year for K-12 private school tuition, or up to a total of $10,000 to pay off student loan debt.
  2. You can start with a big lump sum. The IRS treats 529 contributions as gifts, so one person contributing more than $18,000 in a single year would trigger a federal gift tax. One exception, however, allows a contribution of up to $90,000 (five years of contributions at once) in the first year, with no tax consequences. Frontloading the account in this way can make a huge difference in value as the money has more time to grow.
  3. Any third-party can contribute. Grandparents, aunts and uncles, other extended family members or even friends/third parties who want to help can also make annual contributions to a 529. As an added benefit, residents of many states (not including Texas) can claim a state income tax deduction for their 529 contributions; requirements vary by state.
  4. Unused funds are convertible. In previous years, over-saving in a 529 was a concern since withdrawals not used for education expenses incurred a 10% penalty. Beginning in 2024, unused 529 funds can be converted to a Roth IRA in the beneficiary’s name, giving the recipient a head-start on retirement savings.
  5. You can change beneficiaries. Another option for unused funds is to change the beneficiary to another qualified family member. For example, if your daughter earns a full scholarship and doesn’t need the money you had saved, you could use it for the education of another child, a grandchild or even a niece or nephew. However, before doing so, ensure that family member is eligible.

While the rules can be tricky, the benefits of 529s are worth the extra planning. As you explore further, be sure to consult your Frost wealth advisor on how best to structure your accounts.

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Homeowners Insurance: Is Your Replacement Cost Coverage Guaranteed?

Most homeowners know they need insurance to shield themselves financially against major damages. Choosing the right level of homeowners coverage can be complicated and not understanding the options could cost you dearly if your policy doesn’t fully cover your losses.

A common source of confusion is the limitations of replacement cost coverage. If your home is damaged or destroyed, this type of policy reimburses you for a pre-determined cost to rebuild your property. While it’s a step up from actual cash value coverage, which deducts depreciation from your reimbursement, a replacement cost policy doesn’t guarantee you’ll pay nothing out of pocket.

Why replacement cost may not be enough

When you buy a replacement cost policy, your insurer performs an assessment of your home and assigns a dollar limit to the coverage. For example, if they estimate it would cost $1 million to rebuild your house from the ground up, that’s the amount you would receive if your home was completely destroyed. The trouble is that costs fluctuate over time. The price of labor and materials could rise considerably between the time you buy the policy and the time your loss occurs. Due to inflation, the true cost to rebuild your home would far exceed your $1 million policy limit, leaving you on the hook for hundreds of thousands of dollars.

How to bulletproof your coverage

The good news is there are insurance options that offer even greater protection than replacement cost coverage. Select carriers may offer these two alternatives:

  • Extended replacement cost: For an extra charge, you can add an endorsement to your policy that covers additional replacement costs up to a certain percentage of the original estimate (usually 25-50%).
  • Guaranteed replacement cost: Typically offered only for homes valued at $1 million or more, this option will cover the entire cost to rebuild, regardless of how much it might exceed the insurer’s original assessment.

As you might expect, guaranteed replacement cost coverage is the most expensive option. For owners of high-end homes (especially those in areas prone to natural disasters), the higher premium can help achieve complete peace of mind.

Not sure which coverage level is right for you? Frost Insurance advisors can assess your risks as part of a comprehensive financial review and connect you with the right insurance partners to meet your needs.

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How to Buy a Luxury Boat Without Sinking Your Finances

You’ve built a successful career and are secure in your financial future. Now what? If you enjoy being on the water, buying a boat could be the perfect lifestyle enhancement. However, you should take a beat before you head to the dealership. Most boats aren’t trivial purchases – they often come with strings attached, so buying on impulse could be a costly mistake. Whether you’re still daydreaming or already shopping, consider these tips to ensure a new boat won’t sink your financial plan.

  1. Think it through. Be honest about how often you’ll really use a boat and whether it’s worth the costs. Some eager buyers overestimate how much free time they’ll have to enjoy their purchase. Choosing the right boat for your lifestyle, whether it’s a pontoon boat or a luxury yacht, can have a major impact on how, when and where you’ll use it. Also, remember that the resale value may be impacted by the boat’s depreciation over time. Once you’ve considered those factors, research reputable manufacturers and dealers to ensure you’re making a high-quality purchase.
  2. Calculate the costs. The boat’s sticker price is just the beginning. You’ll need to factor in additional costs and responsibilities of ownership, like insurance, storage, towing, cleaning and recurring maintenance. Also consider if you will operate and maintain the vessel yourself or hire someone else to handle it. With all those expenses in mind, you might decide to occasionally rent a boat instead.
  3. Analyze your finances. How much boat can you afford? A general rule of thumb is that your total monthly debt service (mortgage, car payments, student loans, credit cards, etc.) shouldn’t exceed 40% of your gross monthly income. If a boat payment would push you over that limit, you’d be wise to scale back – and don’t forget to consider the down payment. Most lenders require 10-20% up front, so you’ll need to decide where that money will come from and whether you’re comfortable spending it.
  4. Compare financing options. Most boat dealers offer financing, but you can choose your own lender. Some banks may offer a lower interest rate, which could knock thousands off your total cost, or discounts on interest rates for existing customers. Working with a familiar bank can also provide the convenience of having multiple services under one roof and a more comprehensive assessment of your financing decisions.

Ready to hit the water? Consider Frost your one-stop-shop to finance and insure your new boat.

Frost Insurance

At Frost Insurance, we don’t think in terms of policies, but in terms of managing and minimizing the long-term cost of risk. We look beyond a list of your assets and get to know you as an individual — everything from your occupation and travel habits to your hobbies and collections. When life changes come, as they always do, we’ll be there to offer advice and make adjustments to fit your needs.

Frost Insurance risk advisors are equipped with a broad suite of products and services that they can personalize to your individual needs. These are just a few examples of the areas and types of coverage our experienced risk advisors can provide:

You and your family:

  • Life insurance
  • Disability
  • Long-term care


  • Nonprofit directors and officers liability
  • Excess liability
  • Personal security
  • Employment practices liability
  • Workers' compensation for household staff

Properties and real estate:

  • Homes, vacation homes and rental properties
  • Farms and ranches
  • Earthquake, flood, windstorm and other catastrophic coverage

Valuables and collections:

  • Automobiles and motorcycles
  • Yachts and aircraft
  • Equine
  • Collectibles, silver, gold, rare coins and fine art

Want to learn more about getting tailored protection for the way you live? Don't hesitate to reach out to our Frost Insurance risk advisors.

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Time Changes Everything, Including Your Financial Goals

Specific and realistic goals form the foundation of any solid financial plan. They give you a target to shoot for, help shape your decisions and serve as motivation to keep working toward the future you envision. But if it’s been a while since you reviewed your goals, you might be surprised to find them outdated, misguided or no longer applicable. Through the pleasant surprises and frustrating setbacks, the unpredictability of life and economics has a way of upending the best laid plans. That’s why it’s smart to refresh your financial goals periodically – ideally on an annual basis. And doing so early in the year makes it easy to track your progress with the 12-month calendar.

Keep these tips in mind as you dust off your plan and update your goals.

  1. Look at your life: What has changed in recent years? Marriage, divorce, health issues, career changes, children graduating – significant events like these can substantially impact your investment goals, insurance needs and estate plan.
  2. Revisit your budget: Even for prosperous families, household expenses have a way of creeping up and quietly eroding your ability to save and invest. Reviewing your bills, cutting out unnecessary expenses and paying off high-interest credit card debt can go a long way toward funding short- and long-term goals.
  3. Maintain liquidity: While most of your net worth may be tied up in fixed assets and investment accounts, make sure you have easy access to the liquid funds you’ll need for this year’s big-ticket purchases, such as a child’s wedding or a dream vacation. If you’re close to retiring or have already done so, be sure to read this edition’s companion article on managing liquidity in retirement.
  4. Get specific: With every passing year, you benefit from a clearer view of long-term needs, such as impending college costs for children or your own retirement expenses. Use that knowledge to fine tune your goals but keep them flexible while plans are still fluid. You may also benefit from breaking up long-term goals into manageable milestones, which can help you evaluate any changes needed along the way.
  5. Play the long game: While it’s good to stay aware of economic issues and market performance, don’t make rash decisions based on temporary conditions, which could potentially derail your long-term plan. Work with your advisor(s) to ensure your overarching plan is still solid and stick with it.
  6. Insist on objective advice: It’s critical to work with professionals who will challenge your assumptions, ask the hard questions and give it to you straight if your goals aren’t realistic. The best financial planners pair their experience with sophisticated software to analyze your probability of success so you can set ambitious yet attainable goals.

Once you’ve refreshed your financial goals, set one more: to meet with your team of advisors and review your plan at least once a year. Frost is with you every step of the way. Call us and learn how we can help you with your financial goals.

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When a Will is Not Enough: Five Reasons You Might Consider a Trust

Every adult needs at least some measure of an estate plan – a set of legal documents that ensures your assets will be handled according to your wishes upon your death. You’ve probably heard of a will, the most basic estate planning tool. But as the complexity of your estate grows along with your wealth, you might also consider creating a trust. A trust is a legal arrangement that assigns a “trustee” the authority to hold your assets (which could include investments, real estate and personal property), and manage and distribute them as directed in your absence. Compared to a simple will, a trust can provide extra layers of control and protection.

There are many types of trusts, so it’s best to work with a wealth advisor and attorney to meet your specific needs. Here are five common ways a trust could serve you and your beneficiaries:

  1. Avoiding probate: If you die with only a will, your estate will be administered according to state law (performed separately in every state in which you own property). This can be a tedious and time-consuming process that often requires publicly disclosing private information. A trust can bypass probate and distribute your assets quickly and privately.
  2. Tax efficiency: Certain types of trusts, such as charitable trusts or generation-skipping trusts, can be used to minimize the amount of tax owed by your estate, leaving more for your loved ones or the causes you support.
  3. Incapacity planning: If a serious medical issue leaves you unable to handle your own affairs, your designated trustee (rather than a court-appointed guardian) can manage your assets during that time and make certain all of your needs are met.
  4. Asset protection: Trusts may be used to shield assets from lawsuits, spendthrifts and creditors, ensuring your estate will continue to benefit your heirs for generations.
  5. Making stipulations: A trust allows you to make specific rules about who receives certain assets, and when and how this occurs. For example, you might set age thresholds for when young children or grandchildren receive money, or arrange timed distributions to care for a special needs family member in perpetuity.

The more complex your financial affairs, the more essential it becomes to choose an experienced estate planning partner. The wealth management team at Frost has extensive experience in helping clients secure their legacies and preserve their wealth for future generations.


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Managing Liquidity in Retirement – Enjoy Today, Stay Secure for Tomorrow

Nearly every retiree faces a similar dilemma: figuring out how to live life to the fullest without outliving their money. Frivolously burning through cash isn’t the soundest strategy, but neither is locking up too much of your money in long-term investments. The goal is to strike the right balance between liquidity and growth, keeping enough cash available to fund the lifestyle you want while continuing to invest for long-term needs.

As you work with your advisor to make a sound plan for retirement, here are a few key concepts to consider:

  • Plan in phases: Your spending habits will naturally change over the years. One common way to envision retirement is to break it up into three phases – “go-go” (the early years when you’re active in travel and leisure activities); “slow-go” (when you’re settling down and not quite as mobile); and “no-go” (when you may experience more limited mobility). With these in mind, you can begin to think about your lifestyle (travel, hobbies, relocation, etc.) in each phase along with any major goals like giving to charity or leaving an inheritance. While your plans won’t be set in stone, they will give you a sense for how much cash you’ll need every month versus how much to invest for the future.
  • Organize your cash flow: In retirement, your regular paycheck may be replaced by a sporadic mix of income from investments, a pension, Social Security, annuities or required minimum distributions from IRAs or a 401(k). At times, it may not seem like enough, while other months may leave you flush with excess cash. Using the right types of liquid accounts, which may include a mix of money markets, CDs and treasuries, a wealth advisor can help organize your various income sources into a consistent amount each month. This can help to ensure you have enough cash available while your funds continue to earn a return.
  • Get tax-savvy: Once you stop working full-time, your tax bracket may change, and the order in which you draw down retirement accounts and other savings could impact how much income tax you owe. Hence, your tax strategy could make a significant difference in how long your nest egg lasts. For this reason, it’s crucial to work with both your tax advisor and wealth advisor who can advise you how to adjust your strategy as your circumstances evolve.

Any way you look at it, retirement planning is a complex process. Lean on the professionals at Frost to help you make the most of the wealth you’ve built.


Frost Personal Trusts

When you’ve acquired substantial assets, determining how they’ll be managed during your lifetime and then protected and distributed when you’re gone requires thoughtful consideration and careful planning. Fortunately, Frost offers experienced estate planning advice and administration — as well as customized trust management for individuals and institutions, families, foundations and endowments. Some of these trust options include:

  • Revocable Trusts
    • Revocable trusts, which include living and standby trusts, can be changed at any time by the creator and may be helpful in eliminating the need to probate a will.
  • Irrevocable Trusts
    • This type of trust generally cannot be cancelled and may include trusts such as testamentary trusts, irrevocable living trusts, irrevocable charitable trusts, special needs trusts and marital trusts.
  • Court-Created Trusts
    • Sometimes called "conservatorships," court-created trusts are legally binding relationships created by a court to manage assets and distributions for a minor, or a disabled or incapacitated adult.
  • Charitable Trusts
    • If you'd like to leave assets to a charity, Frost can provide guidance on 1) a charitable remainder trust, designed to provide income to you, or someone you choose, until transferred to a charity you’ve chosen and 2) a charitable lead trust, which first pays income to the charity, usually for a specified number of years, then the assets pass to your heirs.

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Gifting to Heirs: How to Strategically Pass Down Wealth

If you’re fortunate enough to have a substantial nest egg, you may be planning to pass down some of your wealth to your children or grandchildren. Gifting can benefit your family members today, while also reducing the impact of estate taxes when you pass away. But it’s not quite as simple as writing a big check. The IRS takes a keen interest in what you give away, how much you give and exactly when you do it. And know that an apathetic approach to gifting and estate planning could create a sizable tax bill.

Here are some important tips to consider as you gift to heirs.

  1. Make it a team effort. Your CPA, estate planning attorney and wealth advisor can help you navigate the tax code and create a strategic gifting plan based on your level of wealth, goals and lifestyle needs.
  2. Plan ahead. The deadline for gifts to count toward the current tax year is December 31. So, don’t wait until the last minute, as it can take time to meet with your financial team, decide on a plan and finalize financial transactions.
  3. Know your limits. In 2023, you can gift up to $17,000 per person to as many people as you like before you’re subject to filing a federal gift tax return and possibly paying federal gift taxes. Any overages will also be deducted from your lifetime gift tax exemption of $12.92 million. Be aware these numbers can change from year to year, so it’s best to revisit your plan annually.
  4. Mind the cost basis. If you gift stock or real estate, the recipient will inherit your cost basis (the original purchase price), which could trigger a big income tax bill for them when they sell the appreciated assets. For that reason, you might consider letting these assets transfer to your heirs when you pass on, at which time the cost basis is “stepped up” to the date of death valuation. Additionally, more complex strategies include gifting part of the entity that owns the assets rather than gifting the assets outright.
  5. Consider different forms of giving. Under the right circumstances, some types of gifts aren’t subject to gift tax limitations. For example, paying directly for a family member’s medical or educational expenses could help them tremendously while making a substantial reduction to your estate.
  6. Make your own rules. If you want to dictate how and when your financial gifts can be used, consider putting the assets in an irrevocable trust. When making large gifts to children, for example, you can stipulate that they can’t spend the money until they turn a certain age, or the trust can disburse the funds incrementally over time.
  7. Proceed with caution. Make no mistake – giving money to family members can be tricky, and not just for tax reasons. If not handled with care, a well-intended gift could drive a wedge of resentment between an otherwise tight-knit family. Being equitable and transparent about your gifting decisions can prevent hurt feelings and keep the peace.

Not sure where to begin? Your Frost wealth advisor can help you achieve the right balance of gifting while helping to preserve your estate for future generations.


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Succession Planning: An Important Part of Business Ownership

Many business owners spend a lifetime building and growing a successful company, but they might not have given much thought as to how they’ll walk away from it. Nevertheless, business succession planning is a critical process for any entrepreneur, whether your company is a mom-and-pop shop or a multinational enterprise. Planning ahead for your eventual exit – be it voluntary or unexpected – can help ensure business continuity or maximize the rewards of a sale.

Here are five key considerations to get the wheels turning.

  1. Consider multiple possibilities. At least several years before retirement, make time to think about your ideal exit strategy. Do you want to pass down ownership to your heirs, have your business partners buy you out or sell the company outright? Start learning about the steps involved and weigh the pros and cons of each scenario.
  2. Balance business and lifestyle needs. How you leave the company might depend heavily on your plans for the next chapter. Some business owners want to retire quietly; others want to keep a seat on the board, start a new venture or engage in philanthropy. Your vision of the future will greatly impact your financial needs, and thus your succession strategy.
  3. Involve the right people Succession planning is a team sport. To do it right, make sure to consult with your wealth management advisor, attorney and CPA. Don’t forget to include your spouse and any adult children, especially if you’re expecting them to play an ongoing role in the company.
  4. Get down to details. You and your team will need to conduct a thorough business assessment and pricing study, both to determine the value of the company and how to keep it running in your absence. Then you’ll need to ensure those findings align with your personal financial goals and strategies, including wills, trusts, tax planning and risk management.
  5. Have a safety net. Be aware that life insurance can serve as a succession planning tool, allowing your beneficiaries to assume control of the company if you die prematurely. And be sure to consider other “what if” scenarios, building flexibility into your plan so unfortunate surprises won’t derail the business or your finances.

Even if you envision running your company for years to come, it’s never too early to plan your departure. Contact a Frost wealth advisor or banker for help with making a smooth transition.


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For parents trying to raise self-sufficient kids, there’s a timeless proverb that bears repeating: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Despite this bit of wisdom, many parents still make the mistake of over-providing and under-explaining when it comes to financial education, including investing.

You can avoid this mistake by teaching your children about the basics of investing before they’re out on their own. By introducing some key financial concepts and providing a safe space to experiment, you’ll help them acquire the foundational knowledge they’ll need to build financial security as adults.

Here are four tips to get them started:

  1. Choose the right time: Every child matures at a different rate, but most kids can grasp the fundamentals of investing by their mid-to-late teens. Start with a discussion about the importance of building wealth to afford a comfortable lifestyle and meet major long-term goals.
  2. Explain the essentials: Kids should know that investing means buying assets that can increase in value over time. With recurring contributions and the power of compound earnings, they can potentially grow their money much faster than they would in a basic savings account. But they could also lose money, so it’s crucial they understand the relationship between risk tolerance and time horizon.
  3. Start small, then expand: Consider opening a joint brokerage or custodial account with your preferred institution and buying stock in a few companies your child finds interesting (e.g., Apple or Disney). Later, you can explain the benefits of diversification and how mutual funds and exchange-traded funds (ETFs) allow them to invest in many companies at once.
  4. Get credible advice: There’s no shortage of websites, videos and apps geared toward beginner investors that can help your kids learn. Just be sure the information comes from a reliable and objective source, not some get-rich-quick scheme on social media, or general advice online that’s not tailored to their unique financial situation. Better yet, have your kids sit down with your financial advisor to map out a simple investing plan.

Help your child monitor and modify their budding portfolio, and they’ll begin to absorb the investing principles that will serve them well for the rest of their lives. For further guidance on early investing, reach out to your Frost wealth advisor.

Frost Personal Custodial Accounts

Though not solely intended for educational expenses, custodial accounts (Uniform Gifts to Minors Act, or UGMA; Uniform Transfers to Minors Act, or UTMA) are a tax-preferred way for parents, grandparents and other relatives to transfer assets to a child. When the child turns 18 or 21, depending on the state of residence (21 in Texas), they can use these assets however they wish, including for college.

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Financial Considerations for Caregivers

Caring for aging parents is a challenge many of us will contend with in the coming years. Whether they’re facing health problems or still enjoying a comfortable retirement, your parents may need your help eventually. Caregiving can be a difficult experience under any circumstances, as it’s a situation rife with complex emotions intertwined with financial and legal considerations. While it may feel unnecessary now, putting in some work proactively can help ensure you and your family are prepared to give your parents the care they need when the time comes.

Here are four key areas to consider and discuss with your family before you’re forced to make urgent decisions:

  1. Financial assets: Work with your parents to get a complete picture of their various banking and investment accounts. Additionally, organize their passwords in a safe place and consider asking them to add your name to their accounts so you can help manage the funds if necessary. For simplicity, now may be a good time to consolidate their assets under one or two financial providers. Online tools like Frost’s Wealth Connect make it easy to keep track of multiple accounts on a single screen.
  2. Health insurance: Health care costs often amount to seniors’ biggest spending category, so it’s important to understand your parents’ insurance coverages. Help them evaluate Medicare Advantage plans and make the most of preventive care and prescription benefits. If they qualify for Medicaid, be aware that some states have resources to provide financial assistance for family caregivers.
  3. Living arrangements: Do you anticipate that your elderly parent(s) may move in with you, relocate to an assisted living community, or require the 24/7 care of a nursing home? Consider whether they (and/or you) are in a financial position to cover these costs and look into long-term care insurance or annuities to help offset future expenses. Keep in mind that certain caregiving expenses may be tax deductible.
  4. Estate planning: Consult an attorney to draft appropriate estate planning documents for your parents. Those could include a health care directive, which ensures medical providers carry out their wishes if they become incapacitated, and/or powers of attorney, which give you the right to make certain decisions on their behalf. They should also have an updated will, and business owners should have a clear succession plan.

Serving as your parents’ financial protector can be one of your greatest contributions as a caregiver. For more advice, reach out to the team at Frost.


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Volunteering for a Board of Directors? Make Sure You’re Prepared

For successful professionals, serving on the board of directors of a charitable or non-profit organization can be a great way to give back to the community. In doing so, it allows you to use your knowledge and experience to support a meaningful cause at a higher level. You may be asked to help improve the organization’s operational execution, fundraising strategies or financial management, positioning the entity to fulfill its benevolent mission for years to come.

While the rewards of board service can be great, so can the responsibilities. In fact, board members serve as fiduciaries of the organization, which means you could be held personally liable for poor management decisions or other severe missteps. Even though you’re a volunteer, you’re not necessarily immune to a lawsuit, which could be financially devastating if you’re not properly protected. For those reasons, it’s important to fully understand the implications of board service before signing on.

Here are three key steps to mitigate your risks:

  1. Do your research in advance: However excited you may be about the organization’s mission, take some time to learn about how they carry it out, and ask plenty of questions about what your role will entail. Additionally, investigate any prior legal or regulatory actions against the organization, and contemplate any elevated risks involved, such as serving in a highly litigious field like medicine.
  2. Know how you’re protected: In Texas, the Charitable Immunity and Liability Act of 1987 offers some legal protections for individuals volunteering on behalf of non-profit organizations. But there are many limitations to the law, and it doesn’t cover fiduciary responsibilities. That’s why you should insist that the non-profit organization provides its own robust protection plan, typically called Directors and Officers (D&O) Insurance or Executive Management Insurance.
  3. Cover any gaps: Once you understand the organization’s coverage, you can further assess your personal risks and decide whether additional coverage may be necessary. Work with your insurance provider to explore options for personal insurance, which may shield you from legal damages when other insurance falls short.

Lawsuits against volunteers may be rare, but they’re not unheard of. If you’re considering a board of directors position, consult with your attorney and reach out to Frost for sound insurance advice. With the right protection in place, you can serve the cause with confidence and enjoy the reward of helping others.

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Charitable Giving: The Gentle Art of Saying No

Achieving financial wellness and stability offers more than a ticket to material luxuries. It also presents an opportunity – some would say a responsibility – to give back. Finding a meaningful cause is easy; in fact, many individuals are inundated with requests to support charities, education, the arts, medical research and even their own family members. The hard part is deciding how much to give, as well as when and to whom, while respectfully declining other requests.

According to Frost, the key to making a real difference is developing a focused, long-term charitable giving plan. Here are a few tips to consider as you do:

  1. Start with a blank canvas: Begin by thinking carefully about what causes matter most to you and your family. What changes would you like to see in the world, and where would your contributions make the biggest impact?
  2. Determine what’s feasible: Work with your advisory team to run the numbers, balancing your generosity with your own lifestyle needs and wants. Don’t forget to account for unforeseeable circumstances, such as future health concerns, and how much you may want to pass down to your heirs.
  3. Set clear and achievable goals: With a well-defined philanthropic vision integrated into your overall financial plan, you can map out a systematic approach to making donations over time. It’s also important to build flexibility into this plan in order to avoid overcommitting if your circumstances change.
  4. Consider alternatives to giving cash: Writing a check can be the simplest way to donate, but there may be smarter methods that produce better results. By donating stocks or real estate, for example, you may avoid capital gains taxes, leaving more money for the beneficiary. Similarly, if you’re over age 70 ½, making charitable qualified distributions from an IRA may help you avoid income taxes on the proceeds.
  5. Get comfortable with saying no: Turning down requests for money may not be easy, especially if it comes from a worthy organization or a family member in need. But the reality is, you can’t say yes to everything, and structured giving plans help set those boundaries. For example, it gives you the ability to truthfully say, “I’m sorry, but my money is already allocated to these other causes.”

Looking to make the most of your financial gifts? Contact a Frost wealth advisor for help designing your strategic charitable giving plan.

Make the Most of Social Security

If you’re at or nearing retirement age, you’ve probably wondered about the right time to claim Social Security benefits. It’s money you’re entitled to as a taxpayer, and even if the extra income isn’t necessarily needed, you could consider using it to help fund philanthropic goals or pass it down to your heirs.

Conventional wisdom suggests that if you’re already financially secure, you should wait until after age 70 to collect Social Security and thus maximize your benefits. However, others recommend taking the “bird in hand” as soon as possible, as through the years the government has repeatedly reduced Social Security benefits for high-income investors and may do so again.

Ultimately, the decision of when to claim Social Security and how to use the money is complex and highly personal. The best place to begin educating yourself is at the official Social Security website. Then, work with your Frost wealth advisor to factor Social Security income into your long-term financial plan.


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Downshifting for Summer? Keep Your Finances in High Gear

With warm weather and sunny skies upon us, it’s time for shorts and sandals, backyard barbecues and weekends on the water. But just because you’re planning some well-deserved downtime doesn’t mean your finances should relax too. As you’re updating your summer wardrobe or cleaning up your patio, it’s also a great time (in truth, there’s never a bad time) to dust off your financial plan and fine tune your investment portfolio. A little extra effort now can help ensure your money will keep working hard toward your goals all summer long.

Here are five specific steps Frost recommends:

  1. Take stock of life changes. Any significant events of recent years (a birth or death in the family; marriage or divorce; a health crisis) could trigger the need for some financial fine-tuning. That might include restructuring certain accounts, updating beneficiaries or rethinking your insurance needs.
  2. Reassess your goals. Are you still on track to meet them? If not, it might be time to increase your savings rate, adjust your asset allocation or consider some alternative investment strategies based on the current economic climate. Be sure to consult your wealth advisor for informed and objective guidance.
  3. Examine expenses and debt. Make a list of monthly outflows and cancel any unused subscriptions/memberships. Then, consider putting the money you save toward addressing any lingering debt. While you’re at it, pull a copy of your credit report and check for any errors or suspicious activity that could negatively affect your credit score.
  4. Clean up the clutter. Take some time to consolidate redundant accounts, such as rolling over a 401(k) from a previous employer, and close old and unused accounts. If you haven’t already, consider opting out of paper statements from your financial services providers in favor of electronic versions, which are much easier to store and keep organized. Make sure your financial records are backed up in a secure cloud account so you won’t lose access if your hard drive fails.

  5. Think about family. This mid-year financial checkup isn’t just for your benefit, it’s also a good time to ensure loved ones will be taken care of if something happens to you. Take another look at estate plans, wills and trusts to ensure they’re up to date. If you have aging parents, remind them to do the same.

Bonus tip: Take advantage of available technology to simplify your life. Tools like Frost’s Wealth Connect allow you to see all your accounts on one screen, collaborate with your advisor and track progress toward your goals. With your finances in ship shape, you’ll have one less thing to distract you from enjoying some fun in the sun.


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Prepping for the Wedding? Don’t Forget about Finances

While getting married should be a joyful experience, it can also be the source of some money-related stress. Beyond the expense of the wedding itself, which can be a lot – especially considering current interest rates and market conditions, an impending union may stir up concerns about how two separate financial entities merge into one. Whether you’re tying the knot for the first time, getting remarried later in life or advising your young adult before their big day, these tips can help establish a solid financial foundation that lasts a lifetime.

  1. Start with a straightforward talk. Both partners come into a marriage with their own personal philosophies about money – how best to earn it, spend it, save it or donate it. Discussing those interests and priorities up front to understand the other’s intentions can help prevent marital disputes down the road.
  2. Dig into the numbers. A relationship based on trust should include complete honesty about your current financial situation. Now’s the time to be an open book about sources of income, savings and investments, and outstanding debts. Decide what resources and accounts will be shared, versus what should be handled separately. Remember to keep the conversation going – plan time with your partner to review finances and monitor your goals.
  3. Put protections in place. While everyone hopes for happily ever after, the reality is it doesn’t always work out. A divorce or death in the family can get especially complicated when substantial wealth is at stake. Consider consulting an expert, such as an attorney or wealth advisor, to safeguard your assets and make necessary changes to important financial documents.
  4. Plan for the future. With tough conversations out of the way, you can move on to the fun part of creating new financial goals to reflect your shared hopes and dreams. Then it’s time to put those plans in motion with strategic financial moves. Young newlyweds may want to think about how to buy a house or start saving for retirement, while older couples may be thinking in terms of bucket list vacations or charitable giving goals.

For better or worse, in sickness and in health, money is a factor in every marriage. But it doesn’t have to come between you. Open communication and mindful financial planning are two critical keys to a long and happy life together. For help starting the journey on the right foot, contact your Frost wealth advisor.

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Risky Business: Understanding Insurance Premiums

If you’ve renewed your homeowners insurance or auto insurance recently, you might have seen your premiums increase significantly, and you’re not alone. To the detriment of insurers and consumers alike, a perfect storm of frequent natural disasters and poor economic conditions have created unprecedented challenges for the industry, resulting in universally higher rates for property and casualty insurance. While some factors are out of your control, the good news is you still have some influence over the price you pay for insurance. Armed with some insider knowledge on why insurers charge what they do, you can make more informed decisions to keep your premiums as low as possible.

Your number one priority should be to work with an experienced advisor to establish a well-rounded financial plan tailored to your goals. That plan should not only include strategies to build wealth, but also steps to protect against unexpected “what if” scenarios. Here are a few specific areas to address.

It's All About Risk

At their core, all insurance premiums are based on two things: the risk of a loss occurring and the anticipated cost for the insurer to pay out the claim. Put another way: insurance premiums will be higher for homes and cars that are 1) more likely to be damaged and 2) more expensive to repair/replace. Insurers don’t base their rates on assumptions; they consult actuarial tables containing mountains of data. The historical data quantifies the experiences of millions of people, properties, vehicles and locations over many years, giving insurers a strong idea of the risks involved in covering your home or car.

Unfortunately, recent years have seen risks and associated costs increase. Natural disaster losses from 2020 to 2022 exceeded $275 billion, the highest-ever three-year total for U.S. insurers.* These losses are a product of more frequent catastrophic storms combined with skyrocketing inflation in the cost of construction materials, home furnishings and other goods. Subsequently, most insurers have raised their rates.

Reducing Your Risks Proactively

Knowing how insurers assess risk, you can take steps to lower yours. Your homeowners premiums will be based on factors such as the home’s age, construction materials, potential hazards like a swimming pool, whether it’s in a disaster-prone area and even how close it is to the nearest fire station. Thus, making some changes around the house to protect it against fire, burglary and other risks could earn you a discount. For example, consider installing a backup generator, water leak detection system, lightning protection and/or a temperature monitoring system.

When it comes to auto insurance, providers will look at your age and driving habits, crash and theft history for your vehicle type, average repair costs and more. Taking these variables into account as you’re shopping for a car could lead to big savings.

How Credit Plays a Role

In addition to the details about your property, insurers want to know about you personally. Specifically, it’s standard practice for providers to check your credit report, because statistics suggest that people who can manage their debts and pay bills on time are also more responsible about maintaining their homes and driving safely. Thus, qualifying for lower insurance rates is yet another incentive to maintain good financial habits.

All said and done, it’s a tough time for those with insurance premiums increasing. That’s why Frost is here to support you along the way – contact your Frost team to discuss your unique needs.



Frost’s Wealth Connect


Wealth Connect is a collaborative financial planning tool that features advanced forecasting capabilities to help you take control of your financial future. With an intuitive interface, powerful integrations and multiple planning options, you can:

  • Forecast to ensure you're on target for goals
  • Aggregate all your financial accounts in one place
  • Monitor your daily financial progress
  • Access your accounts 24/7

Be sure to chat with your Frost advisor about how to make Wealth Connect work for you.

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Teach the Next Generation These Five Financial Lessons

All parents hope their kids will grow into responsible young adults who manage their money wisely. However, countless students and recent grads often find themselves unprepared for the financial challenges of the real world. Today’s sky-high inflation and housing costs only make matters more difficult, leading many young people to struggle with debt, fall short of their goals, or even move back home.

One of the greatest gifts parents can give is an early education in money management. Introducing the next generation to key financial concepts in their teens will ease the transition to adulthood and set them up for a lifetime of self-sufficiency. Here are five important lessons to teach your children before they move out on their own.

  1. Budget for needs and wants. It’s critical that young people know how to set aside money for core expenses like rent, utilities and groceries before deciding how much they can spend on the fun stuff. Lucky for tech-savvy Gen Zers, today’s smartphone apps make budgeting easier than ever.
  2. Build credit while avoiding debt. Using a credit card is a common way for young people to establish a good credit score that will help them qualify for loans at lower interest rates. But it’s also easy to overspend and rack up debt that can haunt them for years. The solution? Teach your kids to charge only what they can pay off every month.
  3. Pay yourself first. It’s hard to save for the future when it’s last on your to-do list. The most successful savers take the opposite approach – automatically directing a percentage of every paycheck toward savings and retirement accounts, and spending whatever’s left.

  4. Understand insurance. Many young adults stay on their parents’ insurance policies into their early-to-mid 20s, only to face sticker shock and confusion when it’s time to go it alone. Before that happens, help them understand the relationship between premiums and deductibles, how the claims process works and the benefits of working with a strong insurance professional along the way.

  5. Stay vigilant. Sadly, identity theft and financial fraud are extremely common threats that can wreak havoc on anyone’s financial well-being. Make sure your children are alert to phishing tactics, electronic payment scams (involving PayPal, Venmo, etc.) and other attempts at fraud.

Need more specific guidance? Ask a Frost banker or advisor how to help your child enter adulthood on firm financial footing.

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Financial Fraud: Are You Prepared?

For years, the public has been warned about the dangers of identity theft and financial fraud. By now, you probably know to be wary of opening unsolicited email attachments or sharing account details with strangers. But make no mistake – the fight against fraud is never over. Criminals are always inventing new scams to steal money and today’s fraudsters are more organized, technologically advanced and convincing than ever. Safeguarding your finances requires constant vigilance.

While scams come in many forms, here are four increasingly common cons to keep on your radar:

  • Spear phishing. With phishing, perpetrators send an attempted scam to the masses through email, phone or text, hoping someone will bite. Spear phishing is more sophisticated and may target you specifically, using personal details (often found online) to impersonate a trusted party like your banker or broker. Think twice before complying with any urgent requests to supply your account information or move money around.
  • Electronic payment scams. As more people use services such as Zelle, PayPal or Venmo to transfer money, scammers have devised countless tricks to get you to pay them. As a rule of thumb, only send money to people/businesses you know and trust to be legitimate.
  • Package delivery fraud. If you shop online often, you’re used to seeing emails/texts about your pending delivery. But if the message asks you to verify information such as your address or credit card number, it’s likely a scam. When in doubt, ignore the request and visit the merchant’s or shipping company’s website to contact customer service.
  • Mobile malware. Many phone users unwittingly install malicious apps that can capture data from their screen or skim information from other programs (including banking apps). Only download apps from your phone’s official app store, and close all other apps before using your banking app.
What else can you do?

While it’s not always possible to prevent fraud from occurring, catching it early and acting quickly can minimize the damage. Get in the habit of monitoring your credit card and bank accounts for any suspicious transactions. You can also set up fraud alerts to have your bank contact you regarding abnormal activity. Finally, bank at an FDIC-insured institution, which limits your liability to just $50 if you’re a victim of fraud.

Reach out to your Frost banker or advisor for more information about safeguarding your finances.

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Financial Tip: Expect the Unexpected

The road to financial freedom is rarely unobstructed. Unforeseen events will inevitably arise and threaten to knock you off track. It could be a stock market crash, a divorce or a health crisis. For the unprepared, a single misfortune could lead to devastating financial losses. The key to success is to expect the unexpected by putting the right resources in place to mitigate potential risks.

Your number one priority should be to work with an experienced advisor to establish a well-rounded financial plan tailored to your goals. That plan should not only include strategies to build wealth, but also steps to protect against unexpected “what if” scenarios. Here are a few specific areas to address.

  1. Keep a sum of cash that’s easily accessible. Most financial planners recommend setting aside an emergency sum of cash to cover at least 6-9 months of living expenses. If you lose your job or have a major unexpected expense, this allocation of cash in a managed portfolio can help soften the blow.
  2. Assess your allocations. While basic advice like “don’t put all your eggs in one basket” applies, financial planners use sophisticated tools to help diversify your investment portfolio according to your age, goals, time horizon and risk tolerance so a market downturn won’t wipe you out.
  3. Ensure you’re insured. Securing the appropriate insurance policies – homeowners, umbrella, life, health and long-term care – and optimizing the coverage levels – is critical to guard against events that could negatively impact your finances.
  4. Safeguard your assets as related to relationship status. Of course, couples don’t plan for divorce. But unfortunately, many go through it. It’s worth thinking about how your assets are titled and how they would be divided if the marriage ended, especially for those with significant assets and/or those with children from previous marriages to consider how their assets are protected.
  5. Prepare for what’s next. Even if you’re not in a later stage of life, devote some time to estate and legacy planning. Creating a will, trust and other legal instruments can help ensure your assets will be passed down according to your wishes, and with minimal complexity and tax burden to your family or charitable causes.

By working with your advisor to safeguard your finances, you’ll be better prepared to absorb whatever financial shock comes next.

Simplify Your Tax Preparation Process

Let’s face it – tax filing season can be a drag. But there are ways to make the process a bit less painful and time-consuming each year. Keeping good records is a great place to start. By knowing in advance what documentation you’ll need and keeping it organized throughout the year, you can shave hours off the chore of preparing what’s needed for your tax return.

Here’s a list of records to keep on file:

  • Tax returns from prior years
  • Any letters or notices you’ve received from the IRS
  • Any tax-related documents such as earning statements, W-2 or 1099 forms
  • Interest and dividend statements from banks or investment institutions
  • Any records relating to the sale or disposal of property
  • Receipts for purchases that might qualify for a deduction or tax credit
  • Business income and expense documents, including employment tax records
  • Health care insurance records, including premiums paid

For more information on how to prepare for tax season, visit the Get Ready page of

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Finish 2022 Strong with Smart Financial Strategies

A lot can happen in a year. Even as the nation pushed forward beyond the initial disruptions caused by the COVID-19 pandemic, the economic aftershocks created challenging financial conditions in 2022. Rampant inflation made goods and services more expensive. The Fed countered by raising interest rates, changing the game for borrowers (see this issue’s article on the Rising Cost of Credit) and dampening corporations’ financial forecasts. In turn, the stock market took a significant step backward.

However, tough times come and go, and some smart financial planning can position you for a strong rebound in 2023. As end of the year approaches, it’s important to meet with your financial advisor to review your plan and make strategic adjustments. Here are a few starter ideas.

  • General investing. Begin by reassessing your goals. Take a good look at what might have changed in your life in the last year (e.g., new grandchildren), and whether those changes could impact your risk tolerance and time horizon for investing. Also, if one asset class in your portfolio has dramatically overperformed or underperformed another, now is a good time to consider rebalancing your asset allocation.
  • Retirement planning. Still haven’t hit the ceiling on your employer-sponsored retirement account? Consider increasing your contributions through year-end. Assuming you won’t need to withdraw the funds soon, buying stocks during a down market is a great way to potentially capitalize on an upcoming rebound. If you’re nearing or already in retirement, it’s important to recognize how the past year’s inflation will impact how long your funds will last. Even if you’re not worried about day-to-day expenses, it’s worth re-running the numbers to evaluate how the legacy you plan to leave behind might be affected.
  • Insurance. It’s always a good idea to review all insurance policies (home, valuables, life) periodically to ensure your coverage still matches your needs. However, health insurance should be top of mind around year-end, as the open enrollment period runs from Nov. 1 – Jan. 15 in Texas. Think about what might have changed regarding your family’s medical needs and whether it makes sense to choose a different plan for next year.

    On a side note, if you still have money left in a flexible spending account for 2022, use it up by year-end or look into any grace period and/or carryover provisions offered by your employer.
  • Charitable Giving. The holidays are the perfect time to make monetary gifts to meaningful causes. Consider making tax-deductible donations to your favorite non-profit organizations (just be sure to keep your receipts) or taking advantage of a donor advised fund. You can also think about making monetary gifts to family and friends (give up to $16,000 per person per year) in order to transfer wealth and limit future estate taxes.
  • Estate planning. Extended family visits during the holidays can be a good opportunity to think – and perhaps talk with your loved ones – about estate planning. That includes reviewing your will, family trusts and powers of attorney. Decide whether the provisions and beneficiaries on these documents require any updates.

Seeking more financial guidance after a tumultuous 2022? Reach out to a Frost wealth advisor for strategic counsel tailored to your goals.

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Lessons from ‘Snowpocalypse’: Protect Your Property Proactively

Few Texans will forget February 2021, when a massive winter storm sent temperatures plunging, blanketed cities in snow and ice and left millions of residents without power. Homeowners suffered tremendous losses to their property as frozen pipes burst, tree limbs snapped and roofs collapsed. All told, it was the costliest winter storm in history, registering $25 billion in damages.*

It's unlikely we’ll see another winter storm of such proportions anytime soon, but property damage can still happen in the absence of a statewide natural disaster. Freezing temperatures, snow and ice always pose a threat to your home, not to mention your personal safety. Before the next cold spell hits, take time to make sure you’re prepared and protected – it could save you thousands of dollars. Here are some important tips:

Understand Your Insurance

When was the last time you reviewed your homeowners insurance policy? Take a few minutes to double-check your coverage levels are adequate for the value of your home – as well as vacation properties – and pay attention to any exclusions related to storm damage. Some insurers, for example, require homeowners to take preventive measures (or corrective actions once damage occurs) before they will fully cover certain losses.

Prepare Your Home(s)

There are also measures you can take to safeguard against unforeseen damages to your home(s). A few examples include:

  • Invest in a backup generator to power lights and heaters during a prolonged electrical outage.
  • Cut large tree limbs that overhang the property; they become heavy when they gather ice and can fall on cars, roofs or people.
  • Place a protective screen in front of a wood-burning fireplace since many house fires start in the winter when embers escape the fireplace.
  • Drip faucets to prevent pipes from freezing (and later bursting). Wrap exposed outdoor pipes, drain swimming pool equipment and open cabinet doors to allow warm air to circulate around indoor plumbing.
  • Own a vacation home that will sit empty? If so, make sure to leave the heat on as well as shut off the main water supply and open the faucets to drain the pipes.

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How to Combat the Rising Cost of Credit

After a two-year period of exceptionally low interest rates, the Federal Reserve has spent most of 2022 increasing rates to counteract skyrocketing inflation. And while these are still well within the normal historic range, significant rate increases tend to create an economic ripple effect – impacting everything from consumer spending to business development to the stock and bond markets. Aside from investment considerations, rising interest rates are especially noteworthy for another reason: borrowing money becomes more expensive.

Even consumers with a solid financial footing may use credit as a tool to finance important purchases, making the rising cost relevant to everyone. While a few extra percentage points probably won’t put you in dire straits, it’s worth considering how higher interest could affect your personal financial decisions over the next year. Here are three money moves to consider

  1. Look into alternative financing. Think twice about selling off investments to make major purchases in cash. This could trigger capital gains taxes or derail other financial goals. First, talk to your banker to explore options like a personal line of credit or home equity line of credit (HELOC), which can still be obtained at relatively lower rates.
  2. Refinance variable rate loans. If you have an adjustable rate mortgage (ARM) or private student loans with a fluctuating rate, it might make sense to refinance those balances to lock in a fixed rate before the Fed raises rates yet again.
  3. Take advantage of the flip side. Keep in mind you’re not the only one paying higher interest rates. As the Fed has increased rates, Frost has acted quickly to pass this benefit along to customers, raising interest rates on savings, money market and CD accounts. This increase is about rewarding you for saving and is in line with our commitment to doing what’s right for customers. This presents some opportunities – for example, increasing the cash in your emergency fund or opening a certificate of deposit (CD) could help hedge against volatility in the investment markets.
Further Reading:

Home Equity Line of Credit


A home equity line of credit is a revolving line of credit. If you have equity in your home, you can use it as collateral to secure funds for almost anything you need. Many people use a home equity line of credit for debt consolidation or to manage unexpected expenses, pay for education or start a business.

  • Equity: The difference between your home’s fair market value and the outstanding balance of all liens on that home.
  • Collateral: Something you’re pledging as security for repayment of a loan.
  • Draw period: The length of time you have to use the available funds.
  • Interest-only loan: For the first 10 years of the term you’ll make interest-only payments, and pay off the principal balance in the last 10 years of the term.
  • Loan term: The home equity line of credit is a 20-year term, meaning you’ll have 20 years to pay off the principal plus interest.

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High Inflation and Rising Rates: What it Means for You

Over the past year, the U.S. has experienced a dramatic increase in prices for food, fuel and many other essentials, with the inflation rate hitting a 41-year high of 8.5 percent in March. In response, the Federal Reserve has been aggressively raising interest rates to cool the economy and will likely make more incremental increases through 2023. Even for families that aren’t overly concerned about day-to-day expenses, this time of economic instability may have them rethinking their overall financial strategies.

For example, many are concerned about the impact of high inflation and rising rates on their investment portfolios, long-term legacies and previously planned big purchases. Preserving capital, mitigating risk and maintaining purchasing power are all top of mind. There is no perfect approach to navigating through an economic storm, so you should work with your advisor to understand the obstacles and prepare to change course, if only temporarily.

Be Open to New Strategies

When it comes to investing throughout the year, keeping it simple is usually a wise approach. But in turbulent economic times like we’re seeing today, investors may benefit from some slightly more sophisticated maneuvers and strategies. In order to determine which make the most sense for your unique financial situation, consult your financial advisor. They can help you learn about additional options and work to determine the best strategy with you. Be open to making a change – it just might pay off.

Don’t Neglect Growth

While guarding against potential investment losses is prudent, it’s important to balance short-term protective strategies with long-term goals for building wealth. After all, high inflation erodes the purchasing power of funds that aren’t appreciating. Investors need to think carefully, not only about their own longevity and retirement needs, but about the financial legacy they’d like to leave behind some day. History suggests that, despite inevitable setbacks, the stock market remains a reliable generator of growth when viewed over the long term.

Pull the Trigger on Planned Purchases

As interest rates rise, borrowing money becomes more expensive. So, it may make sense to move quickly on major purchases that require a loan. If you’re already set on buying a beach house, for example, locking in a fixed-rate mortgage this year will likely cost considerably less than six months from now. Alternatively, buying in cash would avoid the concern of paying interest altogether, and with an appreciating asset like real estate, it could prove to be a shrewd investment to offset inflation.

Re-budget for Big Expenses

While routine daily expenses may not cause much concern, skyrocketing costs for big-ticket purchases can make a meaningful dent in even the healthiest of nest eggs. Planning a much-anticipated wedding? Putting in a new pool? Dreaming of a bucket list vacation? Be prepared to pay more, perhaps much more, than you originally expected.

Don’t Go it Alone

When the economy throws investors a curve ball, the objective advice of an experienced financial professional becomes more valuable than ever. Reach out to a Frost advisor for help with strategies tailored to your unique goals, risk tolerance and time horizon.

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Valuable Advice: Cover Expensive Items with Personal Articles Insurance

If you own a home, protecting your financial security with homeowners insurance is a no-brainer. But what about your other prized possessions – diamond jewelry, your fine art collection, or that rare baseball card in mint condition? You might be surprised to learn that homeowners policies have exclusions that limit coverage for personal property to a maximum amount per item – typically a few thousand dollars or less. To completely protect your most valuable possessions, you’d be wise to consider a separate insurance policy for these items.

Coverage for whatever you’re into.

Stamp or coin collections; expensive watches; women’s designer handbags; rare wines; antique furniture. Any of these meaningful items could be snatched on the street or destroyed in a fire or flood. While a personal articles insurance policy won’t replace an item’s sentimental value or recreate a unique work of art, it could certainly soften any financial blow.

Anywhere, any reason.

Another great feature of personal articles insurance is that a loss doesn’t have to occur at your home to be covered, even if you lose or accidentally destroy the item yourself. If you’ve ever been hesitant to take nice jewelry on vacation, loan a painting to a museum, or transport a rare stamp to a philately show, this type of extra insurance can provide peace of mind. What’s more, personal articles insurance has no deductible.

It pays to appraise.

For items or collections worth tens of thousands of dollars or more, it’s important to have the property appraised by a qualified professional. This will help you and the insurance company understand the item’s true value and agree on the right amount of coverage. It’s also smart to get a new appraisal every year or two in case the market value of the item may have risen.

Take a look around.

If you haven’t already, make sure to prepare a home inventory that documents your valuable possessions with photos, receipts, serial numbers and other details that could help when filing a claim. As time goes on, reassess your valuables after any significant life event such as getting engaged or married, remodeling your home or moving, receiving an inheritance from a loved one or starting a new hobby or career. Events like these often coincide with acquiring new things of value.

For help in understanding your coverage needs and options, reach out to your Frost insurance specialist – we’d love to help.

Further Reading:

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Gifts that Give Back

Making monetary gifts to meaningful causes benefits everyone involved. When you support people or institutions in need, the government may reward your generosity with handsome tax advantages. Keep these ideas in mind as you prepare.

  • Donations to qualifying 501(c)(3) institutions are tax deductible, so keep your receipts and documentation. But remember that deducting donations of more than $300 ($600 for couples filing jointly) will require itemizing your tax return. Review IRS Publication 526 for details.
  • If you’re over age 70 1/2, consider making your donation via a Qualified Charitable Distribution from your IRA. This strategy counts toward your required minimum distribution for the year but does not increase your adjusted gross income. In other words, you don’t pay income tax on the withdrawn funds.
  • Ready to take charitable giving to the next level? Consider a donor advised fund. Instead of making separate donations to multiple charities, you contribute to a single account with investment growth potential. The account team handles distributing the funds to meet your philanthropic goals and capture tax advantages.
  • If you’re looking to transfer wealth and limit future estate taxes, think about making monetary gifts to family and friends (give up to $15,000 per person per year).
Further Reading:

Reminder: Extended Tax Filing Deadline is October 17.

Every April, many Frost clients with family businesses or complex financial assets take advantage of the IRS’ tax filing extension option, which gives taxpayers an extra six months to organize and file their federal income tax returns. If you requested an extension in the spring, don’t forget to file by October 17, 2022 (two days later than normal due to Oct. 15 being a Saturday).

And remember, filing for an extension back in April only gave you more time to file your return; you still have to pay any estimated taxes you owe. If your estimate was on the low side, you may need to make up the difference at this time. Conversely, you may receive a refund if you overpaid in April.

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Here Comes the Rain Again

Are You Protected Against Water Damage?

Whether it’s falling from the sky, rising from a river, or gushing from a burst pipe, water can cause tremendous damage to your home and property. In fact, the Federal Emergency Management Agency (FEMA) says just one inch of flood water in a home can cause up to $25,000 in damage.

With Texas’ torrential spring rains looming and hurricane season on deck, every homeowner should double check they have the right insurance policies to protect against water damage. If you own a second home near a body of water, reviewing your coverage is especially vital, because it’s not always as straightforward as it might seem.

Different Threats, Different Policies

The most important thing homeowners need to know is this: Standard homeowners insurance does NOT cover flood damage. To be insured against a flood – which occurs when normally dry land becomes inundated by rising water – you’ll need a separate flood insurance policy. If you live in or own additional property in an especially flood-prone area, your mortgage lender may require you to have flood insurance. But remember, flooding can happen almost anywhere, so paying for protection isn’t a bad idea even when it’s not mandatory. Though coverage is administered by the federal government’s National Flood Insurance Program, Frost or other insurance providers can facilitate the purchase.

Nonflood-related water damage is a different story. If the loss is caused by a failed water heater, burst pipe, or leaky dishwasher, homeowners insurance would protect you in most cases. Your policy might also cover losses from a storm where rain enters through a damaged roof or window, but we recommend consulting with an insurance professional to confirm.

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Words to be Water Wise

Here are five extra tips to help you avoid getting soaked financially:

  1. Assess your risk: Even if you’re not required to have flood insurance, you may want to understand your potential vulnerability. Obtaining an elevation certificate from an engineering firm will tell you where the structure falls within the flood map and enables insurers to give you a quote for coverage.

  2. Don’t procrastinate: Unless you’re opening a new mortgage that requires flood insurance, there’s a 30-day waiting period before a new flood insurance policy takes effect. So, don’t wait until water is lapping at the doorstep before you take action.

  3. Read the fine print: All homeowners insurance policies are not created equal; coverage varies from company to company and product to product. An extremely inexpensive premium might be attractive at first, but could cost you later when certain water-related damages aren’t covered.

  4. Keep up with home maintenance: Homeowners insurance is designed to cover sudden, catastrophic losses, not damages that occur when homeowners fail to maintain their properties. Steps like replacing the water heater every 10 years, insulating pipes, sealing leaks and other regular upkeep can help ensure your claims won’t be denied.

  5. Upgrade your technology: Devices such as temperature sensors and automatic water shutoff valves can alert you to problems in the home and help minimize any damage from frozen pipes or water leaks. These types of tools are even more important if you own a vacation home that sits unoccupied for lengthy periods.

If you’re unsure about the types of insurance you might need, a Frost Insurance risk advisor can help you understand the risks and secure the most appropriate coverage.

Further Reading:

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Four Ways to Help Your Teens Become Financially Literate

As we head into the summer job season, there’s no better time to engage your kids in discussions about managing their money. The cornerstone of good financial decision-making is developing a fundamental understanding of the money being earned and spent. In addition, savings should be a topic of discussion. Helping your kids, particularly teens, make saving a habit will lay a solid foundation for a more secure financial future. All of this is easier said than done, but here are some suggestions for getting started.

  • Review their first paycheck together. This a great opportunity to talk about paystubs and how to review them, including how and why money is taken out for taxes. Explain that while it’s good that they have a paycheck, this is not free money. They worked for it, paid taxes on it and it’s important to think about how they want to use that money, including saving on a regular basis.
  • Make savings enjoyable. Help them open a checking or savings account. Then, match every dollar they save. If your child puts five dollars into a savings account, match it with five dollars of your own. You should also help them establish savings goals and strategies. As they see their savings grow, they may just find that they like saving as much as spending.
  • Introduce investing. Parents should start to discuss investing with their teens as they build their bank accounts. If they are putting money aside and gaining momentum, it’s a good idea to talk about opening a small investment account. You can also help them run mock investments beforehand and then encourage them to join investment clubs once they are ready.
  • Encourage philanthropic activity. Introducing philanthropy is a great way to provide your kids with a deeper purpose and meaning in their lives. You can do this by helping them set up a giving circle with their friends or providing them with money to donate in a meaningful way on their birthday or during the holidays. As you do, make sure to explain how the money was used and what the impact was.

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Career Shift?

Smart Money Moves to Consider Amid the Great Reshuffle

Over the last two years, record numbers of workers have left their jobs in what has become known as “the Great Resignation.” But many career-minded professionals aren’t exiting the workforce altogether; they’re reevaluating their priorities and making strategic moves to improve their quality of life and long-term prospects. As it turns out, “the Great Reshuffle” may be a more accurate description. If you’re considering a job change, your finances should weigh heavily in the decision, but there’s a lot more to the equation than salary alone.

Keep these tips in mind to stay on solid financial footing as you ponder your next career move.

  • Compare apples to apples. Don’t be lured into switching jobs for a bigger salary, only to find out the total compensation package doesn’t measure up. Account for everything your current employer gives you (health care benefits, retirement plan, incentive pay, education and training, vacation time, etc.) to make sure the new job is really a better fit for your lifestyle.
  • Roll the right way. If you do leave your job, you’ll likely need to decide what to do with the funds in your current employer’s retirement plan. If the current plan is to your liking, you may have the option to leave the account in place. On the other hand, it may be better to arrange a rollover to your new employer’s retirement plan (for the simplicity of consolidated accounts) or to a separate IRA (which may offer more investment choices). Whichever you choose, be sure to conduct a direct rollover and avoid cashing out the account, which would result in tax consequences and early withdrawal penalties if you’re under age 591/2.
  • Reevaluate everything. A big career change – especially if you’re leaving to start your own business or to retire altogether – calls for a complete review of your financial situation. Work with your advisor to make sure you and your family will be in good shape when it comes to health and life insurance, paying off debts, handling emergency expenses, funding your retirement and kids’ college accounts, and other needs.
  • Don’t discount happiness. Money isn’t everything, of course. More time with your family, or a greater sense of fulfillment at work, can be just as life-changing as a bigger paycheck. So, if you’re on the fence about switching jobs, the “joy factor” might just be the key to your final decision.

“The Big Four” Considerations for Comparing Retirement Plans Between Employers

  1. Fees – Will it be more or less expensive on an annual basis to roll your retirement assets into your new employer’s plan?
  2. Investment Options – Does one plan offer better investment options than the other? Are you able to direct how your retirement assets are invested or does the employer make those decisions?
  3. Flexibility – What are the rules set by each company for its retirement plan? When can you access your funds? Is there a 401(k) employer match program in place? Does the company offer profit sharing to their employees, and, if so, how is that determined?
  4. Convenience – Will one option be more convenient than the other? Are you willing to manage and keep track of multiple accounts?

Need additional guidance? Frost wealth advisors can answer your retirement planning questions and help you make a well-informed choice.

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Four Tips for Your Q1 Financial Health Checkup

Just like getting an annual physical, it’s good practice to check in on your financial plan and accounts periodically and make updates to reflect any changes in your life or goals. At Frost, we recommend kicking off the year with this checkup. Let’s take a broad look at a variety of topics to help you conduct a first-quarter financial review and take steps to build and protect your wealth effectively throughout the year.

Here are four areas where some extra attention might pay off. 
  • Retirement planning. Are you one of millions of Americans who have experienced major career events in the past two years, like a job change or voluntary exit from the workforce? If so, consider how that might impact your goals and plans for retirement. Make sure your asset allocation still matches your investment objectives and risk tolerance. You should also consider adjusting your contribution levels appropriately if your income has changed.

    Moreover, it may be time to enhance your saving strategy with different types of financial accounts. For example, if your employer offers a Roth 401(k) in addition to a traditional 401(k), it may be worth contributing to both in order to gain more tax flexibility in retirement. Unlike a Roth IRA, a Roth 401(k) does not have income restrictions that prevent high earners from contributing.

  • Banking and credit. While investing for long-term growth is undoubtedly important, it’s also critical to have easy access to a liquid emergency fund (enough to cover 3-6 months of living expenses is recommended) to handle unexpected situations. Check your balances and start setting aside a little extra, if necessary.

    Also, it’s a good time to consider how to best use debt to your advantage. This could be the year you use your home equity to invest in your growing business or remodel your kitchen, either of which could pay you back handsomely.

  • Insurance. Meet with your risk advisor to review all of your policies to make sure your financial assets are thoroughly protected from unforeseen life events. Be sure to discuss the value of an umbrella policy that shields you against excessive liability claims. And with health concerns top of mind these days, rerun the numbers to ensure your life insurance will adequately provide for your loved ones in the event of a tragedy. Similarly, ask your risk advisor to help you evaluate your need for long-term care insurance which can spare your family the significant burden of unexpectedly having to pay for nursing home or assisted living services.

  • Estate planning. Family dynamics can change over time. So, as you’re reviewing financial accounts and insurance policies, take an extra minute to make sure the listed beneficiaries are accurate and still reflect your wishes. Review your will, family trusts and powers of attorney, and decide whether the provisions on any of these documents require any updates. Additionally, don’t forget that the current estate and gift tax exemption law sunsets in 2025, meaning the exemption amount will drop down to a $5 million cap.

Remember that Frost specialists in banking, investments and insurance are here to help you look at the year ahead, ensure your financial plan is still aligned with your goals and to help you make informed, strategic decisions to improve and preserve your financial health year after year.

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Two Tips for Home Makeovers

Cooped up at home with nowhere to go during the pandemic, millions of Americans have funneled funds toward sprucing up their own spaces. Instead of spending thousands of dollars on vacations, people are installing pools, outdoor kitchens, putting greens and home theaters.

But before you decide to take on those home improvement projects this year, consider these two tips for a smooth renovation process and to set yourself up for success. 

Finance wisely.

There are several ways to pay for big remodels, including a home equity loan, home equity line of credit (HELOC) or a home improvement loan. As a rule, you need to know all the details and associated risks when you’re considering either a loan or a line of credit. For both the home equity loan and HELOC, the maximum amount you may qualify for is based on the amount of equity you have in your home. But, they do have their differences and it’s important to take those into account. A home equity loan provides you with a lump sum of money that must be repaid over a fixed period of time at a fixed interest rate. On the other hand, a home equity line of credit is a flexible, revolving account that lets borrowers draw money as needed similar to a credit card. A home improvement loan is also an option that many people use to install a pool, renovate a kitchen or repair a roof. There are two types of home improvement loans – one that uses your home as collateral (secured) and one that doesn’t (unsecured). A secured loan requires a licensed contractor to complete your projects, while an unsecured loan is best for those who plan to take on the labor themselves, as a contractor isn’t required. Start by learning more about the options, and exploring our “Loan Selection Tool.” When in doubt, a Frost banker can offer specific advice.

Update your insurance.

Because of the rising cost of construction, we are frequently seeing homes that have become underinsured as well as homeowner policies missing simple yet critical coverages. Home insurance is not a one size fits all, and we suggest meeting with a Frost personal risk advisor to ensure proper coverage before undergoing any renovations. Certain additions and renovations can increase the value of your home, in which case you need to increase your homeowners’ insurance coverage. Additionally, consider updating your safety coverages as a preventative measure. For example, if you’re putting in a pool, consider increasing your liability coverage to reflect the inherent safety risks. Lastly, with Texas hail season approaching in March, you want to be sure you have proper insurance coverage for possible hail-related damages, and your risk advisor can provide tips on being better prepared, such as cleaning your gutters and trimming your tree branches and large shrubbery.

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Eye on IRAs

Although you’re probably familiar with the Individual Retirement Account, or IRA, here’s a quick refresher: It’s a long-running favorite among financial planners for its potential to deliver tax-deferred growth, and it’s a great alternative (or supplement) to a company-sponsored retirement plan like a 401(k). A traditional IRA allows contributions of up to $6,000 in 2021 and 2022. And if you’re 50 or older, you can pitch in an extra $1,000 ($7,000 total) as a catch-up contribution.

What many investors don’t realize is that the IRA comes in various forms, each designed to serve specific needs. We’ve provided a rundown of the options to consider. 

  • A Roth IRA, the opposite of its traditional counterpart, offers no upfront tax deduction but withdrawals in retirement are completely tax-free.
  • If you’re self-employed, the SEP IRA allows for much higher contribution limits – the lesser of up to $61,000 or 25% of employee compensation in 2022.
  • For small business owners, a SIMPLE IRA can serve as the company’s retirement plan, allowing employees to contribute via salary deferral.
  • A spousal IRA presents an extra savings opportunity for a nonworking or low-income spouse.

Talk to a Frost wealth advisor to learn which IRA might be right for you and be sure to read the complete IRS rules regarding each type of account.


Terms to Know: SEP IRA


A SEP (Simplified Employee Pension) IRA (Individual Retirement Account) is a variation of the traditional IRA in which you, the employer, make annual contributions to the account. These contributions must be equal to all participating employees. Read more.


Employer must include all employees who:

• Are a minimum age of 21
• Have worked for your company for any three of the immediate past five years and;
• Earned at least $650 in compensation during the current year