The Latest Financial Planning News from Kaka’ako
Financial Planning Hawaii | Fee-Only Planning Hawaii | Nest Egg Guru Personal Finance
By John H. Robinson, Founder/Financial Planner (November 2024)
Although Financial Planning Hawaii has a national footprint, about 40% of the people for whom we work reside in the Aloha State. This post shares recent news that is specifically relevant to our local Hawaii clients.
Bank of Hawaii is Not Playing Nicely With eMoney
We consistently and persistently receive communications from clients complaining that the connection that enables eMoney to report daily account balances at Bank of Hawaii has dropped. Some clients express frustration with eMoney, but their vitriol is misdirected. All dropped connections are solely attributable to back-end changes made by Bank of Hawaii. Most recently, Bank of Hawaii announced that it is adding a third verification step, which will almost certainly take the connection down permanently.
So, what are eMoney users to do? You can always manually update the values. Another option is to switch banks. Seriously. If your bank is making your life more difficult, find another that offers better services, better interest rates, less lending hassles, etc. Bank of Hawaii is also the only bank in the state that permits only one beneficiary designation on its payable-on-death agreement. It is irritating to me too.
I understand that switching banks can be cumbersome, particularly if you have multiple automated deposits and payments in place. Another solution may be to set up an account at a bank or investment firm that pays better interest and has lower fees and link it to your Bank account for bidirectional fund transfers. This way, you only need to keep a minimal amount on deposit at Bank of Hawaii. Let me know if you would like suggestions for alternate banks.
Hawaii State Income Tax Cuts Bring Relief to Beleaguered Taxpayers
On June 3, 2024, Hawaii Governor Josh Green, M.D., signed into law HB 2404, the Green Affordability Plan II (“GAP II”). The tax cuts include increases to the Hawaii standard deduction that will be phased in from 2024 through 2031 and decreases to marginal income tax brackets – also phased in.
A review of the law finds that it does not raise income tax for any earnings group, but the reductions disproportionately benefit lower-income residents. The Hawaii Department of Taxation press release states highlights the progressive nature of GAP II by noting that Hawaii wage earners with incomes over $150k currently pay 53% of the state’s income tax collections. This figure is projected to increase to 69% upon final implementation.
Perhaps more illuminating is the table below showing Hawaii’s current rank as one of the highest income tax states next to the significantly improved ranking post-implementation.
I do not dispute that this is a positive step in support of Hawaii taxpayers. However, we still have an onerous general excise tax, one of the highest highest long term capital gains tax rates (7.25% flat rate), and one of the most onerous estate tax regimes in the country. The tax price to live in paradise remains expensive.
RELATED READING
Estimating the Impacts of Hawaii’s 2024 Tax Cut Bill (State of HI Dept of Taxation)
Governor Green Signs Largest Income Tax Bill for Working Families (Office of the Governor)
Free Group Life Insurance - A Hidden Benefit Included in HMSA Small Business Health Plans
I would hazard a guess that most Hawaii small business owners who offer HMSA health plans to their employees are unaware that the plan includes a modest, free group life insurance benefit. It receives scant mention in the annual plan summaries and is extraordinarily difficult to find on the HMSA website. Here is where to find it –
When you click on the plus sign, the group life benefits are revealed. As you can see, the coverage varies with the employee count and the type of plan selected.
If no one knows that you have this coverage, it is likely that no one will ever think to file a claim. In raising awareness of this semi-precious, free employee benefit, I am encouraging readers who have HMSA plans to see if their plans offer group life coverage. If so, you should complete a beneficiary designation form and keep it with your estate planning documents. FPH clients who use eMoney should upload the documents to the “Beneficiaries Folder” in their eMoney Vault.
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John H. Robinson is the owner/founder of Financial Planning Hawaii and Fee-Only Planning Hawaii. He is also a co-founder of fintech software maker Nest Egg Guru and the new personal finance website NestEggPF.com.
