Broker Check

Financial Watch Articles

Are you less than 50 years old and looking for ways to better your financial future? 
Sign up to receive our monthly Financial Watch emails!

April 2021

4 Tips for Raising Financially Literate Kids

When it comes to parenting, families have different styles, values, and traditions. However, most parents share a common goal. They want their children to grow up to be healthy, happy, independent adults. As a parent or grandparent, teaching fiscal responsibility is one of the most important ways you can help foster that independence as well as overall well-being. And since April is National Financial Literacy month, this is a great time to ensure your children are on the right path to a confident financial future.

So, where do you begin? Fortunately, teaching kids about basic financial principles doesn’t require special training or a degree in finance. It starts with the behaviors you model every day, from the importance you place on budgeting and keeping discretionary spending in check, to what you choose to splurge on, and your values when it comes to charitable giving. To get started on your family’s journey, consider the following tips.

1. Talk about it.

While money helps your family accomplish many different goals, it can also be a source of deep emotions, conflict and anxiety. To help children develop positive attitudes about money, begin by sharing your own experiences with money. For example, explain how saving money helped you buy a car, pay for college, purchase your home, or pay for a family vacation. Talk about your values around spending and debt, and why you choose to contribute money to certain charitable organizations or causes.

Talking about money helps children of all ages learn about and embrace the important role it plays in supporting your family’s goals. As appropriate, consider including kids in family meetings about budgeting and spending to help them understand that everyone has a role to play in keeping household finances on track. Encourage them to ask questions and share their thoughts and ideas. This can help children develop greater respect for how money is earned and how it is used within your household. It also conveys valuable lessons about saving, goal setting and trade-offs.

2. Start early.

The sooner children begin to learn about the important role money plays in life, the more likely they will develop a positive and healthy relationship with it. Even very young children can master three basic principles: saving, giving and spending. To help children visualize how money can be used to accomplish these different goals, consider the “bucket” method. Set up three containers, these could be piggy banks, envelopes, or recycled food containers. When children receive money for completing chores or from grandparents, allow them to make decisions about how much they will save, give to others, and spend on themselves. Consider rewarding the behaviors you want to foster by occasionally adding a small bonus or matching contribution to that bucket.

3. Encourage negotiation.

When it comes to parenting, some things are not negotiable, such as requiring small children to hold hands while crossing the street, or older children to adhere to curfews. (Broccoli consumption, on the other hand, falls into some vague middle ground.) However, money—by its very nature—is negotiable. Teaching children how to negotiate not only helps them master basic budgeting principles, but better prepares them for the real world, where they will eventually be spending their own hard-earned money instead of yours.

An allowance can provide a great starting point for teaching important negotiation skills. Before deciding on an allowance, ask kids for their input in placing a value on different chores or tasks. This not only provides them a voice it also helps them understand the relationship between work and earnings. Keep in mind, an allowance doesn’t have to involve cash. Feel free to get creative. Many families use a point system where kids can trade points earned for a trip to the park or the ice cream shop, the ability to stay up an hour later on the weekend, or a free pass on certain chores.

4. Embrace technology.

Learning money management basics doesn’t have to be boring, thanks to a broad range of age-appropriate websites, games, tools and mobile apps available to children of all age groups. Begin by checking out the following to find the interactive resources that work best for your family.

  • The Mint offers information and activities for children of all ages to enhance their financial literacy.

  • I.P. Pocket Change Kids Site, sponsored by the U.S. Mint, offers a full menu of free educational games for kids of different ages, including Gold Rush, Math Jam, Space Supply, and more.

  • Money Instructor offers comprehensive education resources for kids, parents and teachers, including lesson plans, worksheets, and activities.

  • Piggy Bot is a free app that uses the concept of spend/save/share to teach children budgeting skills. Kids can see what they have on hand and what they need to save or earn to meet their goals.

  • gohenry is a financial literacy app and debit card platform for kids ages 6 to 18. Designed in partnership with Mastercard, it offers parental controls for each child and no worry of overdrafts, making it easy for kids to learn real-time financial literacy lessons. The first month is free. After that, the app requires a subscription fee of $3.99 per child.

If you have questions or concerns about saving, budgeting or managing family finances, call the office to schedule time to talk.

This information was written by Katie Williams, a non-affiliate of the Broker/Dealer.

March 2021

How Will You Avoid These 5 Common Retirement Planning Pitfalls?

Understanding the different steps you can take now to drive the retirement outcome you desire is an important part of planning for a confident future. However, it’s also important to understand what can throw you off course. Below are four common pitfalls to avoid along the path to saving for the retirement you envision.

1. Waiting to begin saving.

The earlier you start saving, the greater the potential benefits, thanks to the power of compounding. Compounding is the process in which investment earnings, from either capital gains or interest, are reinvested to generate additional account earnings over time. Your money has the potential to grow even faster when invested in a qualified retirement plan, such as a 401(k), 403(b) plan or individual retirement account (IRA). This is due, in part, to tax-deferred compounding, where earnings are not subject to taxes until they’re withdrawn, usually in retirement when you may be in a lower tax bracket. You may also be able to reduce your current income tax burden by contributing to a traditional 401(k), 403(b) or IRA, since those contributions are made on a pretax basis, effectively lowering the amount of your income that’s subject to taxes. But how much can you contribute annually? The maximum contribution limit for 401(k), 403(b), and most 457 plans (available for governmental and certain nongovernmental employers in the U.S.) in 2020 and 2021, is $19,500. If you’re 50 or older, you can contribute an additional $6,500 in catch-up contributions, for a total of $26,000. The limit for IRA contributions also remains unchanged at $6,000, with an additional $1,000 for catch-up contributions if you’re 50+, for a total of $7,000.

2. Setting it and forgetting it.

Saving for retirement through your employer’s plan may be one of the smartest decisions you make. That’s because most plans provide an easy, automated way save, which eliminates the need to remember to transfer money to savings each month. Many plans also offer matching contributions, which can exponentially increase the value of your retirement plan assets over time, assuming you are contributing enough each year to capture the full match. However, it can also be easy to forget to increase the amount you contribute each year, or ensure you’re receiving the full plan match, if your plan does not automate these features. Be sure to review your plan at least annually to ensure you’re taking full advantage of important features and benefits, which may include employer matching contributions, automated annual deferral increases, and the ability to choose pretax and/or Roth contributions. (Plan provisions vary by employer. Check with yours for a list of plan features and benefits available to you.)

3. Claiming Social Security too early.

When you choose to begin taking Social Security makes a big difference in the amount you will receive in retirement. Age 62 is the earliest you can claim benefits. However, if you begin taking benefits at age 62, rather than waiting until your normal retirement age (NRA)—when you’re entitled to receive your full, unreduced Social Security benefit amount—you can expect about a 29% reduction in monthly benefits (adjusted annually for inflation) for the remainder of your life. On the other hand, if you wait until age 70 to start Social Security, your benefit amount will be approximately 77% higher, than if you started at age 62. That’s because you receive delayed retirement credits for each month you wait to file for benefits beyond your normal retirement age. There is no additional benefit increase after you reach age 701. Keep in mind, with few exceptions, you can’t stop and restart Social Security benefits at a higher amount later. So, it’s really important to understand whether or not a reduced benefit will be enough to help you meet all of your goals and expenses over a 20 or 30+ year period in retirement.

4. Failing to plan for rising healthcare costs.

As retirees enjoy longer average lifespans, healthcare costs will remain a significant expense in retirement. This is important because Medicare only pays for a portion of expenses for those age 65 and older. Retirees must pay for other expenses, such as dental, vision and hearing services, and prescription drugs, either out-of-pocket or through supplemental insurance plans. Notably, Medicare does not cover long-term care services—one of the highest expenses many retirees may incur. In fact, a recent study revealed that the national median cost per year in the United States for assisted living is roughly $51,600, while home health aide services average nearly $55,000, and nursing home care averages just over $105,000 for a private room.2 This is important because, according to the U.S. Department of Health and Human Services, 70% of adults who survive to age 65 will require long-term services and support during their lifetime, with 48% receiving some paid care. That makes it critical to incorporate future health care spending into your retirement planning.3

5. Relying on work in retirement.

Whether you choose to work during your retirement years out of a sense of fulfillment or the need to supplement income sources—planning on paid work in retirement can be a risky proposition. In a recent survey, 71% of workers said that they anticipated paid work to be a significant source of income in retirement. However, only 31% percent of retirees said they actually derived a portion of their retirement income from work.4 That’s because many people are forced to stop working earlier than planned due to a medical crisis or injury, or other circumstances outside of their control, such as a layoff. Understanding how much you may need to support your lifestyle in retirement, well before you reach traditional retirement age, can help you avoid a shortfall that may compromise your lifestyle goals during this important stage of your life.

To learn about strategies that can help you avoid common pitfalls and optimize your planning, call the office to schedule time to talk.



This information was written by Katie Williams, a non-affiliate of the Broker/Dealer.

Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty.

February 2021

8 Things You Need to Know Before You File Your 2020 Tax Return

By any standard, 2020 was an unusual year, marked by rapid change and unexpected events. As a result, filing your tax return may be anything but straightforward. Below we explore eight things you need to know before filing your return—and a few things to keep in mind for your 2021 planning.

1. Don't miss the filing deadline.

There was an extension for the tax-filing deadline in 2020, but this year, so far, the deadline remains April 15. If you file after that date without having asked for an extension, you'll have to pay a late filing fee, which is 5% of the taxes you owe for each month, or part of a month, that your return is late. That penalty starts accruing the day after the tax filing deadline and can build up to a maximum of 25% of your unpaid taxes.1

2. Stimulus payments are tax free.

If you were one of the millions of Americans who received an Economic Impact Payment, those are tax-free. If you didn’t get a payment, or received less than the full amount you were eligible for, you may be able to claim the Recovery Rebate Credit based on your 2020 tax information. To do so, you must file a federal tax return.

3. Unemployment benefits are taxable.

If you lost your job last year and qualified for the extra $600 a week in unemployment benefits, you’ll need to report that income on your 2020 federal tax return (and state return, if applicable). You’ll receive a Form 1099-G, which will tell you the amount of benefits you received in 2020, and how much was withheld for taxes.2

4. The standard deduction increased.

The standard deduction typically increases each year due to inflation, and last year was no exception. For 2020, the standard deduction rose to $12,400 for individuals ($24,800 for married couples filing jointly). Taxpayers age 65 or older are eligible for an even higher standard deduction, $14,050 for individuals and $27,400 for married couples filing jointly.3 If your deductions exceed the standard deduction for your filing status, consider itemizing on your return.

5. More taxpayers can deduct charitable contributions.

Under a provision in the CARES Act, which was signed into law in March of last year, you can deduct up to $300 for cash contributions to qualified charities if you do not itemize on your 2020 return.4 Previously, charitable deductions were only available to those who itemized. It gets even better in 2021. Joint filers who do not itemize will be allowed to take an above-the-line deduction of up to $600 in cash contributions made to qualifying charities this year.5

If you itemize and made charitable contributions in 2020, you can deduct contributions up to 100% of your adjusted gross income (AGI). This provision has also been extended for tax year 2021. (Prior to the passage of the CARES Act, you could only deduct up to 60% of your AGI for charitable contributions.)4

6. Don't overlook the child tax credit.

Many families may be eligible for a child tax credit of $2,000 for each child under age 17. To claim the credit, you must determine if your child is eligible, based on seven considerations: age, relationship, support, dependent status, citizenship, length of residency and family income (individuals must make less than $200,000 a year and couples must make under $400,000). You and/or your child must qualify for all seven to claim this tax credit.6

7. The threshold for medical expenses is permanently reduced.

While the Tax Cuts and Jobs Act of 2017 reduced the income threshold for unreimbursed medical expenses to 7.5% of AGI for tax years 2019 and 2020, it was set to increase to 10% in 2021. However, new legislation signed into law in December permanently lowered the threshold to 7.5%.7

8. Need more time?

Regardless of income, taxpayers can use Free File, a service available through the IRS, to electronically request an automatic tax-filing extension. Filing this form gives you until October 15, 2021 to file a return. However, there’s a catch. If you owe taxes, you’ll need to pay the estimated amount at the time you file for an extension or face penalties.

For more information on filing your 2020 tax returns, visit or schedule time to meet with a tax professional. To learn more about managing your tax burden throughout the year with tax-smart financial and investment strategies, contact the office to schedule time to talk.







This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

January 2021

4 Steps for Strengthening Your Financial Safety Net in the New Year 

As many Americans learned in 2020, emergency savings can provide a much-needed lifeline during periods of crisis or uncertainty. Adequate cash reserves can be critical for helping you stay on track during turbulent times by preventing the need to dip into long-term savings or incur debt to cover unanticipated expenses. However, according to Bankrate’s January 2021 Financial Security Index, only 39% of U.S. adults say they are confident they could pay for an unexpected $1,000 expense. Among those who are not prepared:

  • 18% would put the expense on a credit card and pay it off over time, incurring interest charges
  • Another 18% could handle a surprise expense without borrowing but would have to make room in their budgets by scrimping on other items
  • 12% would borrow from family or friends
  • 8% would take a personal loan

While 44% of survey respondents expect their financial situations to improve this year, since 2014, the percentage of Americans who could tap cash reserves to cover a $1,000 emergency continues to hover between 37% and 41%.If you or someone you know is looking for ways to shore up savings or replenish cash reserves in the new year, the following steps may help.

1. Make saving a priority.

Savings should be high on your budget priority list, right after essential expenses for food, housing, clothing, transportation, and healthcare. If you’re not currently following a budget, the new year is a great time to create one. A study by the CFP Board found that having a household budget can positively affect your emotional state by reducing stress, anxiety and frustration. Among those who have a budget:2 

  • 62% feel more in control
  • 55% feel more confident
  • 52% feel more secure

2. Automate savings.

Once you determine how much you need to set aside each month, consider making savings automatic. One of the most effective ways to accomplish this is to direct a portion of your pay to a savings account before your paycheck hits your bank account. Check your employer to see if this option is available to you. If not, most banks allow you set up automatic deposits from your checking account to a savings account.

3. Keep emergency funds separate.

Ideally, you want to keep emergency savings in their own separate account, so you’re not tempted to dip into these funds to satisfy other goals, such as non-emergency home improvements or a family vacation. You also want make sure these assets are liquid and can be easily accessed when needed, using a check, debit card, or electronic transfer.

4. Look for ways to continually boost savings.

There are a number of ways to boost savings over time that don’t require a lot of pain or sacrifice. One technique is to increase monthly savings each time you receive a raise, bonus or promotion. If you receive a tax refund or economic stimulus payment, consider adding all or a portion of those funds to savings. If you pay off a credit card, car loan, or other debt, consider redirecting that “extra” money to savings, as well.

How much is enough?

Most financial professionals recommend that you set aside the three to six months' worth of living expenses for emergency cash reserves. However, the right amount for you should be based on your individual circumstances. Do you have a mortgage? Are you making car payments? What about credit card debt? Do you have dependents who rely on your income to meet their needs? In the event of an accident or illness, do you have short-term and long-term disability protection?

If you’re not sure how much you may need to pursue your short and long-term savings goals, contact the office to schedule time to talk.

P.S. If you need help with budgeting, the following articles provide information on a variety of tools and mobile apps that make it easy to create and manage your budget in real time: 11 Online Budget Tools and The 7 Best Budget Apps for 2021.



December 2020

5 Financial Lessons to Optimize Your Planning in the New Year

As 2020 draws to a close, its lessons will remain with us for some time. Below, we look at some of the most important financial lessons learned this year, and actions you can take to strengthen and optimize your planning in the year ahead.

1. Change is inevitable

If we learned nothing else this year, it’s that circumstances can change quickly, creating imbalance in our lives and our finances. While a plan won’t prevent shifting circumstances, having a plan in place can help ensure you’re in a better position to weather change. In fact, a key benefit of the planning process is the ability to stress test your strategy for extreme circumstances and events, like we saw earlier this year, when the S&P 500 lost 34% in value over a period of weeks in February and March, before rebounding to new highs.1

2. Everyone needs a safety net

If you tapped into emergency savings due to a reduction in household income or change in job status, think about how you will rebuild those savings going forward. Start by making savings a line item in your monthly budget. If your spending patterns have changed and your spending less money on expenses like commuting, dining out, childcare, or travel, consider redirecting those savings to your emergency fund.

3. Investment risk needs to be managed

Over time, market swings can throw your portfolio asset allocation out of balance with your risk target and investment goals. When this happens, you can rebalance by moving money from investments that take up a greater portion of your portfolio than desired, into those that could use a boost, to get back to your target allocation. Keep in mind, this also requires a strategy for dealing with the tax liability associated with harvesting losses, as you sell certain securities and purchase others. That can be complex, so be sure to consult our office or a tax professional.

4. Staying on track requires discipline

Having a disciplined and repeatable investment process in place can be especially important during periods of change and uncertainty when managing your investments requires even more time and experience. That’s where professional asset management can really make a difference. A professional approach to investment management encompasses a range of considerations from your goals, risk tolerance, and timeframe, to managing your investment tax burden. Best of all, it helps to eliminate behaviors—such as chasing returns or emotional decision-making—that can derail your strategy and make it harder to accomplish your goals within your desired timeframe.

5. The right legal documents are essential

The global pandemic got a lot of people thinking about who would take care of them or make important financial and healthcare decisions on their behalf if they became incapacitated. While a pandemic is an extraordinary occurrence, it’s important to remember that an accident, illness or other unexpected event can happen at any time. That’s why it’s critical to have a plan in place to protect your interests and the people who depend on you. If you haven’t recently reviewed or updated your will, powers of attorney, healthcare directives and other critical documents, plan to do so soon. If you have minor children, it’s critical to name a guardian. Otherwise, a court will appoint one for you.

Confidence comes from knowing you have the right legal documents in place and have appointed people you trust to manage your affairs, if you’re unable to do so yourself. And don’t forget about beneficiary designations. Review the beneficiaries you have named on your retirement accounts and life insurance policies, at least annually, to ensure they’re current.

For more information on strategies to optimize your planning in the year ahead, contact the office to schedule time so we can talk about your needs.


For discussion purposes only and in no way represents legal or tax advice. For advice regarding your specific circumstances, the services of an appropriate legal or tax advisor should be sought.