Money Tip 10/14/19
People often refer to their retirement savings as their nest egg. They intend to draw this money down over their lifetime and hope that they will not run out. Instead, think of your assets as a goose, not as an egg. Where an egg could run out, a goose could produce a steady supply of eggs. Your assets need to provide you the level of income and growth you need throughout retirement. So nurture and protect the goose – and for goodness sake, don’t eat the goose!
Money Tip 10/07/19
You may have life insurance in case you die earlier than expected, but what if you live longer than you anticipated? To get a better understanding of your life expectancy, evaluate your family history, your health and your lifestyle. Longevity should factor into decisions such as pension payouts, Social Security timing, insurance coverage and even spending. So, look at longevity. What if you live to one hundred? Will you have enough money to live that long?
Money Tip 9/30/19
If you’re looking to invest for retirement, look into a Roth IRA. Money in a Roth IRA grows tax free and can be distributed tax-free. In retirement, the ability to draw from your account without paying tax can be a game-changer. Most people don’t know that a Roth option may be available in their retirement plan at work. If your employer offers a retirement plan, check to see if there is a Roth option available. Meet with a financial professional to see if you qualify for Roth.
Money Tip 9/16/19
As a CPA, I learned many years ago to not only look at the past but also the future. Accounting and tax preparation usually involves working with last year’s numbers. With the new tax law, it is important now more than ever to look forward multiple years. You might reduce your taxes significantly. This goes for individuals and businesses. Talk to your tax advisor about doing some multiple-year planning. Tax planning is a service outside of normal tax preparation but may be money well spent.
Money Tip 9/9/19
We all know that we should insure our home, our vehicle and our health. But what about your income? Disability insurance helps cover your income in case you cannot work. People are more likely to become disabled than die during their working years. Yet most people are covered by life insurance but not disability insurance. Contact your HR department to find out if disability insurance is available to you. Also consider an insurance professional to help you determine what you need.
Money Tip 9/2/19
Do you know your credit score? Nearly a third of the population does not know their score, so you may not be alone. Credit scores can impact the amount you pay for car loans, cell phone plans and even whether or not you get the job offer you want. No matter how old you are, you should know your score. You can get a free credit report once a year from each of the three credit bureaus and most credit card companies provide you access to your credit score at any time. So, what’s your score?
Money Tip 8/26/19
Besides having a will, there is another document that may be just as important to your estate plan. That document, a durable power of attorney, is a written authorization for someone to act on your behalf in case you become incapacitated. Let’s say a loved one suffers from dementia and is no longer able to make financial decisions. A durable power of attorney would name someone they trust to take over financial tasks like paying bills. Make sure you have a will and a durable power of attorney.
Money Tip 8/19/19
With personal data breaches on the rise, you need to consider monitoring your credit now more than ever. There are several credit monitoring services you can subscribe to for less than ten dollars a month. In fact, some companies that have been breached offer free monitoring services for a period of time. If you’ve received a valid offer, you may want to take them up on it.
Money Tip 8/12/19
The new tax law significantly reduced the number of taxpayers who are itemizing. Many are disappointed that they are no longer deducting their charitable gifts. However, making charitable donations out of your IRAs directly to a charity is a tax-efficient way to contribute. These distributions (called “QCDs”) made directly to a qualified non-profit are not treated as taxable income. And if you are seventy and a half or older, making a “QCD” might help cover your required minimum distributions.
Money Tip 8/5/19
Studies show that six out of ten American adults do not have a will or a living trust. They tend to put it off since there is no sense of urgency. You don’t know when you will die, but estate planning gives you control over how your assets will be distributed and even who will take care of your minor children if you are unable to do so. If you do not have a will, make an appointment with a professional. Put it on the calendar and get it done. This is a case where paying for professional advice is money well spent.
Money Tip 7/29/19
Let’s face it, some people are very organized, and some are not. It takes extra effort to be organized. It’s one thing to be messy, but another to have no idea where things are located. As far as your financial affairs, we highly recommend that you get your financial records in order. Records like your will, tax documents, and investment information should be kept in a place where you can quickly locate them. Keep in mind that a loved one may have to find them if something happens to you.
Money Tip 7/22/19
When we meet with clients to help them plan, we ask them how much they spend each month. Most of the time, they truly have no idea. To get a better idea of your monthly spending, you need to add up your spending for a full year and divide that number by twelve. This will capture monthly expenses as well as non-routine expenses like vacations, repairs, and gifts to loved ones. The key is to capture all of your spending. Knowing the amount can be very powerful and can help you make wise decisions with your hard-earned money.
Money Tip 7/15/19
Let’s say you are walking through a store and your child sees something they really want. Let’s say the item costs ten dollars. Often we might say yes and buy the item. Instead, consider offering to pay for half. By leaving and returning to the store, you just eliminated the impulse buy. Now they might consider other options for their money. And if they still want it, they are more likely to take care of it because they have skin in the game. These are invaluable lessons that will pay off throughout your child’s life.
Money Tip 7/8/19
You’ve heard the saying, “it’s never too early to start saving”. This is one of the best habits you can teach children when they are young. In fact, it is much easier for a child to start saving while life is simple. Many adults wish they had formed this habit when they were young. Whether it’s a piggy bank or a checking account at the bank, make sure they have some sort of mechanism to start saving on a regular basis. Giving a child the opportunity to watch their balance grow reinforces the habit of saving.
Money Tip 7/1/19
Should you save or should you pay down debt? Although there is no perfect answer, you generally want to do both simultaneously. Paying off all your debt before saving for retirement could mean you’ll miss out on the power of compounding returns over time. You should participate in your employer’s retirement plan, fund your emergency savings, continue to pay your mortgage, and avoid high-interest debt. A financial professional can help you find the right balance between saving and paying debt.
Money Tip 6/24/19
Retirees are often concerned about running out of money and if they are withdrawing too much from their accounts. A good rule of thumb is a withdrawal rate of about 4 percent. To calculate, add up the money in all of your retirement accounts and multiply that number by 4%. This is the maximum amount experts say you can use to live on without putting your retirement at risk. Of course, everyone’s situation is unique, so you should seek advice from a professional.
Money Tip 6/17/19
Do you know how much is coming out of your paycheck and going into your 401(K) or other retirement plan? If you do not know, it is a good time to find out. Are you contributing a fixed dollar amount, a percentage of the maximum allowed? No matter which method you are using, consider bumping up your contribution. Even a small increase now can have a significant impact on your retirement. Remember to contribute at least the amount that gets you the full match from your employer.
Money Tip 6/10/19
It may be tempting to begin taking Social Security as soon as possible which would normally be at age sixty-two. You may want to delay drawing your Social Security if you can afford it. Each month you wait to draw, you increase your monthly benefit for all subsequent years. By taking early, you may be leaving money on the table that you could have had down the road. Consult a professional who understands Social Security benefits and evaluate your options.
Money Tip 5/27/19
Do you know how much life insurance you have and how much you need? Normally, life insurance is used to replace the income that would be lost if someone passes away. Calculating that amount is not easy. It involves multiple factors like your mortgage, children’s education, salary, and age to name a few. We recommend you meet with a professional periodically to review your needs so you know you and your loved ones are adequately covered.
Money Tip 5/20/19
Many employees do not know all the benefits that are available to them at work. You may have access to benefits, such as life insurance, disability, flexible spending accounts, and other benefits. You may be taking some unnecessary risks that the benefit could reduce or eliminate and you may be leaving money on the table. Contact your human resources department today and review your available benefits.
Money Tip 5/13/19
When was the last time you reviewed who you named as your beneficiaries? Making sure that you have designated beneficiaries on all your retirement accounts and life insurance policies is a good exercise. Life events such as a birth, a death, a new marriage or a divorce often mean its time to update who you have named as beneficiaries. If you haven’t done so in a long time, sit down with your advisor or agent and review your beneficiaries.
Money Tip 5/6/19
If your employer offers you a retirement plan, make sure you are participating. This is an easy, cost-effective way for you to save for retirement. Employers usually offer a match, meaning they will put in the same amount or a portion of what you put in, up to a max. If there is an employer match, make sure you are contributing enough to at least get the entire match. Consider it as a bonus to your retirement!
Money Tip 4/29/19
If you own your home and have a mortgage, consider paying an extra hundred or two hundred dollars each month. If you can, stick with it. This additional money will reduce your mortgage balance which will shorten the life of your loan. This is another form of saving and can help you reach your goal of retiring debt-free. Let’s face it, you have a lot of fun things you would rather do with your money during retirement other than paying a mortgage.
Money Tip 4/22/19
When making large, discretionary purchases like a new TV, appliance or a car, use the 30-day-rule. This means waiting 30 days to make the purchase unless it is an absolute necessity. This helps eliminate spontaneous purchase decisions. During the 30 days, you should evaluate the pros and cons of making the purchase. This takes an emotional decision and turns it into a rational one. You might even find a lower price or a better use of your money.
Money Tip 4/15/19
At tax time, you’re probably focused on how much you owe or how much you are getting back. However, it’s a good time to see how the new 2018 tax law affected you. To find out if your tax rate went up or down, compare your tax rate and tax bracket to your previous two tax returns. If your tax rate changed significantly, you may want to change your tax withholdings on your paycheck or other sources of income and make sure you are withholding an appropriate amount.
Money Tip 4/8/19
Don’t be a victim of identity theft and other fraud schemes. In order to defend yourself, consider setting alerts on your accounts. Most banks and credit card companies will alert you instantly about purchases above a certain dollar amount. It’s normally very easy to login to your account and set up these alerts. You should also review your accounts periodically for any unauthorized purchases.
Money Tip 4/1/19
Make sure you have an emergency fund. If you are still working, a good rule of thumb is 6 months of income in the emergency fund. If you are retired or retiring soon, think about keeping 5% to 10% of your investment net worth in your emergency fund. If you take money out for an emergency, remember to replenish it soon.
Money Tip 3/25/19
If you are participating in your employer’s retirement plan, find out if it has a Roth option available. Consider contributing to the Roth rather than pre-tax or at least a combination of Roth and pre-tax. There are rules to understand when it comes to Roth so you should consult a financial professional to make sure this is right for you.
Money Tip 3/18/19
Savings should be part of your budget. Just like a necessary expense such as spending on groceries and housing, savings should be a necessity. Similar to a 401(k) contribution that comes directly out of your paycheck, use a similar mechanism to save monthly. We recommend using automatic drafts for monthly savings and investing. You should aim for a total of at least 10% of your income going to some sort of long-term savings.
Money Tip 3/11/19
No matter what age you are, you should have a very solid understanding of how much you spend every month. There are online tools available to you but if you do not want to use online tools, try writing down everything you spend for 2 or 3 months. Then write your average monthly spending down where you can see it on a regular basis. Remember, what you can measure you can manage. Measure your spending so that you can manage to keep it at or below your goal.
Money Tip 3/4/19
Many Americans who have not saved enough for retirement often say that they will simply work longer and retire later. However, over a third of Americans who have retired report that they retired earlier than they had planned. They retired earlier as a result of health reasons, company layoffs, grandchildren or caring for an aging parent. This statistic emphasizes that saving for retirement is so important. You may end up retiring earlier than you expected.