Originally, I paid my bill by mail and only made monthly payments. Mail was the only choice, so I really paid attention to the charges and fees that were assessed due to carrying a balance. Paying your bill monthly helps build up your credit score by showing that you can make payments. Here I am many years later and I pay my bill online. I make sure to review all of the charges to confirm they are mine, and I pay my bill in full. I imagine that most people also pay their bills online. If you carry a balance what you may be missing is what you are paying in interest charges. Please make sure you review everything carefully to make sure the charges are legit and that you do not pay excess interest.

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Occasionally the Federal Government makes changes that are beneficial. This year if you are between the ages of 60-63, there is a substantial change for you to take advantage of. It is the Super Catch-up Provision in the Secure Act 2.0. Here is what it provides:

For 2025, the standard catch-up contribution limit for 401(k) plans is $7,500. That means anyone who meets the age requirements can contribute a total of $31,000 to their workplace retirement plan.

The SECURE 2.0 Act increased the catch-up contribution for some employees to $10,000 or 150% of the standard catch-up contribution, whichever is greater. Since 150% of $7,500 is $11,250, that is the new catch-up contribution limit in 2025 for select investors.

Here is the catch. You are only eligible to make this super catch-up contribution in 2025 if you are between the ages of 60 and 63 (inclusive) at the end of the year. If you are turning 64 in 2025, sorry, you just missed the boat. But if you are about to celebrate your 60th birthday, you will have four years to make supersized contributions to your 401(k). *

If you are eligible for this increased savings, please take advantage of this opportunity to put money in your pocket vs. paying Federal Income Tax.

*USAToday.

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I know, nobody really like resolutions, but these can really help you have a successful financial life. I don’t think any of them are too hard to accomplish.

Increase your 401k deposit amount and reallocate funds if necessary. The more you put into your account, the less you will pay in current income taxes.

Check your credit report. this is something that can be done annually for free through the annualcreditreport.com site.

Review your taxes. See if there are areas you are not using that can save you some income tax.

Devote some time to these points, then you will have a Happy New year!

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The best part of this time of year is the memories we make. Happy holidays!

We get so excited about the upcoming holidays that we often overlook some important end of year financial issues. Here are a few items I think are important for you to review:

Have you maxed out your retirement savings?
Review your contributions to your company or individual retirement plan to make sure you have contributed as much as you can. Pre-tax contributions will save you on current income tax while Roth contributions will save you future taxation.
Review your itemized deductions.
One thing to look at is bunching your deductions. If you plan to donate the same amount of money each year, consider “bunching” the donations into a single year. This could increase your potential itemized deduction for that year. Consider using a donor-advised fund to spread out the giving while taking advantage of “bunching.”
Another are to look at is your property tax, it may be advantageous to pay this years and next year’s property tax at one time to increased your itemized deductions.
Check your Credit status.
Go to any one of the credit sites to make sure there are no surprises. Make sure the items listed are actually yours, check your credit scores, and look at the interest rates you may be paying to see if they =can be lowered.

A little bit of work can usher you into a financial healthy New Year.

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Acronyms often make it easy for us to remember how to do things, here is an acronym for your financial goal setting:

S: Be specific with what you want to achieve. Here is an example: “I want to save $5000 for a trip to Italy”.

M: make your goals measurable. An example of this would be stating specifically how much money you want to be saving every month.

A: Make your goal achievable. Based on your own financial situation, make sure you set a goal you can achieve.

R: Your goals should be relevant. For example, if your car needs to be replaced soon, do the homework necessary to be able to save for that specific goal.

T: Timely. Set a deadline for your goals. Each goal will have a specific deadline, this will help you stay on track for success.

*ChatCPT is source of SMART

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I read this article and feel that these points are important to share. These are points that I agree with and try to get my client to follow. Mr. Buffett shares 3 specifics to avoid so you have a good retirement.
1. Speculating instead of investing
Some investors fail to recognize the difference between a speculative asset and an investment-worthy asset. According to Buffett, the difference is in how the asset generates a return.
“All investment is, is laying out some money now to get more money back in the future,” Buffett once explained. “Now, there’s two ways of looking at getting the money back. One is from what the asset itself will produce. That’s investment. [The other] is from what somebody else will pay you for it later on, irrespective of what the asset produces. And I call that speculation.”
2. Trying to time the market
Market timing is deceptively tempting. Investors often convince themselves they can wait for the right time to buy or sell a stock. However, experienced investors understand that market cycles are unpredictable, so staying invested for longer is typically the best approach.
3. Overpaying
During market bubbles and speculative manias, investors run the risk of overpaying for assets. This can be detrimental for returns.

“No matter how wonderful a business it is, there always is a risk that you will pay a price [and] that it will take a few years for the business to catch up with the stock,”

Moneywise interview 9/10/24

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I have saved six months’ worth of expenses in an emergency fund, but inflation is eroding its value. Should I invest part of my emergency fund in something higher-yielding, like bonds or a high-yield savings account?

Emergency money needs to stay liquid; these are funds you almost have to ignore because they are for an emergency. I understand that it is hard in today’s environment to see what inflation has done to our savings. There are a number of money market accounts that will pay more than savings accounts, which might be an option. My rule is, any money you might potentially need in 18 months or less, needs to stay liquid, regardless of the yield.

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In 2024, you can cash out as much as $1,000 from a traditional 401(k) or IRA to cover an urgent need. And here’s a big change: You get to define what counts as an emergency.
But there are rules, here they are:
You can make one withdrawal per year.
◾ You can’t take out more than $1,000.
◾ You can’t make an emergency withdrawal that brings your account balance below $1,000.
Remember, if you withdraw from a your 401(k) prior to age 59.5, you will pay a 10% penalty.
Please think twice before taking advantage of this new rule, you only have so much time to save for your retirement.
Need to borrow from your 401(k)? Now you can decide what is an emergency.

In 2024, you can cash out as much as $1,000 from a traditional 401(k) or IRA to cover an urgent need. And here’s a big change: You get to define what counts as an emergency.
But there are rules, here they are:
You can make one withdrawal per year.
◾ You can’t take out more than $1,000.
◾ You can’t make an emergency withdrawal that brings your account balance below $1,000.
Remember, if you withdraw from a your 401(k) prior to age 59.5, you will pay a 10% penalty.
Please think twice before taking advantage of this new rule, you only have so much time to save for your retirement.

*USA Today is the source for this information 8/14/24

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Many times, when I am meeting with new people in my office, they pull out their phone to open their financial accounts. They may be logging into the company 401(k), their brokerage account, or their bank accounts. I always ask them if they have a VPN on their phone, their common reply is “what is that”?
A VPN, which stands for virtual private network, protects its users by encrypting their data and masking their IP addresses. This hides their browsing activity, identity, and location, allowing for greater privacy and autonomy.
I cannot stress enough how important it is to have this on all of your devices. Most people are keeping their financial data on their phone or iPad without protection. Thieves are getting very sophisticated at skimming information. This is an effortless way to protect your financial data – do it!

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