“Family isn’t always about the people in your life who are blood relations. It’s about the people in your life who want you to be in theirs. It’s about the people in your life who accept you for who you are, support you in the things you choose to do and no matter what, are there for you. It’s the people in your life who love you, respect you and who you can depend on. Now that’s “family!” – Anonymous
Many people are looking for the next hot stock or mutual fund that they can make a killing with. What industry will be going crazy, what company will shot straight to the moon? That is not how you have a successful retirement. Looking for the next hot investment will not work.
What will work – and here is the secret – is how you manage your spending. It is not sexy or glamorous – it is calculated decision making that works. Every time you spend, you need to ask yourself “is this a need or a want?” If the answer is a need, then you have to spend the funds, if it is a want, you may need to think twice before spending.
Managing cash flow can be tricky or easy, depending on how much work you are willing to put in. You need to take a hard look at your fixed, regular expenses, than add in your discretionary spending to see what changes you have to make.
Time is on your side when planning for your retirement, use it, and make your spending decisions wisely.
The Presidential election is over, at least I think it is. Now is the time to look at all of the various tax proposals, changes to Medicare and Social Security, and decide if you need to make changes now before any laws are changed.
Will the tax brackets go back to the pre-Trump brackets? Will capitals gains tax go back up? Will you have to pay more in Social Security Tax? All of these changes will impact everyone, no matter what your income level is. There is a proposal to make Medicare mandatory at age 60 vs. the current age 65, what impact will that have on your health care choices?
Granted, these are all just proposals. Depending on what happens with the Senate recount in Georgia, these may all be moot, but they may not.
Meet with your financial professional before the end of the year. If you do not have one, feel free to contact me at firstname.lastname@example.org.
Today is Election Day and it is a divisive one. I know that many people are very emotional about this election. People have lost friends, stopped talking to family members, and have gotten very angry over this election. We may know tonight who the next President will be, we may not know for a few days. Some people will be very happy, others will not. Please be kind, this is not worth losing family and friends over.
Q: I will be 70 next September and will start taking my Social Security at that time. My wife, who will reach full retirement age for Social Security in March has been receiving Social Security Disability payments for years. Do we need to do anything to have her Social Security payments go up to her full payment in March so she can receive the higher spousal benefit?
A: From what I have experienced, the Social Security payment will automatically increase without you having to notify the Social Security Administration. If you do not receive any increase, make an appointment with the Social Security office in your area to address any changes that need to be made to get the higher benefit.
I love questions. Questions allow you to learn about people. You can find out about someone’s background, their likes and dislikes, and what they plan for their future. Questions can be fun, questionnaires on the other hand, not so much fun. We have an Investment Questionnaire that is only 13 questions long but feels like so much more. Many clients have commented that it really seems like 3 questions asked in several different ways. We use this questionnaire for two reasons; first it is required by the regulators in our business, second it allows me to assess a clients’ feelings about risk of investments over different periods of time. It allows me to put together a sound investment mix geared toward their tolerances to risk over their investing lifetime. If you are interested is taking our Investment Questionnaire, please email me at email@example.com.
A number of people I have spoken with recently have been retired sooner than they had planned. Many are not sure what to do with their 401(k) accounts, some like their investments within the plan and would like to keep them. Here are three points I think you should consider if you find yourself in this position:
I am not a fan of keeping money where you no longer are. Often, plans, and the investments within them change. If you are no longer employed where the plan was offered, you may find out about these changes when it is too late to act in your best interest.
Many 401(k) plan have higher internal investment fees vs. holding the same funds outside of that plan.
If you find you need to withdraw funds you will pay an automatic 20% Federal Income Tax when withdrawing from a 401(k). You may not be in a 20% tax bracket. When you withdraw from and IRA, you can pick your tax withholding.
If you find yourself in this situation, establish a Rollover IRA, then directly transfer the funds from the 401(k) to that account.
Recently, a client told me that her tax preparer told her not to pay Social Security tax because it will not be there when she wants to use it. That is the absolute wrong advice to take.
Most taxpayers have to pay Social Security taxes on their income, regardless of whether they work for an employer or are self-employed.
Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $137,700 (in 2020), while the self-employed pay 12.4 percent.
Social Security tax it not a choice. I told her she was not to use that tax preparer again.
This is the $64,000 question.
What Does the Upcoming Election Mean to My Investments? This is a question I am asked at almost every meeting I have had lately. Let’s look at a few things:
Here is a graph from Kiplinger magazine about the impact of elections on the markets
My advice to you is, don’t panic. There will be some volatility, please do not try to time the markets. Remember that investments, especially your retirement investments, are for the long term. It is not as important how your investments are doing at this moment as it is to make sure they will last over your lifetime.
If you have not retired and are still adding to your retirement accounts, a dip in the markets is a gift. You will be able to purchase shares of your funds at a lower price, thus accumulating more. This could give you more shares to provide income in your retirement years.