We are creatures of habit, most people put their garage door opener on their visor, and I am here to tell you to stop doing that. Just think about where your car is most of the time. Our cars do not spend most of the day in the safety of our garages. We park in open lots while at work. We park in shopping mall parking lots and those of restaurants. Living in Central Florida, many of us also leave our cars in the lots of theme parks. You are leaving yourself open to theft. Just think about it, a thief breaks into your car and the only thing you may notice missing is the garage door opener, if you even notice that. Do you keep you car registration in your glove box – most of us do. What information is available on that piece of paper? A stranger now has your garage door opener and your address along with enough other information to steal your identity.
Hide your garage door opener. It is an easy thing to do to protect yourself.

disclosures:http://www.hechteffect.net/?page_id=31

A generation or so back, many people retired with a pension, social security, and personal retirement savings. This is no longer the case. Hardly anyone receives a pension, we still have social security, but the personal savings rate is so low it is scary. A survey conducted in 2014 by the Federal Reserve has shown that over a third of Americans have no retirement savings. NO RETIRMENT SAVINGS! Many of those Americans never plan to retire. Many are working well into their 80’s just trying to make ends meet while dealing with health issues. What is the solution?
You do not need a company plan to save for retirement. If you have earnings you can open a Traditional IRA. It does not matter how much or little you set aside, just do it. Another excuse for not saving that I often hear is: my company does not match in the 401(k). I say “who cares.” A match is gravy. Every dollar you save pre-tax in your company plan, is a dollar less you pay in federal tax. The money is leaving your paycheck anyway – just put it in your pocket.
Take responsibly toward building your own stool. One that is strong – built out of your own hard work.

disclosures:http://www.hechteffect.net/?page_id=31

Over the weekend, my husband and I went out to dinner. It was a restaurant where the tables are a bit close to one another and it is hard not to hear others’ conversations. The man at the table next to me stated that at age 59 he was tired of working. He could not wait until he reached 62 so he could file for social security and hang it all up. I wanted to turn around and tell him he was about to make one of the biggest retirement mistakes he could make.
If he goes down this path and does take social security at age 62, he will take a permanent 25% cut in his social security. If he then finds that this is not enough to maintain his lifestyle and goes back to work, he will have more headaches. Since he is below the stated full retirement age for social security benefits, he will have to pay $1 tax for every $2 earned over $15,720.
I really hope this guy was just speaking out of frustration and does not resign himself and his family to a permanent 25% cut in retirement income.

disclosures:http://www.hechteffect.net/?page_id=31

I recently wrote of calling a client’s cousin to let her know she inherited from his estate and she was shocked but happy as it would be a big help to her. There are cases, rare as they are where the beneficiary says, “No thank you” to the inheritance. Why would someone do this? Here are a few reasons why:
If you prefer that your children inherit your portion of an estate, you can “disclaim” the inheritance, thus, not accept the benefit. This will force the gift to pass to the next in line.
Often property is passed on but may not be as desirable to the next generation as it is to those making the gift. There could be taxable gains associated with the sale of the property or expensive repairs required.
Another reason people don’t want to inherit is that an income producing asset may push them into another, higher tax bracket.
When planning your estate, please make sure you look carefully at whom you wish to receive your estate and whether or not they really want it.

disclosures:http://www.hechteffect.net/?page_id=31

This is a conversation I have with all of my clients. This is also a question I cannot answer for them. How much cash is enough is really a personal preference. Many people look to accumulate between 3 – 6 months of expenses as a minimum. Some of my clients are happy with $10,000 – $15,000 in cash; others don’t feel comfortable with less than $100,000. Let’s look at few reasons why you may want to keep cash, even with earning little or nothing on that asset.
Emergency funds:
We are in the middle of hurricane season; this is a great reason to have paper money in your house + cash reserves in the bank. During the 2004 hurricane season, we lost power a lot, had roof damage, and lost other items. Yes, we have insurance, but you do not get reimbursed quickly. Medical emergencies are often the biggest drain on finances, often driving people to bankruptcy. Another reason to keep a nice cash buffer is in case of downsizing.
What is on your bucket list?
Is there a special trip you wish to take? A dream car to buy? Funding an education? Buying a vacation home? Saving funds for a big down payment or to completely pay cash for a bucket item list is another reason to build up cash reserves.
Life cycle events can be expensive.
Do you have a child that is getting ready for college or grad school? What about a wedding or Bar Mitzvah? How about that youngest kid moving out and you want to downsize but have to replace your roof first? Life cycle events often cost more than we think because emotions tend to bump up the spending.
Whatever your reason is, look at your life and determine for yourself how much cash is enough.

disclosures:http://www.hechteffect.net/?page_id=31

I have met people in the past that do not know how to handle success. They are more comfortable dealing with the disappointments of life. This can extend to accumulating wealth also. Many people attach guilt to wealth. Are you one of those people?
Money can inspire envy from family members and friends. I see this most often directed to those who are self-employed. We tend to work a bit harder because we have to depend on ourselves completely for what we make and keep.
If you have gone through an adverse financial situation such as bankruptcy or a layoff, you may suffer from being in a prolonged survivor mode. Gaining wealth is the least of your concerns when this happens.
Often, fear breeds confusion, or the other way around. It’s sometimes hard to know who to trust, especially when it comes to money.
Don’t let fear get the best of you. Put together a budget; determine what a need vs. a want is. Stick to your plan and hire a qualified Certified Financial Planner™ Professional®. Don’t be afraid.

Disclosures:http://www.hechteffect.net/?page_id=31

I have a lot of retired clients so someone passing away is not unusual. Recently, a long term client that was well into his 80’s passed away. He was married but did not have any children. He had named two of his cousins as small beneficiaries on his IRA account. It fell to me to notify his cousins that they had inherited his account
Neither of his cousins had expected this at all. They were taken aback by my call and the notification of sudden wealth due to their beloved cousin. There are steps we now have to go through to process their distributions and this will take time. The time it will take to process their withdrawals is giving them time to process the generosity of their cousin.

disclosures:http://www.hechteffect.net/?page_id=31

I have two clients reaching their FRA (full retirement age) according to Social Security in December of this year. They have asked me when to file. Both plan on working beyond their FRA. My suggestion is that they wait until January due to the income penalties. Here is the earnings statement from the Social Security Administration:
•We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2016 that limit is $15,720.
•In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2016, the limit on your earnings for the months before full retirement age is $41,880.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Please remember: if you defer your Social Security payments until age 70, you can get an extra 8%/yr. added to your FRA benefit.

disclosures:http://www.hechteffect.net/?page_id=31

In January, I had a couple of clients call to complain about capital gains they had earned in 2015. Most of my clients are happy that their holdings have gains, but these gains had a negative impact on my client’s Social Security checks. Because the gains pushed them into a higher tax bracket, their Social Security payment was reduced. Is this a bit of crying with a loaf of bread under each arm? Maybe.
With the recent market uncertainty due to Brexit, this may not be the case for 2016. I know, we are only ½ way through the year, but there is that silver lining.
If you sold into the panic of Brexit, you may have booked some capital losses that can offset any potential capital gains yet to be paid. It is often a good idea to do a thumb nail tax return in the middle of the year just to keep check of where you are moving from a tax standpoint.
Silver linings present themselves at odd times – take advantage of yours.

disclosures:http://www.hechteffect.net/?page_id=31

Q: My father passed away and left me, his only child, a fully invested portfolio of over $15 million to take care of with the help of a few financial advisors. Some of the advisors have been handling my father’s money for over 10 years and look at me as if I am a dimwitted, spoiled child. I need help – how do I find an advisor that will help and respect me?
A: Sudden wealth can be overwhelming to the most knowledgeable of investors, let alone someone who has not had to make these decisions in the past. You should take as much time as you need to interview financial professionals until you are comfortable with someone. I suggest a Certified Financial Planner™ practitioner vs. someone who just calls themselves a financial advisor. As a CFP®, we have greater education and regulations to follow than those who do not have the CFP designation. I also suggest that you look for a fee-based, or fee only CFP®. There will be no question that your needs will be first in foremost in the relationship.

disclosures:http://www.hechteffect.net/?page_id=31