We spend a lot of time planning our weddings, where, when, who will be invited, who will be in the wedding party? Then the honeymoon, then real life. Here are a few tips to make the transition from single to married a bit easier.

Put all your cards on the table.
If you don’t already know your spouse’s financial status, or you haven’t shared your own, it’s well past time to have the money talk. Items to discuss are; salaries, current debts, credit scores, and savings habits.

Get specific about your financial goals.
Discuss your short term and long term goals, where you want to live and in what type of house, how many kids you want, when and where you would like to retire. All of these life cycle goals are very important.

Have an emergency fund.
You never know what life will throw at you, but you’re in it together. Now that there’s twice the chance of a job loss, sudden illness or other disaster affecting your balance sheet, you need to make sure you’re using both your incomes to prepare.

As someone who is approaching my 36th wedding anniversary, believe me, these tips matter.

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

The past two years have made a lot of people take a long hard look at their lives and careers. Many people that I know are thinking about career changes to something that will either make them happier, or give them more free time. Some people are being aged out of their careers, but are not ready to leave the work force so they must look for something different.

Everyone in the above listed situations are asking themselves which direction should they move in, and what will make them happy. Happiness is a vastly under rated virtue that has a huge impact on our day to day lives. When making a career change by choice, you have time to plan. When the choice is made for you, planning becomes an immediate need.
A solid cash flow plan for current needs and retirement is a must. Planning can help take the worry of life changes off the table. Meet with someone like me to make sure your next move will make you happy.

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

Because FRA (full retirement age) has been shifting later and later for newly eligible beneficiaries, each new group who has turned 62 in recent years will be forced to wait a little longer to start Social Security checks if they want their standard payment. They’ll also have fewer opportunities to earn delayed retirement credits, which can be earned until 70 for each month you delay claiming benefits after FRA.
But this won’t continue forever. In fact, everyone who turns 62 in 2022 or beyond will have the same FRA.
So for anyone who turns 62 in 2022 or beyond, full retirement age will be 67. These seniors must wait until then to avoid early filing penalties. By contrast, those who turned 62 last year could get their standard benefit at 66 and 10 months, while those who hit this milestone in 2020 were able to claim at 66 and 8 months and not face penalties.

But remember, this is all under the current tax laws – we know those are subject to change.

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

Q: Why should I move my 401(k) from my former employer to a Rollover IRA?

A: First, I am never a fan of leaving money where you no longer are. There can be material changes to the plan or investments and you will potentially not find out about those changes in a timely manner.

Second, if you need funds from your retirement account, a withdrawal from a 401(k) will have a mandatory 20% withholding for Federal income Tax, you may not be in a 20% tax bracket.

Third, the internal expenses in a corporate 401(k) are generally higher than the fees a Certified Financial Planner™ would charge.

Fourth, you will have more investment choices outside of the 401(k).

Take you hard earned retirement savings with you, do not leave it to chance.

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

As part of our practice we rebalance our client’s portfolios regularly. Everyone, even my clients with a conservative risk tolerance, has some portion of their portfolio in stock mutual funds. Recently I read an article that stated “You shouldn’t own any stocks as a retiree”. This is the wrong advice. If you plan on living any length of time in retirement, you need equities to stay ahead of inflation. We have not had to deal with much inflation over the past 10 years, but we all know it is here now. Everything is costing more. Retirement money shouldn’t just sit in cash. Rather, it should stay invested so it continues to grow. Now you’ll often hear that owning stocks in retirement is a risky move you should avoid. But actually, not only is it OK to hold stocks in your portfolio as a senior, but you should hold stock mutual funds so your IRA or 401(k) can keep gaining value even as you take withdrawals.

But dumping your stock mutual funds completely could cause your nest egg to dwindle faster than you’d like it to.

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

We have been hearing how short staffed the IRS is and I now have first-hand experience with this situation. We received a letter the other day stating that they are holding a credit balance for us, but we need to file, or re-file our 2020 tax return.

When it comes to our taxes I always pay our quarterlies early, and file our return before the end of March. I have made copies of our original signatures, the full return, and the priority mail receipt returned to us by the IRS confirming receipt of your 2020 tax return.

It is all very frustrating, but nothing to play around with. One interesting note, the credit they state they are holding for us is a bit more than we paid in tax – did it earn interest?

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

Many investors are concerned that we are going to have another 2008 market style crash this year. There is a lot of uncertainty in many areas of our Country right now, so maybe we will, maybe we won’t. If the markets do mirror 2008, there are opportunities to be aware of.

Make sure you are investing during periods of volatility.
Although it may seem counterintuitive, market downturns are some of the best opportunities to buy more. I love buying on the dips, but I never invest everything at once, today’s dip may not but the lowest one.

Don’t pull your money out of the market
Unless you need some cash, stay invested. You never want to sell in a down market if you do not have to. You want to buy low and sell high.

Don’t chase fads.
We have seen GameStop, the crypto currencies, and companies like Peloton run up on rumors and hype. Quality will always prevail.

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

This is the time of year when we reflect and make resolutions. We are motivated, excited to make positive changes, then life starts taking over and the changes don’t always happen. So what will you do differently this year to break that pattern? I have a few easy tips to help you be successful.

What is your why?
Come up with a “why” for each financial resolution you make. Once you’ve written down a “why” for each financial resolution you’ve made, revisit them each month to make sure they still hold.

Improve your credit score.
If you can get to the point where you’re regularly using your credit card and paying it off every month, your credit score will grow by leaps and bounds, plus you can rack up points you can use toward purchases.

Make a realistic budget & stick to it.
I know, everyone hates making a budget, but they really help. Look at all of the areas that you regularly spend money to see if you can make small changes to save more.

Pay yourself first.
How much are you contributing to your 401(k)? Many people will only contribute to the company match. Every additional dollar you contribute to your 401(k), is a dollar that will not be going to Federal Income Tax. Pay yourself, not the Federal Government.

Make this year different, and successful.

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

I have spent the better part of this year talking about taxes and inflation. Since the second week of January 2020, there have been a huge number or tax proposals thrown at us, I am sure some of them will be written into law next year. Anyone who has spent money on anything of late knows the impact of inflation. We have this final week of the year to make sure we don’t get bitten by either of these points.

Have you taken your full RMD? The required minimum distribution form your retirement accounts is mandatory, the amount you have to withdraw changes every year, and the penalty for under withdrawing is a 50% tax.

Have you made all of the Charitable Contributions you wish to? For many taxpayers, Charitable Contributions are deductible, check the tax code to see if this applies to you.

Are there any big ticket items you planned on buying? Make big purchase now, or at least try to lock in 2021 pricing with deposits. The Fed has stated that rates will be raised at least three times next year.

Use this short week wisely so you do not miss an opportunity to save.

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

2021 is winding down fast, but you still have time to make some moves that will cut your tax bill and leave more money in your pocket.

Capital loss harvesting
If you have some investments that have gone down in value since you bought them, you might consider selling them and taking a loss. You’re allowed to offset any capital gains you’ve taken this year with the losses, as well as up to $3,000 in personal income.

Retirement plan contributions
If you have extra savings you can live on right now, you may consider increasing your 401(k) salary deferral. The contribution limit for 2021 is $19,500 for those under age 50, or $26,000 for those 50 or older. These are pre-tax contributions. The money will go into your pocket vs. the IRS.

Charitable donations
Even if you’re not itemizing your deductions in 2021, you can still get a tax benefit for your charitable giving. For 2021, you’re able to make a deduction up to $300 for single filers or $600 for a married couple filing jointly without itemizing. If you do itemize, you can deduct the full amount of charitable donations made in 2021.

Use your time wisely, the more you can save in taxes – the more you can save for yourself.

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