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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, the Financial Symmetry advisors unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Now displaying: September, 2021
Sep 20, 2021

We all have those milestones in life that we enjoy reflecting on or looking forward to. Graduations, weddings, and births of children are a few that stick out.

Video recap: https://youtu.be/llO9d9DIKs4

However, there are financial milestones that are also important to remember. While maybe not as memorable, they can be just as valuable.

The most important times (financially) in a child’s life

  1. Birth - As soon as your child is born you can start contributing to their financial future. Once that child has a Social Security number you can open a 529 account in their name. This is a popular way to save for that little bundle of joy’s education. Another account that you can open for your child at birth is a Uniform Trust for Minors account (UTMA). 
  2. Age 13 - This is the age when your child is no longer eligible for the dependent care tax credit. The dependent care credit covers after-school care and summer camp.
  3. Age 18 - Your baby is no longer a child at this point, so that means you must say goodbye to the child tax credit. Also at age 18 (or 21 in some states), a child’s UTMA will automatically be transferred to their name. This is also an opportune time for you and your child to think about creating a healthcare power of attorney. 
  4. Age 26 - Yes, technically they are not children at this age, but this is the age when children lose eligibility for their parents’ health insurance. 

The years before retirement have plenty of financial milestones

There is a lot to remember to stay on track in the years leading up to retirement. By this time in life, you are probably beginning to dream about that upcoming milestone. To make sure that you stay on track for retirement, pay attention to these ages. 

  1. Age 50 - You can now contribute $6,500 more per year to your 401K and $1000 more per year to your IRA accounts. 
  2. Age 55 - You can now make HSA catch-up contributions of an extra $1000 per year. You should also note that some 401k plans allow for penalty-free withdrawal at age 55.
  3. Age 59.5 - This is when you can finally access your retirement accounts without a 10% penalty. You’ll also have the ability to roll over a portion of 401K to your IRA even if you are still working.
  4. Age 60 - You are now eligible for Social Security survivor benefits.
  5. Age 62 - You now can qualify for Social Security benefits. But should you? Listen in to hear why this may not be the best idea. 

What’s in store for you once you reach retirement age?

Congratulations, you’ve made it to retirement age! Let’s find out what milestones are in store for you next. 

  1. Age 65 - You probably won’t miss this one due to the amount of mail that you’ll be getting. You’ll want to review the literature so that you know what kind of Medicare to sign up for. You can also now withdraw HSA funds for non-medical purposes without a penalty.
  2. Age 66-67 - Full retirement age for Social Security used to be age 65 but now, depending on your birth year, it is between 66 and 67. 
  3. Age 70.5 - This used to be the time of life when you had to take RMDs. Now the only notable aspect of this age is that you can make qualified charitable distributions (QCD). This is a fantastic way to donate money to your favorite charities if you are so inclined. 
  4. Age 72 - The required minimum distribution age has recently increased from 70.5 to 72. 

Who is holding you accountable?

You may know about many of these milestones, but it is helpful to have a reminder to take action once you reach these ages. One way to ensure that you are making the most of your financial life is to have someone help hold you accountable. A fee-only financial advisor with Financial Symmetry can do exactly that. Give us a call if you would like to ensure that you are doing everything you can to stay on top of your financial life. 

Outline of This Episode

  • [2:19] What to think about when children are born
  • [5:52] Why age 26 is important
  • [12:55] You can take Social Security at 62, but should you?
  • [16:35] The RMD age has changed
  • [18:13] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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Sep 6, 2021

With Grandparents day around the corner, we're breaking down helpful financial planning strategies for grandparents.  Many grandparents have dreams of sharing the fruits of their labor with their families. However, sharing your wealth effectively takes careful planning.

YouTube recap here: https://youtu.be/eGYLeS_8hNw

Listen to this episode to hear the best ways to plan effectively for your kids and grandkids.

Vacationing Confidently

Grandparents love spoiling the grandkids. One of the more memorable ways to do this, is by taking care of planning and paying for the whole family to take a bucket list vacation. After working and saving for years, retirement brings an excellent opportunity for grandparents to take everyone on this epic family trip.

Before taking your trip, understanding how much you have to spend and whether it will be a one-time event or an annual tradition. This is where financial planning can provide priceless perspective to help you understand how much you have to spend and at what level.

Share the wealth

Another common planning strategy many grandparents begin to consider is direct gifting to their children and grandchildren. In 2021, the gift tax exemption is $15,000 per person, which means $30,000 per couple. This provides a more meaningful way for grandparents to enjoy seeing their children and grandchildren benefit from their hard work vs. waiting to inherit monies after they were to pass.

If you want to do even more to provide for the grandkids’ education you could contribute to their 529 plan or even start one of your own with the grandchild as the beneficiary. Many grandparents choose to pay the fees directly to the school.

Have you thought about ways to contribute to your grandkids' education?

Leave your affairs in order

Too many people put off their basic estate planning documents in place. Before planning anything else, make sure that you have a will, power of attorney, and healthcare power of attorney.

Once you have the basics in place then you can think more strategically about specific ways you can plan your estate.

One way to directly leave your wealth to those you love is by naming them as beneficiaries on your accounts. It’s important to remember that named beneficiaries supersede your will, so check your beneficiaries periodically to assure they still align with your wishes. Listen in to hear about trusts, per stirpes, and whether it’s better to give cash or appreciated stocks.

Common misconceptions to avoid

There is a common misconception that you can plan for a long-term care event by giving away your assets and waiting 5 years to be eligible for Medicaid. What many people don’t realize is that your household income could disqualify you from Medicaid. To qualify for Medicaid care, your household income must be less than $17,000 per year in NC and most people’s Social Security benefits would be higher than that.

Listen in to hear how important it is to create a plan to put in place and communicate your wishes to your family.

Outline of This Episode

  • [2:09] Family travel is one way to show your love
  • [3:39] How to share your wealth with your family
  • [6:30] Get your affairs in order
  • [10:35] Common misconceptions to avoid
  • [14:44] The progress principles

Resources & People Mentioned

Connect With Chad and Allison

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

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