Have scary markets made you second guess your retirement plan?
For those of you who are near, or already in retirement, you may feel like this year is a part of some retirement horror story.
🎥Watch the video here: https://youtu.be/bPmWBKTM-yg
Which reminded us of a common retirement tale from one of Halloween’s favorite fictitious characters, Michael Myers.
After 40+ years of scaring audiences, the Halloween movie franchise is coming to an end. Now that Michael has reached 65, we thought it fitting to envision that everyone’s favorite murderer is finally done chasing victims and is ready to settle down into retirement.
Has he prepared well enough or did he chase returns the way he chased his victims? Listen in to hear the retirement horror story of Micheal Myers.
📬 Tips each month to help you reach your Ideal Retirement. Subscribe to the Financial Symmetry newsletter!
📰 DOWNLOAD the free EBOOK Your Game Plan for Market Volatility ebook
Have you ever been offered a non-qualified deferred compensation plan as part of your benefits package?
In this episode, you’ll learn who non-qualified deferred compensation plans were created for, what they are, the pros and cons, and their potential for helping you reduce your lifetime tax bill.
Find out if this additional savings tool could be a difference maker for your retirement withdrawal strategy.
📬 Tips each month to help you reach your Ideal Retirement. Subscribe to the Financial Symmetry newsletter!
📰 DOWNLOAD the free EBOOK Your Game Plan for Market Volatility ebook
We all have visions of our ideal retirement, and none of them include a terminal illness. However, sometimes life has other plans.
Today, we discuss the top concerns that are often overlooked for those facing a terminal diagnosis.
This is a difficult, yet important, subject to address. Investment strategies, tax strategies, and estate planning may not be at the forefront of your mind during this challenging time period, however, doing the legwork now will set your loved ones up for success after your passing.
You won’t want to miss this episode if you or a loved one has recently experienced a terminal diagnosis.
📬 Tips each month to help you reach your Ideal Retirement. Subscribe to the Financial Symmetry newsletter!
Retirement rules of thumb can give you a false sense of security.
Today you’ll learn why you should second guess these 4 commonly referenced retirement rules.
In this episode, we'll discuss:
Our expanded pre-retirement checklist is packed with common questions asked by our clients. Our new guide answers the 4 questions you should ask about Social Security, includes common tax planning tools used by retirees, and examines how your investing may change in retirement.
Download this newly revised and expanded checklist to help you best prepare for your retirement.
📗 Download the expanded Retire On Purpose Guide
Have you ever wondered how your retirement preparations compare with others?
Short video recap: https://youtu.be/mNYvWKgO3MM
This is a common question that we hear as financial advisors. On this episode, we’ll take a look at data from a recent study about the 4 types of retirement journeys that people take. You’ll also hear about the risks and opportunities that stem from these 4 retirement paths.
People’s circumstances, attitudes, and ambitions can greatly affect their retirement experience. So, if you are on the cusp of retirement you may be wondering what type of retirement you will have. You can think of retirement as a Choose Your Own Adventure book. Each path has its own opportunities and lessons to learn. Which retirement adventure will you choose?
Which retirement stage are you in? Spoiler alert: the stages begin before you are retired. You'll also be surprised by some of the stats we uncover as we dissect findings in the latest Age Wave study on retirement.
Video Recap: https://youtu.be/8YeA6nSCenY
We've had the pleasure of working with hundreds of families as they have planned and transitioned into retirement. Let’s dive in to this episode to explore how you can maximize these 4 phases of retirement through financial planning.
Deciding to retire is just the beginning of your retirement decision-making. From tax planning to Social Security decisions, finding the best strategies for you requires regular analysis.
Video recap: https://youtu.be/TleOZ8CwYXw
Today’s question comes from a client who recently read an article from Rethinking 65 titled Why Trying to Quantify Roth Conversions Is Futile. After reading the article the client wanted to know if they should take advantage of Roth conversions. As we explore this question today, you’ll learn how you can decide whether Roth conversions would be a good fit for your retirement situation.
Many people that listen to retirement podcasts and read financial articles are fantastic savers. If that sounds like you, congratulations!
Video recap: https://youtu.be/pUvfv1815fw
You have done the hard work to accumulate plenty of assets and be on track to reach your financial retirement goals.
However, after a lifetime of accumulation, you may discover that you have a hard time letting go of your assets. I recently came across an article in Barron’s magazine called Retirees Aren’t Spending Enough of Their Nest Eggs. Here's Why. On this episode of Financial Symmetry, Allison Berger and I will discuss the reasons that some retirees are reluctant to spend their savings and explore strategies that you can use to ensure that you have a successful transition into retirement.
Financial planning is a powerful tool that can help you not only anticipate risks and opportunities but also help you envision your future to ensure that you can retire the way you want to retire.
Video recap: https://youtu.be/hKJRvl-_RlM
As Howard Marks says, “You can’t predict but you can prepare.”
As you prepare for retirement it is helpful to stay up to date with the latest retirement trends. This is why we're excited to share our takeaways from the JP Morgan Guide to Retirement with you. You may be curious about how you are doing compared to others in your demographic and guides like this one can help you more deeply understand where you stand in your retirement planning journey.
From data breaches to text messages, emails, and phone calls, scammers are always looking for new ways to commit fraud.
Video recap: https://youtu.be/_PwxMMqnjNk
Fraud can devastate retirement plans, so it is important to stay one step ahead of scammers and keep your guard up to protect yourself and your retirement.
On this episode, we discuss types of scams to be on the lookout for and how you can protect yourself from the conmen that are constantly devising new ways to ruin people’s lives.
The biggest financial threat to your wealth is not the market; it is your brain.
Video clip with Money Egg example: https://youtu.be/PJ4Zryp2w8Y
Human behavior surrounding money varies greatly and can be fascinating to study. Allison Berger has been studying financial behavior in more detail over the past year in the Certified Financial Transitionist coursework.
On this episode of Financial Symmetry, we delve deeper into the common money scripts that drive financial behavior. Our conversation is inspired from the book Wired for Wealth by Brad Klontz, Ted Klontz, and Rick Kahler.
When you listen you’ll learn what a money script is and how it can impact your financial wellbeing. You will also learn 5 steps you can take to help you improve your money mindset.
Markets go up and down but one fact holds true: the money scripts you play in your head will determine your financial well-being. The things we do surrounding money are defined by the money scripts we learned in childhood.
Money scripts come from the explicit or implicit messages we received about money as children as we were trying to make sense of the world. Usually, these ideas are partial truths based on our parents' teachings and actions around money. We have internalized these money scripts and unconsciously follow them as adults as the logical response to what we saw as children.
Here are common examples of money scripts: money doesn’t grow on trees, money can’t buy happiness, rich people are shallow, money is the root of all evil.
Your money scripts can become roadblocks in your thinking about money, so it is important to think about how they may be affecting your life. At their worst, money scripts can contribute to financial disorders like financial infidelity, compulsive buying, pathological gambling, compulsive hoarding, financial dependence, and financial enabling.
These are examples of money scripts that will keep you poor: your self-worth equals your net worth, it's ok to keep financial secrets from your partner, if you are good your financial needs will be taken care of.
These negative money scripts can be linked with overspending, compulsive shopping, or workaholism. As people edge closer to retirement the more they tend to stick with the money scripts that have led them through life. However, retirees may need to embrace new ideas to be able to reach their financial goals. If you are struggling with your money mindset, try reaching out to an objective third party for help.
Money should be saved, not spent. You can never have enough financial security. Money that I did not earn is not really mine to spend. These are a few examples of money scripts that can cause people to underspend. Scripts like these can lead to hoarding wealth and workaholism.
A financial plan can help you break free from your money scripts. Without a financial plan in place, you don't know how much you can safely spend. A financial plan will ensure that you look at the details and the reality of your spending situation. You want to make the most of your money and your life especially as you transition into retirement.
You can change your mindset surrounding money and the book recommends 5 steps to overcome your limiting financial beliefs.
These are not quick, easy steps to take. They require a bit of soul searching to get to the heart of your issues with money. However, if you find yourself with a money mindset that is not serving your goals you’ll want to do what you can to solve your problems.
If you think that you may need help changing your money mindset, reach out to us to see if we can help you. Head over to FinancialSymmetry.com and click talk to an advisor.
The end of the year is a great time to start tax planning for next year.
Video example: https://youtu.be/lzghkK2iP3Q
This week we are discussing the strategies you can utilize to enhance your tax situation before year-end.
You’ll learn which tools you can use and how the actions you take in one area of your financial life can flow into other areas.
When considering your pre-tax retirement account contributions there are a couple of aspects that you should consider. These contributions are a great way to reduce your tax burden, but you also need to examine your cash flow.
Do you maximize your employer match? If not, look at your budget to see how you could take advantage of this free money. You could also take your savings a step further to maximize the pre-tax retirement account contribution cap. In 2021, the yearly max was $19,500, but in 2022 that number rises to $20,500.
If you are maximizing your savings, it is important to review whether you are at risk of over-contributing both this year and next. After analyzing the amount that you want to save, then you can consider which account type is best for you to save in.
Another tax opportunity is to harvest capital gains and losses. Harvesting capital losses can offset any capital gains that you have realized over the year. This year it may be difficult to find capital losses; however, this is a concept that you can explore so that you can understand how it impacts your tax return. Harvesting capital losses creates an opportunity to reduce your tax burden.
The standard deduction changed in 2017 to $12,500 for singles and $25,100 for married people filing jointly and thus causing 90% of filers to utilize the standard deduction. There are 4 deduction categories to consider when calculating whether to take the standard deduction or to itemize deductions: state and local income taxes, mortgage interest, charitable contributions, and medical deductions.
Listen in to learn if you should take the standard deduction or whether it would make sense to itemize, you’ll also hear how you could receive a tax benefit of $600 for charitable contributions.
Roth conversions can be an exciting opportunity to take advantage of current tax rates and have your investments grow tax-free. However, you have to be careful about how you take them. The best way to consider whether to make Roth conversions is to zoom out and look at your overall lifetime tax plan.
If you are in a higher tax bracket than you are projected to be in the future then taking a Roth conversion now doesn’t make much sense. You also need to consider how taking a Roth conversion now could trigger other events, especially if you are 63 or older. Listen in to hear how doing a Roth conversion at age 63 could trigger an additional Medicare premium.
The decumulation stage of retirement is different from all those years you spent accumulating your retirement savings.
Video Recap: https://youtu.be/UyvHGltT1Z0
This is why you need to have a retirement plan in place to help guide you through this transition. Unfortunately, the same plan won’t work for everyone which is why it is important to understand what type of strategy would work best for you.
On this episode of Financial Symmetry, Allison Berger and I will check out the risks and opportunities to consider as you approach the decumulation stage of your life. Listen in to hear what you need to consider to make the most of your personal retirement plan.
If you are planning to retire before the age of 59.5 you first need to make sure that you have all your ducks in a row. Before age 59.5 you won’t be able to access your various retirement accounts without a penalty, so you’ll want to make sure that you have access to money for this time period outside of a traditional retirement account. You could obtain funds from a brokerage account, home equity, rental properties, or an inheritance. Before you retire early, think about which funds you could source without having to take a penalty by dipping into your tax-deferred accounts.
You’ll not only need to know where your money is coming from when retiring early, but you’ll also have to think about health insurance. Obtaining health insurance before you are eligible for Medicare can be quite costly. Many people choose to go with COBRA or the ACA. Make sure you consider the costs of health insurance when creating your retirement plan.
The younger you retire the more susceptible you are to sequence of return risk. Sequence of return risk can lead many people to become conservative with their investments, however, this leads to increased inflation risk. To consider these two types of risk it is important to have a balanced portfolio
If you are planning to wait until full retirement age at 67 or beyond then you may be funding the early years of retirement all on your own without the help of Social Security. Once you reach the age of 59.5 you can access your retirement accounts without penalty. However, it is important to remember that income from your IRAs, 401Ks, and 403Bs will be taxed when you access them.
Sequence of returns is still a factor this early on in retirement so make sure that your portfolio can weather the storms that the market could bring. Listen in to discover what you should be thinking about 2 years before you apply for Medicare.
Once you reach 65 you can enroll in Medicare and will no longer have to worry about paying for costly medical insurance. This is a good time to start thinking about when you will take Social Security and the tax ramifications. If you are unfamiliar with the Social Security tax bubble check out episode 101 to learn more.
During retirement, your annual tax plan should always be taken into consideration with your overall retirement tax plan to ensure that you save as much as you can over the course of your lifetime.
You’ve probably heard of popular retirement strategies like the 4% rule, the guardrails, the bucket strategy, or a systematic withdrawal approach. These strategies are all great on paper but they can often fall apart when life gets in the way. We like to take a flexible approach to retirement planning that is based on your life and your financial plan. We look at the big picture to think about how you can reduce your lifetime tax rate and create a plan that works with your financial goals.
Examine where you are on your retirement journey. Think about your risks and opportunities when creating your retirement plan. Listen to this episode to hear what you need to think about during the different phases of your retirement.
A recent survey discovered that millions of Americans 55 or older are in a rush to retire. The pandemic has many contemplating retiring years earlier than originally imagined after adopting a "life is short" mentality.
Video recap: https://youtu.be/q5r5ZiVw7d4
But before you rush into a decision to retire early you’ll want to consider it carefully. We've listed 6 steps below to analyze if you are ready to retire.
Why retire early?
Since the pandemic has made us all consider how we are spending our time, people have become more and more frustrated with their daily grind. Many people would like to spend more time with their families or pursuing hobbies that they enjoy.
However, if you are in a position to retire early it is important to think about why you really want to retire beyond the initial urge to leave the work world behind. It is important to consider how you will spend your days. Think about your purpose so that you are retiring to something, rather than simply running away from the 9-5. Have a plan, not just a portfolio.
Grayson Blazek and I have come up with 6 strategies to consider when thinking about early retirement. We’re using the word RETIRE as an acronym to help keep it easy to remember.
The question of whether to retire early is one that should not be taken lightly. You can use these 6 considerations to help you contemplate your retirement readiness, in addition, you can also download our Pre-Retirement Checklist to ensure that you are making the right decision for you and your family.
It’s always fun to peek behind the curtain and see the strategies and process people use for their decision making.
Video recap: https://youtu.be/DDp2dBUhrSg
During this conversation, we review some of my core beliefs around:
You can use it to live, give, owe or grow. For us, we rank these in the following order: give, grow, live, owe.
Giving is at the top of our budget. Giving first breaks the power of money and releases its hold over people. Therefore, tithing to our church has been at the top of our priority list.
We then focus on the growth aspect. This starts with automating our savings so that we can reach 15% of our income. As for how we invest we focus on various types of accounts from 401K to Roth IRAs to 529s for the kids. We explain in the episode how we've set up a system to where we don't lose sleep over our 90% stock allocation.
With 3 yr old twins, a large part of our spending goes to daycare costs. My spouse and I try to spend our money on the things that create joy, including going to NC State sporting events and going on camping trips.
I've always used debt as a tool for large, low-interest purchases such as his home and car. We only hold one credit card and doesn’t want to open any more accounts than are necessary.
Have you wondered if there are any financial mistakes that you may have been making?
Video recap here: https://youtu.be/9fsWlp56R2U
Sometimes our financial mistakes aren’t obvious, so in this episode of Financial Symmetry, we discuss 3 hidden financial mistakes that you may be making and how you can spot them.
Are you guilty of believing an uncertain outcome is certain? Sometimes we feel confident that things are going to happen. This can be true even with geopolitical events like the Coronavirus. You may have known the virus would happen, but could you have predicted this current situation?
People are naturally overconfident, but the market is smarter than you. Trying to anticipate corrections will cost you money. In fact, trying to anticipate market corrections will end up costing you more money than the market corrections themselves.
One way to prevent overconfidence is by talking through potential outcomes with a financial advisor or a financial accountability partner.
Many people have a negative money script or way that we view finances. This scarcity mindset could penalize their financial potential. There will always be reasons to wait it out or not invest, but instead of focusing on those reasons focus on not missing out on opportunities. You don’t want to take a pay cut in retirement because of missed opportunities.
We often delay financial decisions to give ourselves time to think about it more or evaluate the alternatives and to consider all outcomes. But often the best investments are the most difficult ones that you have to make. This is why having an investment plan makes sense.
There are different tax opportunities that can be taken depending on your phase of life and how the laws change. One opportunity that many retirees were able to take advantage of this year was the lack of required minimum distributions (RMDs). This allowed people to do Roth conversions. Retirement brings on a wealth of tax planning opportunities since you have more control over your income in retirement. Advanced tax planning early in retirement can help you save on your lifetime tax bill. Listen in to hear how long-term tax planning can save you money over your lifetime.
Estate planning is often the last part of a financial plan that people want to address since it is the least enjoyable part of financial planning. But if you want a say in what happens to your money after you are gone then you’ll need to create an estate plan and review it periodically. Check out episodes 102 and 122 to learn more about estate planning.
Do you have enough? Are you saving enough? When is the best time to invest? Are you missing out? These are all questions that can be answered with the right financial plan. Think about what a financial plan can do for you. If you are looking for a financial advisor to help you create a financial plan click through to our website.
What is the most important thing you can do for building wealth?
Video recap: https://youtu.be/OVSKtk6TzB0
Recently, Jeff Levine (@CPAPlanner) put this question out into the Twitterverse: Other than saving and investing, what is the one single most important factor to financial success?
Too often when dealing with financial decisions, we try to overcomplicate what is best for us. We liked the simplicity of a single thing to focus on, so this week we are breaking down our version of the most important thing you can do in each decade to improve your financial journey.
If you are starting to build wealth in your teens and 20s you’re in luck. Time is on your side.
An often cited roadblock to getting this started, is the overwhelming debt obligations to student loans. While important to tackle high interest rate debt, carving out a small amount of automated savings can be life-changing.
For many, the first time we see a compound interest example, we are inspired. We included a powerful example below to demonstrate how much investment growth accumulates over 40 years, compared to the amount you are saving.
By saving small amounts early, compound interest becomes your super power. Automating this savings each month in an investment account with exposure to a diversified stock portfolio starting in your 20s, is arguably the single biggest impact decision you'll make in building wealth. Because of the natural discipline it creates, making it harder to stop it down the road.
During your 30s, life often becomes busier. Between new marriages, job changes and growing families, consequential decisions can pile up. These exciting changes bring curveballs you often don't expect, like childcare for remote school over the past year.
This is when deciding to pay yourself first benefits you behind the scenes when life decisions are taking priority. If your saving and investing decisions are made only after you cover your expenses, then your budget is upside down.
Automating your savings and charitable giving can leave you better positioned as you head in to your 40s.
During this decade, it's tempting to continue moving the goalposts as you reach certain levels of success.
Comparing your financial situation to others is a common derailment to your long-term success in your 40s. Keeping up with the Joneses can feel like an endless treadmill.
In the The Psychology of Money, Morgan Housel writes, “the ceiling of social comparison is so high that virtually no one will ever hit it, which means it is a battle that can never be won or that the only way to win is to not fight it to begin with, to accept that you might have enough even if it’s less than those around you.”
Determine your definition of enough. Is it a certain amount of money in the bank? A bigger house? Being laser focused on your ultimate financial goals, allows you stick to your financial plan, providing peace of mind along the way.
Successful financial planning begins with understanding potential high impact risks.
More and more, we see unexpected hurdles for people in their 50s. It could be a layoff or a loss of assets due to grey divorce, but understanding the potential impact with scenario planning beforehand can leave you more agile to adjust.
Investing in your personal and professional relationships through the years, allows for more flexibility when reinventing yourself in these circumstances. Additionally, understanding the impact of withdrawals on your assets can be valuable in the case you need temporary withdrawals to sustain you during a transition.
Hopefully, in your 60s you are reflecting on a life well lived. This is a time to gain perspective. Common rules of thumb or family recommendations may not be the best. Some common things we hear related to this are:
Having a plan in your 60s provides confidence. Hiring a financial professional can help you develop a plan and to gain perspective so that you can create a long term plan for your money.
Have you been offered an early retirement package?
Video recap: https://youtu.be/jpIfdhYVx6Y
Early retirement packages are on the rise. Companies are often looking for ways to cut costs and one way to do that is to give highly compensated employees an incentive to ease into retirement. Usually, these packages offer a one-time payment and sometimes they come with a period of additional healthcare coverage.
If you are offered an early retirement package many questions will arise. Is this a good deal? Is the package negotiable? What will I do about health insurance? And, of course, should I take it?
On this episode, Mike and I will give you the tools to create a framework to think about the questions that early retirement packages bring. Listen in to learn how to weigh this huge decision.
Before you consider anything else you need to think about how this package fits into your long-term financial plan. Receiving a lump sum can give you a lottery mindset, so you’ll need to consider what is most important to you. How would this package fit into the bigger picture of retirement?
This is a good time to ask a professional for help. If you are working with a financial advisor, you’ll definitely want to ask their opinion. A financial advisor can help you spot risks and opportunities that you may not have otherwise seen. Mike has some questions you may not have asked yourself about this early retirement package, so make sure you listen in to hear all the questions.
The main reason that many people decline an early retirement package is due to insurance. You may want to see if health insurance is a negotiable part of the package. Sometimes the company will offer to pay for your health insurance for a certain period of time.
You can also check into COBRA coverage which will guarantee you 18 months of health insurance coverage under your old plan--just be prepared for a bit of sticker shock.
Another way to cover your health insurance is to check into the ACA healthcare exchange. Be sure to weigh all of your healthcare options before signing the deal.
So many tax opportunities pop up with an early retirement package. You’ll want to consider all the ways that you can save on taxes if you do decide to accept it. Do you have a health savings account? If so, make sure to max it out. Have you maxed out your 401K for the year? What about your company stock?
If you are under 59 ½, where will your income come from? When do you plan on taking Social Security? Now is the time to plan how to build your ultimate retirement withdrawal strategy.
Will you be able to transition into retirement successfully? The answer to this may be dependent upon whether you are retiring from something or to something. This is why it is important to consider what’s next.
Will you relax on a beach somewhere, find another job, become a consultant, or try your hand at entrepreneurship? An early retirement package can bring about myriad choices, but you need to make sure that you are financially prepared to accept them.
2020 has brought us a new reality with our vacation mindsets. With many vacation plans put on hold or completely cancelled, the pandemic has become the impetus for second homes becoming more of a reality.
Short Youtube video recap: https://youtu.be/dZvXxmFmDxM
If you have been considering purchasing a second home, we lay out 5 questions to consider as you're analyzing your purchase decision.
Have you ever considered buying a lake house, beach house, or mountain house? Vacation home purchases have surged this year, quadrupling the sales of last year. After an amazing vacation, some people want to jump right in and buy. But before you apply for that second mortgage there are some questions you need to consider.
Many people only consider the cost of the mortgage, but with a second home, there is much more to consider. Where will you get the down payment? How will you pay 2 sets of utilities? Will you have 2 HOA’s to pay for? If you or your spouse lost a job, how would you continue to pay for this second home? Remember, typically a second home is not a great investment. They can be hard to sell and generally do poorly in recessions. Another important consideration is: how will this purchase impact your other financial goals?
When will you use your new home? Every weekend? Winters? Summers? Will you rent it out? Consider whether you really want a second home, or 2 nice beach vacations a year.
How much time will you use it? Will you feel like you have to go there? Will it limit other vacations? Is this really where you want to spend all of your time?
Many people end up selling their vacation home because they realize that they didn’t use it as much as they had envisioned. How close is it to your primary residence? Oftentimes, the amount of use a vacation home gets is based on proximity to one’s house.
Remember there are not only the financial costs to consider but the time cost as well. Another house means more maintenance. This upkeep requires a financial cost but it could also mean that you have to spend your own personal time fixing up the place. What will you be giving up in return for the new house?
If you are still keen on the idea of purchasing a vacation home after answering all of these questions, listen in to hear what steps you should take next are.
You spend half your life preparing for retirement, but that doesn’t mean that there won’t be surprises when you get there.
YouTube Recap here: https://youtu.be/zzEnHR9Qv8I
Retirement can bring on both positive and negative surprises, so it's important to prepare the best you can beforehand. So in this episode we breakdown the different kinds of surprises you may experience in retirement and how you can be ready.
2020 has been a year of surprises. It seems that every time we turn around the world has something new in store for us. Life has changed substantially and we are all dealing with a new reality. A changing reality amidst retirement can be scary if you aren’t prepared. If you want to be prepared for any eventuality during retirement then listen to this episode now.
In retirement, there could be good surprises or bad ones. We like to start out with the potentially beneficial surprises. You’ll want to hear which surprises might start out negative but could lead to positive changes.
Unfortunately, retirement doesn’t always bring sunshine and rainbows. It’s important to be prepared for negative surprises in retirement as well.
Today we're taking a deep dive to explore the retirement changes within this landmark piece of legislation. On this episode, you’ll learn what CRD’s are, who are qualified individuals, and how to note CARES Act withdrawals on your tax return. Join us to hear about financial opportunities that you may not have considered.
Short Youtube video recap: https://youtu.be/2QjSpi3op_U
The CARES Act was recently passed to help Americans get through this difficult time that has been filled with job losses, furloughs, lay-offs, and the mandatory closing of workplaces. The goal of the new law was to make it easier for citizens to access their money during these stresses. The CARES Act makes retirement account withdraws easier and more accessible without the standard early withdrawal penalties.
Coronavirus related distributions or CRD’s allow for qualified individuals to take up to $100,000 from their retirement accounts during the period of January 2020 to January 2021. This withdrawal for qualified individuals is taxable but you can pay the taxes on these withdrawals over a period of 3 years. It’s easy to remember what the CRD’s offer by thinking of the 3 R’s.
The CRD’s are only available to qualified individuals, but who exactly can qualify for these withdrawals? You can qualify if you or your spouse has been diagnosed with COVID-19 or if you have experienced a loss of income during this time. You may have experienced a job loss, a reduction of hours, or an inability to work due to lack of child care. If you do qualify for a CRD you’ll want to examine all of your options before you make this choice. Make sure to work with a professional to see if this is the best choice for you.
The government doesn’t want to force you to sell your stocks at lower prices, so for 2020 RMD’s will not be required for anyone. If you have already taken your RMD for the year you can even pay it back. Listen in to learn how. Instead of taking your RMD, you may want to consider doing a Roth conversion.
The CARES Act was just recently passed and the new law will impact just about every American. But do you know how it will affect you?
View Youtube recap here: https://youtu.be/BTaeWH0aEB0
On this episode of Financial Symmetry, Grayson Blazek joins me to give you some actionable information that you can use to help you consider how best to take control of this challenging financial situation. During this stressful time, it will be helpful to learn as much as you can to give you a feeling of empowerment.
The most discussed part of the CARES Act is the recovery rebate. The full rebate is eligible for taxpayers that make $150,000 or less when filing jointly with their spouse or $75,000 for single filers. If you make more than that you can use a calculator discover how much you will receive. The full rebate is a one-time payment of $1200 per adult and $500 per qualifying child. The recovery rebate will be directly deposited into the bank account listed on your most recent tax return. Listen to this episode to hear if you should file your taxes right away or if it would be best for you to wait a bit longer.
If you have been impacted directly from the Coronavirus directly or if you have experienced lost wages then you will be able to pull funds out of your retirement accounts in the year 2020 without the usual 10% early withdrawal penalty. These funds will still be taxed, but you can spread the tax burden over a period of 3 years if needed. The CARES Act also changes the maximum 401K loan limit from $50,000 to $100,000. You’ll want to carefully consider before taking the full loan amount.
There were several other changes that should be noted as well.
This landmark legislation didn’t only affect people’s finances, it made some changes to health care as well. The CARES Act has ensured that health insurance will have to pay for any COVID testing or potential vaccines that are developed. It also expanded qualified medical expenses for HSA’s. What will be the biggest change brought to you by the CARES Act?
Will your retirement regrets list be full of "I wish I would have...?" What if you could use regrets of other retirees to change or improve your current course?
Short Youtube Recap here: https://youtu.be/CiGxXeem2yI
Listening to the wisdom of those that have gone before you, can help you avoid their big mistakes and take advantage of financial opportunities you may have missed.
In our role as financial advisors, we have the unique opportunity of hearing a long list of retirement regrets. In listening to their perspectives, we gain an understanding of the path they took and the things they wish they could have done to prepare for retirement.
In this episode of the Financial Symmetry podcast with Chad Smith and Allison Berger, we break down the top retirement regrets that investors typically experience. Listen in so you can learn from others and ensure that you don’t make the same mistakes they did.
The Financial Symmetry Podcast is an original podcast from Financial Symmetry in Raleigh, NC. To learn more about the show or the past 104 episodes, visit https://www.financialsymmetry.com/retirement-podcast/.
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How closely did you look at your Medicare premium notice letter this past December? If it mentioned an IRMAA adjustment, and you experienced a life-changing event, you may want to look again. There's a few steps you can take that can save you thousands of dollars in Medicare premiums. In this episode, we are breaking down the the tax cliff known as IRMAA and how proper planning can help you avoid overpaying for your Part B and Part D Medicare premiums.
YouTube recap: https://youtu.be/BQ7K_DeJiHs
This often misunderstood or overlooked area of the tax code is how Medicare determines the premiums that are automatically taken from your Social Security check. IRMAA stands for Income Related Monthly Adjustment Amount. Understanding the IRMAA threshold is key to understanding your Medicare premium.
Generally, when you think about Medicare you think about age 65 and above. It’s actually important to begin thinking about Medicare when you are 63. Your Medicare premium at age 65 is actually based on the income that you made 2 years prior. So if you were in one of the higher income brackets before you retired, your Medicare premium will reflect that. There are 5 tiers of IRMAA and if you go even $1 over you will be knocked into the next bracket. If you end up in the highest tier you could be paying over $4000 in extra Medicare Part B premiums.
Now that you know about IRMAA you can begin to plan ahead. If your AGI is $87,000 or less for singles or $174,000 or less for a married couple then you will qualify for the Medicare Part B baseline premium which is $144.66 per person per month. It’s important to understand your income sources and whether they are taxable or not. Knowing where you fit in the IRMAA tiers will save you money. Listen in to hear more about IRMAA and how it can affect your retirement plans.
If you didn’t plan ahead and are stuck with high premiums you may be able to appeal. You can appeal based on marriage, divorce, death of a spouse, work stoppage, work reduction, or loss of income. If you qualify for an appeal then you’ll need to fill out an SSA44. There are 5 steps to follow to appeal process. Listen in to discover what you can do if IRMAA has got you down.
The SECURE Act is the biggest piece of retirement legislation to pass since 2006.
On this episode, we discuss what the SECURE Act is and how it will affect you and your retirement plans. The acronym SECURE stands for "Setting Every Community Up for Retirement Enhancement."
Watch corresponding Youtube video here: https://www.youtube.com/watch?v=d0K8KBlCYhs&t=2s
In our breakdown of the new bill, you’ll learn about the highlights including new IRA rules, changes to 401K’s, non-retirement changes, and extenders.
One of the most impactful changes in the legislation deals with the Stretch IRA provision for non-spouse beneficiaries. Under the old law, upon a person’s death, the non-spouse beneficiaries of their 401K’s and IRA’s could withdraw savings over the span of their entire lifetime.
Now, as of January 1, 2020, the Secure Act compresses that time period to only 10 years after the year of death, thus speeding up the timeframe for taxes to be paid on these pre-tax savings. This complicates some old strategies being used, but creates new planning techniques for others.
There are a few eligible designated beneficiaries that will avoid the 10 year payout. These include:
Tune in to see how you may need to tweak your retirement withdrawal strategies to best work for you and your heirs.
The Stretch IRA wasn’t the only thing that changed with IRA’s. The required minimum distribution (RMD) age was raised from age 70 ½ to 72. This means, for those yet to reach 70.5 by 1/1/2020, that you won’t have to take funds out of your IRA until age 72. You’ll have a year and a half longer to convert those funds to a Roth IRA, depending on tax brackets.
Despite the RMD age moving back, you still have the option to make a qualified charitable distribution (QCD) at age 70. If you'd like a refresher for some of these financial acronyms we're mentioning, check out episode 63, our Financial Acronymology guide.
Additionally, those over 70 and still working can now contribute to a traditional IRA if they have earned income. In the old law, this ability stopped at 70.5. But people are living and working longer now (without adequate retirement savings for many), so the SECURE act makes this possible.
Finally, we get to the part about setting communities up for retirement. With the changes in the Secure Act, more small business owners will be able to offer 401K’s to their employees.
The bill makes it easier to be auto-enrolled to help those people that never get around to setting up their 401K contributions. Part-time employees will also benefit from the new bill. Now part-timers who have worked 500 hours over the past 3 years will have access to 401K’s. These changes are designed to make retirement savings a bit easier.
The Secure Act is a great reminder of how quickly laws can change. Without close attention, your original intent could no longer be the most optimal strategy for your retirement plans.
One of our primary responsibilities is to help you uncover tax saving or planning opportunities when they become available. Remember, financial planning is like putting together a puzzle. Make sure you have all the pieces by learning as much as you can to improve your financial opportunities.
Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for 20 years.
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