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 Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Jun 27, 2022

In a bear market, it can be easy to panic and forget that investor behavior drives results more than choosing the right investments. People tend to be their own worst enemy during these trying times. That’s why it is important to learn from those that have gone before you. 

Video Recap:

Your Playbook to Market Volatility:

Check out this episode to discover the 4 typical investors that we encounter during market declines. As you listen consider who you have been like in the past. Which one are you feeling like now? Which one do you want to be in the future?

Outline of This Episode

  • [2:56] Nervous Ned
  • [7:02] Told-you-so Tabatha
  • [10:44] Defiant Dan
  • [13:07] Anchoring Andy
  • [15:06] Steady Sandy
  • [18:10] Progress principles

Resources & People Mentioned

Connect With Chad and Mike

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Jun 13, 2022

Most of us believe we’ll always have more time with our spouse, but when that time is cut short, we’re often left with too many questions and not enough answers.

Video recap:

On today’s show, we tackle the emotionally challenging subject of losing a spouse.

Between planning a funeral, notifying people, and taking calls, it’s hard to find time to grieve, much less think about the financial consequences and tax changes you have to deal with in the coming weeks. Part of our responsibility during this difficult time is to walk you through the steps of navigating the administrative part of handling a loved one’s resources.

Listen to this episode to learn about the tax changes to consider when dealing with the death of a spouse.

Read more in the show notes here:

May 30, 2022

Do you have an estate plan?

Is it up to date?

Was it prepared by an estate planning professional?

Video link:

If you answered "no" to any of these questions, this episode is for you. 

On the show this week, we welcome Adam Tarsitano, an estate planning attorney in Raleigh, NC, to discuss why it is so important to have a professionally prepared estate plan in place.

Listen in to hear the difference between a professional estate plan and a DIY estate plan and what could happen to your assets if the state decides what to do with them.

Outline of This Episode

  • [1:30] The goal of an estate plan is an orderly transfer of assets
  • [4:26] Why it is important to set up a trust for minor children
  • [13:57] Make sure to use full names
  • [16:30] Make sure your goals are the same every few years
  • [19:27] What is the default?
  • [23:20] Progress principle

Resources & People Mentioned

Connect With Cameron

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May 16, 2022

Stocks are now in a bear market. Rising interest rates mean bonds are having a horrible year. Inflation reached a 40-year high.  Headlines like these makes it tough to have confidence in your investment strategy.

Youtube video:

This is why today, we are reviewing how to create a retirement plan that provides peace of mind through an investment roller coaster. If you are worried about the future of your money, our goal this week is to provide you a game plan for volatile markets.

Press play to listen in or check out the video with the slideshow on our YouTube channel.

Outline of This Episode

  • [2:42] The current economic situation
  • [6:25] What history can teach us
  • [13:20] Is this time different?
  • [14:50] What should you do?
  • [19:05] The media can cause you to think you can time the market
  • [22:30] Tax-loss harvesting can help you save on taxes
  • [24:22] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

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May 2, 2022

If you recently filed your tax return you may have noticed some unexpected surprises.

Video recap:

Since tax planning and preparation is an important part of what we do at Financial Symmetry, we wanted to make you all aware of the top 10 tax surprises that we see in our office. Listen in to hear if you are familiar with any of these tax prep surprises. 

Outline of This Episode

  • [2:58] Inheritances
  • [6:55] Credit card reward points
  • [7:56] Advanced child tax credit
  • [10:30] Cryptocurrencies and NFTs
  • [13:20] 1099K through Venmo or other cash apps
  • [14:58] Underwithholding on W4s
  • [16:39] It got lost in the mail
  • [18:38] Double taxation on backdoor Roth
  • [22:18] What to do if you receive a K1

Resources & People Mentioned

Connect With Chad and Allison

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Apr 18, 2022

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:

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.

Outline of This Episode

  • Cameron’s thoughts on the article [1:42]
  • When to take the income [3:48]
  • Look at other areas of your life when considering a Roth conversion [7:48]
  • Longevity risks that come with retirement [13:38]
  • How taking Roth conversions could affect Social Security [16:58]
  • Today’s progress principle [22:20]

Resources & People Mentioned

Connect With Chad and Cameron

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Apr 4, 2022

Many people that listen to retirement podcasts and read financial articles are fantastic savers. If that sounds like you, congratulations!

Video recap:

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.

Outline of This Episode

  • [1:33] Retirees aren’t spending enough of their nest eggs and here’s why
  • [3:30] Why is there a reluctance to spend in retirement?
  • [6:53] Tactics to spend
  • [10:20] Create a retirement paycheck
  • [12:26] Delay taking Social Security
  • [14:48] Understand the tax tools available to you
  • [19:31] Estate planning is not only about documents
  • [22:05] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

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Mar 21, 2022

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:

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.

Outline of This Episode

  • [2:10] Increased longevity is changing retirement 
  • [5:33] How will you spend your 3rd act?
  • [9:30] Time is a limited resource
  • [13:50] How are retirees spending their money
  • [20:21] The benefits of diversified sources of savings

Resources & People Mentioned


Mar 7, 2022
In honor of International Women’s Day on March 8, we're discussing retirement considerations for women that can help them #BreakTheBias surrounding women and money. 

Video recap:

Listen in to discover how you can accelerate women’s equality by overcoming or breaking through these biases. 

Bias #1 - Women are afraid of investing

This first bias is simply untrue. Actually, women are more likely to take calculated risks than men. Women are also more likely to hold an appropriate amount of investments when compared with their cash savings. 

Men and women are equally fearful at the beginning of their investing journeys. However, since women are more cautious about things that they are unfamiliar with they often become more educated about investing so that they feel more comfortable. 

In the long term, women’s investments often outperform those of men. This could be due to women having more intentionality, self-control, and a higher savings rate than men. Since women are often playing catch up with their investing, they are usually excited to get started. Investment and retirement planning is especially important for women since there are so many preconceived notions that surround women and money. 

Bias #2 - Overcoming compensation bias

On average, women make about $0.84 to a man’s dollar. This is often due to the way compensation is structured. Women often ask for less, negotiate less, or don’t negotiate at all. This means that women have less to contribute to their retirement savings. 

Knowledge is the power to overcome this bias. To improve your salary it is important to understand the average salaries for your area of the country and, specifically, for your field. Use websites like Glassdoor or to help you research. Don’t be ashamed to discuss this topic with friends, family, and colleagues to learn more. 

Once you’ve done your research, consider your next salary negotiation. Set a range that works well for you and shoot for the top of that range. Remember that you are selling yourself, so consider the value that you have added to your role. Come up with a list of your accomplishments. Listen in to hear all the tips that this bright group of women brings to the table. With a bit of preparation, you may be pleasantly surprised by your next salary negotiation. 

Bias #3 - Women are big spenders

We’ve all heard this myth perpetuated; however, spending doesn’t have a gender. Either partner in a relationship can be the big spender, but since women are often the ones buying for the family, it can seem like they spend more than men. 

Budgets are an important part of the financial health of any relationship so that both partners understand how much they can safely spend. Typically, one partner is more of a saver and the other is more of a spender, but the ideal is to strike a balance between the two. 

Since women have been shut out of the financial conversation for so long, they often don’t know where to begin the conversation. Here at Financial Symmetry, we encourage both partners to come to the table, even if it takes an extra conversation to understand and address all of the issues or concerns. 

As you approach International Women’s Day, consider whether any of these financial biases have come up in your life. You can research more biases surrounding women by using the hashtag #BreakTheBias. 

Outline of This Episode

  • [1:39] Are women really afraid of investing?
  • [5:15] Addressing compensation bias
  • [9:18] Women are big spenders
  • [14:56] The progress principles

Resources & People Mentioned

Connect with Allison, Grace, Haley, and Darian

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Feb 28, 2022

From data breaches to text messages, emails, and phone calls, scammers are always looking for new ways to commit fraud.

Video recap:

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. 

Outline of This Episode

  • [2:12] Elder fraud is an egregious form of fraud
  • [6:47] Victim shaming can make things worse
  • [9:43] Be cautious about new romantic relationships
  • [10:58] Ways that you can protect yourself from scams
  • [18:38] Is a credit freeze a good idea if you have been a victim of fraud?
  • [19:56] The progress principles

Resources & People Mentioned

Connect With Allison and Will

Feb 14, 2022

Do you have concentrated stocks in your portfolio?

Video recap:

You may have inherited stocks from a loved one or maybe you receive stock options as part of your pay structure or a compensation package. Whatever the reason you have concentrated stocks, if you own more than you think you should of one company, it is important to understand what you could do with it. You may be surprised to hear all of the options that you have available, so listen in to hear what your choices are. 

What is a concentrated stock?

You may be wondering if any of the stocks that you own would be considered concentrated stocks. Deciding whether you own any is easy. You don’t need to look at the percentage of the stock in your portfolio. It doesn’t matter if that stock is 5%, 10%, or even 50% of your portfolio. What matters is what would happen if that stock went to zero. If that would affect your financial life then you do own a concentrated stock.

You may argue that the richest people in the world gained their wealth through concentrated stocks, but you don’t hear about all those that have lost their wealth from putting all their eggs in one basket.

Individual stocks are volatile. Over a 40 year time period, 40% of individual stocks experienced negative absolute returns. The reason we choose to have a balanced portfolio is to balance the winners with the losers. 

Why do we hold onto concentrated stocks?

There are different reasons that people choose to hold on to stocks for longer than they should. If the stock is from their employer, they may have a bit of bias thinking that they know their company and it will outperform the rest. Some people got into a position early and rode the wave. Others feel an emotional attachment to the stock and are hesitant to let it go. 

Whatever the reason you may be hanging on, it is important to analyze your holdings to see if they fit into your overall financial plan. If not, it is time to find a strategy to divest from your position. 

Strategies to mitigate the risks of owning concentrated stocks

Coming up with a strategy that fits into your overall financial plan requires some thought. The easiest thing to do when you aren’t sure of the right choice is to do nothing, but that, of course, is the worst thing you can do. 

There are 4 options available to you when you own concentrated stocks: sell, hedge, diversify, or transfer the wealth.

  • If you need the money, then you may want to sell all or a portion of your stocks. Listen in to hear all the options available to you if you choose to sell your position. 
  • Hedging will limit the downside, but it can be very expensive. 
  • An exchange fund can help to diversify your portfolio which will help you lessen the risk. 
  • You can gift family and friends up to $16,000 per year before you have to report it to the IRS. 
  • You may also want to consider setting up a donor-advised fund if you are charitably inclined. 

Whatever you choose to do, make sure it fits into your overall financial strategy

This episode has some advanced strategies to consider, so if you are wondering what you should do with your concentrated stocks you may want to listen twice or take notes as you listen so that you can discover what to do with your concentrated positions and how it could fit into your overall financial plan. 

If you still think you need help coming up with a strategy, reach out to us so that we can help you come up with a financial plan that is right for you. 

Outline of This Episode

  • [1:58] What is concentrated stock? 
  • [5:11] Why do we hold onto concentrated stocks?
  • [6:47] Strategies to mitigate your risks
  • [15:43] What you can do with your stock if you are charitably inclined

Resources & People Mentioned

  • Episode 59 - Tax Solutions for Charitable Giving

Connect With Chad and Mike

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Jan 31, 2022

Tis the season to prepare your taxes!

Video recap:

Whether you do your own taxes or you are gathering information for your tax preparer, you’ll want to make sure that you don’t miss a thing. Listen to this episode to ensure that you think about everything you need to do to prepare this year’s tax documents.

Don’t miss the obvious

As you start your tax preparation journey by gathering documents and ensuring that you have everything in order, you may end up forgetting the obvious. Did you move in 2021? You’ll need to report the sale of your prior home if that was the case. 

Also, if you use tax preparation software, be careful with the autofill feature. If you have used it before, your tax software will automatically fill in the information that you used last year. It is important to type in the correct address so that you don’t miss any communication with the IRS. 

Gather all the pertinent information

If you changed jobs in 2021 you may have multiple W2s. Make sure that you have them all together before you start your tax preparations. You’ll also want to look out for the forms if you made any 401K or Roth rollovers. 

For the 2021 tax season, you’ll need to look out for the usual documents like W2s, 1099s, 1098s, or K1s, but you’ll also need to be watching out for the letter from the IRS if you received an advanced child tax credit. If you did receive an advance on your child tax credit, you may or may not receive any more or you may have to pay some of it back depending on your income in 2021. 

Once you have your list of docs how do you get ready?

Once you have all of your documents ready, then it is time to start thinking outside the box. Do you have your receipts or transaction history for charitable donations? What about real estate and property tax forms? Do you have a record of how much you spent on child or dependent care? Make sure to have a record of any crypto transactions and business and rental expenses. 

Having this information together will decrease the legwork when the time comes to file your taxes.

Kickstart better record keeping

Not all financial advisors focus on tax preparation, but at Financial Symmetry, we see tax season as an opportunity to generate ideas to improve your financial situation. Whether it is through improving your tax situation or taking advantage of missed opportunities, tax preparation is something we focus on to enhance your today and enrich your tomorrow. 

Our clients have the opportunity to use the document vault in our Client Center portal as a type of digital file cabinet. Keeping documents together like this takes away some of the anxiety surrounding tax season. 

Once you get everything you need together, take a step back and reflect. If you haven’t been keeping the best records now is a good time to implement a system to help you stay organized. 

Listen in to hear how we can help you prepare for the upcoming tax season and beyond as Financial Symmetry clients. You’ll also hear why it doesn’t always make sense to file early. Learn why sometimes filing for an extension could be a better option. 

Outline of This Episode

  • Did you move in 2021? [2:21]
  • Did you receive the child tax credit in 2021? [5:52]
  • Once you have your list how do you get ready? [9:48]
  • You don't always have to file as soon as you can [13:27]

Resources & People Mentioned

Connect With Chad and Mike

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Jan 17, 2022

The biggest financial threat to your wealth is not the market; it is your brain.

Video clip with Money Egg example:

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.

What is a money script?

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. 

Money scripts can keep you poor

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 scripts may keep you poor in spirit 

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.

5 Steps to change your money mindset 

You can change your mindset surrounding money and the book recommends 5 steps to overcome your limiting financial beliefs. 

  1. Face your fear. Accept that you have beliefs about money that are not currently serving you. Identify your present reality to see how your money scripts have contributed to your financial situation. 
  2. Visit your past. Ask yourself these questions to help you dig a bit deeper into your money scripts to discover where they stem from. What was your first money memory? What is a positive money memory? What money experience was painful to you?
  3. Understand your present. What is your current financial situation? What is your current reality? Explore your financial situation deeply to understand it fully.
  4. Envision your future. What does your future hold? What would you want your life to look like if you had 30 days to live? What are your goals?
  5. Transform your life. Redefine your priorities and your core values. In light of these changes, what are your new financial goals? What lifestyle or behavioral changes are necessary to take action? 

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 and click talk to an advisor. 

Outline of This Episode

  • [3:30] What is a money script
  • [7:01] How can you move away from your money script
  • [10:42] The money scripts that keep you poor
  • [14:22] The money scripts that promote wealth accumulation
  • [17:15] How to change your money mindset
  • [22:15] The progress principle

Resources & People Mentioned

Connect With Chad and Mike

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Jan 3, 2022

At the start of every year, people are more motivated to get off on the right financial foot. This might mean contacting a financial advisor for the first time.

Video recap:

So we put together a list of 5 questions we hear from those looking to hire a financial advisor.

If you are considering working with a financial advisor this year, you may want to use these questions to help you understand how the financial advising process works so that you can feel comfortable choosing the right advisor for you. Listen in to hear the most frequently asked questions and our answers.

Is your financial advisor a fiduciary?

Thankfully, the word fiduciary has gotten more publicity lately, so more people understand what it means. A fiduciary is a financial advisor that puts their clients’ best interests first. It is important to ensure that your advisor is a fiduciary so that you know that they will put your well-being ahead of the myriad conflicts of interests that can arise in this industry. 

How often will you review my situation?

The first question most clients have is how often we will review their finances. This usually depends on the client’s situation, but we usually review a specific financial area for every client each quarter. The specific areas that we focus on regularly are taxes, estate documents and financial plans, and of course, portfolios. 

We also have an automated system that checks each client’s portfolio every day. Our clients feel comfortable with these automated daily inspections. Our Client Center is another way that Financial Symmetry clients can assess their portfolios at their convenience. 

When and how is your fee charged?

At Financial Symmetry, we are fee-only financial advisors and completely open about what we charge. All of our fee information is available on our website. Our wealth management clients are charged quarterly whereas other clients choose to work on an hourly basis. Make sure you understand the fee structure of any financial advisor that you choose to work with.

How often do we meet?

Typically, in-person client meetings are held once a year, but of course, Covid changed everything. Communication can be had through phone calls, emails, or video conferencing. The frequency of meetings depends on the complexity of the situation.

Who is my primary point of contact?

Every advising firm has a different setup and who you meet with initially may not end up being your primary source of information that you work with. At Financial Symmetry, you’ll have the opportunity to work with a team of 2 advisors plus one other staff member. Listen in to hear why we work this way.

If you are thinking of hiring a financial advisor, make sure to add these 5 questions to your list of questions.

Outline of This Episode

  • [1:27] Are you a fiduciary?
  • [2:38] How often do you review my financial situation?
  • [5:50] When and how is the fee charged?
  • [9:10] How often will we meet?
  • [10:58] Can I contact you if I have questions?
  • [13:55] Who is my primary point of contact?

Connect With Chad and Mike

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Dec 20, 2021

2021 has been a wild ride! But like with any roller coaster, we've learned that the most important thing to do is to stay in your seat so that you don't get hurt.

Video recap:

On this episode, we recap our views on the top 10 economic stories from 2021 and the lessons they hold going forward. 

1. Social Security to increase COLA at highest rate since 1981

Written by: Allison Berger

Social Security remains a critical component of retirement income for most senior citizens.  To ensure retirees maintain purchasing power through their golden years Social Security benefits are subject to an annual Cost of Living Adjustment (COLA) based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  Due to rising prices and persistent inflation concerns, the COLA for 2022 will be 5.9%, the highest upward adjustment in decades.

If you are 62 or above and delaying benefits for your higher FRA or age 70 payment, you will also benefit from this adjustment.  The Social Security COLA applies to estimated future payouts for anyone who is 62 or older in 2022, even if you have not yet filed for benefits.

While the higher COLA for 2022 is positive news for today’s Social Security recipients, retirees also need to consider how inflation may impact their other retirement income sources.  Maintaining an investment portfolio with a healthy allocation to assets likely to outpace inflation over the long term remains critical to sustaining your standard of living.

2. Housing Market

Written by: Will Holt

Along with the rapid increase in energy and food prices, housing costs have contributed to an inflation rate that is at its highest level in more than 30 years.   Low interest rates, low inventories and a strong increase in demand are driving home prices to record highs.  The Raleigh housing market has been one of the hottest in the country.  According to Zillow, the price of a home in Raleigh has gone up by 26% over the last twelve months!   Large employers like Apple and Google have announced plans to expand their operations in the Triangle area which will add thousands of high paying jobs and bring even more demand to the local housing market.  The last time housing prices were rising like this was in 2007 before the housing bubble popped.  However, there are fundamental differences this time – lower interest rates, stricter loan underwriting standards and homebuyers with stronger balance sheets.  Nonetheless, it’s likely that home price increases will stabilize, especially if we get a spike in interest rates.  This will be a story to watch closely in 2022.

3. US Gov’t Debt

Written by: Bill Ramsay

Almost every year there seems to be substantial concern over the amount of US government debt and 2021 was another one.  It is notable that concerns tend to become louder when there is pending legislation or upcoming elections, but the concerns tend to involve some fundamental misunderstandings.

One of the most common arguments is that the US government should operate like a household and not have so much debt.   Two of the problems with that argument are:

  • Many households do have substantial mortgages which most often is the right thing for those households, because it wouldn’t make sense for everyone to be required to pay cash to purchase a home. So, households often run deficits and cover those deficits with debt.
  • The US government is more comparable to all households instead of a single household, and just as it would not make sense to expect all households to pay off all mortgages at one time, it also doesn’t make sense for the US government to pay off all it’s debts. After all, investors and savers want a portion of their savings to be in ultra-safe investments and the US government has never defaulted on its debt.  Just like with total mortgage debt, we should also expect the debt to grow as the economy grows.

Another misunderstanding is that high government debt leads to hyperinflation.  We can see that the argument is weak since Japan has had much higher government debt than the US for the last 20+ years with extremely low inflation.

But there are cases where high government debt and hyperinflation occurred and looking at the difference in those cases compared to Japan demonstrates the misunderstanding.

In Japan’s case, their debts are denominated in their own currency, the Yen.  In the hyperinflation cases, the debt is owed in some other country’s currency.  When a nation owes debts in another currency, if their own currency declines, the debt becomes bigger when translated back to their own currency.

This can lead to a spiral where the debt becomes harder to pay, which causes more loss of confidence in the borrower’s currency, which leads to falling currency and this spiral can continue until the borrower’s currency becomes effectively worthless and the foreign currency debt cannot be repaid.

Fortunately, the US government is a very reliable borrower, so all US government debt is denominated in US dollars.

4. Supply chain problems

Written by: Cameron Hendricks

Starting all the way back on the run on toilet paper to the shortages at your local Chick-Fil-A , supply chain scares have existed since the beginning of the pandemic. COVID outbreaks at various distribution centers and manufacturing plants sent ripple effects throughout the supply chain system which are continuously being felt to this day. Auto dealers lots have been empty of new cars for over a year now with the chip shortage, loaded cargo ships sit backed up off the coast of California, and basic items at your local grocery randomly seem out of stock (no individual packaged gold fish snacks is really bugging my two toddlers 😊). Of course with high demand and low inventory, prices have risen as you’ve seen if shopping for a car, or even just the increase in value of your current used car sitting in the driveway. The supply chain system that once seemed so smooth is now unpredictable and impacting every aspect of the lives of consumers.

5. Build back better plan

Written by: Grayson Blazek

Ahead of his inauguration, President Joe Biden proposed legislation that addressed funding for COVID-19 relief, social services, welfare, infrastructure, and the reduction of climate change effects – coined the Build Back Better Plan. The underlying components of this plan were much debated in Congress throughout 2021, with some parts of the plan passing through legislation after extensive negotiations from both sides of the political aisle. In March, Congress passed the American Rescue Plan, a COVID-19 relief package. In November, The Infrastructure Investment and Jobs Act was passed and included funding for broadband access, clean water, electric grid renewal and additional infrastructure maintenance and improvements. The Build Back Better Act, seen as the final component to the Build Back Better Plan, was passed by the House in November and now heads to the Senate to debate. In its current form, the Act includes additional funding for climate change provisions, increased funding for childcare, home care, housing and child tax credits, paid family leave, and extended Affordable Care Act subsidies. Much of this proposal would be paid for via a minimum corporate tax of 15% and increased taxes on the wealthiest taxpayers. As has been the case throughout the year, this Act will likely be much debated and revised in the Senate, and if passed, would then head back to the House for a second vote.

6. Inflation

Written by: Grace Kvantas

Inflation was the subject of many conversations in 2021 as well as one source of financial stress for many households.  During the summer, monthly inflation started creeping higher, and many economists believed that the higher inflation would be short-lived.  By October, 12-month inflation of 6.2% was at the highest rate since 1990 and higher than the Federal Reserve’s target of 2%.  Some top contributors to this higher-than-desired inflation include supply chain issues, post-lockdown demand for goods and services, and increased prices on fuel and used cars.  The effects of inflation will vary from household to household, with some feeling it more acutely than others.  Inflation is a fact of life; no one can avoid it completely.  Thankfully, stock growth has outpaced inflation over time.  This is why it’s important to have your long-term savings invested in a well-diversified investing strategy to help your money grow faster than inflation.

7. Gamestop

Written by: Mike Eklund

GameStop is a company that sells video games, consoles, and assorted merchandise.  It made headlines earlier this year when the stock price went from ~$20 to ~$483 in less than a month (January 2021).  As of December 2, 2021, the stock down ~63% from earlier highs.  What happened?  Short story is a group of retail traders worked together (Redditt forum) to force professional money managers to buy the stock to cover their short position.  This resulted in significant demand which drove the price up to levels no one expected.  The summary is markets can be crazy and feel unfair in the short-run.  The best way to reach your financial goals is not to avoid the markets, but to act and think long-term.   Investment success is driven by patience and discipline, not gambling.

8. All-Time Highs

Written by: Chad Smith

Yes, all-time stock market highs aren’t all that uncommon. In fact, we’re in the 9th year where the S&P 500 has set at least 10 new all-time highs during each of those years. In 2021, we’ve now seen 68 new highs as of November 20th.  But, for many investors, all-time high prices can be a cause for concern. They worry if they’ve missed the run up. Or shy away because what goes up, must come down. While that tends to happen every six to seven years in the markets, what’s most important to remember is that all declines up to this point have been temporary. This is where evidence can help. Looking at the S&P 500 94 year history, even if you invested at all-time highs, you’d have enjoyed double-digit annualized returns one, three, and 5 years later. Another great example of how a durable, disciplined, and diversified portfolio can help you fight the temptation to try and time the markets based on headlines. We addressed this idea in a recent podcast and video here.

9. Delta Variant

Written by: Darian Billingsley

As we entered round two of the pandemic, headlines of yet another COVID-19 mutation known as the Delta variant took over our news and media feeds and quickly became a major economic topic of discussion for the year.

First detected in March of 2021 the highly infectious Delta variant became the predominant strain, eventually accounting for over 90% of confirmed cases across the globe this year. The variant's impact stretched across multiple economies causing businesses to scale back staffing capacity, delay workers returning to the office, and experience widespread supply chain disruptions worldwide.

Navigating an unprecedented pandemic remains a factor of concern for economic interruption as we adjust to new headlines daily. We look onward into 2022 for signs of improvement as our world economies adapt to strengthen economic resilience.

10. Cryptocurrency

Written by: Haley Modlin

Bitcoin and Ethereum, the two largest cryptocurrencies, recently set new all-time highs in 2021. Although they’ve since experienced substantial drops in price, there is no argument that cryptocurrencies have continued to increase in popularity among investors, pop culture, institutions, as well as criminals. The first Bitcoin linked ETF made its debut on the NYSE in October and BlackRock, a global asset manager, added Bitcoin futures to two of its funds in January. Mainstream companies such as AMC will begin to accept Bitcoin payments and others like PayPal and Square are allowing users to buy it on their platforms while a number of companies have added it to their balance sheets. Lawmakers around the world and in the US continue to try to tackle laws and guidelines to make cryptocurrency safer for investors and less appealing to cyber criminals which could have varying effects on crypto in the future. One could speculate on the value of cryptocurrency could possibly hold for its investors in the short or long term but as a relatively new and speculative investment, its extreme volatility could take investors on a wild and bumpy ride.

Outline of This Episode

  • [1:42] The Delta Variant has impacted the world
  • [3:15] Inflation is well above historical averages
  • [3:53] Retirees are getting a raise next year through a significant COLA increase
  • [5:41] Supply chain issues have led to shortages
  • [7:32] The housing market has exploded
  • [8:34] The Build Back Better Plan is still being debated
  • [10:31] US government debt has many worried
  • [12:43] Cryptocurrency have achieved all-time highs
  • [14:00] Game Stop lovers forced the stock way up
  • [16:59] Today’s progress principles

Resources & People Mentioned

Connect with Allison and Darian 

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Dec 6, 2021

Everyone is talking about inflation. You can’t open a newspaper, look at your phone, or go to a barbecue without hearing about it. With all this talk, it can be easy to worry about your financial future.

Video recap:

On this episode of Financial Symmetry, we’ll explore the causes of inflation, historical inflation, and what you can do to hedge against this silent enemy. Press play to educate yourself and ease your worries.

Why does inflation occur?

Inflation is different from market risk: it doesn’t show up in your bank or investment accounts. Instead, inflation presents itself at the gas station and the grocery store, so you do feel it in your pocketbook. Since it eats away at your buying power, inflation is often referred to as retirement’s silent danger. 

If you recall your college economy class, you’ll remember that inflation is caused by supply and demand. When there is a limited supply and a high demand, then prices go up. We see that happening now with auto sales due to the offline chip manufacturers and supply chain issues. During inflation, people worry that prices will continue to rise, so they want to rush out and make their purchases now.

Although it is frustrating to see your purchasing power erode so quickly, it is important to remember that there are worse things that can happen in the economy. Deflation is actually worse for the economy than inflation. Stagflation is a type of inflation that occurs when prices go up but the economy is slow and there is high unemployment. Thankfully, we have the opposite happening now since employers are having a hard time finding workers. Even though it is difficult to watch your purchasing power erode, there could be a worse economy.

A historic perspective

The question on everyone’s mind is: will this inflation last? Over the past 10 years, we have had historically low inflation that averaged about 2%. When comparing that average to this past year’s average of 6%, it's easy to understand why people are concerned. 

One way to contemplate the future is by looking at the past. In the 70s the US experienced some of the highest prolonged inflation rates that were punctuated by the shock in oil supply. After WWI Germany experienced crippling inflation when it had to repay its debts in foreign currency. 

The good news about our current situation is that the supply chain issues will eventually be resolved. The bad news is that higher prices are often the best solution to higher prices. Listen in to see how that works out in the long run. 

What should you do to hedge against inflation?

The reason we invest in companies is to hedge against inflation. A varied investment portfolio with global stocks is one way to ensure that you retain buying power down the road. In addition to creating a diversified portfolio, you should limit the amount of money that you retain in cash. Try to keep your cash to emergency savings since your purchasing power erodes over time. Another way that you can protect against this silent risk is by investing in TIPS, real estate, commodities, or crypto currency.

Whatever you do to protect your wealth, don’t let the media dictate your financial decisions. Stick to your financial plan. If you don’t have a financial plan, reach out to us to see how we can help you weather all kinds of financial storms. 

Outline of This Episode

  • We have had historically low inflation over the past 10 years [1:52]
  • What drives inflation [3:46]
  • Why should people care about inflation? [5:45]
  • A historic perspective [8:38]
  • Investment options to hedge against inflation [13:32]
  • Today’s progress principles [20:18]

Resources & People Mentioned

Connect With Chad and Mike

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Nov 22, 2021

The end of the year is a great time to start tax planning for next year. 

Video example:

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.  

Are you maximizing your retirement account contributions?

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. 

Harvesting capital losses or capital gains

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. 

Itemizing vs taking the standard deduction

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.

Should you utilize Roth conversions?

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. 

Outline of This Episode

  • [2:42] Your retirement account contributions
  • [6:00] Harvesting capital losses or capital gains
  • [8:47] Review your deductions
  • [14:23] How to utilize Roth conversions
  • [18:05] Tax withholding for high earners
  • [20:58] Utilize catch-up contributions to supersize your savings
  • [27:50] RMDs are back in 2021
  • [29:39] Create a checklist of these opportunities

Resources & People Mentioned

Connect With Chad and Grayson

Nov 9, 2021

Welcome to this bonus episode of Financial Symmetry with Allison Berger and Grace Kvantas. Grace and I bring you this episode as a special preview to the upcoming Women: A Force in Business Conference in Raleigh, North Carolina.

This episode and our presentation are targeted toward women professionals looking to build their retirement nest egg. Our goal is to help women achieve success and financial wealth. So if you are a woman or if you love a woman, listen in to hear how women can achieve more success and improve their financial well-being by harnessing their financial superpowers. 

Women are stressed about money

A recent study has shown that women are more worried than ever about their finances. ⅔ of women worry about money at least once per week and 40% suffer physically due to their financial stress. This is no surprise when you discover that the top emotion that women feel about money is overwhelm whereas for men it is confidence. 

The pandemic has made women’s financial worries worse than ever since they were the hardest hit by layoffs. Once you compound women’s stress with the gender pay gap, a longer life expectancy, and a predominantly male financial industry then you realize that the odds are stacked against us.

Women are actually better investors

It is a common misconception that men are better investors than women, however, this isn’t true. Women simply don’t talk about money in the same way that men do. Women are actually more likely to do well in the markets for several reasons.

Women typically spend more time researching investment choices which leads to better selections. Women also tend to buy and hold equities longer than men, this leads to less trading costs and fewer taxes on their investment income. Overall, women are more intentional investors than men. 

Harness these 5 investing superpowers

You don’t have to carry so much financial worry. One way to ease that worry is by using your inner investing superpowers. Grace and I are here to help you to implement these superpowers so that you have a better investing experience and feel less stress when it comes to finances. If you can implement these superpowers you can come ahead financially and position yourself for a more secure retirement.

  1. Have a plan. We’ve all heard the saying: “Failing to plan is planning to fail.” This is true with your finances as well. Your financial life will run more smoothly when you have a plan. Having a plan in place helps you identify what your life goals are so that you can create a financial road map for how to achieve them. Your investment strategy will stem from your life goals. 
  2. Know your safety net. Make sure you understand what an appropriate emergency fund for your household is and put it in place. This will help build your confidence so that you can take long-term steps to achieve financial success. 
  3. Take calculated risks. Invest for the long term by building a globally diversified investment portfolio of equities (companies you use every day). This will allow you to build wealth and purchasing power over time. 
  4. Automate your savings plan. Pay yourself first. Women are busy, so creating an automated savings structure will help ease your worries about saving. Make sure that you are contributing at least the minimum amount to get an employer match in your 401K. Another way to automate your savings is to set up monthly transfers from your checking account to a savings account. By automating your savings you will build wealth over time.
  5. Know when to act and when not to. Successful investing is a lot like riding a roller coaster. The only time you will get hurt is if you get out of your seat. Make sure to stay strapped in through times of market turbulence. Bear markets can be as financially dangerous as a bear, so it is important to stay in your place and not try to flee. Instead, when you encounter a bear market, think like an opportunist, not as a victim. This will ensure that you continue to build your wealth over time. 

Listen in to hear what action items you need to take now to improve your financial well-being. 

Outline of This Episode

  • [1:45] Women are more stressed about money than ever
  • [6:03] Why are women better investors than men?
  • [7:30] 5 Investing superpowers
  • [14:13] Progress principles

Resources & People Mentioned

Connect With Allison and Grace

Subscribe To This Podcast

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Nov 1, 2021

Anxiety-inducing headlines, all-time stock market highs and an economy still recovering from a pandemic, have left many people hesitant to invest their cash savings.

Video recap:

None of us can make uncertainty disappear, but considering potential outcomes and evidence can make a huge difference in the returns you receive over your investing lifetime.

This week we are discussing strategies for how to fight the fear that comes when markets are near all-time highs.

Watching the news can be expensive

When reading and watching the news, it can be hard to remember that financial headlines are are designed to pull at your insecurities.

Many of our everyday conversations now include inferences to supply chain issues, potential tax hikes, and inflation.  The wall of worry can seem higher when crawling out of a pandemic shutdown and continues to impact investor’s confidence.

So naturally, record market highs have people wondering whether now is a good time to invest. The fear of an impending fall in the markets causes some to hold onto their cash instead of investing. Others don’t know what the right choice is for their money and are crippled by analysis paralysis.

By holding too much in cash, you’ll face the erosion of purchasing power over time due to inflation, but also experience the opportunity cost of stock market gains and the FOMO byproduct.

A financial planning process can help you make decisions

You don’t want to get stuck with analysis paralysis. A financial plan is key to understanding your investment strategy and helping you answer the question: should I invest my cash?

Walking through the financial planning process can help you create a disciplined and diversified strategy to provide added confidence in making your financial decisions.

By creating a financial plan, you can dial in your specific goals and time horizon. This helps you determine how much you’ll need in the short-run and how much you could afford to risk for the potential of higher expected returns in stock investments.

What if I invest it now and the bottom falls out?

The potential for an immediate drop after investing is always a risk investors wrestle with. And if investing in March 2000 or October 2007, you’d have to wait roughly 6 years each time to see a new all-time high.

Alternatively, there have been at least 10 record highs achieved each year over the past 9 years. So if you waited to invest during that time, because what goes up, must come down, you could still be waiting. Paralyzed by the fear of an impending drop.

One way to combat that fear is to analyze the numbers. Let’s look at historical data.

Of the people who invested at all-time highs since 1926, 81% were better off 1 year later and 77% were better off 5 years later. That still leaves a chance that you will lose money in the short-run, which is why it is important to have a safety net. And to this point, all market declines have been temporary.

Investing is like a roller coaster ride. The only time you could get hurt is if you get out of your seat.

Investing pitfalls to watch out for

The average investor is susceptible to several common investing pitfalls.

One of these is recency bias. If a stock has performed well in the past then many assume that it will continue to do well. Rather than make this assumption you’ll need to study its performance over time.

Another pitfall is market timing. Many people get a feeling about the market and they try to time their entrance and exit, but history has shown that most people can not time the market accurately. Time in the markets is better than timing the markets.

Listen to this episode of Financial Symmetry to hear all of the perils that could arise by pressing play now.

Outline of This Episode

  • [3:08] What is it about headlines that make people feel uncertain
  • [5:51] A financial planning process can help you make decisions
  • [8:14] What if I invest now and then the bottom falls out?
  • [12:50] Pitfalls that average investors fall into
  • [17:25] Today’s progress principle

Connect With Chad and Mike

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Oct 18, 2021

The decumulation stage of retirement is different from all those years you spent accumulating your retirement savings.

Video Recap:

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. 

What to consider if you are retiring before age 59.5 

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

Retirement between the ages of 59.5 and 65

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. 

Retirement considerations after age 65

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.

Retirement strategies don’t always go according to plan

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. 

Outline of This Episode

  • [2:40] What to consider if you are retiring before age 59.5 
  • [7:30] Considerations for those between the ages of 59.5 and 65
  • [9:49] Retirement strategies don’t always go according to plan
  • [12:10] Retirement between ages 65 and 72
  • [16:39] Retirement in the post-RMD age
  • [22:28] Progress principles

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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Oct 4, 2021

The American Families Plan hasn’t yet become law, but that doesn’t mean that you can’t prepare for the changes that may be coming.

Video recap:

In this episode we consider the planning opportunities that could arise with the changes in tax legislation. Our goal is to ensure that you have all the tools in your toolbox so that you can minimize your tax burden. 

Who will most be affected by the tax law changes? 

The current tax law comes from the Trump administration and dates back to 2017. Prior to the current tax cuts, the marginal tax rate for those making over $400,000 was 39%. The present marginal tax rate is 35% for married couples who earn $650,000 or more.

The American Families Plan essentially reverts the tax cuts back to the pre-2017 rates. Those most affected by the proposed tax plan are higher-income earners. The current administration sees the tax changes as a way for high-income earners to pay their fair share of taxes rather than burdening those at lower income rates.

How will capital gains taxes change?

If the American Families Plan passes and becomes law then the new income tax structure would go into effect in January of 2022 which doesn’t leave much time for tax planning. 

In addition to the changes in marginal income tax rates and compressing the income brackets, there are proposed changes to the capital gains tax. The original capital gains tax plan had been to keep the capital gains tax at the income tax rate, but new changes to the legislation have dropped that rate to 25% for those who earn $400,000 or more.

Unlike the income tax plan, the capital gains tax proposal would take effect the day it was written which was in September of 2021. This leaves no time for advanced tax planning, however, Grayson Blazek offers plenty of ideas in this episode on how you can best prepare for any upcoming changes in the tax code.

Are we saying goodbye to the backdoor Roth IRA?

The backdoor Roth has been a strategy that high-income earners have been able to utilize for years to continue to fund Roth IRAs. Under the new proposal, the backdoor Roth would disappear. Rather than lamenting the loss of this useful tax tool, a better outlook is to be thankful that you were able to implement it when you could. To ensure that you take full advantage of what could be the last year of the backdoor Roth, make sure to get all of your backdoor Roth contributions in by January 31, 2021.

How will the American Families Plan affect families?

The main way that this proposed legislation will affect families is by the extension of the expanded child tax credit. The American Rescue Plan increased the child tax credit up to $3000 per child and the American Families Plan would ensure the continuation of this credit. In addition, American families would continue to receive the benefit monthly as they have in the latter part of 2021. 

Make sure to listen to the entire episode to hear the rest of the highlights of the proposed legislation. We want to keep you informed of all the potential effects of the changes in the tax code so that you can make careful decisions in your tax planning. If you have any questions regarding these changes or are looking for an advisor that stays on top of the latest in tax planning legislation, please reach out to us at

Outline of This Episode

  • [2:40] Who will be most affected by the tax law changes?
  • [6:15] How will capital gains change?
  • [10:50] The death of the backdoor Roth IRA and mega backdoor Roth IRA
  • [12:44] Who would be affected by a surtax on ultra-high income earners?
  • [15:33] Changes to RMDs
  • [20:26] Estate tax changes
  • [22:55] The child tax credit
  • [25:52] Today’s progress principle

Connect With Allison and Grayson

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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:

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

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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:

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

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Aug 23, 2021

The Mega Backdoor Roth IRA could be the secret weapon you have yet to use in your retirement saving strategy. If you consider yourself a super saver, looking for alternative ways to save tax efficiently, this could be a great option.

This strategy is of most interest to those maxing out all other tax-efficient savings accounts. Including standard employee 401k contributions, Roth IRA, 529, and HSA. In this episode, you'll see why we call this the secret weapon for super savers, as we breakdown who the Mega Backdoor Roth is for, why you might be interested in it, and how it compares to other IRAs.

Who should take advantage of the Mega Backdoor Roth IRA?

In order to take advantage of the Mega Backdoor Roth IRA, you first have to have access to a 401k that allows after-tax contributions. These are contributions on top of your regular $19k allowable contributions to a 401k in 2019. Hence the "Mega" moniker. So if you are already maxing out your 401K, Roth IRA, 529, and HSA contributions then the Mega Backdoor Roth IRA could be a great extra additional savings opportunity. Many get confused as to why it's called a Mega Backdoor Roth IRA when we are talking about your 401k. Good question. The name derives from where the money will be after you complete the consolidation process.

You're now seeing more larger companies and solo 401ks allow for "in-service" distributions. Meaning, you could withdraw portions of your 401k savings, while still employed. The real benefit with this savings strategy, is when you can save the extra after-tax contributions and then roll them to a Roth IRA in the same year. Meaning, you could get a larger amount in to a tax-free savings account to grow for years to come.

What’s so great about the Mega Backdoor Roth?

If done correctly, the Mega Backdoor Roth can allow you to contribute up to 6X what you can contribute to a regular Roth IRA. With a regular Roth IRA, you can contribute only $6,000 per year in 2019. The Mega Backdoor Roth allows you to contribute up to $37,000 extra each year on top of your normal employee 401k contributions.

Many people don’t know this, but the limit for 401K contributions is $56,000 or $62,000 and for those over 50. Many people assume that the limit is only $19,000. But this $19,000 limit is for pretax contributions. You can actually contribute up to $37,000 more after taxes are withheld (depending on your employer match amount). You can ask your employer if they contribute to after-tax contributions. If you aren’t sure then you should contact your HR department. They may not even know about the Mega Backdoor Roth, but if you communicate with them you could get it started in your company.

What is the difference between the Mega Backdoor Roth and the regular backdoor Roth?

If your income for a married couple is over $203,000 then you are ineligible to contribute to a typical Roth IRA. Instead, you can implement the Backdoor Roth IRA strategy. But this strategy has multiple steps to assure it's done correctly which we wrote about in a previous post. To be a good candidate for this strategy, you need to first move existing pretax accounts to an existing 401K, if you have one. The next step is to contribute $6000 to a regular non-deductible IRA. After completing this, you can convert the non-deductible IRA to a Roth IRA. The issue with the Backdoor Roth is that you can only contribute $6,000 per year.

The Mega Backdoor Roth allows you to contribute much more and would be a provision of your 401k account. Essentially, it's the amount above your normal employee contributions ($19k in 2019; or $25k if over age 50) plus your employer match contributions. It’s important to consider all of your options to see if the Mega Backdoor Roth is right for your circumstances.

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Download the Pre-Retirement Checklist here to assure you are taking the steps you can now, to retire with confidence.

Outline of This Episode

  • [2:27] Who is the Mega Backdoor Roth for?
  • [4:31] What is the difference between the Mega Backdoor Roth and the regular backdoor Roth?
  • [12:33] How do you know if you can take advantage of the Mega Backdoor Roth?
  • [17:59] What are the risks?

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Aug 9, 2021

Stock options can be one of the most lucrative benefits of your job, but they can also be a tax land mine.

Video recap:

Our resident tax professional, Will Holt, joins us this week to help you build a framework to consider your company’s stock options.

You’ll learn 3 key strategies you can use to make better decisions for managing your stock option holdings. Including:

  1. Managing the risks and benefits around taxation for 2 types of stock options
  2. Handling the leverage and concentration risk of stock options
  3. Deciding what to do with the proceeds once choosing to exercise and sell

If stock options are one of the perks of your job, you don’t want to get bit by the tax dog, so don’t miss this episode.

What are the risks and benefits of the two primary stock options?

It is important to understand the type of stock options that you have. There are two primary types of company stock options: incentive and non-qualified. The difference between the two is how they are taxed.

Non-qualified stock options have no real risks until they are exercised since they aren’t worth anything until they are above the strike price, or “in the money.” You can exercise your right to purchase these stock options at the strike price, but they first have to vest over a period of time, typically 4 years. If choosing to exercise and not immediately sell, and the stock price is above the strike price, your shares are in the money. If choosing to sell while in the money, any gain would be taxed at ordinary income rates and come through your paystub in most cases.

Incentive stock options alternatively, offer the opportunity for preferential tax treatment compared to non-qualified stock options.  To get preferential long-term capital gains tax treatment, you must be 2 years from the grant date and 1 year after you've exercised. This is known as a qualifying disposition.

The big risk if choosing this strategy is the potential for phantom income to be taxed at AMT rates. Before you reach the 12 month timestamp, the stock price could fall dramatically. If this occurs after the end of the calendar year when the exercise occurred, you would still be responsible for alternative minimum tax due on the 'bargain element," the difference between the strike price and fair market value of the stock when exercised. It's called phantom income, because the income effectively disappears, but the tax remains on gains that are no longer there due to a sinking stock price.

Working with a professional can help you make better decisions

Understanding strategies to unwind your stock options can be complex, which is why it's helpful to work with a professional. A financial professional can help guide you through the challenging decisions that stock options present. Stock options can be a very valuable part of your net worth and you don’t want to make the wrong moves. Taxes and holding periods aren’t the only challenges that you face by owning stock options; the concentration that you might have can pose further risk.

Are your benefits putting you at risk?

The advantage of having stock options in your benefits package could end up being a sizable risk if not managed properly. You may end up holding a supersized concentration of one stock. Having your net worth tied up in one stock can lead to more risk vs. a diversified portfolio. But many people delay selling because of the potential negative tax impact of selling.

There are ways you can manage these risks. One way is to set target prices to time your exit. You won’t always make the right call, but if you set up a framework to help manage your decisions it can help take the emotions out of the sale. You’ll also want to consider the impact of your stock options on other areas of your financial plan.

What do you do with the proceeds when you have been forced to sell

There may be times when you are forced to sell before you are ready. This could be a large, infrequent income event that could change your tax situation. One of the best ways to see this impact is running a tax projection for the year.

You may be able to take advantage of tax-loss harvesting to offset some of your tax burden. If you are charitably minded, then another way to reduce your tax liability is to set up a donor-advised fund.

In the end, remember that stock options are a reward for your hard work. You don’t want to ignore them or get caught up in analysis paralysis. You can avoid this by building your decision-making framework or working with a financial professional that can help walk you through your choices.

Outline of This Episode

  • [2:14] The difference between incentive and non-qualified stock options
  • [7:40] Your concentration can be another risk
  • [11:35] What do you do with the proceeds when you have been forced to sell
  • [16:36] How are you handling your strategies?

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