How Do I Save for My Child’s College and Retirement?
How Do I Save for My Child’s College and Retirement?
Myths About Working with a Financial Professional
Myths About Working with a Financial Professional
An employer-provided financial
professional can help you plan for a successful retirement and navigate a wide array
of financial decisions and challenges. Unfortunately, many people fail to take
advantage of this valuable resource because they believe one of the following
myths:
1. Financial advisors are only
for the rich. You could actually make the opposite case — a financial
advisor is even more important for those who aren’t independently wealthy. Good
financial advice can make the difference between retiring comfortably on time
and remaining in the workforce for years longer.
2. Nobody can “beat the market,”
so why bother? While returns are never guaranteed, there are many reasons
to work with a financial advisor beyond selecting investments. They can help
you create a budget, determine how much house you can afford, plan for your
children’s college education and help you manage debt.
3. I’ll lose control of my
money. You will always maintain control of your investment funds while working
with your employer-provided financial advisor. Their role is simply to explain
and give advice, but you’ll always have the final say regarding all financial
decisions.
4. They’ll make me feel
embarrassed about my spending. A good financial advisor helps their clients
make better decisions through education and support — not by judging or
embarrassing. They should never make you feel bad about any lack of investing
experience or ongoing financial challenges.
5. I’m in a target date fund
(TDF), so I don’t need advice. Target date funds adjust risk according to your
planned retirement timeline, thereby automating a certain amount of
decision-making. However, you may still want to discuss your contribution
levels to the TDF as well as a host of other issues, such as the ones already
mentioned. Your personal finances comprise more than just your retirement
account, and your adviser can be helpful in many different areas.
6. I won’t understand what they
tell me. Your advisor can explain financial concepts and investment options
in a way that matches your level of understanding and experience. If you don’t understand
something, ask for an example. You may also receive written materials or videos
that you can read or view on your own. In short, it’s their job to explain
things to you in a way that you can understand — no matter your level of
expertise.
7. They’ll pressure me to put my
money in risky investments. You’ll always have final say over how to invest
your money. An advisor should conduct an investment risk assessment to help
gauge your personal risk tolerance and make recommendations that are appropriate
to the level of risk you’re comfortable with.
Don’t believe any of these myths and potentially miss out on a valuable and useful employer benefit. Schedule a meeting with your financial advisor today to discuss retirement planning and any other financial goals you have.
Budgeting During a Pandemic
Budgeting During a Pandemic
Sticking to a budget is hard enough
normally — and things are anything but normal right now. Unfortunately, this is
one more area of our lives that’s a lot more complicated since the pandemic
began. Just as many folks are rethinking how they work and grocery shop, it’s a
good idea to look at your household budget and consider whether some
adjustments are in order.
Budgeting is about planning ahead.
But before you do that, review changes in your spending habits since the
COVID-19 crisis began. While it may feel like you’re saving money by eating out
less or staying home, there may be other areas where you are, in fact, spending
more than you did before the pandemic. These might include groceries, utilities
and even household repairs, as appliances and other systems in your home deal
with increased demand.
Once you have a good sense of the increases
and decreases in your spending, adjust your budget accordingly. Then, consider
the following:
1. Bolster your emergency fund.
Whether or not you’ve had to tap your emergency fund, consider adding to your
safety cushion. With the future still uncertain, see if you can squirrel away
an extra $50 a month to put toward repairs or other unexpected expenses. Adding
to your Flexible Spending Account (FSA) or Health Savings Account (HSA) can
also help cover any unanticipated medical costs.
2. Review discretionary
spending. Some budget items are necessary expenses, such as food, housing
and utilities, while others are optional. Review your discretionary spending,
such as multiple streaming services and nonessential clothing. Consider cutting
back on these temporarily to liberate additional money for building your emergency
fund or paying down debt.
3. Seek out savings on essential
spending. Curb grocery bills by using paper or online coupons. Buy in bulk
and look for lower-cost meal options that include pasta, beans and in-season vegetables.
Cut back or eliminate alcohol purchases. Getting creative with leftovers can
also help. Look for new budget-friendly recipes to add to your meal-planning
repertoire. Many auto insurance carriers are offering discounted rates as well,
so check to see if yours is one of them. You can lower monthly insurance
payments by increasing your deductible, but only consider this strategy if you
can afford the higher out-of-pocket expense.
4. Negotiate with creditors and
service providers. If your budget is straining, speak to your lenders to
see if they can lower your monthly payment or interest rate. They may even
allow a forbearance of payments altogether. If you have a mortgage, investigate
whether refinancing that loan makes sense for you. Call credit card companies
and ask for a lower interest rate or consider a balance transfer to a card with
a more favorable fee structure.
5. Review your retirement plan.
Try to avoid dipping into your 401(k) as this could potentially set you back
years on your retirement timeline — as can lowering or stopping contributions.
It’s particularly important to contribute the minimum required to receive any
company-match funds if possible.
Many American families are feeling
the crunch right now. You’re not alone. Seek out guidance from those who can
help. Setting an appointment with your financial advisor is a great place to
start during this challenging time. If you’re under a great deal of financial
stress, talk to supportive friends and family. And, if necessary, obtain
professional help from your Employee Assistance Program (EAP) or a qualified
counselor through your health insurance plan.
It’s Time to Talk to an Adviser When…
It’s Time to Talk to an Adviser When…
Having a financial advisor is like having
a tennis or baseball coach. While you want them to track your performance throughout
the year during routine practice, there are also key moments during a big game when
you look to them for important advice. So, when exactly should you touch base with
your advisor?
1. When you land your first job.
This is an excellent time to schedule a meeting with an adviser about setting up
a monthly budget and starting to save for retirement. If your employer offers a
401(k) plan, a financial advisor can help you decide how much to contribute and
how to allocate your contributions.
2. When you leave or change jobs.
If you’re taking a hit in income, your advisor can give you strategies about how
to adjust your finances until you find that next job. And they can walk you through
options regarding your 401(k) plan from your previous employer — such as rolling
those funds into an IRA or transferring them into a 401(k) through your new job.
3. When you get married. Getting
married can change your personal finances significantly. Are you going to merge
your funds or keep them separate? If you are now going to be a dual–income family,
what will you do with that additional income? What about life insurance needs?
4. When buying or selling a home.
An advisor can help you figure out exactly how much house you can afford and, along
with a tax professional, plan for any tax consequences. Finally, he or she can
help you adjust your budget to accommodate all of your home mortgage and maintenance
needs as well as continue to invest toward retirement.
5. When you have children. Children
are bundles of joy that can also cost your bundle. Getting professional advice about
how to manage child-rearing expenses can be extremely beneficial. An advisor can
also help you set up a dedicated college fund to plan for your child’s educational
needs down the road.
6. When you receive an unexpected
windfall. Whether it’s a large bonus or an inheritance, you want to plan for
any unanticipated funds. There can be tax obligations, and you need to make decisions
about how to spend or invest that money.
7. When you’re about to retire.
The transition from your income-generating years to retirement can be tricky to
navigate. Working with a financial planner all along will help smooth out the transition.
However, there will still be adjustments to how you manage your money, and an advisor
can help you during this critical time.
8. Every 6 to 12 months if nothing
major has changed. It’s important to touch base regularly with your advisor,
even if your circumstances remain more or less the same. Periodically review your
progress toward your retirement and other financial goals, such as debt reduction.
A good financial advisor can help you train and prepare, recover from injury, and come up with a game-winning strategy to get you over the goal line to your retirement years.
Budget-Friendly Ideas for Valentine’s Day … or any Day
Budget-Friendly Ideas for Valentine’s Day … or any Day
There are plenty of ways to romance
your sweetheart without breaking the bank. All it takes is a little planning and
creativity.
Dining on a Dime
Dinner reservations may be difficult
to book this February 14th, and even if you can score one, it’ll probably
come with a hefty price tag. Why not cook up a meal from scratch with some romantic
ambiance at home? Lay out a white tablecloth, light some tapers, eat off the good
china and prepare a dish they’ll love, whether it’s spaghetti and meatballs, chicken
cordon bleu or stir-fried veggies with tofu. You can linger at the table as long
as you want, and you don’t need to leave a tip.
Cut Candy Costs
Forgo the pricey store-bought chocolates
for a sweet home-baked treat. The price of fancy foil-wrapped confections in heart-shaped
boxes can be a budget buster. But you can do something a lot more unique that shows
you’ve put your heart into each and every delicious bite. Bake a batch of mini cookies,
cupcakes or homemade fudge and pack a love note with them.
Frugal Flowers
Red roses are so commonplace on Valentine’s
Day that they’ve become almost cliché. Break the norm — and save money — by
giving your loved one his or her favorite flower, whatever that may be. A bouquet
of daisies, peonies or gardenias with their amazing perfume can go a long way toward
helping your romance bloom. Or gift a live flowering plant to symbolize how your
love will grow over time.
Gift Thrift
Present your sweetheart with one of
these frugal-but-fabulous tokens of your affection.
1. Budget-friendly bauble. If
you want to give jewelry but can’t afford something 14-karat, take a stroll to the
local vintage shop and find an interesting treasure with a history for a fraction
of the price such as a ruby red rhinestone or a sterling silver locket.
2. Memory montage. Another great
idea is a small photo album. As most photographs stay on hard drives these days,
a memory album is a lovely keepsake. Be sure to add some blank pages at the end
to leave room for the memories you’ll make together in the future.
3. Love story. Purchase a poetry
book, a love story or even a coffee table book of Renaissance artwork. Then, inscribe
it with a dedication. Remember, you don’t have to be Shakespeare — it’s the sentiment
that counts.
Economical Entertainment
There are plenty of low-cost,
high-romance activities to choose from. How about a romantic stroll through a museum
gazing at masterpieces depicting lovers through the ages? Or visit a public garden
and steal a kiss among the snowdrops? If it’s cold enough, head out for some ice
skating and then snuggle by the fire with a cup of hot cocoa — with marshmallows
of course!
The Finale
Wrap up the night by lighting some candles and slow dancing to a personalized playlist of your favorite ballads. Remember that the best things in life are often the things that money can’t buy.