It’s Time to Talk to an Adviser When…

It’s Time to Talk to an Adviser When…

Feb 2021

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

Feb 2021

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.

Avoid These 8 Budget Blunders

Avoid These 8 Budget Blunders

Feb 2021

Creating and maintaining a household budget is a powerful tool for achieving financial goals. But these eight budgetary blunders could tank your best efforts to stay on track.


1. Omitting occasional expenses. You (hopefully) don’t have to repair your car on a monthly basis, but it’s unrealistic to pretend it’ll never happen. And just because you don’t know when the next breakdown will be, that doesn’t mean you should leave an occasional bill from your mechanic out of your budget. For unpredictable expenses like these, look back at the cost of prior repairs for an average figure to factor into your budget. As your car gets older, you may want to adjust that estimate up a bit as you’ll have a greater chance of more extensive repairs with a “mature” vehicle.


2. Forgetting about small purchases. That daily cup of joe at the train station may not cost you much, but little things can add up when they’re repeat offenders. Capture small expenses like these in your monthly budget. Include things like tips on services and your Sunday morning bagel run.


3. Ignoring large purchases. How do you budget for a big two-week summer vacation? It’s important to have a plan if you don’t want to end up with a gigantic credit card bill as a final souvenir of your beach getaway. Tackle large expenses like these by dividing the total cost by 12 and including that amount in a monthly savings budget. That way, by the time you pack your bathing suit and sunscreen, your fun-times fund will be able to cover your costs.


4. Relying on memory. When you review your spending at the end of the month, it’s easy to forget a purchase here and there. This is why it can be helpful to look back at electronic banking records to account for every dollar spent. After all, if you don’t accurately align your spending with your budget, what’s the point of making one to begin with?


5. Leaving no wiggle room. Always reserve a little cushion in your budget just in case. It’s pretty hard to anticipate every expense that might come up during the month, so don’t budget down to the penny – allow some wiggle room in case you’re overly optimistic in your projections.


6. Not paying yourself first. Don’t let planning for your future become an afterthought. Make it a top priority each and every month. Participating in your employer-sponsored 401(k) plan is a great way to make retirement saving automatic. And when by making regular contributions, you’ll dollar cost average into the market, which means you’ll accrue more shares when prices are lower. And everyone likes a bargain, right?


7. Being too hard on yourself. Sticking to a budget takes practice and discipline. You might not hit your target each and every month, but it’s important not to beat yourself up if that happens. Try to understand what occurred, make adjustments based on what you learn and get right back on track. You don’t need to budget perfectly to make a positive impact on your financial future.


8. Going it alone. Your employer-provided financial advisor is a fantastic resource. Budgeting can be complicated, and your advisor can help you sort through the details. Make an appointment to review your budget or get help setting one up for the first time.


Making — and maintaining — a budget is one of the best things you can do to stay on track for your retirement and other financial goals.

Retiring Soon? You Need to Be Doing These 7 Things Now

Retiring Soon? You Need to Be Doing These 7 Things Now

Feb 2021

Retirement can be a rewarding and exciting time. Make the most of yours by preparing ahead so you can relax and focus on all the fun stuff ahead.Are you in the final countdown to retirement? Congratulations! This can be an amazing time full of new opportunities. Put yourself in the best position possible for your next adventure with these seven retirement readiness tips.

1.  Revamp your budget. If you’re retiring soon, some expenses will likely go up — like medical and travel. But others will probably go down. You may not need to spend as much on clothes for work, and you may not even need a second car if you’re married. If you’re going to lose employee-sponsored health insurance and are not yet Medicare eligible, you’ll have to budget for purchasing insurance privately or buying it through one of the Affordable Care Act exchanges. And while you may have hoped to have all your debt paid off before retirement, unfortunately for many this is not the case. But you should at least audit all your debt including: mortgages, home equity lines of credit, cars, credit cards and other loans. That way you can budget for those expenses during retirement. Or you may decide to work a few more years part time to help expedite that process.

2.  Know Your Tax Strategy. Your taxes may change dramatically once you stop working, and different sources of income may be taxed at different rates. For example, IRA or 401(k) plan withdrawals are taxed as ordinary income, but for Roth IRAs or Roth 401(k) plans, withdrawals can be tax free. You may be subject to capital gains if you withdraw from a taxable investment account and required minimum distributions may push you into a different tax bracket once you reach age 70½. Consult your tax advisor to know what you can expect in your particular situation.

3.  Have a Social Security Plan. Your benefits will be reduced if you start taking Social Security before your full retirement age, which is probably about 66 to 67 depending on when you were born. If you wait, your checks will be higher. Determining exactly when to opt in can be a

complicated decision that would also benefit from an open discussion with your financial advisor. Taking benefits early can affect how much you can earn without your Social Security

benefits being reduced. Many people don’t realize that a large portion of their benefits may also be taxable.

4.  Get a handle on Medicare. What you’ll end up paying for your Medicare benefits depends on several factors, including your income. Medicare is a complicated program and you don’t want to be figuring it all out at the last minute, so now is a good time to do your homework and speak to your financial and/or Medicare advisor. According to research from Fidelity Investments, the average 65-year-old couple will spend more than a quarter million dollars for health care over the rest of their lives. Having Medicare and the right supplemental insurance is critical in planning for this phase of your life.

5.  Finish your estate plan. If you haven’t already, take care of your will, durable power of attorney, healthcare power of attorney, and/or advanced directives. Other documents such as a trust, guardianship designation or letter of intent may also be appropriate. Consult an estate planning lawyer regarding your specific needs.

6.  Reassess investments. Hopefully you’ve been keeping a watchful eye all along, but if not, it’s especially important to reevaluate your allocations before retiring. Your portfolio may not have time to recover from a serious market downturn. Check risk in all your retirement accounts. Make sure your market exposure is appropriate given your age and risk tolerance.

7.  Plan your free time. You’re retiring soon and that means your life is about to undergo major changes — and not all of them financial. Your daily rituals will be different and you may not be seeing a lot of the same people day to day. While sleeping in and hitting the links may be satisfying in the short term, for some it may gradually give way to boredom or depression. Consider joining some clubs or volunteering to keep yourself busy and meet new people. Couples who may have never spent all day long together may also need a little time to readjust to a new routine.

Source: make-sure-youre-prepared.html

Tags: estate planning, retirement, budget, estate

How Much House Can I Afford?

How Much House Can I Afford?

Jan 2021

You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?


Or is it?


Perhaps a better question really is: What else do I want to afford? In other words, do you want to get the most house possible, with little left for a new car — or that European getaway you’ve been learning Italian for? It’s important to take into account your goals and lifestyle as you consider this important decision.


And a huge consideration should be your retirement goals. What will you appreciate more: an extra bedroom, larger yard or an early start to your retirement?


While a house is an asset that can be a savings vehicle and wealth-builder, it’s not especially liquid, flexible or portable. And if the housing market deflates, it can cost you. So, it’s important not to get in over your head.


No Magic Number

Many financial planners advise budgeting no more than 28% of your gross income toward your mortgage and no more than 36% of your income toward all of your debts combined. That mortgage cost includes principal and interest as well as taxes and insurance (PITI).


Another common formula dictates that most people can afford a mortgage of 2 to 2.5 times their annual income. By that guideline, a person earning $60,000 a year would be able to afford about a $120,000 to $180,000 mortgage payment.


Look at the Big Picture

Remember that these are only starting points for making a decision. There are additional costs beyond PITI to keep in mind. HOA dues, maintenance, upgrades (even small improvements add up), commuting costs and school quality all should be considered.


Also, how long a loan do you want? 15 years? 20? 30? With a shorter-term mortgage, you’ll pay more each month but significantly less over the life of the loan — and you’ll get out of debt sooner. But be very careful about using an Adjustable Rate Mortgage (ARM) as the means of affording more house. With mortgage rates at historic lows, they are likely to go up at some point in the future.


Get Some Professional Advice

Finally, review how much you’re currently saving for retirement. Balance that against potential returns from the eventual sale of the home. While houses have generally been good investments historically, it’s very hard to predict values for a particular neighborhood 10 or 20 years in advance. If you think you may want — or need — to move in the near future, you may be rolling the dice. Balance the above factors. Buying a house is committing you to a monthly payment and lifestyle not only for today, but also in the future.


Choose wisely. Run the numbers. Talk to your advisor.



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