Financial Goal Setting with Agemy

Retirement planning during a bear market is challenging enough. But the 2023 retirement outlook includes a host of other major threats, such as high inflation and rising interest rates. Here are our top six suggestions when setting financial goals for the year ahead.

Looking back over the past few years, we have learned more than ever how important it is to be financially prepared. Financial preparedness is all about setting goals, but how often are these goals being reached?

When it comes to financial goal setting in 2023, it’s important to reflect your intentions and aspirations so you can achieve your intentions in confidence. Here’s what you need to know about goal setting if you are near retirement.

List and Prioritize Your Financial Goals

One of the best ways to set goals is to list them out and identify each one. Prioritize your goals from most important to least important. Write down specific details about each goal like the timeline and the amount of money you’ll need / how much you have already saved.

It’s easy to think of saving as a one-and-done activity. But you can actually save for more than one goal at a time, especially if those goals are short-term and long-term. For example, you could put money away for a vacation while continuing to contribute to retirement accounts.

Take Care of Financial Basics

Once you have identified your goals, ensure that your basics are covered. Depending on where you are at with your financial planning, you may have already accomplished these steps. Here are a couple financial basics that you can keep in place that will help you build a strong foundation in the long run.

  • Build an emergency fund
  • Have a healthcare gameplan
  • Pay off debt
  • Save for retirement
  • Create an Estate Plan

By making sure these are covered, it will help you pursue other goals with confidence.

Tackle Inflation Head-On

Nothing strikes as much fear into the hearts of retirees as inflation, and for good reason. The best-laid retirement plans can be wrecked by the rapid decline in value of the dollars you’ve socked away in your golden years. But inflation isn’t always the big bad wolf it is portrayed to be.

According to analysis performed by the U.S. Bank Asset Management Group, stocks have held up well against inflation over the last 30 years. And while you may think of inflation simply meaning higher prices on everyday goods, for investors, it means moving some of their money to assets that benefit from inflation or at least keep up with its pace.

The following investments tend to fare well during periods of inflation:

  • Commodities like gold, oil, and even soybeans should increase in price along with the finished products that are made with them.
  • Inflation-indexed bonds and Treasury Inflation-Protected Securities (TIPS), tend to increase their returns with inflationary pressures.
  • Consumer staples stocks mostly do well because price increases are passed on to consumers.
  • Mortgage-backed securities (MBS) and collateralized debt obligations (CDOs) are risky choices but tend to perform well under inflationary pressure.
  • Investment real estate is traditionally a safe haven but should be approached cautiously in 2022 and 2023 given the unsettled state of the industry.

Retired Americans should worry more about local property tax rates or the rising cost of health care. It’s really important not to let the emotional part of the inflation situation dictate your retirement planning strategy.

Understand Sequence of Returns Risk

You face plenty of risks when investing for retirement. Markets crash, inflation can eat into your returns, you might even worry about outliving your savings. But there’s one big retirement risk that gets very little attention: Sequence of returns risk.

Sequence-of-returns risk, or sequence risk, is the risk that an investor will experience negative portfolio returns very late in their working lives and/or early in retirement. Sequence-of-returns risk is a significant threat because retirees have little time to make up for losses that are compounded by the simultaneous drawdown of income distributions.

Protecting against sequence risk means anticipating a worst-case scenario. Don’t assume that a bull market will reign throughout your golden years.

  • Consider working as late as you can in order to contribute more to your retirement account, particularly in your peak earning years.
  • Keep saving and investing even after you retire. If you’re past age 70½, you can’t use a traditional IRA but you can contribute to a Roth IRA or, for that matter, open a personal investment account.
  • Diversify your portfolio. Nobody ever went broke investing in high-quality corporate and government bonds.

Create a Financial Plan to Each Your Financial Goals

Now that you have your goals and motivations, it’s time to start mapping out how they all fit together in a financial plan. 

The good news is you don’t have to do this alone! You can either do the work yourself or get help from a financial professional. Either way, it’s important to understand how you’re positioned to achieve your goals.

To get started, take inventory of what you have and consider what you need. Document your income sources and expenses. Knowing how much money you can allocate to different goals each month gives you clear direction on how to move forward. Then, use your goals and their timelines as drivers for your financial plan.

Perhaps you count yourself among the self-sufficient crowd who never sought professional assistance during your working years. Maybe you’ve done just fine that way. But now that you have to deal with retirement math and estate planning, it’s maybe time to lean on the experience of others. That’s where the Fiduciary advisors at Agemy Financial Strategies can help.

We can help you understand your current financial reality, and where you would ideally want to be, based on your current age and financial goals. Not sure what your goals are? We can help you with those as well. Furthermore, we can provide great insights on how to structure your finances so that you’re better able to meet your goals.

Final Thoughts

Once you learn how to identify financial goals and have a plan in place, it will slowly evolve over time. Life is a constant ebb and flow and many factors can affect your financial goals. As long as you review your goals and achievements once a year with your trusted advisor, you can review and make changes where necessary.

At Agemy Financial Strategies, we sit down with you and take the time to reflect on the purpose behind your financial goals. We will help craft a financial plan that works for you.

Looking to get your financial plan for 2023 started? Contact us to set up your complimentary consultation today.

/by

Year in Review with Agemy Financial Strategies

Our firm exists for the purpose of helping people achieve their personal and financial goals. Our philosophy is to deliver quality financial programs and teach principles for successful living. Here’s a look back at 2022 and what to expect for 2023 and beyond. 

Can you believe we’re wrapping up the year? And what a year it has been; Inflation, war, a Bear market… just to name a few! Amid these challenges, it is more important than ever that individuals and families have their financial lives in order.

Despite the hurdles, Agemy Financial Strategies has been hard at work this year helping all our clients achieve their retirement goals and navigate the financial storm of 2022. As we ring in the new year, here’s how our experienced, tireless and talented team of Fiduciaries can help you, too.

  1. Financial Podcasts

You can never be too money smart, and one easy way to boost your financial IQ is to tune into some really great, and often even entertaining, podcasts. Our Financial Strategies Podcast, Andrew Agemy and son Daniel Agemy combine their expertise, knowledge (and often humor) to educate retirees and assist them in reaching their retirement goals. Covering important topics that affect your golden years, Andrew brings his 30+ years of experience helping retirees with their finances and Daniel brings his ever-expanding knowledge and technical skills.

Together they prepare retirees with the FINANCIAL STRATEGIES they need to stay happily retired. You can now listen to the show on the radio or as a podcast on Spotify and Apple Podcasts! 

  1. Large Variety of Financial Blogs

More into reading than podcasts? While necessary, retirement planning isn’t easy and can get very confusing. Trying to learn best practices and derive meaning from financial and healthcare jargon can be burdensome. With our complimentary online financial blogs, you’ll find a wealth of information on financial planning, tax planning, healthcare planning, estate planning and more to help you learn everything you need in an easily digestible format. Our financial planning blogs give you a rare insight into the financial world, while explaining strategies in a clear manner that make sense.

Whether it’s trying to plan for retirement or learning how to create a sustainable estate plan, we had you covered. Providing the correct information to our clients is something we strive for. Our financial blogs are written by our financial experts in the field and they provide the best information available on the market. We hope you continue to enjoy them in 2023.

  1. Youtube Shows 

It’s been a wild year for Agemy Financial Strategies. We’ve been helping our clients plan for retirement and build their wealth, but we’ve also been thinking about legacy planning, wealth management and how to help people get the most out of the money they make.

We know that the world is changing fast, and that means that you need to make sure your money is working for you in the best way possible. Having our Youtube shows incorporated into your learning materials is one of the best ways to educate clients. Financial literacy is a big part of a fruitful retirement, and sharing the information via Youtube shows is just another way to learn from Andrew and Daniel Agemy’s experience in this field.

At the end of the day, helping our clients get smarter about their finances will help them make better decisions in order to reach their financial goals sooner. Subscribe to our Youtube channel here. 

  1. Financial Resources

Finally, we’re grateful for all the love we get from clients who have utilized our new large array of online financial resources. At Agemy Financial Strategies, our areas of expertise are Estates, Insurance, Investments, lifestyle Balance, Money, Retirement, and Taxes. All of these areas are crucial to building a secure financial road to success.

Forms and information are updated as policies change, so it’s a great way to get ahead of the retirement game with some complimentary learning tools. What have you got to lose? Check them out here.

Ready for 2023?

If you live in Connecticut or Colorado, hiring a retirement income advisor is only half the job done. The other half is to make sure the advisor is able to deliver on your expectations. At Agemy Financial Strategies, we are an indispensable part of your financial planning process and can add immense value to your life with our Fiduciary expertise and acumen. This is why we encourage all clients to set up an annual review. Why? Regularly meeting with us can help you maximize your money and keep on top of your long-term financial goals. Our goal is to help you save more, reduce your debt and invest more wisely for retirement. 

In your review, we’ll cover topics such as:

  • How your cash flow is going.
  • Life changes that affect finances, such as marriage, divorce or a death in the family. 
  • Updating beneficiaries to your estate plan.
  • Tax plans and changes for the year ahead.
  • Review your investment strategy and make changes where needed.
  • Checking short and long-term goals are on track and your wealth is growing as expected.

At the end, we should leave the meeting with a clear action plan for the next 12 months ahead! Set up your review here today.

Final Thoughts

As 2022 winds down, it’s time to look forward to 2023—and put yourself on the best financial footing possible for the new year.

When you work with us, you get a lifelong partner – a dedicated financial planner who creates strategies designed to evolve with you.It’s been a great year at Agemy Financial Strategies. Our mission is simple: we want our clients to feel confident knowing they have someone looking out for them and their financial needs. As Fiduciaries, it is our obligation to always put you and your needs first. 

It is a pleasure helping each of our valued clients, thank you for all your trust in our work, once again wishing you a Happy and Prosperous New year!

To schedule a consultation and discuss your financial strategies and goals for 2023,contact Agemy Financial Strategies here today.

 

 

 

 

 

 

 

/by

Who Needs Estate Planning in 2023?

Having a comprehensive retirement plan is one of the most important ways to help ensure financial freedom. But don’t forget to include an Estate Plan.

Retirement planning paves the way for achieving life goals, managing medical emergencies, and becoming financially independent. Imagining life at 70 or older is one of the most challenging aspects of retiring. What many Americans don’t realize is that, in addition to investing, estate planning is a crucial component of your retirement planning. Many people ignore succession planning or put it off until the last minute. Both are developing an estate plan, and a retirement plan is crucial. Your retirement plan will enable you to establish a sizable corpus for your stress-free retirement life.

What is Estate Planning?

Effective estate management enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.

Being intentional with your estate planning is a gift to your loved ones. Doing so not only benefits them, but it can also provide a great deal of peace for you, too. Consider these five tips below to determine whether you feel your estate planning is up to speed and to help ensure a seamless transition of assets once you’re gone.

Who Needs Estate Planning?

Everyone with assets should have an estate plan. Whether that be millions of dollars tied up in real estate or your family car, an asset needs to be passed down.

Having an estate plan ensures your wishes, goals, hopes and dreams are possible for your family well after you are gone. An estate plan is the foundation to leave a legacy for your community and the world around you.  As you think about using your assets to benefit your loved ones after you’re gone, consider having these items in place.

A Will

A Will is essential to ensuring that your decisions are honored after you are gone. You’ll need to select decision-makers, people who will act as executor and/or trustee of any trusts created in your Will. Without a will, most of the assets you own will go through your state’s probate process, which could be a confusing, drawn-out experience for your loved ones. And it’s unlikely that the results will reflect your wishes for your assets.

Retirement Plan Beneficiaries

If you own an IRA or employer plan account, like a 401(k), you probably designated a beneficiary when you opened it, which could have been decades ago. Take a look at the beneficiaries your financial companies have on file and make sure they reflect your current wishes.

Power of Attorney

The most basic tool to ensure that if you become disabled mentally or physically, your assets can be accessed and managed with the least expense and without court intervention is a power of attorney. The powers that you grant in a power of attorney are broad and are intended to permit the attorney-in-fact to step into your shoes.

Healthcare Directives

Healthcare decision making is also an important part of estate planning. Like the power of attorney, having documents in place in advance ensures that you’re able to retain control and have a voice in your own health care decision-making for as long as possible.

Other Considerations – Note Your State’s Estate Tax Laws

Estate planning is often a way to minimize estate and inheritance taxes. But most people won’t pay those taxes.

  • At the federal level, only very large estates are subject to estate taxes. For 2021, up to $11.07 million of an estate is exempt from federal taxation. In 2022, up to $12.06 million is exempt. What if you have a larger estate that surpasses the federal tax exemption limits? You may want to consider a grantor retained annuity trust, or GRAT, a type of irrevocable trust that can help reduce the amount of taxes your heirs pay.

  • Some states have estate taxes. They may levy estate tax on estates valued below the federal government’s exemption amount. If you live in Connecticut, the exclusion amount in 2022 is $9.1 million. Even though there is no Colorado estate tax, Colorado death tax, or Colorado inheritance tax, there are still tax-related concerns for many people when it comes to estate planning.Some states have inheritance taxes. This means that the people who inherit your money may need to pay taxes on it.

Final Thoughts

Estate planning is not simply who gets your stuff when you die. Sure, that’s a part of it and an important part. But estate planning also includes planning for yourself in the event of your incapacity.

Working with a financial planner is a great way to ensure that your finances are in good standing now and in the future. It’s important to have a trusted advisor at your side when it comes to your family’s finances—someone who can help you make informed decisions about estate planning, retirement planning, and everything else in between. At Agemy Financial Strategies, we’re here for you! We’ve been helping our clients live better lives for over 30 years and we’re ready to help you, too.

Our mission is simple: we want our clients to feel confident knowing they have someone looking out for them and their estate planning needs. To schedule a consultation and discuss your options for estate planning, contact Agemy Financial Strategies here today.

/by

Preparing for a Potential Recession in 2023

“Before anything else, preparation is the key to success” – Alexander Graham Bell. Recession is very likely in America’s future, but it will take its time arriving. Here’s how to plan accordingly.

There are some key economic indicators pointing to a recession in 2023. The most prominent being the Fed’s decision to continue to raise interest rates in the face of rising inflation. The October job report continued to show historic lows in unemployment, with over a quarter of a million jobs being added. Facts like these show that a recession could be considered likely. That makes preparation more important than ever. Ensuring that your family is in the best financial position possible will benefit you even if we do experience a recession.

Read on to learn a few ways to stay one step ahead of a potential recession in 2023.

Know the Warning Signs

Stay informed. There are a handful of indicators that can point to a recession. While none of these signs indicate a recession with 100% certainty, they are worth paying attention to.

Consumer spending is one such sign. While most won’t have access to all of the data, a simple search can point to the fact that October’s online spending was roughly on par with last October. If we see a considerable dip in money spent, this can indicate the public has concerns about spending money vs saving it.

Unemployment reports are also a major indication. Currently unemployment is around 3.7%  which is near historic lows. To put this in perspective, at the height of the great recession, unemployment was as high as 10%.

Finally, watch housing prices. If they begin to plummet, this can show a similar thought process to consumer spending. The general public – as a whole – may feel buying a home is a risky proposition and holding off may be a better option in the face of economic uncertainty.

Prepare an Emergency Fund

A six-month emergency fund is always worth having, but with inflation, have you adjusted your fund?

If your six-month fund was prepared in May of 2020, when inflation was essentially zero, then that money is simply worth less today than it was then. Ensure that your emergency fund is keeping up with inflation, so that in a worst case scenario you and your loved ones are covered while you regroup.

Review Your Budget

As interest rates creep up, major purchases like cars and homes may be something to put on hold. Instead, focus on other debt such as an existing car payment or other personal loans.

Beyond this, it’s worth evaluating your “kitchen table” budget – things like food, entertainment, allowances, etc. Small changes to unnecessary expenses can add up over time and put you ahead.

Evaluate Bonds

Investors who have already endured one of the most challenging years ever must now confront the question of how to invest when the U.S. and other major economies may be headed toward a recession. While financial market volatility is likely to persist, we believe the case for bonds is stronger than it has been in years, bolstered by significantly higher starting yields and bonds’ strong track record during economic downturns.

Currently a two-year United States Treasury note has a 4.4% yield, while a 10-year note has a 3.9% yield. While bonds are not going to offer the immediate satisfaction of a skyrocketing stock, they can offer a steady return in the face of a recession. Considering that most stocks are down across the board, bonds can help counteract this dip and be a low-risk position for a portion of your assets.

Final Thoughts

As Alexander Graham Bell said, preparation is the key to success. Whether a recession occurs or not is unknown, but being prepared for one is absolutely in your control.

By knowing the warning signs, and taking proper financial steps, you can put yourself and your loved ones in the best possible position if the economy takes a turn for the worse.

Schedule a call with the Agemy Team today. We will secure your financial assets to ensure the health & longevity of your portfolio.

/by

Last Chance to Max Out 401ks and Roth IRAs

Many Americans nearing retirement may think they have all their I’s dotted and t’s crossed. But what many fail to recognize is the importance of maximizing their 401(k)s and IRAs. Here’s how to make sure you’re not missing out on your well-deserved retirement money. 

If you’re reading this, chances are you’re already contributing to your 401(k) account. That’s great! But with the IRS increasing the annual contribution limits in 2023 for most 401ks and Roth IRAs, to $22,500 from $20,500, most retirees or people nearing retirement might feel pressure to put more money into retirement savings.

If you haven’t looked at your account in a while or have never checked it out before, now is a great time to check out how much you’re contributing and take stock of whether or not that amount is enough. If it isn’t—or if you’ve always wanted to contribute more but haven’t been able to—it might be worth considering upping your contributions now that the ceiling has increased.

Here is what you need to know about maxing out your 401ks and Roth IRAs.

401(k) Contribution Limits for 2023

In order to combat rising inflation, the IRS has increased the maximum contribution limit for 401(k)s to $22,500 in 2023. However, the IRS did not raise catch-up contributions for traditional or Roth IRAs.

The biggest take away from this is people above the age of 50 are eligible for catch-up contributions to their 401(k). This means that this age group can contribute above the $22,500 limit. The IRS also increased the catch-up contribution value in 2023, from $6,500 in 2022 to $7,500. In total, employees above the age of 50 can contribute up to $30,000 to their 401(k).

Should you be maximizing your contributions? The savings would be wild to pass up. Let’s take a look at IRA and Roth contributions for 2023 before we dive in.

IRA and Roth IRA Contribution Limits for 2023

The annual contribution limit for traditional IRAs and Roth IRAs is increasing in 2023, which means you’ll be able to save more for retirement this year.

For people who have a retirement account outside of their employer, the limits are going up for both traditional IRAs and Roth IRAs. In 2023, eligible individuals can contribute up to $6,500, up from $6,000, to their IRAs.

Roth IRAs have income limits, so individuals making above a certain income threshold are eligible for reduced contributions. Individuals who make above the upper range of that threshold are not eligible at all. In 2023, the income phase-out range for single filers is $138,000 to $153,000. For married couples filing jointly, it’s $218,000 and $228,000.

Should You be Maximizing Your 401(k) and IRA Contributions?

Having a 401(k) or IRA account puts you in a better position for retirement compared to many Americans. If you’re wondering if you need to contribute more money to your 401(k) or IRA now, it depends on your finances.

For example, If your employer offers to match a percentage of your contributions, your first priority should be contributing enough to earn the match. By not taking advantage of the match, you’re essentially losing out on free money.

After that, you’re ready to invest your money. You can choose from a number of different investment vehicles, such as a Roth IRA. The important thing is to start saving early and to contribute consistently. The earlier you begin investing, the longer time your money has to grow through compound interest.

Ready to Retire?

Maybe not quite, there are many ways to invest outside of your 401(k) and IRA:

– Upgrade Your Savings: Stashing your extra money in a certificate of deposit (CD), high-yield savings account, or money market account might be the least risky investment you can make.

– HSA: Some experts say an HSA is one of the most tax-favored, yet underused, investment vehicles.

– A 529 savings plan is a tax-advantaged savings account designed to encourage saving for qualified future education costs, such as tuition, fees, and room and board. Much like a 401(k) or IRA, a 529 savings plan allows you to invest in mutual funds or similar investments.

– Open a Brokerage Account: If you’ve paid off your credit card debt, established an emergency fund, and exhausted all your tax-advantaged accounts, you can open a regular old brokerage account to squirrel away some more money.

– Invest: Whether in real estate or stocks, strategic investing could be a good place to tap into if you are looking to diversify your portfolio.

Please note: Wherever you put your money, remember that each type of investment comes with drawbacks. You should understand your risk tolerance and be comfortable with the potential pitfalls involved before getting started with a new investment. Asset diversification is a way to offset the potential risks — do not put all your eggs in one basket.

Final Thoughts

There are many different strategies you can use to max out your 401(k) and Roth IRA accounts. Starting in 2023, you’ll be able to contribute more to your 401(k) and other retirement accounts than you could before.

With this in mind, it’s important to have a financial advisor you can trust. At Agemy Financial Strategies, we specialize in investment strategies and retirement planning. These two go hand in hand when it comes to planning your financial future in order for you to enjoy your golden years.

Have questions about retirement planning or building up your retirement accounts? Contact us today.

/by

5 Retirement Taxes You Should Know About for 2023

The IRS recently announced a number of changes to retirement savings accounts, social security and tax brackets for 2023. Additionally, the IRS issued technical guidance regarding the cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2023 tax year. 

Planning for retirement is one of the most important financial tasks most Americans have to consider. With so many moving parts, it can be difficult to keep up with all the changes that frequently occur in the retirement landscape. To make sure you get the most out of your retirement plan, it’s essential to be aware of everything that’s going. Here are 5 retirement tax changes you need to know for 2023.

Social Security 

The cost of living adjustment (COLA) for Social Security payments has been increased to 8.7% in 2023. This is substantially higher than last year, when the payout was out 5.9%. This adjustment results in an average increase of $146 per monthly benefit. For the average retired worker, their monthly check will increase from $1,681 to $1,827.

New 401(k) Contribution Limits

For 2023, the annual contribution limit for 401(k)s, 403(b)s, most 457 plans and Thrift Savings Plans have been bumped up from $20,500 to $22,500 in 2023. Additionally, individuals above the age of 50 will be eligible for catch-up contributions for up to $7,500. In total, employees above the age of 50 can contribute up to $30,000 to their 401(k). And for those that work for companies with match programs, the total annual contribution limit is now up to $66,000.

New IRA Contribution Limits

For those who have retirement funds outside of their employers, annual contribution limits have increased for traditional IRAs and Roth IRAs as well. Next year, individuals will be able to contribute up to $6,500 to their IRAs. However, catch-up contributions have not been raised, remaining at $1,000.

IRA Income Phase-Out Range

For traditional IRAs, the phaseout range in 2023 starts at $73,000 and ends at $83,000 for single taxpayers covered by a workplace retirement plan. This means single filers who earn more than $83,000 in 2023 cannot contribute to an IRA if they are covered by a workplace plan.

For couples filing jointly, the new phase-out range is $116,000 to $136,000, only if the spouse making the contribution is covered by a workplace plan. If one spouse does not have a workplace plan, but the other does, the phase-out range is $218,000 to $228,000.

Roth IRA Income Phase-Out Range

There are income limits, so individuals making above a specified threshold are eligible for reduced contributions. Those in an upper range of the threshold may not be eligible at all.

For single filers or heads of household, the 2023 Roth IRA phase-out range is now $138,000 to $153,000.

Final Thoughts

From increased government payments to higher limits for savings, make sure you know what’s new ahead so you can successfully plan for retirement. But remember, you should never contribute more than you can afford. If you haven’t yet done so, check out our complimentary Tax Resources here where you’ll find forms, explanations, and other tools to help you manage your taxes.

Oftentimes, it’s best to consult a financial professional to ensure you’re making the best financial decisions for your situation. If you’re interested in getting started on building a strong retirement plan, Agemy Financial Strategies can help. No matter where you are in your financial journey, we can create a plan tailored just to you.

Learn more, and request an appointment with us today.

/by

Cook Up an Estate Plan this Thanksgiving

‘Tis the season to surround yourself with your loved ones to enjoy one another’s company. With family together this holiday season, now is a perfect time to discuss estate planning. It’s also an ideal time to plan for the future. 

While Estate Planning may not immediately be the first thing that comes to mind over the holidays, it’s a great step to take in order to have some hard conversations. What would happen in a medical emergency, or your last wishes? Who would inherit your most cherished items?

The end of the year is a time where things start to slow down a bit and you make some space for family gatherings. You may also want to have a conversation or two with those who mean the most about your plans for the future.

Here are some estate planning tips to follow this holiday season as you gather around the table to feast.

All In It Together

One of the best things about the holiday season is that your family is all in one place together, even if it’s just for a short amount of time. Now more than ever, is a great time to have conversations around estate planning.

End of life plans and who gets the family home after you’re gone can be a hard thing to talk about. However, with everyone in one space it makes easing into these conversations a bit easier. When it comes to estate planning, more than 70 percent of families lose their wealth by the second generation, and 90 percent by the third. Nasdaq reports that this wealth loss occurs for three key reasons:

  • Families do not talk about money
  • Older generations worry that younger generations will develop bad habits
  • Many individuals lack the education and training on the value of money, or how to handle it.

By strategizing now you can have clear and concise conversations about what your vision and intentions are.

Conversations to Cover

Once you’ve done the hard part of having the conversation, you’ll want to have an idea of what topics to cover. Most people assume that estate plans cover just inheritance–when there’s actually a lot more to cover.

  • Medical

Estate planning is often associated with making sure that your loved ones are taken care of after you’re gone. But did you know that an estate plan can also help you live a healthier, happier life?

You may think that your family members know what to do in the event of your incapacitation, but they might not have thought through all of the details. Make sure they’ve signed healthcare directives and selected Power of Attorney(s) so that their wishes are carried out in the event of a medical emergency.

  • Roles

Most estate plans come with several roles, each of which can be filled by a family member if you so choose. Sit down and discuss with your family to find and name Executors, Guardians, and Powers of Attorney (medical, financial, etc.)

  • Insurance

Now is the time to talk about money and to make sure everyone has obtained or is in the process of obtaining a life insurance policy. Lastly, make sure they have named a beneficiary.

  • Estate

It’s common for immediate households to discuss assets, but it’s rare for extended families to gather and discuss family estates as a whole. One of the best ways to tackle this is to talk about the family estate with their aging parents about plans to divide up the estate. This may feel like an awkward conversation at first, but it’s better to be transparent and hash things out now to prevent infighting and ugly court battles in the future.

For example, you might discuss who will inherit what pieces of jewelry or art work in your family. If one sibling doesn’t want something because they already have a similar piece of jewelry, perhaps you could donate it —or give it to another sibling who hasn’t inherited anything yet.

  • Taxes

Taxes and estates are a tricky subject. There are several estate and inheritance taxes, including generation-skipping taxes, that could affect the overall wealth of the family. This can be a complicated topic for families to discuss, but it’s important to have these discussions early on.

If Not Now, When?

If you’re reading this, you’re probably not just thinking about estate planning—you’ve already decided to take action!

And if it’s time to get started on your estate plan, there’s no time like the present. As we’ve discussed above, the holiday season is a time when the whole family comes together to celebrate the season and all they must be grateful for. It’s a time of bonding and looking forward to the future, and it’s the perfect time to ensure that you’re protecting yourself and your family, no matter what happens.

Working with Agemy

When it comes to estate planning, having a financial advisor that you trust is crucial to your planning success. The best way to protect yourself, your family, and your assets is by having a comprehensive estate plan in place.

An effective estate plan enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. It can also spell out your healthcare wishes and ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.

If you’re ready to get started on your estate planning, give us a call today to set up a complimentary consultation.

Wishing everyone a safe, happy and healthy Thanksgiving from the entire team at Agemy Financial Strategies.

/by

How to Determine Risk Tolerance During Retirement

Knowing your risk tolerance can make the difference between a smart investor and a sorry investor. 

Understanding your risk tolerance is essential in developing a successful retirement strategy. The overarching principle of risk is that the higher it is, the greater your potential for growth, but also the greater your potential for loss. Risk tolerance isn’t a static consideration. As your investments change over time, so should your tolerance for risk, especially as you near retirement.

Typically, the closer you are to retirement, the lower your risk tolerance will become. The younger you are, the more time you have to make up for short-term losses. However, if you’ve still got some ground to make up before or in retirement, you may need to accept additional risk for the opportunity to reach your financial goals.

Continue reading to learn more about risk tolerance, its importance and how to determine yours.

What is Risk Tolerance? 

Essentially, risk tolerance is the degree of volatility in investment returns an investor is willing to withstand over time. In other words, it’s how much you can stand to lose in the short term. How much risk an investor can tolerate varies widely and is determined by a number of different factors. It can be influenced by the news, friends, family, your gut and emotional connections to particular investments and money in general. The most considerable influence on risk tolerance for your retirement accounts show be driven by two factors, time to retirement and retirement goal. Once you’re in retirement, your risk tolerance again changes. Generally, retirees have a much lower risk tolerance, and would look for conservative investments.

Levels of Risk Tolerance

  • High risk tolerance

With high investment risk tolerance, you are a natural risk taker and an optimist. You like weighting your portfolio with lesser-proven stocks or other investments that have the opportunity for big gains, but could also dip dramatically if certain assumptions about markets and demand don’t pan out.

  • Moderate risk tolerance

If you can tolerate some risk, you probably prefer investments that are likely to produce solid gains over time but also have the potential to drop somewhat.

  • Low risk tolerance

If you’re uncomfortable with anything but small risk, you’re most likely to only invest in conservative assets. You only feel comfortable with the type of investments that typically generate more moderate gains in share prices but are less likely to dip.

How to Determine Your Risk Tolerance

When assessing how much investment risk you can take on, thinking practically is important. Your financial circumstances may justify some reasonable chances or may merit more conservative choices. If you’re not sure what your level of risk tolerance is, start by asking yourself the following questions.

What Are Your Investment Goals? 

Why are you investing? Everyone has their own reasons for investing but some common goals include:

  • Retirement
  • Buying a home
  • Paying for your children’s education
  • Financial independence

Determining the why of investing is the first step in understanding how much risk you’re willing to take on. Additionally, having a goal in mind helps assess your time horizon and estimate how much money you’ll need.

What’s Your Time Horizon? 

Your time horizon is the amount of time until you plan to use the money you’ve invested.

Generally, the larger your time horizon, the more risk you can take on. If your investments lose value, you have more time for them to recover. While downturns occur and past performance is no guarantee of future results, the stock market has historically bounces back, offering long-term returns.

A shorter time horizon means your investments have less time to recover from a potential downturn. If your goal is to earn a big return in a short period of time, larger risk is necessary. The closer you are to retirement, or if you’re already there, your time horizon would be short.

Do You Have an Emergency Fund? 

Regardless of your risk tolerance, it’s important to have savings set aside in liquid accounts. If you face an emergency, you want to have easy access to cash without having to liquidate investments. However, if you keep a large portion of your savings in cash because investing makes you nervous, this is a sign you’re risk averse.

Keeping a specific amount in cash to help ride out market fluctuations is extremely important, so always make sure your emergency fund is topped up.

How Comfortable are You Taking Short-Term Losses? 

It’s common for investments to fluctuate in the short term. With stocks and similar investments, it’s important to remember that your shares may decline in value, but you don’t realize the loss until you sell the investment. If you’re in need of the money in the near-term, you may be forced to sell at a loss. Investors with a longer time frame have the ability to hold onto the investment with the hopes of recovering and potential increases in value with time.

Final Thoughts

Every investment comes with risk, but it’s important to understand the balance of risk and reward that is best for you and is appropriate for your portfolio. Generally, as you near retirement or enter into it, it’s much safer to add more conservative, low risk investments into your portfolio. Of course, this always just depends on personal preference and what makes sense with your own financial situation.

Risk tolerance is a highly individual matter and can be sensitive once you move into retirement. You should consider working with an experienced and trusted financial advisor who can help further shape your risk capacity and suggest products that fit within it. At Agemy, we specialize in retirement income planning, helping you take care of yourself and your loved ones. Whether you’re looking to change up your financial strategy, need assistance with wealth management or legacy planning, or just want someone with you while you jump into retirement, we’re here for you!

/by

Six Common Issues That Can Cause Stressful Inheritance Disputes

Estate Planning can be a difficult topic to prepare for – but nonetheless, it’s essential to have.

Estate Planning is about more than just managing your assets and wealth. It’s also about making sure that your wishes are carried out, even when you’re not around to communicate them.

When you take part in estate planning, you’re planning for when you become incapacitated or dead. It’s even less fun to talk about unorganized estate planning, which oftentimes leaves your loved ones heartbroken or left with strained relationships.

Here is a look at six common issues that can cause inheritance disputes, and how you can avoid them.

Leaving Behind Surprises

We all want to keep our loved ones out of the dark, but there are some things that are just easier to talk about first with a financial planner. Estate planning is one of those things.

The biggest problem when it comes to estate planning is the tendency to keep things secret. That’s why conversations should start with a trusted advisor. Most clients are actually more comfortable talking to their advisors about difficult topics like debt, divorce, and you guessed it – death and incapacitation.

But it’s always in best practice to go home and talk to your loved ones about your plans as well. Talking about what’s going to happen when you die is a difficult subject, and we understand the impulse to push the conversation off. Planning ahead of time and talking as openly as possible now will alleviate heartache when the time comes.

Naming the Wrong Executor

When you decide to pass on and leave your estate to whomever you choose, it’s important to consider who will act as an executor on your behalf. The role of an executor can be with a person for years, and can include going to court, traveling, and working through reams of paperwork.

Executors take on a big role and it’s important to assign the role to someone who can handle it maturely. Too many times, estate issues will arise because the person in the role of executor was just not able to handle the responsibility.

The best way to handle this issue is by creating a short list of individuals you think are up for the job, and then think about their strengths and weaknesses. Are they responsible? Organized? Ethical? Do they have the flexibility in their schedule to handle the tasks they will need to accept as executor of your estate? Will they have the financial ability to ensure that your assets don’t lose value? Whoever you choose it is best practice to discuss with other family members on who you ultimately choose for the task.

Not Planning for Incapacitation

The last thing you want to think about when planning your estate is what happens when it’s your time to go. But it’s actually one of the most important things to prepare for, especially as we age.

While it is easy to forget that estate planning does more than help our loved ones after we’re gone; it can also provide them with critical guidance about our wishes while we’re still alive, but incapable of carrying those wishes out on our own.

You can have a POA (power of attorney) in place to make sure that you have someone to handle your affairs while you are still alive. This person can be someone close to you who has your best interests at heart, or it can be an attorney who specializes in these types of matters. Having a POA in place will help avoid any potential financial disasters that could come up during a time like this.

Not Having Correct Names Listed on Estate Documents

It’s easy to get confused about where you should list your beneficiaries. If you’ve listed a beneficiary on your will, but that same person isn’t listed on the account level, it can cause delays and even cause your estate to become the subject of contentious disputes.

This is a very simple and common issue that can cause problems further down the road. If there are any contradictions it can lead your estate to become open to contentious disputes. Make sure to check, double check, and triple check where you list your beneficiaries before filing.

Not Claiming/Allocating Personal Assets

Preparing for incapacity and death is an important process. While many people take the time and care to clearly indicate to whom their financially valuable assets will go after their death, they often neglect to make plans regarding sentimental items. This can cause awkwardness later on as family members may feel confused about what they can take.

One of the best ways to avoid this issue is by gathering your family members and discussing who takes what. There are many ways you can go about this, but one of the most popular ways is by having some sort of color coding method and having everyone take turns on claiming the items that they would like to inherit one day

Once this task is completed, have a document or spreadsheet in place that lists the items and their claimants and include it in your will.

Estate Planning Solo

When it comes to estate planning, having a financial fiduciary advisor you trust is key to ensuring all of your belongings will be left to your beneficiaries.

The process of estate planning can be difficult and intimidating. It’s important to have someone who has experience, who you trust, and who can guide you through the process so that you’re leaving everything to the right people in the right amounts.

Estate Planning with Agemy Financial

At Agemy Financial Strategies, we understand that you want to make sure your estate is handled properly and distributed according to your wishes.

We can help you craft an effective estate management strategy that will enable you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.

If you have any questions regarding estate planning and other will planning services, contact us today.

/by

How to Prepare for Retirement in a Volatile Market

,

For every investor, the world has become a hard place. But for those reaching retirement, pressure is significantly mounting. Here’s how to cope with a roller-coaster market on the lead up to your golden years. 

When you think of retirement, many Americans imagine a fun and relaxing lifestyle. However, preparing for retirement is no easy task– especially with volatility and rising interest rates. This past year has been especially challenging to plan for retirement. The economy has been turbulent and many are having a hard time keeping up with the cost of living.

It’s estimated that 1.5 million retirees have re-entered the U.S. labor market over the past year due to such factors as more flexible work arrangements, rising costs, and the inability to keep up while on a fixed income (according to an analysis of Labor Department data by Nick Bunker, an economist at Indeed). Additionally, 25% of Americans feel they have to delay their retirement plans because of disrupted savings resulting from increased prices and market instability.

During such an uncertain time many are second guessing their road to retirement. However, a down market should not deter you from reaping the benefits of a fruitful retirement. Here are a few tips to help you prepare for your golden years in a volatile market.

Evaluate Risk Tolerance

When it comes to risk tolerance, having a diversified portfolio will help minimize the impact of risk and total loss in a volatile market. The right mix of investments for you will depend on your unique circumstances, including your age, investment goals, and risk tolerance.

The key is to find the right balance of risk and reward for you.

Investing Without Emotions

It can be hard not to invest with emotions. After all, it’s your hard-earned cash you’re watching rise and fall. Market volatility is a stressful environment for anyone with money in the stock market. Investing with emotions can lead to significant losses.

It can be difficult to impulse buy or sell stocks when the market is experiencing a hiccup. In the end, it’s hard to predict market behavior—so try not to make any risky or permanent decisions regarding your portfolio when it’s likely that current market conditions are temporary. Stick to your investment plan and build on these important building blocks:

  • A retirement date. Figure out how long you’ll have to save.
  • Your major life goals. Plan for small and big events in the future.
  • Your tolerance for risk. Find your comfort zone.

Your plan is like a safety belt when the market starts seesawing. Stay on track by sticking to it during market swings.

Having a Plan in Place

When it comes to planning for retirement, having a long-term plan can help ease stress and keep you on track for the long-run. Market volatility can tempt you to want to ditch your plan, but it’s important to think long-term. If you’re nearing retirement it may be an appropriate time to make some small changes in order to reduce the chances of major risk. Make sure to rebalance your investment plan on a regular basis — quarterly, semiannually or once a year. Why? Because volatile markets can change the proportion of your funds in different asset classes. Therefore, rebalancing resets your portfolio to your desired investment mix.

Note: It’s important not to make any significant changes without consulting your financial advisor. A trusted advisor is crucial to your success when preparing for retirement during a volatile market.

Final Thoughts

Don’t let market volatility derail your retirement savings plan. With the market’s current conditions, it may not be as smooth of sailing as you’d hope for–but market downturns don’t last forever.

The investment professionals at Agemy Financial Strategies can help you make sure your investments and assets are mixed to create a balanced plan for your unique retirement goals. Regardless of a volatile market, we can help strategize asset allocations to help stomach inflation, or revise your current plan to make helpful amendments.

If you’re looking for more ways to prepare for retirement with inflation, connect with the team at Agemy Financial Strategies here to help you get started on your portfolio diversification journey today.

/by