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Five Things You Never Knew About Estate Planning.
NewsJuly 20, 2022
If you hear the phrase “estate planning” and immediately tune out, you’re not alone. If you don’t think estate planning is a priority, here’s five reasons you might change your mind.
Think estate planning isn’t for you? Think again.
Estate planning is often overlooked when it comes to preparing for retirement. 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.
1. You Should Begin Estate Planning Early
A lot of people put off or wait to plan for their estate until they get a little older. However, life can be cruel and unfair, and tragedy strikes every day. If you have an accumulation of assets of any size, you should be planning your estate. The earlier you begin, the easier it will be to continue to grow your estate and keep a detailed record of your wishes.
Planning your estate is extremely important because it helps you to avoid probate court when you pass away. This is a lengthy process that can cost your heirs thousands of dollars in legal fees (as well as the obvious stress). If you have a will in place at the time of your death, the probate process is much quicker and less expensive for your family members.
2. Estate Planning is for Everyone
Maybe it’s the word “estate.” It sounds fancy and, well, it sounds like money, but some people assume that you only need to undergo estate planning if you have numerous assets worth a lot of money. However, there is no minimum amount that you need to make estate planning worth it. In reality, those with less should be focusing on estate planning more, as it allows them to be as cost effective as possible. Since estate planning consists of determining how everything you own will be divided amongst your family or friends, it’s essential for everyone to complete as a part of their retirement plan.
If you do not want your family members fighting over your belongings after your death, then it is best for you to plan ahead and figure out what goes where. This can be done through the process of making a will or trust. A will is a document that names who receives your assets after you pass away, while a trust is an arrangement by which someone else manages your assets until they are passed onto someone else.
Whether or not a person has any assets does not matter when it comes down to how important estate planning really is for everyone involved!
3. You Can Make Changes to Your Estate Plan
If you are like most people, you will be in a very different place in life than you are now when you first create your estate plan. This is why it’s important to have an estate plan that can easily adapt to your changing needs.
Changes like marriage, divorce, the birth of a child, or even new laws can make your old estate plan inadequate. As your situation changes throughout your life, you can easily make changes to your established estate plan. You’ll be able to change beneficiaries as needed, adjust the amount of assets that each beneficiary receives, or add in new beneficiaries if your family or close circle grows. Up until the day you pass away, estate plans can be legally changed, if the changes are done so without coercion and under the right frame of mind.
Reviewing your plan on a regular basis – and keeping your estate planning advisor up-to-date on any life changes – will help ensure your plan continues to work.
4. Plan Ahead if You’re Giving to Charity
It’s not uncommon to feel like the world is moving too fast, and you’re constantly being pulled in a million different directions. That’s why it’s so important to take time to plan ahead. If you have any loved ones who depend on you, it’s crucial that they know what they can expect from you when the time comes. This means having conversations about your end-of-life care and what kind of care you’d like to receive if you become incapacitated.
Planning ahead also gives you time to decide whether you want any of your assets to go to charity. If this is the case, having the conversation early will give peace of mind there’s no surprises to come after you die. Do you want part of your estate to go to a favorite charity? Intestacy laws leave no room for charitable contributions. So, the only way to be charitable in death is to create an estate plan. And, if you have concerns about taxes, charitable estate planning can afford you tax breaks you otherwise wouldn’t qualify for.
5. You Don’t Have to do it Alone
Estate planning can be intimidating, and it can also involve some complex rules and laws, creating pitfalls for those less experienced. A full-service Fiduciary advisor can help you navigate the process and put an effective plan in place.
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.
The Financial Side of a Gray Divorce.
NewsDivorce is hard, but a divorce later in life presents a unique set of challenges. Understanding how your finances are affected by your gray divorce can save you a great deal of worry and stress.
Experiencing a gray divorce may not have been in your retirement plans, but if you’ve found yourself in the middle of one, you’re not alone. Bill and Melinda Gates were separated after 27 years of marriage. And now experts say ‘gray divorce’ is on the rise. According to Pew Research Center, divorce rates for those 50 and older have more than doubled within the past 25 years.
What is a Gray Divorce?
A gray divorce, or silver divorce, is a divorce between two individuals 50 or older. The term was coined as research showed the phenomenon of the overall divorce rate going down while the “gray-haired” demographic’s rate of late-in-life divorce was on the rise. The 50+ crowd currently makes up a quarter of all divorces and 1 in 10 is 65+.
AARP conducted a study titled The Divorce Experience: A Study of Divorce at Midlife and Beyond. Some of the findings consisted of:
Who initiates divorce in later life?
Participants’ age when divorced
Gray Divorce Reasons
There are a multitude of reasons why people decide to get divorced later in life. Some of these reasons are the same for younger couples deciding to split — infidelity, lack of intimacy or unrealistic expectations, to name a few. However, many gray divorces have more unique causes.
No matter your reasoning for getting a gray divorce, you’ll need to determine the best way to legally separate from your spouse in the most financially beneficial way.
Collecting Financial Information
Ending a marriage can be a difficult process for both spouses involved. However, it can be significantly beneficial for you to collect your financial information early within the divorce process in order to know the entirety of your financial situation. By doing this, it can help you maintain some control during this stressful time.
When a couple divorces, they have to come to an agreement about how to divide their marital estate. Marital estate includes all assets and debts acquired during the marriage. Unless divorcing spouses agree on how to divide everything, a judge will evaluate and divide the marital estate using the state’s property division laws. Some states divide the estate equally (community property states), while others use an equitable distribution method, which means a fair but not necessarily equal division.
In order to resolve the allocation of your assets the court and your ex-spouse has to have a complete picture of your assets, debts, and expenses. Having all of your financial information readily available to you will put you at an advantage. The sooner you know what you’re dealing with, the better prepared you’ll be to resolve it. Being prepared will essentially allow you to move quickly through the disclosure process.
Try To Cooperate
Divorce is never easy, but it’s easier when spouses work together. If both parties are willing to cooperate and work toward a resolution, dividing the marital estate can go more smoothly and reach a resolution faster. But cooperation between divorcing spouses isn’t always possible, and sometimes, as the divorce progresses, spouses become less willing to work with one another.
Regardless of the relationship you have with your ex-spouse you should try and work together as much as possible. Having a divorce financial checklist is a great way to tackle this head one. Here’s a look at what information you’ll need to gather.
Assets
Take inventory of all your property and belongings, and make copies of all documentation related to these items. The following categories can help you keep track of this information:
Debts
Before the court can divide your estate, the judge must have a complete picture of your debts as well as your assets. If you and your spouse took on debt during your marriage, the court will evaluate it alongside your disclosed assets and assign it according to state law. In general, when a spouse has a debt that is considered separate or unique to that spouse—such as a student loan—the court will assign it to the spouse who acquired it. Gather information about the following even if the debt is in your spouse’s name:
Expenses
One of the most challenging parts of calculating your expenses is the fact that outgoings vary from month to month. For example, one month you might have only your car payment and fuel costs; the next month, though, you could be faced with hundreds of dollars in repairs when your battery dies, or worse. Don’t worry about getting everything exactly right; estimate as best you can while disclosing every expense you can think of.To help prepare for your divorce and plan your future budget, use this checklist of common expenses you might need to track:
If any of the expenses above were paid by third party contributors, you must make a note of the amount and frequency that the payments were made.
Create a Divorce Budget
Divorce can create financial instability, especially if you depend on your spouse’s income to cover some/all expenses. One of the best ways to become financially independent from your spouse during and after your divorce is to create a budget. By estimating your post-divorce income, you can use the information you’ve gathered about your expenses and debts to see how it balances against your income and assets.Asset management and budgeting can be crucial when planning for divorce-related expenses such as court costs and lawyer fees. A good financial advisor can assist you in finding ways to save money where you can while strategizing a new retirement plan for you.
Retirement Accounts
Besides a home, retirement accounts are often a couple’s most valuable assets—particularly for those who’ve been married a long time. Whether you live in a community property state or one that uses equitable distribution, retirement accounts are considered property that can be divided in a divorce—but only the portion of those accounts that is marital property.
Calculating the marital portion of retirement accounts can be complicated. It depends on the type of account or plan and when contributions went into the account:
401(k)s, pensions and other qualified plans: These accounts are split through a qualified domestic relations order (QDRO), which is based on the order of a judge and in accordance with the terms of the qualified plan and applicable law.
IRAs — Roth and traditional: These accounts are divided under what’s called a transfer incident to divorce. Even though money will leave the account, the account owner doesn’t owe income taxes because it’s part of a divorce settlement.
Social Security: Aspects of Social Security payments can change after divorce—your former spouse can receive Social Security benefits based on your record. Before applying for Social Security benefits based on a former spouse’s record, the two people must have been divorced for at least two years. However, Social Security benefits can’t be included as a marital asset, by law, and the actual benefit can’t be divided.
After you’ve divided up your various retirement accounts and the divorce is finalized, it’s important to revisit, and revise, the beneficiary designations on the accounts you still own. A common mistake is to leave an ex-spouse as the beneficiary.
How Agemy Financial Strategies Can Help
A gray divorce can be complicated, costly and emotional. Having a trusted financial advisor by your side when you’re going through a divorce is a great benefit, especially if you’re retired and looking for ways to save money while protecting your nest egg.At Agemy Financial Strategies, we value the time we take to get to know you and your situation so we can create a plan specifically tailored to you.
Our purpose is to educate our clients so that we can help you get a clear picture of the assets and debts that make up your marital estate.Whether navigating a revised estate plan, looking to split investment assets or in need of a new retirement income plan, we want you to know we’re here to help you navigate any questions you have regarding these financial aspects of divorce. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.
Recovering from a divorce can take time, but having others there to help you through the process can get you back on your feet quicker.For more information on our asset management and financial planning services, contact us here today.
5 Financial Planning Moves to Make Turning 50
NewsJuly 06, 2022
From retirement security to living debt-free, turning 50 is your chance to make big moves in reaching your financial goals.
Reaching 50 is a huge milestone for many reasons. Your children have left home and may have a family of their own (hello “bank of mom and dad”).Your parents may need your help too, while your own future care is a looming worry. Retirement, which has seemed far in the future for decades, suddenly seems more real. 50 is an age where people reassess their financial life and aspects. You could even have your heart set on an early retirement. It’s time to make financial moves that will pay off in the future.
If you are in your 50s, are you set for retirement? Have you thought about how sturdy your financial plan is? Meeting with your trusted Fiduciaries at Agemy Financial Strategies can help you work through these items if you feel like you’re not fully prepared for retirement.
Pay Down Debt
Debt is probably the last thing you want to be dealing with before you retire. Calculate your current debt load and start paying off your larger debts first. Debt includes car loans, mortgages, credit card balances and personal loans.
A majority of retirees who have paid off their homes find it financially liberating to live without having a mortgage. By entering retirement without a big mortgage payment, you can live on less. If you’re in a situation where you can’t eliminate your mortgage, you could consider other options to reduce the cost.
Refinancing your home loan could give you a lower interest rate. If you decide to refinance your home, it’s important to look at the terms and conditions. Some people end up refinancing for what they think is a better deal, and end up having their refinance term be longer than their current mortgage.
Turn Savings into Income
You’ve saved for retirement for years. Now that retirement is approaching, how can you create a regular stream of income from these savings to help pay your outgoings? The first step in creating retirement income is to picture how you’d like to spend those years. This way you can understand how much money you’ll need and prioritize what’s most important. Next, create a list of goals to determine which things you might add or eliminate depending on your unique situation.
Based on your goals, create a realistic budget and find out how to revise it for different phases of retirement before making your withdrawal strategy. A withdrawal strategy helps you know how much you can take out of your savings and investments each year to cover your needs and wants. It should also outline which funds you’ll withdraw from during retirement and in what order, i.e., retirement accounts, taxable accounts, etc.
Most financial advisors will suggest the following order (least to the most tax-efficient accounts) because of tax implications and the assumption that your taxes will be lower later in retirement:
Taxable accounts – Non-Retirement Accounts
Tax-deferred accounts – Traditional IRAs and 401(k)s
Tax-exempt accounts – Roth IRA
The traditional approach has been that you can safely withdraw about 4% of the initial value of your retirement savings and increase that amount each year with inflation. However, it may no longer be safe with the current combination of low bond rates and high stock valuations. Add in the possibility of even higher inflation and longer average life spans, and you could face a significant chance of running out of money in retirement using the traditional 4% “safe” withdrawal rule. In which case, you can discuss other options with your advsor such as the 7% rule or r Annuitization. Be sure to discuss this method of retirement income with your Fiduciary. By purchasing an income annuity, you trade a lump sum of money for an income that’s guaranteed by an insurance company for as long as you live.
Life Insurance
If you don’t have a life insurance plan or have been living underinsured, now more than ever is a good time to consider you and your family’s needs. A general rule of thumb when it comes to life insurance is that your individual needs may vary based on such factors as:
The need for life insurance doesn’t start or end when you reach a specific age. Oftentimes, when people reach their 50’s their insurance may be reaching its expiration date. When this happens, it could mean that their life insurance could go up.
One option to consider is converting your term policy into a whole life insurance policy. Whole life policies, while significantly more expensive than term insurance, offer the flexibility of tapping into the policy’s cash value while you’re still alive. You can borrow against the cash value of a life insurance policy or simply elect to take money from it, which will lessen the death benefit payout. However, be careful if you make that move.
If your children have left home, you may also need to review your life insurance requirements. Do you need life insurance or can your spouse financially support him–or herself? It also could be time to think about long-term care insurance. Long-term care is often needed by older people and can be expensive without insurance. While Medicaid can be available, it often requires that people drain their own assets first. It’s always important to discuss long-term care insurance with your trusted Fiduciary or financial advisor.
Review Your Estate Plan
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.An estate plan generally includes a Last Will and Testament, as well as powers of attorney for medical and financial affairs. It is wise to have an estate plan early in life, particularly if you have any assets or property worth protecting.
If you die without a will, your estate may be tied up in probate for months or even years. This includes all accounts—checking, savings and retirement—unless they are held jointly by your family members. Probate can also include your home (or other real estate) and personal property until the will goes through probate.
The best way to ensure that your assets are passed onto the people you want is to include them in your will. If you become incapacitated or ill, having a power of attorney in place will simplify both your life and the lives of your family members. Your full-service retirement planning firm can assist you in this area.
Review Your Risks
Risk management helps you ensure that your assets are protected.
In your 50s, you need to learn how to manage risk successfully. Failure to do so can be detrimental to your retirement. You always have the option to help avoid investment risk by choosing only safe, guaranteed retirement income investments. Choosing to avoid risk is one of the smartest decisions you can make until you have learned the skills you will need to manage risk appropriately.
However, ALL investments, even the most conservative, come with different types of risk. Understanding these risks (from Intrust Bank) will help you make educated choices in your retirement savings plan mix:
Don’t forget about personal and family risk, too:
These risks tend to affect the personal lives of retirees.
Diversify Your Portfolio
All investors–whether aggressive, conservative, or somewhere in the middle–can potentially benefit from diversification, which means not putting all your eggs in one basket. If something were to happen to that basket, you’d lose all of your eggs. To mitigate that risk, it’s wise to spread out your assets. When applied to investing, this proverb directly speaks to the value of portfolio diversification.
When you reach your 50’s you’ll want to try and minimize the amount of mistakes you can make financially – especially ones that could derail your retirement plan. It’s important to review your portfolio with a trusted financial advisor to make sure you’re on the right track when it comes to diversification strategies.
At Agemy Financial Strategies, we will sit down with you and discuss how you can diversify your portfolio for maximum retirement income. Once you reach 50, you want to be able to reap all of the benefits from your investments, especially if you’re planning on an early retirement.
Let’s Get Started
Your 50s are a pivotal decade. Capitalize on these years by firming up plans and feathering the nest for a secure retirement.
It’s important to look at your financial plans and see if any of the above strategies could help you in the long run. If you’re like most people, qualified-retirement plans, Social Security, personal savings and investments are expected to play a role. Once you have estimated the amount of money you may need for retirement, a sound approach involves taking a close look at your potential retirement-income sources and making amendments where needed.
At Agemy Financial Strategies, we want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.
For more information on our retirement and financial planning services, contact us here today.
Who Should Inherit Your Wealth?
NewsJune 28, 2022
Many people put off estate planning because they assume everything will work out fine if they die unexpectedly. But this isn’t always the case. One of the most important factors to consider in your financial plan is who is going to inherit your wealth. Here, we cover everything you need to know before choosing your beneficiaries.
When it comes to inheritance, there are no fool-proof guides to help you objectively determine who should get your money and assets when you’re gone. It’s a decision every person should have a right to make for themselves. Depending on the assets and people you care about, you might be forced to make some hard decisions. Divorce, children from multiple marriages, grandchildren and personal philosophies on charity or generational wealth can pull you in multiple directions.
So when you’re gone, who gets what? It’s a question every person should have the right to answer for themselves. But without a legally binding plan, your wishes may not be carried out.
With Agemy Financial Strategies, you can create a legally binding plan that clearly lays out who gets your assets and how they are distributed—so there’s no confusion when it matters most. Here’s what you need to know.
Assets & Trusts
When it comes to planning your will, it’s best practice to speak with your trusted financial advisor – or even better, Fiduciary – about what your requests are. At times, financial advisors will suggest putting your assets into a trust.
There are two kinds of trusts, revocable and irrevocable. Under the two categories are there a number of different classes of trusts. Each trust serves a specific purpose. Some options include charitable trusts, generation-skipping trusts or special needs trusts for a dependent or family member.
A trust can be a useful tool for your family and beneficiaries to ensure that your wishes are carried out as you intend. When you create a trust, you are creating an entity that will manage your assets according to the terms of the trust.
Trusts are managed by a trustee regardless if you’re living or deceased. The trustee can be a person or an organization and they are responsible for carrying out your i.e. the trustor’s wishes. When you pass away, the trust is immediately passed on to beneficiaries or can continue to be managed by co-trustees.
Unlike wills, bequeathing through a trust can prevent your family or beneficiaries from needing to go through the traditional probate process. Which can be easier to ensure your wishes are followed as you intend with a carefully designed and properly executed trust.
Trustees and Executors
There are two primary types of individuals who can serve as trustees: a trustor, and an executor. The trustee is responsible for managing the trust and can be the trustor themselves, or an executor. An executor can be named in a person’s will as the individual who will handle the dissolution of their assets and liabilities.
An executor is solely in charge of administering a person’s estate after their death and can also be a co-trustee and/or the one to disburse assets according to the decedent’s wishes. Be sure your will and trust documents include specific instructions on who you want in charge and what you want them to do after your death.
Choosing Beneficiaries
For some, gaining sudden wealth could mean finally being able to buy a home, pay back student loans, save for retirement or start a business. For others, it could mean achieving financial freedom for the first time in their lives. However, passing on your assets to an individual could adjust their income negatively. This could negatively impact the benefits they may be receiving such as supplemental security income, disability or medicaid. It’s important to make sure that the person you choose to inherit your wealth does not suffer any consequences.
This also means doing your due diligence and checking the beneficiaries you have listed on your estate planning documents, annuities, life insurance policies, and retirement savings accounts are aligned to avoid any additional disputes. Making a trust of your beneficiary could be ideal if your goal is to leave assets to minors, an adult child with questionable judgment or a dependent with a disability. Estate planning is all about being prepared for the unexpected. So when you choose who you want to inherit your estate, we’ll also ask you to name back-ups in case your chosen beneficiary dies before you. These are known as secondary beneficiaries.
Lastly, you can leave specific assets to different beneficiaries in your estate plan. Compare it to leaving a specific piece of property to a child from a past marriage or a bank account to a grandchild.
Considerations
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.
Once you have decided who will inherit your wealth, it’s important to keep open lines of communication so your family can properly prepare. When the time comes to review your will or estate plan, you are looking to ensure that your intentions have not changed, that the right people are included, that major life changes are reflected, and that all other major changes are notated.
If you’re looking for a firm that handles estate planning and ways to reduce your taxes in life and death, look no further! Agemy Financial Strategies can help you look for ways to fortify your finances and get a properly prepared plan in place. For more information on our Estate Planning and Financial Advisory services, contact us here today.
Top Retirement Hacks For People Reaching Retirement Age
NewsJune 22, 2022
Worrying about having enough retirement savings can keep you up at night. The good news is there are some hacks that can make it easier.
Is there a secret to retiring on time? Well, maybe. But it probably isn’t what you think. The average age at which people retire varies greatly depending on factors like ease of work, health, and financial preparation. A comfortable retirement is something that most people dream about. Lots of hard work and dedication can help you get to the point where you can retire with ease.
If you are approaching retirement age and you want to retire on your terms, one of the most important things you can do is understand how long you will need to work. Many of us have dreamed about retiring comfortably, but it can be difficult for those who feel like they have been working all their lives. Here are our top retirement hacks for those reaching retirement age.
Figure Out How Much You Need
One of the difficulties of creating a financial plan for retirement is that it will differ dramatically depending on when you want to retire. This along with hundreds of other criteria can be difficult to predict how much you will need. Factors such as health and family circumstances will throw your plan off course at times.
It’s important to create a financial plan that you can change as life continues. With Agemy Financial Strategies, we can help you create a plan that changes along with you and life’s changing circumstances. We provide a wide range of financial planning services such as:
Eliminate Debt
When you have debt, you are diverting money from wealth-building activities such as saving and investing. Debt can squeeze your retirement savings by reducing your cash flow. This can make it tougher to save as much money as you’d like, which can depress your standard of living in retirement.
A great way to start chipping away at your best is by paying off high-interest credit cards. Make a list of all the debt you have acquired starting from highest to lowest interest and prioritize paying off the ones with higher interest first. By doing this and reducing your spending you won’t add to your debt balance. The sooner you stop overspending the sooner your money can be put into savings for retirement.
Plan For Healthcare Costs
Sure you have planned for healthcare in retirement. But have you budgeted enough? Health insurance, drugs, medical supplies, health services and out-of-pocket expenses quickly add up. According to a report by HealthView Services Financial, a healthy 65-year-old couple retiring in 2019 can expect to spend more than $387,000 for retirement health care costs, not including long-term care. This projection is based on the current value of the U.S. dollar and includes Medicare premiums, the costs of supplemental insurance and other out-of-pocket expenses for a man whose life expectancy is 87 and a woman whose life expectancy is 89.
Hoping to retire early? One of the biggest drawbacks to any retirement is how to fund healthcare. Unfortunately, Medicare isn’t available until age 65. Self-insured retirees in their 40s, 50s, and 60s can be looking at an expensive healthcare plan. Here are a couple options you can look into if you’re not at age 65 quite yet.
Having a plan for how you will cover this cost in retirement is absolutely essential.
Take Advantage of Catch-Up Retirement Savings
After you have figured out how to reduce your current expenses, you will be in a better position to start taking advantage of catch-up retirement savings. Catch-up contributions are the IRS’s way of making it easier for savers aged 50 and up to contribute enough money to their retirement savings.
UnforTunately, the IRS imposes limits on how much you can contribute annually to tax-advantaged retirement accounts such as IRAs and 401(k)s. However there is a silver lining to this plan. The IRS allows people who turn age 50 or older to make additional “catch up” contributions over and above the annual contribution limits. This includes contributions to your 401(k), 403(b), or 457 plans.
Other Considerations
Of course there are multiple other realities in retirement to be aware of; including remaining flexible in your retirement date, and even consider including a phased-retirement. Why? Because clocking in at a reduced work schedule allows freedom to focus on the other parts of life, such as family, travel and volunteering, while still earning a paycheck and employer benefits to keep your financial safety net in place.
Whatever your retirement strategy, there are risks to identify and manage as you navigate retired life. But one key factor remains the same: the more you prepare, the less nasty surprises you’ll face along the way.
Final Thoughts
Planning for retirement may look harder than it seems. But having a trusted financial advisor on your side will make planning for the golden years easier. When it comes to creating a retirement plan it’s important to account for the changes that come with life. Having an advisor guide you through the process will help you feel more at ease when retirement does come.
At Agemy Financial Strategies, we value the time we take to get to know you and your situation so we can create a plan specifically tailored to you. Our purpose is to educate our clients – whether that be planning for retirement, legacy planning, wealth management, or just holding your hand when it’s time to leap into retirement.
We want you to know we’re here to help you navigate any questions you have regarding investments, retirement and anything else that comes up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.
For more information on our retirement and financial planning services, contact us here today.
3 Strategies for Investing in a Bear Market
NewsJune 14, 2022
Investing at a chaotic time like this takes fortitude and planning. And if you can handle it, a falling stock market can be an opportunity for people with long horizons. But are the risks involved worth the gamble? Let’s find out.
As investors grow increasingly worried about inflation and higher interest rates, Wall Street has fallen into a bear market.
Making the right moves with your investments and retirement plan is key when the stock market is in free fall like it has been – and it is one of the best ways to build long-term wealth. So how come so few are taking advantage? Firstly, Americans have a lack of confidence when it comes to investing, especially women. A study conducted by the U.S. Bank, found women were less confident and less engaged with managing money compared to men. And with the current market, it’s no wonder why.
Investing is not something that comes easily to everyone. It’s something that you need to work at in order to feel more confident in. When it comes to the stock market, investor confidence is one important factor, the other is having a confident financial advisor. Having an experienced and confident financial advisor will help you to make better decisions as an investor.
What Investment Advisors Do
Investment advisors, also known as Financial Advisors, make investment decisions on behalf of their customers and adjust portfolios over time to meet predetermined goals.
Without an investment advisor, it’s up to you to decide things like what assets to hold in your 401(k), how much exposure you want to specific industries, and what percentages of your money to invest in which vehicles.
Investment advisors work as professionals within the financial industry by providing guidance to clients in exchange for specific fees. Investment advisors owe a Fiduciary duty to their clients and are required to put their clients’ interests first at all times.
Seeking financial advice can help you prepare for downswings and seek out new opportunities in the markets. Whether you’re feeling bullish or bearish, enlisting the guidance of a Fiduciary financial advisor can help you manage your assets with your best interests in mind.
Looking for ways to become more confident in your investment decisions? Here are 3 ways to acknowledge the fear factor that accompanies investing to help boost your financial faith.
1. Recognize that stock market downturns are normal
A bear market is defined by a broad market index falling by 20% or more from a recent high.Now, the S&P 500 is down around 22% so far in 2022 and bitcoin’s price has fallen more than 60% from its high of $68,000 in November. But stock market crashes are nothing new. In fact, the S&P 500 index has experienced 26 other bear markets since 1928 and, ultimately, it’s managed to recover from every single one. Recognizing that market downturns just happen could make the idea of living through one less worrisome.
Increasingly volatile changes in the value of stocks have become more common. The average stock market return is 10% per year, and yes, sometimes, like in 2022, it’s lower, and sometimes it’s higher. It’s a good rule of thumb to stay invested and resist the urge to pull out of the market on down days like these.
2. Conduct Thorough Research of the Company You’re Investing In
You want to know that you are buying from the right company so when stock prices momentarily fall, you won’t be triggered to move and sell immediately.
One of the benefits of knowing that you are investing in a great company is that you know the company will be around in the next decade. In other words, always think long-term, not short-term. Beyond knowing a company’s financial metrics, you also want to know that the company is run by trustworthy and good people.
Having more confidence in the company results in more confidence in your investment choices for that company. When you know that you have really found a great company, you want to do your best to buy it on sale. If you do your research and know that you’re buying something that is considered good stock at a low price, you know not to be discouraged as you understand the true value of the company. Therefore, knowing that it will come back up to its non-discounted price eventually will help build confidence moving forward.
3. Have an Experienced Financial Advisor to Guide You
An investment advisor is an expert on matters related to your investment portfolio and could be a vital asset in helping you grow your wealth. Just selecting an investment advisor is not the end of your financial journey. You should be cognizant of your investments at all times and keep asking questions from time to time.
While Americans seek to gain investing confidence during a bear market and that gap of women is slowly beginning to shrink, it’s important to know what to look for in an experienced advisor. All generations of women and predominantly boomer men value an advisor who takes the time to listen to them. When choosing an investment advisor, be sure to explore the following questions and attributes:
Final Thoughts
Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. Especially in a bear market when tensions are high. There are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snare some investors.
When it comes to investing, the key is to know what you’re buying and to always stay rational. Don’t let your emotions get the better of you. If you’re like most people, you might be looking to find a financial advisor who has experience and confidence when it comes to suggesting the best investment strategies for you.
How We Can Help
At Agemy Financial Strategies, we value the time we take to get to know you and your situation so we can create a plan specifically tailored to you. Our purpose is to educate our clients – whether that be planning for retirement, legacy planning, wealth management, or just holding your hand when it’s time to leap into retirement.
We want you to know we’re here to help you navigate any questions you have regarding investments, retirement and anything else that comes up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.
For more information on our investing, retirement and financial planning services, contact us here today.