What is Reverse Estate Planning?

Agemy Financial Strategies

April 18, 2022

Most Americans follow the “classic” method of estate planning, that goes from older generations to their younger ones. However, that perspective doesn’t take into consideration some opportunities to increase family after-tax wealth.

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.

It usually involves creating a living trust for the purpose of avoiding conservatorship in the event of incapacity and avoiding probate upon death. There is no question that being able to avoid the cost, expense, frustration, and other hassles with conservatorship and probate is worth the legal fee in creating such an important document.

Sadly, many Americans have not seen additional benefits of creating a living trust beyond avoiding conservatorship and probate. However, there is much more than meets the eye. The idea behind Reverse Estate Planning is that adult children can use an array of standard tax and estate planning strategies to transfer assets to their parents in a tax-advantage way.

Here’s what you need to know about Reverse Estate planning, and if it might be for you.

Reverse Estate Planning 101

When most individuals consider Estate Planning, they look “downstream” to future generations. They think about how to structure the Estate Plan so as to provide for children, grandchildren, and other younger beneficiaries.

The perspective has always been, “How can we benefit future generations?” And while this is a key aspect of any Estate Plan, there is not enough focus on the reverse, also known as “Upstream Estate Planning”. You should also focus upon how gifts and inheritances you expect to receive should be structured in order to benefit you.

The idea is the adult children can use an array of standard tax and estate planning strategies to transfer assets to their parents in tax-advantaged ways. The parents then use their lifetime exemptions to pass that wealth to their younger generations through either their estates or lifetime gifts. They might even benefit their adult children at little or no tax cost by passing the money to irrevocable trusts the adult children can’t control.

It’s also a good way for family members to make loans. For example, the adult children can take out low-interest loans for their parents. The parents use the loan incomes to buy assets that are expected to grow. At some point, they repay the loans and let the appreciation pass through their estates tax-free to the younger generations, either directly or through trusts. Or the parents can make lifetime gifts to the grandchildren or the trusts, using part of their lifetime exemptions.

Is Reverse Estate Planning for You?

As mentioned, traditional Estate Planning usually involves creating a Living Trust for the purpose of avoiding conservatorship in the event of incapacity and avoiding probate upon death. There is no question that for the vast majority of Americans, being able to avoid the cost, expense, frustration, and other hassles with conservatorship and probate is worth the legal fee in creating a Living Trust.

Nowadays however, most of the widely-used strategies for transferring wealth to younger generations also can be used to transfer wealth to the older generation.

Some adult children who have more assets than parents and can help take care of the older generation. In these cases, Reverse Estate Planning can play a valuable role. Some families would also benefit by using Reverse Estate Planning to pass assets now to the older generation so their excess exemptions can be used to transfer assets tax free for the benefit of their grandchildren or later generations.

Be aware, the lifetime estate and gift tax exemptions might not remain at their current levels much longer. The 2017 tax law is scheduled to expire after 2025, which would cut the exemptions in half. So, if Reverse planning seems like a good idea for your loved ones, now is the time to take advantage of it.

Final Thoughts

The key is to be aware of the concept of “Reverse” or “Upstream” Estate Planning and if it’s for you, you should ask your benefactors if they’d be willing to sign a Heritage Trust and make a modification to their Estate Plan.

There’s no better time to plan for the future than right now.  At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and provide you with the highest level of service.

Whether you think Reverse Estate Planning is for you or you’d like to explore a more traditional Estate Planning route, reach out to our Fiduciary advisors here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.

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Holistic Financial Tips for Earth Day

Agemy Financial Strategies

April 14, 2022

First held on April 22nd 1970, we appreciate the awareness that Earth Day has brought to protecting our environment and the urgency that it’s instilled in all of us. As we strive to better our world this Earth Day, there are some takeaways that we can apply to our personal finances.

Earth Day comes around only once a year but reducing, reusing, and recycling can become an everyday habit. Not just for the environment, but financially as well. This year you can take action to save money in a sustainable way.

April 22 is Earth Day, a yearly celebration of the beauty that Mother Earth gifts her residents every year. With the holiday often comes a reminder that we need to be doing more to preserve our land, water and precious resources. In fact, Americans create 4.5 pounds of waste every single day—1,643 pounds a year—and three times more than the global citizen’s average.

Here are a few things you can start working on to reduce your carbon footprint financially.

Go Paperless – Sign up for eStatements

Tired of having your mailbox full of unwanted statements that end up in the trash? There’s an easy fix for this! Most financial institutions are taking steps to reduce their environmental impact by having their customers enroll in eStatements. It’s a win-win for both ends.

You may be incurring a small monthly fee — which some banks charge for paper statements — that can be eliminated by going paperless. Some financial institutions may provide a monetary perk for those who enroll in eStatements. Switching to online statements is significantly easier because they are readily accessible through your online account. Making for a simpler and more cost-effective solution.

Minimize Your Spending to Help Reduce Waste

Cutting back on unnecessary purchases will both help you put more money into savings and reduce waste from store packaging. According to the recent report by the Environmental Protection Agency (EPA), the containers and packaging category had the most plastic tonnage at over 14.5 million tons in 2018.

Here are a couple things you can do to minimize unnecessary spending and reduce waste:

  • Budgeting – This is the number one thing that helps to control spending and avoid unnecessary purchases.
  • Understand and recognize marketing traps that make us buy what we don’t need. Amazon is a big player in this, even when you search things you may need they include other items that might interest you on Facebook or Instagram. Understand how these traps work and avoid them by not buying into them.

Adjust Your Commute

Most people are used to working from home, especially after the coronavirus pandemic shut down offices and workspaces. If your work allows you to, see if you can continue working at home for part of the week. Some workplaces have adopted a hybrid work model where you come into the office two or three days out of the week and work from home the days you’re not in the office.

Better yet, see if you can limit your business travel by opting into more virtual meetings and conferences. That might free up even more cash, with the average American spending $1,186 on gasoline in 2019, according to the U.S. Energy Information Administration. (Let’s not begin to talk what that number is today with inflated gas prices!)

Look out for tax credits that can reward you for sustainable decisions

Saving money on energy costs and helping the environment are a big incentive you can take advantage of. You might be able to claim tax credits and other tax-advantaged opportunities at both the state and federal level by “green-ifying” your home.

Those tax credits range from the well-known to the obscure. If you own property, consider participating in one of the U.S. Department of Agriculture’s various environmental assistance programs, such as the Conservation Reserve Program (CRP) that pays a yearly rental payment in exchange for farmers removing environmentally sensitive land from agricultural production. There might be more options exclusive to your area.

Work with a tax advisor and Fiduciary financial planner to help you track down all that could be out there for you.

How Agemy Financial Strategies Can Help

Who knew Earth Day could provide so much inspiration for improving upon your personal finances? If you’re looking for ways to save holistically for Earth Day and beyond, look no further. Working with the advisors at Agemy Financial Strategies can help you get ready for the future and future generations. Because making just a couple adjustments to your financial lifestyle can be greatly beneficial in the long run.

Click here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you. 


Happy Earth Day to you and yours. Here’s to a happy, healthy and wealthy future ahead.

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TAX DAY: LAST MINUTE CHECKLIST FOR MONDAY’S DEADLINE

Agemy Financial Strategies

April 13, 2022

If you’re reading this, chances are you’re running a bit late with your tax return this year. No worries, and no need to panic! Agemy Financial Strategies’ Fiduciary advisors are here to help you sort everything out just in time to make Monday’s deadline. 

Tax Day is Monday, April 18th, 2022. If you’re unsure about which items you need for a last-minute tax appointment, you’ve stumbled across the right post, we’ll provide you with an up to date tax checklist that will make your appointment run smoothly.

Most taxpayers will be required to file their federal income tax return by April 18. However, there are some exceptions to this deadline and it’s certainly not the only date to mark on your financial calendar this year. Individuals who are self-employed, who file an extension or who are at an age when minimum distributions are required, for example, need to be aware of other important tax deadlines.

Here are the 2022 tax day tips you need to know.

Request a transcript from the IRS

Individuals can actually request a transcript from the IRS of your account history from all of 2021. It includes everything you need regarding wage and income information throughout the year. So if you misplaced any important documents such as a W-2 or a 1099 form, this is where you can rely on to find that information. For this all you need is your social security number, and you can view this information immediately online or have it mailed to you.

Re-visit your return from last year

Unless you’ve had a drastic life change over the last year such as marriage, divorce or children, most likely your tax return from the year prior will be an excellent place to start. Whether you’re employed through a company or if you’re self-employed, or even if you went through a bout of unemployment, having last year’s return handy may help to recall certain memories of deductions you typically make, any missing income, and/or expenses related to job searching and looking for new clients. This also will save you the hassle of recalculating the square footage of your home office cubicle.

Look for any stray documents and receipts 

Let’s be honest with ourselves here, if you’re just now starting your tax return, that probably means you aren’t the person who also has their paperwork filed away neatly or scanned into a document safekeeping app on your iPad. Time to drag out the box of receipts, and look through any miscellaneous income statements and payments that may need to be included in your tax return. This also includes downloading your bank and credit card statements and do a scan of emails for any non-profits you may have donated to over the past year.

Calculate in any random pay days

Did you win big in Vegas this year, receive a big bonus, or stocks took off in 2021? If you can recall it, the IRS already knows about it as well. How you file these types of incomes will completely vary depending on how you came up with the money. Contact us at Agemy Financial Strategies if you have questions on how this should be filed.

Verify. Verify. Verify again. 

If there’s anything that should be double and triple checked, that would be your tax return. As they say, the devil is in the details. Returns can be flagged for even the smallest of mistakes, perhaps a stray zero or a missing income figure.

An important note that is commonly missed: If you owe a penalty of some sort and you provide your routing number for direct withdrawal, or you list that the account is savings rather than a checking account, the IRS won’t be able to process your payment. That means even if your bank account is entered correctly, you’ll receive a penalty for a failure to pay.

Don’t forget to send it in!

Make sure to mail or e-file this year by Monday, April 18th, 2022. This seems pretty obvious and straightforward right? You would be surprised at how often people complete their taxes, only to set them aside and forget about them, and never get back to it. Maybe you’re thinking that you and your family don’t owe anything and weren’t expecting any refund. The potential consequence of this? Thousands in failure-to-file penalties. Make a reminder to yourself on your phone, in your calendar, and anywhere you need to make sure you have all of your ducks in a row by the due date.

More from Agemy Financial Strategies

Tax season is almost coming to a close. We just reviewed your tax checklist of the most common things to remember. When in doubt, it’s best to call your financial advisor to ensure nothing is forgotten.

Still a bit lost and need help with your 2021 taxes? Don’t panic, Agemy Financial Strategies is here to help you.Contact us today, and we’ll help you with a personalized plan to ensure you properly file and check all the confusing tax boxes. We’ll also evaluate your current tax strategy for 2022 to make sure you’re not paying more tax that you need to.

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Women and Financial Literacy: Facts You Should Know

Agemy Financial Strategies

March 23, 2022

As National Women’s History Month comes to a close, we take a look at why financial planning for women is more important today than ever. Whether you are a working woman, a retired woman, a stay-at-home mom or a mom with a son or daughter in college, you have to think about your retirement now. This is your money and your financial future. It’s time to take charge and start taking some steps that’ll help you move closer to your retirement dreams. 

Let’s give a shout-out to all the women out there first and foremost—because there’s no doubt that women have been making serious strides lately.

Managing money and financial planning can be a tough task if you don’t have the proper information at hand. Women especially bear the brunt of this while caring for a family and having a retirement plan in place. However, the barrier is closing between segregated duties, and more men and women are sharing financial tasks as a result of women becoming more confident about managing money, according to an annual survey on women and investing by OppenheimerFunds of New York.

Women Investors Breaking Financial Barriers

According to the Fidelity 2022 Money Moves Study, women currently ages 18-35 years old are starting to invest nearly a decade earlier than women ages 36 and older. On average, this younger generation of women started investing in a brokerage account at age 21, compared with age 30 for older women who started to invest during the same age frame.

Beyond opening a brokerage account by age 21, the study shows that younger women also opened a retirement account even earlier, at age 20, compared with their older peers who opened one at age 34. Not surprisingly, the pandemic has caused many people to reevaluate their finances and in the case for some younger women, this was the time to start investing with 50% reporting they have started to invest in the past six months, or they plan to do so in the next six months.

Those are some great reasons to celebrate. But there’s work to be done… A recent study found that only 12% of women are very confident they’ll be able to retire comfortably. Meanwhile, more than half of women (55%) expect to retire after age 65 or don’t plan on retiring at all.

Taking the initiative to educate yourself about complex financial decisions will help you achieve your financial goals. Here are a couple facts and tips on women and financial planning which can help you better prepare for the future.

Women can Struggle with Financial Literacy

Financial literacy is the most important and fundamental stepping stone to building and maintaining wealth. A lack of financial confidence keeps many women from pursuing education in personal finance. It’s because of this, that women are less likely than men to view themselves as financially savvy. As a result, women are less prone to negotiate salaries and attain financial independence.

Here’s The Facts:

  • Only 9% of women think they’re better investors than men are. However, women are less risk-averse and tend to seek financial advice, so their investments often perform better.
  • 23.3% of all Certified Financial Planners are women.
  • Only 18% of women between ages 60 and 75 passed a financial literacy quiz on retirement. 35% of men passed the same quiz.

Income Disparity & Gender Wage Gap

Women playing an active role in the workforce is a unique situation. An unfair wage gap and life interruptions have slowed career progress and have forced some women to struggle with basic living expenses.

On the brightside, the pay gap between men and women is narrowing. However, this development is progressing slowly. The pandemic caused income disparity across the board which had many women face financial challenges to their overall well-being and threatened their ability to gain financial independence.

Here’s The Facts:

  • The gender pay gap is higher among educated men and women. Women with a bachelor’s degree earn 74% of what men with a bachelor’s degree make.
  • The lifetime earnings of a woman with a bachelor’s degree is $1.32 million. The average lifetime earnings of a man with a high school diploma is $1.53 million.
  • Women ask for raises just as often as men do, but are only likely to get the raise 15% of the time, while men who ask get the raise 20% of the time.

Retirement Planning Priorities

Women tend to live longer than men. As a result, they must draw out their retirement savings for a longer period of time. Trends show women risk falling into poverty if they don’t have sufficient funds for retirement.

Single women of all types — unmarried, divorced and widowed— from age 44 to 64 are underprepared for retirement. One of the worst outcomes of not prioritizing savings is missing opportunities to leverage time in your favor. Money kept in interest-bearing accounts for years can grow into a substantial asset. Employer-offered accounts include tax advantages and sometimes match plans that double savings.

The wage-earning gap also limits available Social Security benefits — a built-in foundation that some seniors rely on for retirement expenses. As a result of these challenges, fewer resources and a lack of planning, women are more likely to encounter poverty in old age and be forced to rely on government programs for living expenses.

Here’s the Facts:

  • 84% of women who will retire after 65 plan to do so for financial reasons.
  • Nearly 50% of women have less than $25,000 in savings, compared to 36% of men.
  • 54% of women plan to work after they retire – including 12% who plan to work full time
    and 42% who plan to work part time.

Overcoming These Challenges

There are steps you can take as you get ready to start thinking about your retirement future. These include:

  • Start by assessing your financial picture: You’re going to have to be honest with yourself about where you stand when it comes to saving for retirement and how much you know about investments. Once you know where you stand, you can figure out how far you have to go.
  • Align your choices and values: Spend time considering what you want to value and prioritize in your life. Do you value time with family and friends? Traveling? A strong financial foundation — i.e., saving for emergencies and making retirement contributions?  If you realize that you are spending money on things you know you don’t value, it is time to reconsider your financial strategies.
  • Put Your Needs First: As a woman, we understand this is fighting against your natural instincts. Especially when it comes to financially helping your kids. But in doing so, women often put the goals and objectives of others before their own needs. Start focusing on yourself and your needs and redesign your relationship with money. Then move on to helping others.
  • Learn About Investing: When you know what your investing options are and how they work, you’ll feel empowered to make the kind of financial decisions the “future you” will thank you for. Check out informative news articles and financial podcasts as a fun way to stay up to date with the latest financial news and investment trends.
  • Get Help From a Professional: When you get the right information from the right people, you can make the right decisions.That’s why we always recommend working with a Fiduciary Financial Advisor who can guide you through your financial journey with your best intentions at heart. A Fiduciary you can trust can help you set short- and long-term goals and bring all the pieces of your financial life together.

Final Thoughts

Planning for retirement should look different for women and men given the different life cycles – and it’s never too late to start your journey to financial planning. You can improve your financial welfare by making a plan for how you will use your income wisely. The power to make positive and healthy spending and saving choices is yours. But a dream without a plan is simply a wish. You need to take the first step in taking control of your finances.

A great way to get started is by reaching out to a trusted Fiduciary Advisor. Your financial advisor should provide the education, time frame, and comfortable setting appropriate for your needs. And, if your advisor does not listen or pay attention to what you want for your financial future, find someone else to work with. At Agemy Financial Strategies, we have all of the tools you need to make the leap towards a healthy financial future. 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. By working with us, you can envision your roadmap to success.

Click here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.

Happy National Women’s History Month from the entire team at Agemy Financial Strategies!

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Digital Currency and the Future of Retirement Planning

Agemy Financial Strategies

March 16, 2022

Cryptocurrency is everywhere. From being used for charitable donations and even on our TV screens during the Superbowl commercials. But when it comes to the future of retirement planning, how do these new world assets come into play? 

With the popularity of cryptocurrency on the rise, everyone is eager to invest in it or invest it for retirement. Because crypto is so new, there are still rules and stipulations being crafted to be able to save it for retirement.

The IRS has rules in place stating you cannot contribute cryptocurrency directly into your Roth IRA, but there are currently no rules about adding crypto to your Roth IRA via purchase.

Here’s a look at digital currency and how planning for retirement could change.

Crypto & Roth IRA

Bitcoin IRA’s are retirement accounts designed to let you invest in cryptocurrencies. It’s important to be aware of the risk you are taking if you’re considering investing in crypto. Because crypto is so volatile, it would be considered unsuitable for somebody approaching retirement who cannot afford to ride out a downturn.

In 2014, the IRS considered Bitcoin and other cryptocurrencies in retirement accounts as property, so that coins are taxed in the same fashion as stocks and bonds. Thus, cryptocurrency held in a Roth IRA has an income tax basis for purposes of measuring gain or loss upon occurrence of a taxable sale or exchange.

Even though you can’t add cryptocurrency directly to your Roth IRA because of Section 408(a)(1). This section requires that contributions to IRAs need to be made in cash. You can however, add cryptocurrency to a Roth IRA by purchase, because cryptocurrency is considered a property.

Bitcoin IRAs

For those who are committed to include Bitcoin in their IRAs, self-directed IRAs (SDIRAs) allow for an alternative asset like cryptocurrencies. Recently, there have been companies designed to help investors include Bitcoin in their IRAs. Some of these companies include BitIRA, Equity Trust, and Bitcoin IRA.

One of the positives of adding crypto to your portfolio is that it can add further diversification to Roth IRAs, and others that cryptocurrencies which will continue to increase in popularity and price into the long-term future. However, one of the negatives is that crypto is characterized by being volatile, and this represents a huge risk for those investors approaching retirement who cannot wait out a downturn.

You should also be aware that fees for crypto IRAs are typically much higher than for “traditional” IRAs. There are also recurring custody and maintenance fees charged by providers of such services, and fees associated with individual cryptocurrency trades. A typical provider may charge 3.5% per transaction for each purchase and 1% or a flat fee for each sale. Cumulatively, those fees could negate the tax advantages offered by IRA accounts

Crypto & Charitable Donations

For charitably minded individuals, cryptocurrency investments held for more than a year could provide a unique opportunity to leverage highly appreciated assets to achieve maximum impact with charitable giving. Bitcoin and other cryptocurrencies can be donated to charity, just like stocks and other property. Donating cryptocurrency can, however, be a little more complicated.

Some benefits of using Crypto for charitable donations include avoiding Capital Gains taxes. Taxpayers can avoid having to pay capital gains taxes yet still claim the full donation as a charitable deduction if they donate the Bitcoin directly to the charity. If a taxpayer sells Bitcoin and donates the after-tax cash to a charity, the capital gains will be subject to short-term or long-term capital gains taxes, depending on how long they held the Bitcoin before selling it.

What’s more, if you itemize deductions on your tax return instead of taking the standard deduction, you may claim a fair market value charitable deduction for the tax year in which the gift is made and may choose to pass on that savings in the form of more giving. Donor-advised funds, which are 501(c)(3) public charities, can be a tax-efficient solution for accepting contributions of cryptocurrency, as the funds typically have the resources and expertise for evaluating, receiving, processing, and liquidating non-cash assets.

To substantiate your charitable income tax deduction, you are required to complete Form 8283 and obtain a qualified appraisal from a qualified appraiser for contributions of cryptocurrency valued at more than $5,000.

Final Thoughts

Investing in crypto is a tricky topic to say the least. Since there’s no one size fits all plan for everyone, it’s important to look at the risk and see if it’s something you believe you can take on. While holding crypto in your IRA can increase diversification, the extreme volatility of crypto makes it a poor choice for a retirement investment.

The good thing is that there are alternatives: crypto IRAs, which allow you to invest in crypto for your retirement accounts. 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. Plus using crypto for charitable donations could save you on Capital Gainss taxes and also may increase the amount available for charity by up to 20%.

At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and provide you with the highest level of service.

Click here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.

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What does Socially Responsible Investing (SRI) Mean?

Agemy Financial Strategies

March 16, 2022

The last few years have been ones of stress and uncertainty – but it’s also been a time that’s brought to light issues of social justice, climate change and social responsibility. Here, we look into how more and more investors are opting to align their portfolio with their greater social beliefs and ideals. 

Socially responsible investing (SRI), is an investment that is considered socially responsible due to the business company conduct code. Socially responsible investments can be made into individual companies with good social value, or through a socially conscious mutual fund or exchange-traded fund (ETF). And it’s not going away anytime soon. In fact, between 2016 and 2018 alone, assets being placed in socially responsible investments rose 38 percent. Of the $46.6 trillion of assets under management, one in four dollars was in SRI assets.

Becoming a socially responsible investor isn’t difficult — and can be even more lucrative than traditional investing. Here’s a look at SRI and what you should know.

Examples of Socially Responsible Investing

The abbreviation “SRI” has also come to stand for sustainable, responsible and impact investing. Some SRI practices use a framework of environmental, social and governance factors to guide their investing.

There are two inherent goals of socially responsible investing: social impact and financial gain. The two do not necessarily have to go hand in hand. When an investment is risking gambling itself as being socially responsible, it doesn’t mean that it will provide investors with a good return. An investor must still assess the financial outlook of the investment while trying to gauge its social value.

One example of socially responsible investing is community investing. Community investing goes directly toward organizations that have a track record of social responsibility through helping the community, as well as being unable to garner funds from banks and financial institutions.

The funds allow these organizations to provide services to their communities, such as affordable housing and loans. The end goal is to improve the quality of the community by reducing its dependency on government assistance such as welfare, which in turn has a positive impact on the community’s economy.

Understanding Socially Responsible Investing

Investors interested in SRI don’t select investments by the typical performance metrics or expenses, they make investments on whether a company’s revenue sources and business practices align with their values. Everyone has different values, how investors define SRI will vary from person to person. There’s no one size fits all in this scenario.

If you’re passionate about the environment, your portfolio will likely have investments in green energy sources such as wind and solar companies. If you care about supporting women, people of color and other marginalized groups, you may have some mutual funds that invest in women-run companies or hold stock in Black-owned businesses. Socially responsible investing is as much about the investments you don’t choose as the ones you do.

SRI vs ESG vs Impact Investments

In the realm of SRI, you’ve likely heard other terms like ESG and impact investments. So, what’s the difference? Here’s a quick breakdown:

  • Socially responsible investing (SRI) entails screening investments to exclude businesses that conflict with the investor’s values. SRI excludes companies from an investment that are involved in certain businesses, e.g. gambling, alcohol, or fossil fuel. It’s useful for single-issue investors.
  • Environmental, social and corporate governance (ESG) investing focuses on companies making an active effort to either limit their negative societal impact or deliver benefits to society (or both). ESG rates companies on environmental, social and governance criteria to find the “good” ones. There are, however, no standardized criteria, so it depends a lot on who’s deciding what counts as “good”.
  • Impact investing is characterized by a direct connection between values-based priorities and the use of investors’ capital. Impact investing looks at the specific measurable impact of a company on a particular issue, e.g. climate change, gender lens investing, etc. Investors can see the measurable impact of their money alongside the financial returns.

How to Build a Socially Responsible Investment Portfolio

Creating an ethical portfolio doesn’t have to be difficult or intimidating. As long as you know the values that are important to you, you can start using your investment dollars for good. Here’s a couple tips on how to build an SRI portfolio:

Outline What’s Important to You

It may be helpful to specifically write down what you’re looking for in an SRI or ESG investment. Would you be comfortable owning stock in a company that scores lower in the environmental category if it had a majority-female board of directors? Knowing what industries you are and aren’t OK with supporting will make it easier to include or exclude certain investments.

How Much Help Do You Want?

There are a couple of avenues you can choose when it comes to creating an ethical portfolio. You can build it yourself, picking and choosing specific investments and monitoring them over time, or you can get some help. If you want maximum assurance that the companies you’re investing in support your personal definition of SRI, you may want to create your own SRI portfolio.

A majority of people prefer to make socially responsible investments when possible — but it takes some work to figure out how committed a company really is to ethical practices. This is where robo-advisors come in. Robo-advisors use algorithms to build and maintain an investment portfolio based on your risk tolerance and goals.

The upside of robo-advisors is they’re inexpensive, and several offer SRI portfolios that will do all the work of finding ethical investments for you. The downside is that they don’t let you add in specific investments you’re interested in.

Research with Care

An easy way to judge how socially responsible a company is is to review ratings from independent research firms. Two types of investments you may consider for a sustainable portfolio are stocks and funds.

  • Individual stocks generally shouldn’t encompass more than 5% to 10% of your portfolio, but if there is a company you expect will show strong growth, you may want to include it.
  • Mutual funds are an easy way to instantly diversify your portfolio, and there are more sustainable funds to choose from than ever before. Mutual funds include selected assets that adhere to criteria laid out by the fund manager. If your broker has a screening tool, it can likely help you sift through different fund options to find the right ones for you.

Final Thoughts

For many investors, socially responsible investing is a powerful way to align their investment portfolios with their personal philosophies.

When you’re getting started with investing, it’s important to research the options available to you. Now you know that Socially Responsible Investing (SRI) involves investing in companies that promote ethical and socially conscious themes including environmental sustainability, social justice, and corporate ethics, and fight against gender and sexual discrimination – how will you use this information?

If you’re interested in getting involved with SRI and looking to add it to your portfolio, Agemy Financial Strategies can be of assistance to you.

Our team of Fiduciary financial advisors only have your best interests at heart and are here to help you understand the ins and outs of investing for retirement income.

For more information on our financial advisory services, contact us here today.

 

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Financial Advice During a Crisis

Agemy Financial Strategies

March 02, 2022

Covid-19 has highlighted the importance of developing long-term business, financial and legal strategies that can provide a plan of action for even the most unprecedented times. What’s more, the Russia-Ukraine conflict has only escalated the effects on stocks in the U.S and throughout the world. Here’s how to best navigate and safeguard your money and retirement outlook amid a financial crisis. 

As we enter month three of 2022, many of us are still adapting to the constant COVID-19 changes. The recent Omicron Variant sent stocks plunging to their worst Black Friday since 1931. With all of these changes constantly happening, how can we covid proof our financial security?

Here’s a look at some financial advice to follow during a health crisis like COVID-19.

Covid Effects on The Economy

Thanks to the effects that COVID-19 is having on the U.S. economy, there’s an incentive to move money into a lower tax environment. Before the pandemic, there was already great concern about the federal debt, which was $22.8 trillion at the end of 2019. With the help of coronavirus relief spending and stimulus programs, the national debt now tops $26.5 trillion and is expected to grow.

The U.S. federal government was already facing the need to deal with the increase in budget deficits and the national debt that occurred as a result of the battle against COVID-19.

COVID-19 has added more of an incentive to contributing to retirement IRAs such as a Roth IRA. Consider the stimulus spending that happened last year, tax rates were low and were not likely to last. If you want to be in charge of how much money you’ll have in retirement, a good move is to get as much money as possible into tax-free accounts now.

The Russia-Ukraine War

As we all know COVID is no longer the main threat to the financial market with the war with Russia and Ukraine. The current, limited conflict has already increased turmoil in world financial markets and given support to agents and advisors who have encouraged clients to use non-variable annuities, universal life insurance, direct investments in bonds and other products designed to buffer the holder against volatility. In the medium term, the conflict could lead to enormous retirement planning complications for Russian citizen clients who live in the United States, U.S. citizen clients who live in Russia, Ukraine or other affected jurisdictions, and any U.S. citizen clients, anywhere in the world, who are married to spouses from Russia or other affected jurisdictions who are not U.S. citizens.

Sanctions imposed on Russian banks mean that clients may have trouble with everything from paying routine bills to getting the information needed to file tax returns. Americans who had planned to rely mainly on accounts in Russia to pay to retire there may suddenly have to look at what resources might be available to help them for retirement elsewhere.

Fresh Volatility to the Stock Market

The overall market has recently been reactive to inflation at a 40-year high, rising interest rates, the ongoing pandemic, and now, the devastating situation in Ukraine. This has only highlighted the fact that investors shouldn’t panic sell amid a crisis. If you did sell your investments off last week for instance, you would have lost to the market today.

We can’t predict if the market is going to crash because it’s already based on all publicly available knowledge. So while it’s human nature to act on emotion and the news we watch on TV, remember, the markets have more than doubled since the beginning of the COVID-19 pandemic when we saw the market drop over 30% in March 2020.

Generally speaking, stay the course, stick to your plan, continue to buy and always speak with your Fiduciary Financial Advisor before making such decisions.

Future-Proof Your Retirement

Don’t let the volatile stock market from COVID and war rattle your retirement savings plan.

Volatility is uncomfortable, especially as a retiree. For small investors, whose biggest exposure to the stock market is usually their retirement account holdings — 401(k), 403(b), 457 plans, the federal government’s Thrift Savings Plan, and Individual Retirement Accounts (IRAs). No one wants to go through watching their account balances fluctuate. However, it is part of the saving and investing process. Think of your assets separately. Money for now, money for a specific future need, and money for later, ten years or more.

 

Secondly, adjusting your current plan and asset allocation is a great duscussion to have with your Fiduciary advisor. By looking at how your overall retirement funds are invested, we can make necessary changes to keep your plan on track. 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.

It’s important to understand that some strategies can be more complicated than others. Sometimes certain strategies are better suited to certain individuals or families, so it pays to think this through. Remember, that with all strategies there is no one size fits all. Regardless of the direction you’d like to consider, it’s a good idea to talk with your trusted financial advisor who can analyze the pros and cons of all the options with you.

See How We Can Help

With the Russia-Ukraine conflict and the seemingly never-ending pandemic, investors are understandably nervous, and stocks are volatile. If you’re feeling stressed during these challenging times, and you’re looking for something you can control, this is it. At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and provide you with the highest level of service.

Working with the advisors at Agemy Financial Strategies can help you get ready for sinking markets—and stay grounded when they show up. We can explain ways to rebalance and help protect your accounts moving forward and even suggest a few investments we might consider making while the markets ware down. Creating a retirement checklist with us is a great way to pinpoint your main goals, compare them to retirement realities and make a plan of how to connect the two.

Click here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.

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3-retirement-realities-you-need-to-know

Agemy Financial Strategies

February 23, 2022

Many Americans have misconceptions about retirement planning. Unfortunately, these misunderstandings can lead to the difference between a retirement you want and a retirement you have simply come to expect. 

What works in theory doesn’t always work in reality. And that is certainly the case when it comes to retirement. Predicting exactly what your retirement will be like isn’t realistic, but, understanding some of the more common assumptions about retirement may help you get closer to your goal than most.

With that in mind, here’s the three most common misconceptions the Fiduciaries at Agemy Financial Strategies often hear from clients, and how to plan for the unexpected before stepping your foot over the golden bridge to retirement.

Reality #1: Replacement Rates Aren’t a One-Size-Fits-All

A simple online search will show you a common theme: You need to replace 70-80% of your final earnings in retirement from various sources such as Social Security, personal assets, and, for some, earned income. But those numbers are simply an average.

In early retirement you can expect your spending to go down. Then raise as retirement goes on. According to EBRI, average household expenditures totaled $55,000 for people 50-64 in 2017 versus $50,000 for those 65-74, and $39,000 for those 75 and older. What does this mean for your retirement plan? You might save more than you need if you base your retirement savings plan on the rule of thumb that would have you replace 70% to 80% of your pre-retirement income every year throughout retirement. Or on the other end of the spectrum, you have a false sense of hope you have enough retirement savings, but later find yourself cut short. This spells out exactly why a personalized retirement-income plan is your best option.

Realty #2: Healthcare Costs are Rising

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.

Think you’re in good health so no need to worry? Another surprising fact from the HealthView report is that healthy retirees have higher total health care expenses than unhealthy retirees. That’s because healthy people tend to live longer. So even though short-term expenses for sick people are higher, longer life spans mean that total medical costs for healthy people exceed those for their less healthy counterparts. As daunting as these expenses seem, there are some things you can do to mitigate their effect and lessen the risk that they will derail your retirement. From HSAs to Medicaid and the Affordable Care Act, discuss your best options with your full-service financial advisors.

Reality #3: Taxes Could Get You

You’re still going to be paying income taxes. Your Social Security benefits might even be taxed. So where do you even begin?

Taxes are calculated on your income each year as you receive it, much like how it works before you retire. Different tax rules can apply to each type of income you receive. You should know how each income source shows up on your tax return so you can estimate and minimize your taxes in retirement.

The six most common types of retirement income are taxed according to varying rules:

  • Social Security Income:  A formula determines the amount of your Social Security that’s taxable. You might have to include up to 85% of your benefits as taxable income on your return.

  • IRA and 401(k) Withdrawals: IRA withdrawals, as well as withdrawals from 401(k) plans, 403(b) plans, and 457 plans, are reported on your tax return as ordinary income.

  • Pension Income: Most pension income is taxable. It will be taxed if you withdraw pre-tax money you contributed to the plan.

  • Annuity Distributions: Tax rules apply to any withdrawals or annuity payments you receive from an annuity that’s owned within an IRA or another retirement account. The exact requirements that will apply depend on whether your annuity was purchased with after-tax dollars.

  • Investment Income: You’ll pay taxes on dividends, interest income, or capital gains, just as you did before you retired.

  • Gains Upon the Sale of Your Home: You most likely won’t pay taxes on gains from the sale of your home if you’ve lived there for at least two years, unless you have gains in excess of $250,000 if you’re single, or $500,000 if you’re married.

For a headstart to get a complete overview of your retirement taxes, read our dedicated blog here. And don’t forget to further utlize our tax resources here. 

Other Considerations

Of course there are multiple other realities in retirement to be aware of; including remianing 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 remians the same: the more you prepare, the less nasty surprises you’ll face along the way.

When thinking about how to plan retirement, have you thought about creating a retirement planning checklist? At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and provide you with the highest level of service. Creating a retirement cheklist with us is a great way to pinpoint your main goals, compare them to retirement realities and make a plan of how to connect the two.

Click here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guilford, CT and Denver, CO are looking forward to speaking with you.

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3 Signs of Financial Anxiety

Agemy Financial Strategies

February 16, 2022

Financial anxiety is a feeling of worry, fear, or unease about your finances. Learn to read your body’s responses to conversations about money, and set regular money check-ins to keep financial anxiety under control.

Are you experiencing too much strain when it comes to your finances? The Covid-19 pandemic has made it hard for people to seek answers about their financial futures, and many financial planners are underestimating the financial anxiety that is causing.

Financial anxiety happens when you have money, a job and all the hallmarks of financial security, but still worry that something bad is going to happen. For many people, the constant weight of that anxiety could be worse than a negative event that could be happening. Here are three signs of Financial Anxiety and how Agemy Financial Strategies can help you get back on track to finding answers to your financial futures.

1. You’re Just Scraping By

The Covid-19 Pandemic left more people living paycheck to paycheck.  It’s understandable to be anxious if you’re not sure whether you’ll be able to pay your bills. Or, maybe you’re not even sure if you’ll be able to buy groceries for the week. If you’re in a financial state that requires you to depend on every penny from every paycheck, you’re bound to experience anxiety.

The biggest problem with this type of anxiety is that it might continue to grow as you near the end of your budget every pay period. That keeps you in a constant cycle of anxiety, which can wreak havoc on your system. The best thing you can do to combat financial stress is to get your finances in order. You could see a financial planner, set a budget, or work out a savings plan with your bank.

Financial planners can help ease their clients’ financial anxieties by including a questionnaire on the topic in their client intake process and by undergoing training to help them better identify and manage these situations as they come up. At the end of the day Financial planners are there to help you get back on track and by answering the questionnaires truthfully they’ll be able to get a better understanding of your financial situation.

2. You Overspend

It might seem counterintuitive, but a lot of people actually spend more money when they’re under heavy financial stress. It can help to ease their worries for a while. When you buy something new that you enjoy, you can temporarily push aside feelings of anxiety. As you might expect, though, those “good” feelings don’t last long. The more you spend, the more your financial woes will grow. And those fears will continue to grow along with them.

Keeping your spending habits in check is one of the best things you can do to combat the anxiety caused by financial stress. To get started, look at your bank statement for the last month. Note down all of your income streams and group them together. Then, split your expenses into two categories: fixed and variable costs. Fixed costs include expenditures that are difficult to change such as your rent, utility bills, and any debt repayments. Your variable costs include your payments that are easier to adapt such as money spent on groceries, subscriptions services, and clothing. From here you’ll be able to see:

  • If you have more money going out of your account than coming in every month
  • Any areas where you’re overspending

3. You Have Strained Relationships

We hear it all the time…one of the main causes of divorce is money. It’s not necessarily the money itself that causes it but the behaviors around money that create tension in relationships. This tension can cause too much strain over time and result in divorce. Therefore, it’s best to be able to recognize signs ahead of time that you or your spouse may be under financial stress.

No matter how close the couple is or how long the relationship has spanned, no couple see EXACT eye to eye when it comes to finances. For example, one spouse could have had a childhood of watching their parents overspend or worrying about bills, or having to shut down a family business. Whereas the other spouse could have had a much more stable and privileged upbringing – alas causing them to see money management differently. The answer? Communication. Creating a household money “practice,” or getting into the habit of regularly checking in with your finances as a couple, is the simplest way to shape a relationship with your money, and your partner.

Here are some further recommendations on how to help ease the anxiety.

Identify Areas Where You Can Save

If your outgoing expenses exceed your income, don’t worry. You can either decrease your spending in certain areas or, if possible, focus on bringing in some extra income each month. You can even decide to do both, but it’s important not to overwhelm yourself when creating better financial habits—especially at the beginning.

Once you’ve identified areas where you’re overspending, you’ll have a clear indicator of where you should start cutting back. Beyond that, the easiest place to begin reducing your expenditures is your variable costs. However, if you want to make some more drastic savings, you can consider targeting your fixed costs. This means, for example, finding ways to save on rent or utility bills.

Create A Budget

Next, it’s time to decide how much money you want to save each month and to create a budget to support that goal. As you begin to make changes that free up some extra money, you’ll get an idea of how much you can start to put towards a savings fund.

Adopting a savings mentality can take a little while to get used to, but it’s all about taking small, consistent steps towards your goal. One of the best tools against financial anxiety is having a solid budget helps you navigate your finances and keeps your financial health in check. From here, you can start making some smarter, forward-thinking financial decisions.

This could include saving for an emergency fund or contributing towards your pension. By creating a buffer between you and life’s surprises, you prevent your future self from spiraling into financial stress—you’ll certainly thank yourself for it later!

Explore Your Mental Health

Think: What is my anxiety trying to tell me?

A body check-in teaches people how to step to the side and be able to observe and witness more of what’s going on so we’re not so consumed with it. Start paying attention to your emotions and how your body reacts when you discuss money or make financial decisions. How do you feel when you check account balances online? What about when you share information about your latest investments with a loved one? Identifying financial anxiety triggers will help you consider what is in the conversation that is triggering these feelings. Is it how you communicate with your partner? Are you feeling guilty or ashamed?

Take a step back and work on observing emotions rather than working off of them.

Schedule Regular Money Check-ins with Agemy Financial Strategies

One of the keys to a sound financial strategy is spending less than you take in, and then finding a way to put your excess to work. A money management approach involves creating budgets to understand and make decisions about where your money is going. It also involves knowing where you may be able to put your excess cash to work.

A Fiduciary is a person or organization that acts on behalf of a person or persons and is legally bound to act solely in their best interests. As Fiduciaries, the advisors at Agemy Financial Strategies only have your best intentions at heart.

Scheduling time with us (or your chosen advisor) to address finances and help you focus on immediate actions to see where you are overspending – or where to invest your money. Start by sharing money stories with us, how you’re feeling and then move on to discussing values and how they show up in the way you save, spend or invest. The goal of these conversations is to help you understand your feelings about money — an important step toward getting on the same page and easing financial anxiety for yourself, and for your family.

Final Thoughts

Money Management and Financial Anxiety go hand in hand when managing different aspects of your personal finances. At Agemy Financial Strategies, our job is to help ease those feelings of financial anxiety and help you improve your money management skills by regularly evaluating your current money management plan and making necessary changes that make sense for you.

When you create a roadmap of where you want to go, there will be changes along the way. At Agemy Financial Strategies, our team of financial advisors are here to help you through those changes and to help you understand the ins and outs of money management.

For more information on our financial advisory services, contact us here today.

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Bringing Meaning to Money Management

Agemy Financial Strategies

February 08, 2022

Generally speaking, money management refers to the processes of budgeting, saving, investing, spending, or otherwise overseeing the capital usage of an individual or group. But we’re all wired differently, and therefore mastering your finances looks different for everyone. Here’s how to create a money management plan that has structure and meaning to your unique needs and goals. 

Money management covers a broad domain of knowledge including everything relating to handling money wisely. Whether it’s budgeting, saving or investing in your personal assets. To embrace money management means to learn financial practices that help you accumulate wealth and security, while understanding the key to preserving that wealth.

Implementing the management of your money takes your unique needs, goals, and risks into consideration while focusing on your financial decision making and your previous habits that could stand in the way of your success. Here’s a look at the basics of money management and why it’s important to start implementing these practices into your financial strategy.

The Basics of Money Management

Not understanding the foundation of money can create some issues for you down the road. Without a firm, educated grasp of financial matters, you’ll likely end up like the majority of Americans; locked into years of debt, paying high fees, and unsure where all of your money is going.

Money management can help people accumulate wealth instead of potentially spending all of their money. When you accumulate wealth, you will be able to increase your capital, create security for your family, make positive investments, better your standard of living, and develop a cushion in the form of assets and savings. Overall, money management increases your lifestyle, providing security and greater opportunity for you and your family. Take a look at a couple steps below to see how you can begin to implement money management into your life.

  • Create Goals to Manage Your Money

The bottom line in money management is that you need to know where you’re headed. Without a clear destination, you’re more than likely going to keep going around in circles. That’s exactly what it’s like to be dealing with money without goals. However, if you establish your financial goals, you have a roadmap of where you’re at and where you want to end up financially. You’ll be prepared to intentionally use or save every dollar that comes your way.

By setting your goals, you’ll also be able to set some smaller goals that act as steps along the way. These small goals are basically milestones that help you to progress further down the path to your financial destination. Your goals will give you clarity and vision, helping you make the best decisions for reaching them.

  • Develop an Investment Strategy

Having a long-term investment strategy is often the key to strong and effective money management and wealth accumulation. When you create a long-term strategy, you’re more likely to keep your eyes on the prize and not be swayed by the many things that come your way.

An investment strategy helps people stay focused, moving towards their small milestones instead of veering off in every which way. They are better able to ignore the stepping stones that others are putting in their path in order to keep on heading in the right direction towards their own goals.

  • Money Management & Tax Efficiency

Understanding your taxes is a big part of money management. While everyone knows that they pay taxes, they’re not really aware of how much they pay. They certainly don’t know about unnecessary taxes and how they can actually hinder the accumulation of wealth. When you are managing your money, you aren’t thinking of your income as everything you make. Instead, you know that your income is really whatever you make after taxes, enabling you to better allocate your finances.

In regards to investments, you will want to consider your account location, essentially allocating your money based on their tax status. You will then do the same for your various investments, allocating them in the same manner. This will give you a better understanding of your overall wealth, your options for wealth distribution, and will help you accumulate wealth faster.

  • Portfolio Risk Management

In the financial world, risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions. Poor management of risk is one of the main causes of investment underperformance. You need to be proactive when it comes to risk management, understanding the risk-return relationship and acting on it.

How much volatility an investor should accept depends entirely on the individual investor’s tolerance for risk, or in the case of an investment professional, how much tolerance their investment objectives allow.

When you have a seamless money management plan, you will understand the market risks and the likelihood of negative returns. You will be cognizant of the fact that holding your portfolio longer means more negative returns, yet also means a greater probability of a positive annual return.

Final Thoughts

From managing different aspects of your personal finances, to developing a coherent plan that maximizes financial growth while minimizing risk, money management is not to be taken lightly.

You can improve your money management skills by regularly evaluating your current money management plan and making necessary changes that make sense for you. When you create a roadmap of where you want to go, there will be changes along the way. At Agemy Financial Strategies, our team of financial advisors are here to help you through those changes and to help you understand the ins and outs of money management.

For more information on our financial advisory services, contact us here today.

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