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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.
Financial Planning Tips from One Father to Another
NewsFather’s Day is upon us, and no matter what type of gift you decide to purchase, if you are not giving Dad the opportunity to retire soon, you are missing out on the most important Father’s Day gift — financial independence.
When it comes to planning finances, parents always take the traditional approach. Especially dads! While he THINKS he knows it all, there’s always more to learn when it comes to planning for retirement. That’s where we come in.
As a father himself, Andrew Agemy knows the importance of financial planning; not only for younger generations, but more importantly for those in, or nearing retirement. This Father’s Day, keep the expensive gifting ideas aside. Instead, spend time with your dad talking about money, and help him get his finances in order.
Whether you’re looking for a more meaningful gift this Father’s Day, or indeed a father approaching retirement yourself, here are some financial tips to help achieve a stress-free retirement.
Control your cash flow to spend less than you make.
Being aware of what is going out every month and comparing it to what is coming in is a vital part of the financial independence process. We all have our own money management strategies, and we’re here to help you find yours. Whether it’s your first time budgeting or you just need some new ideas, here are a few tips to get you started:
To get started, first list all your expenses, starting with the last month (although the last 2-3 months or more is ideal to help capture irregular expenses). If you prefer to write things down google sheets or excel. For the more tech-focused, try an easy-to-use online calculator. See our free retirement and budget calculators here. Choosing an approach that gels with your personal preference and lifestyle is key!
You would be surprised how things can find a way to creep into your spending and steadily increase your expenses while eating away at your savings. Things like subscriptions, increasing cable/wireless/insurance bills, irregular expenses- all of these can be budget crushers!
Take a look at these (mostly) painless ways to save money for some ideas. The 50/30/20 rule is an approach that seems to work for many individuals, and here are some other ideas on money management strategies that might work well for you. In order to make sure that you are getting the most out of your budgeting efforts, we suggest splitting up your income into three categories: 50% towards necessities (like housing and groceries), 30% towards wants and 20% to savings.
Paying Off High-Utilizing Debt
No matter how much you make or what stage of life you’re in, you’re going to have to prioritize spending and saving. And when it comes to big financial goals, such as paying down debt or saving for retirement, which one to focus on first isn’t always clear cut. If you do have extra funds, how do you prioritize? The good news: It doesn’t have to be an either-or question. It’s all about finding a balance that’s right for you.
By setting some debt-reduction goals, you can pay off your high interest rate debts and strengthen and protect your credit score at the same time.
The first step is to list out your debts, so you know exactly how much you owe, what kind of interest rate they come with, and how much money you need to pay each month. When it comes to paying off debt, there are two main approaches:
Once you’ve made a plan for tackling your debt, it’s time to stick to it! While it might seem like a good idea to spend some extra money every once in a while on something fun like new shoes or that fancy coffee shop drink you’ve been eyeing up lately—you might want to think twice before going over budget! Going over budget could mean not having enough left over at.
Ultimately the name of the game here is to strengthen and protect your credit score. You can do this by reviewing your credit reports on annualcreditreport.com and disputing/cleaning up any erroneous or stale data. You can do most if not all of it online. This step is super important as this is the information used to generate your credit score.
Once you’ve done this, you’ll want to work on building a good payment history by making sure all your bills are paid on time, and paying them off in full when possible. Paying bills on time helps increase your credit score over time because it shows that you are responsible with your money (and therefore likely to pay back loans).
You don’t have to be debt free to save more for retirement though. It depends on your individual priorities and goals. It can be overwhelming to compare how much you need to save for retirement to how much you’re able to save. Instead, consider small steps which will eventually get you to your goals. To plan for your future, it’s helpful to know where you stand financially. If you’re overwhelmed, ask for help.
The Financial “Why”
Financial independence is a goal that many of us are working towards. But how do you know if your finances are on track? The answer lies in understanding what drives your financial decisions. It all starts with a financial why. Your financial why is the reason behind every decision you make. It’s not just about making more money or being debt-free. It’s about having enough money to do the things that matter most to you, and then some!
The best way to find out what matters most to you is by asking yourself these questions:
This sounds like a lot of work—and trust us: It is! But once you figure out what drives and motivates you, you’ll be able to make decisions about your money that align with your purpose and goals.
Why We Care
For over 30 years, our financial planning has been installed with family values.
Andrew Agemy, Founder and CEO of Agemy Financial Strategies, has won the prestigious Five Star Professional Award in the category of Wealth Management for the last 11 years straight—as seen in Connecticut Magazine, The Wall Street Journal, and many others. Additionally, he is in his second decade of receiving an A+ rating with the Better Business Bureau as well as the National Ethics Association.
With the help of his son and business partner Daniel Agemy – and having dedicated his life to helping people retire and stay retired – Andrew’s and Daniel’s specialty is helping clients move from the investment accumulation phase during their working years into the distribution phase, which will last the rest of their lives – retirement. As fiduciaries, they enjoy using real-world financial data to create personalized financial strategies best suited for each client’s situation.
AFSi became a national firm in 2020 when Andrew and Daniel opened an office in Denver, Colorado, and also became a franchise owner of the national network of Income Specialists known as The Retirement Income Store®. Our values are clear:
– We specialize in conservative retirement strategies with the goal of minimizing our client’s risk with an effective return. Our core objective is to satisfy our client’s needs… We listen.
– A customized approach is used with each individual situation. There are no preconceived ideas as each person has very different needs, backgrounds and circumstances. Being sensitive to each person’s situations, issues and concerns is a core value of our organization… We partner.
– We aim to use a servant’s attitude to develop long-term relationships as we strive to treat others as we would like to be treated… We care.
Happy Father’s Day From Andrew Agemy
If you would like to learn more on our financial planning and education tools, contact us here today. You can also find us on Facebook, Instagram, LinkedIn, Twitter and Youtube where we regularly post valuable tips for those who could use some sound financial advice.
5 Tips to Maximize Savings for Retirement
NewsJune 01, 2022
There is no one-size-fits-all when it comes to saving and investment strategies. However, there are best practices that can help you achieve your financial goals while minimizing risk. Here’s some tips on how to make the best financial decisions for your retirement nest egg.
Saving for retirement is one of the best financial strategies you can take part in. Everyone will hopefully retire at some point in their lifetime. Saving early on in life for your golden years will help prevent you from running out of money. Whether you’re on track for retirement or need to catch up, a Fiduciary financial advisor can help prepare you for your later years.
Here’s a look at 5 saving and investing tips that will help you maximize your savings for retirement.
What is a Retirement Savings Plan?
Having a retirement savings plan is essential to securing your financial security later in life. By utilizing various retirement savings accounts, you can maximize your tax savings, invest in the index funds, and take advantage of compound interest — leaving you with more money when the time comes to retire.
Take Advantage of Your 401(k) or 403(b) Company Match
401(k) and 403(b) plans are qualified tax-advantaged retirement plans offered by employers to their employees. If your workplace offers a retirement plan and a company match, it’s always best practice to contribute up to the maximum your company offers. It is financially beneficial to take advantage of your 401(k) or 403(b) early on in your career.
401(k) plans are offered by for-profit companies to eligible employees who contribute pre or post-tax money through payroll deduction. 403(b) plans are offered to employees of non-profit organizations and the government. You should always see what kind of retirement packages are offered with the company you work for to see where you can better invest and save your money.
Apply for Retirement Savings Credits
If you are a lower- or middle-income taxpayer, you may claim a saver’s tax credit for up to 50% of your retirement plan contribution. If you are married and filing jointly with an adjusted gross income (AGI) of below $68,000 for 2022 ($66,000 for 2021), and you contribute to a qualified retirement plan, you may be eligible for a tax credit.
The income limit for heads of household is $51,000 for 2022 and for single filers and married persons filing separately is $34,000.The maximum credit for 2021 and 2022 is $2,000 for married couples filing jointly and $1,000 for single filers (applied against the maximum contribution amounts: $4,000 for married couples filing jointly and $2,000 for single filers.
Contribute to a Health Savings Account
Healthcare costs are one of the highest growing expenses in the country. High-deductible health plans and health savings accounts are a golden retirement planning opportunity. This tool can not only be used to pay for healthcare expenses but can also be used to squirrel away additional funds for retirement.
Contributions are 100% tax-deductible, and funds unused for medical expenses may continue to be invested and grow over time. One of the best things about an HSA plan is that the distributions made on qualified medical expenses are tax-exempt. People over the age of 55 can keep and save an additional $1,000 per year. It’s important to remember that a traditional IRA is funded with pre-tax dollars whereas a Roth IRA is funded with after-tax dollars. Choose the one that works best for your tax situation.
Use the Backdoor Roth IRA to Increase Savings
For 2022, the AGI phase-out contribution range for Roth IRAs for married couples filing jointly is $204,000 to $214,000 and for single taxpayers and heads of households is $129,000 to $144,000. If your current income is too high and makes you ineligible to contribute to a Roth IRA, there’s another way in. First, contribute to a traditional IRA. There is no income ceiling for contributions to a non-deductible traditional IRA, although there is a limit to what can be contributed.
The IRS caps the contribution limit to $6,000 or $7,000 if you are 50 or over.After the funds clear, convert the traditional IRA to a Roth IRA. That way the funds can compound for the future and be withdrawn tax-free, as long as you meet the withdrawal guidelines.
Retire in the Right State
When it comes time to retire, you should look and see what states don’t have state income taxes. Alaska, Florida, South Dakota, New Hampshire, Tennessee, Wyoming, Texas, and Nevada are just some of the states that don’t have state income taxes. Colorado routinely ranks among the top tax-friendly states for retirees. The state income tax range is a low, flat rate of 4.63%, and you get a fair deduction on retirement income.
A good thing to note is that a majority of states don’t tax social security. Before packing up and moving, evaluate all of the taxes in your proposed new home state.
Fund Your Retirement Accounts with Side Hustles
Side jobs can be an excellent way to make money. Instead of using this cash to purchase a new car or upgrade your appliances, consider using it to fund your retirement accounts. If you haven’t maxed out your IRA contribution, this would be a great option.
Whether you are flipping furniture, tutoring students, or completing freelance work, using side hustles to save money for retirement can be a great way to save money and jump start your retirement investments.
Last Thoughts
It’s important to look at your retirement plan and see if any of our tips could maximize your savings. 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 relocating in retirement, a sound approach involves taking a close look at your potential retirement-income sources.
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.