Manage The Plastics

The 2004 cult hit movie Mean Girls provides a surprising number of useful and life-affirming lessons. Perhaps the most notable is how NOT to manage credit.

Get in LoserEmbroiled in a wide array of  truly deplorable and self-destructive behaviors, members of “The Plastics” reach for their credit cards when it’s time to unwind and enjoy the necessary comforts of teen life in suburban Chicago. This most agreeable arrangement works so long as someone else pays the bill; the girls are eventually chastened, disband, and learn a slew of valuable life lessons. What can we learn from The Plastics? Read on to find out!

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Preparing To Adult: Millennials & Money

adulting Well-educated, collaborative, technology savvy and socially conscious are just a few terms that are often associated with Millennials. Their comfort with technology and the incessant pace of change makes them prized employees in many organizations.

Less comforting, however, are the numerous challenges that Millennials face as they become card-carrying adults: crushing student loan debt, the ongoing economic hangover from The Great Recession, and housing prices that are quickly approaching pre-recession levels. Add in an uncertain labor market, and slow economic growth and it’s no wonder many Millennials feel anxious about life and money.

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You Graduated With Student Loan Debt: Now What?

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Congratulations to the class of 2016, your hard work and perseverance has paid off. You are newly minted graduates and may be facing a variety of decisions surrounding your life and career that you feel totally unprepared to make. Should I take that crazy job teaching English in Tibet, or the stuffy office gig with a 401 (k)? Mom and dad said I could move back home, but living with my friends in a sixth-floor walk- up apartment just seems like more fun. Do I need to start saving for retirement already, oh, and what about my student loans? Continue reading

Buckets, Flooring And Structured Withdrawals: Creating A Dynamic Income Plan

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Turning accumulated assets into a reliable income stream is THE critical issue facing retirees. A growing body of research, and memorable terminology, has provided financial planners with the ability to help our clients create a dynamic income plan that best suits their needs.

While each client has a unique set of circumstances, having adequate income to maintain a given lifestyle in retirement is a near universally shared goal. Likewise, many clients will face similar obstacles and challenges throughout retirement. Our job as advisors is to assist clients in identifying their retirement goals, risks, income sources and expenses, and to combine these to help create an income plan that can be revised and adapted over time. In this blog, we will outline three distinct approaches to retirement income planning.

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How To Make A Retirement Budget And Stick To It.

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How To Make A Retirement Budget And Stick To It.

Developing a retirement budget may not be on most people’s list of fun ways to spend an afternoon, but the effort can pay dividends by reducing the chance that you will spend too much money too soon in retirement. It may even allow you to allocate more money to the things that make retirement enjoyable and rewarding.

First the bad news: budgeting is not a commonly taught skill. Many people have difficulty compiling a list of their current expenses, let alone estimating ones they may incur twenty years or more in the future. In addition, retirees face potential emotional hurdles that come with spending assets they may wish to leave to children, grandchildren or other heirs. Having good budgeting skills can help retired clients feel more in control of their purchasing decisions. It is, after all, the one area of retirement planning over which you exert the most control.

Here is how to create your retirement budget: Continue reading

Checklist for a Midyear Financial Checkup

With tax season ending and the start of summer, it’s easy to forget about your finances.  However, this midpoint in the year, as things begin to slow down, is one of the best times to evaluate where you stand, to become aware of issues before it is too late, and to make any necessary course corrections.

We recommend evaluating your:

BUDGET

Now is a great time to fine-tune your budget or spending plan based on any changes (raises, bonuses, additional debt).

 

SAVINGS

Make sure that your emergency savings fund is on track.  While some suggest setting aside 3 months worth of household income, we suggest 6-9 months of cash readily accessible, particularly as the timeframe to fine employment increases.

Check in on your other savings goals such as: your children’s educational planning, retirement savings, family vacation, or home improvements.

Retirement: make sure you are maximizing your annual contributions to your 401k, traditional or Roth IRA, or any other sort of savings you’re looking towards.  For more information check out our retirement posts.  If you see you’re falling short, you may want to consider increasing your contributions.  Take the time to evaluate your company match to maximize your full match potential

 

CREDIT

Guard against identity theft.  Request your free credit report from the 3 credit reporting agencies online, for free at http://www.freecreditreport.com.  Make sure your credit report is updated and accurate – check for any problems or unusual activity.  Close down credit cards that are no longer in use.  Make sure the debt that you’ve taken out is in your name.

 

TAXES

The midyear checkup is a good opportunity to review your tax withholdings and make any estimated tax payments.  Contact your CPA or check the IRS withholding calculator.

 

INSURANCE

Take a look at your current insurance plans: life, health, disability, long-term care, auto, homeowner’s policy.  Do you have the right type of insurance and coverage? Make any policy changes or modifications based on changes in the first part of the year.

 

INVESTMENTS

Now is a good time to review and adjust your asset allocation or your goals, particularly if you want to take on more risk or your retirement time horizon has changed.

Does Obama’s Proposed 2015 Budget Affect Your Retirement Planning? It Does. Here’s How.

President Obama’s proposed 2015 budget would limit tax deductible contributions to 401(k)s and IRAs to 28% of income and cap retirement savers’ tax-deferred accounts to an amount needed to produce a joint and 100% survivor annuity of $210,000 beginning at age 62 (presently $3.2 million). The budget would also eliminate the carried interest provision that allows income from managed retirement investments to be taxed at the capital gains rate, while dropping the “chained” consumer price index proposal reducing Social Security cost-of-living adjustments.

Budget 2015
Additionally, it would require that Roth IRAs follow the same required minimum distribution rules as other retirement accounts (RMDs at 70 ½ similar to traditional IRAs). It also establishes a 5-year rule for IRAs inherited by (most) non-spouse beneficiaries (requiring that distributions be taken out over a five-year period of time) and establishes 60-day rollover rule for IRAs inherited by non-spouse beneficiaries. Finally, the budget includes mandatory automatic IRA enrollment for small businesses and RMD elimination for small retirement accounts of $100,000 (cumulative across all retirement plans).

Even though these provisions may not be enacted, it’s helpful to know what the President’s legislative agenda for this year is. We will monitor and keep you apprised of any developments.