Even though perceptions have changed during the pandemic with more Americans now saying they need less money to feel rich1, when it comes to retirement, most people are still unclear about how much they will need to have saved before they can quit their jobs. The answer to that question is different for every person. Here are some of the things you need to think about in order to get a realistic retirement number in mind. What do you want to do during retirement? Where will you live? Different people have different retirement goals and visions. You may not
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Posts by Strategic Financial Planning
How a Furlough (or Layoff) Affects Your Finances…and Retirement
Here are six things you need to know if you or a family member has been furloughed—or laid off—from their job A furlough is an unpaid leave of absence. You don’t report to work, you don’t get paid, and you may lose some of your benefits. Getting fired or laid off is different because it is permanent; whereas, being furloughed means your employer wants you back as soon as things get back to normal, typically at the same position and income level as before the furlough. Here are six things you should know: Filing for unemployment Whether
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The CARES Act: 10 Things You Should Know
The $2 trillion coronavirus economic stimulus bill is the single largest relief legislation in U.S. history, aimed at providing help for individuals and businesses affected by the outbreak. It was signed into law on March 27, 2020. The CARES Act is also known as “Phase III,” because it follows a $104 billion package passed March 18 for workers and families, and a smaller $8 billion bill to increase funding for medical treatments and testing. There is already talk of a fourth and fifth package in development in Congress. Here’s what you should know: Direct Payments to Taxpayers Americans are set
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Legislation and News.
Stock Market Volatility: It Helps to Look Backward
Obviously, many of our clients are worried about the news, the headlines about coronavirus, and the drops in the stock market happening at the time of this writing. As you know, our firm focuses a lot of attention on protecting your savings as you near retirement. But for some of our clients (depending on their unique circumstances), part of their portfolio—and/or part of their 401(k) or other retirement funds—are still subject to stock market risk. The reason for this is that based on historic return data: the stock market can offer the highest returns over time, and so might still
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News and Stock Market.
Clearing Up Confusion About RMDs
The SECURE Act has increased the age for required minimum distributions (RMDs) from 70-1/2 to 72 starting this year, 2020. If you turned age 70-1/2 in 2019, your RMDs were required for the 2019 tax year, and WILL BE required for 2020, 2021 and every year from now on. For everyone turning 70-1/2 in 2020, your RMDs will not be required until the year you turn 72, even if you have received notification from your custodian to the contrary. Because the law was passed and became effective within two weeks of passage, automated computer notifications and settings have not been
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Retirement and Tax Planning.
Matthew McMahon, CFP®, Recognized as Top Business Leader
Matthew McMahon, Certified Financial PlannerTM and owner of Strategic Financial Planning, was recently recognized as a top 20 business leader under 40 in Flagstaff, AZ by the Arizona Daily Sun. In the article, he discusses one of the big reasons why he initially became involved in the business. Click here to read the full story.
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News.
The Rules Are Changing For 401(k)s In 2020
The Rules Are Changing For Your 401(k) In 2020 If you’re still working and contributing to a 401(k) or similar workplace retirement plan, there is some good news for the upcoming year. If you’re under age 50, the amount you can contribute to your 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is now $19,500 for 2020—a $500 increase over 2019. Additionally, for those who are age 50 or over by December 31, 2020, the catch-up amount is now $6,500, up by $500 (and the first increase since 2015). Keep in mind that you can still
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Does Your Retirement Plan Include Inflation Risk?
Inflation may not always be top of mind when you think about planning for retirement. Of course, you will likely consider your current expenses, but you need to account for what the costs of those expenses could be over time. None of us can predict the future, but we can plan. Inflation diminishes purchasing power over the years and increases the costs of services that retirees and pre-retirees need. Given that more Americans are living longer, it can pay dividends to include inflation risk in your overall planning. The other issue we have to contend with when it comes to
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The IRA Had a Birthday Last Month
The IRA can provide many gifts as part of a comprehensive retirement plan. The Individual Retirement Account (IRA) turned 45 on Labor Day. On September 2, 1974, the Employee Retirement Income Security Act, or ERISA, was enacted into law, introducing broad safeguards to protect employee savings in both defined benefit plans like pensions, and defined contribution plans. The intent of Congress in initially establishing IRAs was to provide a tax-advantaged retirement savings plan for those workers at businesses that weren’t able to offer pensions. The IRA also made it possible to preserve the tax-deferred status of qualified plan assets when
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Annual Medicare Open Enrollment Begins October 15 and Runs Through December 7
If you’re already enrolled in Medicare it may be time to evaluate your current coverage, make changes or switch plans during the open enrollment period from October 15 through December 7. If you have a Medicare Prescription Drug Plan, and are considering making changes from Original Medicare (Parts A and B) to a Medicare Advantage Plan, or vice versa, now is your chance to make changes or enroll. Medicare health and drug plans are allowed to make changes to their offerings each year, including changes to costs, coverage, and what pharmacies and providers are in their network. If they no
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Healthcare Costs and Medicare.
