Insurance When You Marry After 40 | Under 50

With people marrying later in life these days, coverage has become even more important.

When you marry, you buy life insurance. Right? You buy it out of consideration for your spouse, and also realize that in the event of either your untimely death or your spouse’s untimely death, your household could be left with one income to shoulder expenses that may not lessen.

These days, people are marrying later in life. Take first marriages, for example. A recent study by the Pew Research Center says the median age for marriage in America is now 30 for men and 28 for women, compared to respective median ages of 23 and 21 in 1968. Today, 16% of us are waiting until at least our late forties to marry.1,2   

Maybe you are marrying after age forty, or thinking about it. That might call for other insurance considerations besides having life insurance policy. Whether you are marrying for the first time or the second, third, or fourth time, your earnings and net worth may be much greater than they were ten, twenty, or thirty years ago, and you also may have some age-linked or business-linked insurance priorities.

These are worth discussing on your way to marrying. Are you and your spouse set to run a business or professional practice? Is there a significant occurrence of dementia in your family history, or your spouse’s family history? How about a particular, severe illness? These questions may seem tough to mull over as you approach the big day, but being pragmatic now might be wise for the years ahead.

Some of us will live very long lives, and possibly need assisted living someday. Marrying at mid-life or later means giving serious thought not just to life insurance, but also to ways to insure extended care. The Social Security Administration projects that today, the average 65-year-old man will probably live to age 83; the average 65-year-old woman will probably live to age 85. Advances in health care may mean even longer lifespans for those who turn 65 ten or twenty years from now. A percentage of us may be so “above average” that we live past 100, and that percentage may grow with scientific breakthroughs.3

Extended care coverage, or coverage that offers the potential to keep a household can be important in the marriage. It may be smart to have a life insurance trust created for the benefit of one spouse, or have one spouse own a particular policy.

Using a life insurance trust involves a complex set of tax rules and regulations. Before moving forward with a life insurance trust, consider working with a professional who is familiar with the rules and regulations.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Now is not too soon to think about these matters. Looking into these different insurance coverages could be a very kind thing to do for your future spouse, yourself, and your marriage.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.



Citations
1. Pew Research Center, May 27, 2020 
2. Good Morning America, May 24, 2021
3. NerdWallet, November 6, 2020

Explaining the Basis of Inherited Real Estate | Under 40

What is cost basis? Stepped-up basis? How does the home sale tax exclusion work?

At some point in our lives, we may inherit a home or another form of real property. In such instances, we need to understand some of the jargon involving inherited real estate. What does “cost basis” mean? What is a “step-up?” What is the home sale tax exclusion, and what kind of tax break does it offer?

Very few parents discuss these matters with their children before they pass away. Some prior knowledge of these terms may make things less confusing at a highly stressful time.

Cost basis is fairly easy to explain. It is the original purchase price of real estate plus certain expenses and fees incurred by the buyer, many of them detailed at closing. The purchase price is always the starting point for determining the cost basis; that is true whether the purchase is financed or all-cash. Title insurance costs, settlement fees, and property taxes owed by the seller that the buyer ends up paying can all become part of the cost basis.1

At the buyer’s death, the cost basis of the property is “stepped up” to its current fair market value. This step-up can cut into the profits of inheritors should they elect to sell. On the other hand, it can also reduce any income tax liability stemming from the transaction.2

Here is an illustration of stepped-up basis. Twenty years ago, Jane Smyth bought a home for $255,000. At purchase, the cost basis of the property was $260,000. Jane dies and her daughter Blair inherits the home. Its present fair market value is $459,000. That is Blair’s stepped-up basis. So if Blair sells the home and gets $470,000 for it, her complete taxable profit on the sale will be $11,000, not $210,000. If she sells the home for less than $459,000, she will take a loss; the loss will not be tax-deductible, as you cannot deduct a loss resulting from the sale of a personal residence.1

The step-up can reflect more than just simple property appreciation through the years. In fact, many factors can adjust it over time, including negative ones. Basis can be adjusted upward by the costs of home improvements and home additions (and even related tax credits received by the homeowner), rebuilding costs following a disaster, legal fees linked to property ownership, and expenses of linking utility lines to a home. Basis can be adjusted downward by property and casualty insurance payouts, allowable depreciation that comes from renting out part of a home or using part of a residence as a place of business, and any other developments that amount to a return of cost for the property owner.1

The Internal Revenue Code states that a step-up applies for real property “acquired by bequest, devise, or inheritance, or by the decedent’s estate from the decedent.” In plain English, that means the new owner of the property is eligible for the step-up whether the deceased property owner had a will or not.2 

In a community property state, receipt of the step-up becomes a bit more complicated. If a married couple buys real estate in Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, or Wisconsin, each spouse is automatically considered to have a 50% ownership interest in said real property. (Alaska offers spouses the option of a community property agreement.) If a child or other party inherits that 50% ownership interest, that inheritor is usually entitled to a step-up. If at least half of the real estate in question is included in the decedent’s gross estate, the surviving spouse is also eligible for a step-up on his or her 50% ownership interest. Alternately, the person inheriting the ownership interest may choose to value the property six months after the date of the previous owner’s death (or the date of disposition of the property, if disposition occurred first).2,3

In recent years, there has been talk in Washington of curtailing the step-up. So far, such notions have not advanced toward legislation.4

What if a parent gifts real property to a child? The parent’s tax basis becomes the child’s tax basis. If the parent has owned that property for decades and the child cannot take advantage of the federal home sale tax exclusion, the capital gains tax could be enormous if the child sells the property.2

Who qualifies for the home sale tax exclusion? If individuals or married couples want to sell an inherited home, they can qualify for this big federal tax break once they have used that home as their primary residence for two years out of the five years preceding the sale. Upon qualifying, a single taxpayer may exclude as much as $250,000 of gain from the sale, with $500,000 being the limit for married homeowners filing jointly. If the home’s cost basis receives a step-up, the gain from the sale may be small, but this is still a nice tax perk to have.5

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 - nolo.com/legal-encyclopedia/determining-your-homes-tax-basis.html [3/30/16]
2 - realtytimes.com/consumeradvice/sellersadvice1/item/34913-20150513-inherited-property-understanding-the-stepped-up-basis [5/13/15]
3 - irs.gov/irm/part25/irm_25-018-001.html
4 - blogs.wsj.com/totalreturn/2015/01/20/the-value-of-the-step-up-on-inherited-assets/ [1/20/15]
5 - nolo.com/legal-encyclopedia/if-you-inherit-home-do-you-qualify-the-home-sale-tax-exclusion.html [3/31/16]

Bad Money Habits to Break | Under 30

Behaviors worth changing.

Do bad money habits constrain your financial progress? Many people fall into the same financial behavior patterns, year after year. If you sometimes succumb to these financial tendencies, now is as good a time as any to alter your behavior.

#1: Lending money to family & friends. You may know someone who has lent a few thousand to a sister or brother, a few hundred to an old buddy, and so on. Generosity is a virtue, but personal loans can easily transform into personal financial losses for the lender. If you must loan money to a friend or family member, mention that you will charge interest and set a repayment plan with deadlines. Better yet, don’t do it at all. If your friends or relatives can’t learn to budget, why should you bail them out?

#2: Spending more than you make. Living beyond your means, living on margin, or whatever you wish to call it – it is a path toward significant debt. Wealth is seldom made by buying possessions; today’s flashy material items may become the garage sale junk of the future.

#3: Saving little or nothing. Good savers build emergency funds, have money to invest and compound, and leave the stress of living paycheck to paycheck behind. If you are not able to put extra money away, there is another way to get some: a second job. Even working 15-20 hours more per week could make a big difference.

#4: Living without a budget. You may make enough money that you don’t feel you need to budget. In truth, few of us are really that wealthy. In calculating a budget, you may find opportunities for savings and detect wasteful spending.

#5: Frivolous spending. Advertisers can make us feel as if we have sudden needs; needs we must respond to, or ones that can only be met via the purchase of a product. See their ploys for what they are. Think twice before spending impulsively.

#6: Not using cash often enough. No one can deny that the world runs on credit, but that doesn’t mean your household should. Pay with cash as often as your budget allows.

#7: Thinking you’ll win the lottery. When the headlines are filled with news of big lottery jackpots, you might be tempted to throw a few bucks at a lottery ticket. It’s important, though, to be fully aware that the odds in the lottery and other games of chance are against you. A few bucks once in a while is one thing, but a few bucks (or more) every week could possibly lead to financial and personal issues. 

#8: Inadequate financial literacy. Is the financial world boring? To many people, it can seem that way. The Wall Street Journal is not exactly Rolling Stone, and The Economist is hardly light reading. You don’t have to start there, however. There are great, readable, and even, entertaining websites filled with useful financial information. Reading an article per day on these websites could help you greatly increase your financial understanding.  

#9: Not contributing to retirement plans. The earlier you contribute to them, the better; the more you contribute to them, the more compounding of those invested assets you may potentially realize.

#10: DIY retirement strategy. Those who save for retirement without the help of professionals may leave themselves open to abrupt, emotional investing mistakes and other oversights. Another common tendency is to vastly underestimate the amount of money needed for the future. Few people have the time to amass the knowledge and skill set possessed by a financial services professional with years of experience. Instead of flirting with trial and error, see a professional for insight.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Successful Women | Spring 2022

Material created by Raymond James. The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Raymond James is not affiliated with any other entity listed herein. 21-BDMKT-5250 AB 1/22

AEGIS Cares | Quarter 1 & Quarter 2 2022

AEGIS Cares Q1 2022 Giving Plan

For our Quarter 1 Giving Plan we volunteered at Jake’s Network of Hope in Neenah. Jake’s Diapers, Inc. solves diaper needs for infants, elderly, and those with special needs. They believe this is essential for clean, healthy, and active lives, and creates a sense of dignity for those they serve. On March 1, our team went to Jake’s warehouse for the afternoon to help package and sort  supplies for families in the community!

Go to their website https://jakesnoh.org/ to learn how you can help!

If there are any organizations or causes that you would like us to support, please call Courtney Krell at (920) 233-4650 or email her at courtney.krell@aegis4me.com

AEGIS Cares Q1 2022 Giving Plan

AEGIS Cares Q2 2022 Giving Plan

For our Quarter 2 Giving Plan we will be raising monetary donations for Samaritan’s Purse. Samaritan’s Purse is currently operating multiple medical facilities in various parts of Ukraine and providing food and non-food relief items through church partners in both Ukraine and Moldova. This organization has had a heavy impact on Refugees in Ukraine, and we are excited to help them out in any way we can. AEGIS will be matching all donations up to $1,000! If you are interested in participating, please go to the website above to make your donation. After donating, go ahead and give us a call at 920-233-4650 or send us an email at info@aegis4me.com with the amount you donated, and we will be sure to match it!

If you have any questions or need help donating, please feel free to reach out and we would be happy to help.

If there are any organizations or causes that you would like us to support, please call Courtney Krell at (920) 233-4650 or email her at courtney.krell@aegis4me.com

Image from: https://www.samaritanspurse.org/donation-items/responding-to-the-crisis-in-ukraine/

What’s New at AEGIS Financial | Spring 2022

Forbes Best-in-State 2022

We are excited to announce that AEGIS Financial has been named a Best-In-State Wealth Advisor by Forbes Magazine for 2022! This is the second year in a row AEGIS Financial has been recognized! This is a prestigious national award that requires profound qualitative and quantitative research, a series of in-depth interviews, and a ranking algorithm all conducted by SHOOK Research. Rating criteria included the quality of assets under management, service models, Wealth Advisors that exhibit “best practices”, community involvement, and more. We are grateful for our clients and professional partners that continue to place their trust in us every day!

Please help us welcome our newest team members!

Alyssa Doro – Client Experience Concierge

Alyssa joined AEGIS Financial in 2022 as the Client Experience Concierge. She creates a welcoming experience to both clients and professional partners, performs a varying multitude of client services, and provides internal office support. She is the initial point of contact for clients and professional partners of AEGIS Financial.

Alyssa graduated from the University of Wisconsin Oshkosh in 2011 with a Bachelor of Science degree in Elementary Education. Prior to working at AEGIS Financial, she worked as a substitute teacher for 10+ years and enjoyed her time as a stay-at-home mom.

Alyssa and her husband Mike live on their family farm outside of Omro with their three children, Adalyn, Landyn, and Jack. Outside of work she enjoys reading mysteries, crafting and family game nights.

Jenny Boyd – Relationship Manager

Jenny joined the team at AEGIS in 2022 as a Relationship Manager. She is responsible for participating in client meetings, transcribing notes, processing all the necessary paperwork to maintain client accounts, and providing exceptional customer service to all clients. She enjoys meeting new people and forming lasting relationships.

Jenny graduated from UW-Oshkosh with a Bachelor of Business Administration, majoring in Marketing. She also received her Associate Degree in Interior Design. She comes to AEGIS with more than eight years of experience in the finance industry.

Jenny resides in Oshkosh with her daughter, Macie, and their dog, Baxter. In her free time, Jenny enjoys traveling and cooking with her significant other, Scott. She also enjoys entertaining, decorative painting, and spending time with family and friends.

Ascend

The Ascend platform provides investment management services through an electronic interface and leverages world-class simplified video conferencing and messaging services across most devices.

Ascend saw an issue in the wealth management industry. People were either turning to Robo advisors to handle their investments with no personal touch or they were turned away from some financial firms because they had not built enough wealth for a full comprehensive wealth management program. These people were left to manage their money on their own, even though they may not have had the expertise. Ascend is designed to change that. Ascend can be a perfect solution for those investors who desire professional management of their investments without the full suite of advanced tax and financial planning services traditionally provided to our comprehensive wealth management clients. Our clients’ have loved recommending their children or grandchildren to our Ascend program to get them started with investing at a young age. Our clients’ also love the streamlined options for young busy professionals, without sacrificing performance or professional insight. If you know a friend or family member that would fit well in the Ascend program, please keep us in mind.

Past Events!

2022 Economic Forecast Dinner

On Thursday, February 24th we held our 2022 Economic Forecast Dinner. The dinner included a presentation on the current market and AEGIS’s reaction and expectations. President and Wealth Manager William L. Bowman, CPA presented and also sat on our panel of Wealth Managers for a Q&A Session after. Thank you to all the clients that came to the event and we hope to see you there next year!

Appleton Open House

On March 31st we had our Appleton Office Open House! Several people stopped in to see the new location, visit with our team, and enjoy a snack or two! Thanks to everyone who came out for Appleton Open House!

Upcoming Events!

Oshkosh Open House

Our Oshkosh Office is finished! We’ve expanded the lobby, added a conference room, and a lot more workspace for our back office! Come and see the new renovated office, mingle with our team members, and enjoy a few snacks on Tuesday, May 17th from 12:00-6:00 PM. We hope to see you there!  

Social Media:

Go like us on our Facebook page “AEGIS Financial” and find out what’s happening around the office! We will be posting frequently with birthdays, and important events for our team members as well as sharing some helpful articles that could help you with your finances!

Market Update Videos!

Bill Bowman, CPA and Brian Rogers, CFP frequently share the Investment Committee’s insights on the market and economy. These videos are emailed to you and available on our YouTube Channel “AEGIS Financial” as well as our Facebook and LinkedIn pages! Be sure to like and subscribe!

https://www.youtube.com/watch?v=8O3K1K47rX8&t=1s

Financial Planning 101 Educational Video Series!

Do you have questions about your accounts? Are you not sure what different types of investments are or how they work? Then this educational series is the perfect thing for you! We are beginning a series of short 1-2 minutes videos hitting on questions and topics that our clients frequently have. Follow us on Facebook, LinkedIn, or YouTube to stay up to date with the latest videos in the series!

A Plan for All Seasons | Spring 2022

Updated Premiums and Deductibles for Medicare | 70 + Older

Higher than normal.

Medicare’s premiums and deductibles have seen a larger-than-expected rise this year. For example, Medicare Part B monthly premiums have risen to $170.10, a 14.5% increase. The deductible for Part B rose to $233. The Part A deductible increased to $1,556.1,2

If you didn’t take advantage of the recent open enrollment period, you aren’t alone. According to a recent survey from MedicareGuide.com, 67% of beneficiaries hadn’t looked at their choices by mid-November, while the Kaiser Family Foundation discovered that 71% don’t review their options at all during the open enrollment period.1

For many Americans, Medicare remains a vital program, keeping healthcare affordable. Open enrollment comes again from October 15 to December 7 of 2022, it is definitely worth your time to familiarize yourself with the changes and the options you might select for your coverage.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. CNBC.com, November 29, 2021
2. CNBC.com, November 12, 2021


Retirement Preparation Mistakes | Under 70

Why are they made again and again?

Much is out there about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Aside from these blunders, some classic financial missteps plague retirees.    

Calling them “mistakes” may be a bit harsh, as not all of them represent errors in judgment. Yet whether they result from ignorance or fate, we need to be aware of them as we prepare for and enter retirement.         

Timing Social Security. As Social Security benefits rise about 8% for every year you delay receiving them, waiting a few years to apply for benefits can position you for higher retirement income. Filing for your monthly benefits before you reach Social Security’s Full Retirement Age (FRA) can mean comparatively smaller monthly payments.1      

Managing medical bills. Medicare will not pay for everything. Unless there’s a change in how the program works, you may have a number of out-of-pocket costs, including dental, and vision.   

Underestimating longevity. Actuaries at the Social Security Administration project that around a third of today’s 65-year-olds will live to age 90, with about one in seven living 95 years or longer. The prospect of a 20- or 30-year retirement is not unreasonable, yet there is still a lingering cultural assumption that our retirements might duplicate the relatively brief ones of our parents.2 

Withdrawing strategies. You may have heard of the “4% rule,” a guideline stating that you should take out only about 4% of your retirement savings annually. Some retirees try to abide by it.

So, why do others withdraw 7% or 8% a year?In the first phase of retirement, people tend to live it up; more free time naturally promotes new ventures and adventures and an inclination to live a bit more lavishly.          

Talking About Taxes. It can be a good idea to have both taxable and tax-advantaged accounts in retirement. Assuming your retirement will be long, you may want to assign this or that investment to its “preferred domain.” What does that mean? It means the taxable or tax-advantaged account that may be most appropriate for it as you pursue a better after-tax return for the whole portfolio. 

Retiring with debts. Some find it harder to preserve (or accumulate) wealth when you are handing portions of it to creditors.    

Putting college costs before retirement costs. There is no “financial aid” program for retirement. There are no “retirement loans.” Your children have their whole financial lives ahead of them.     

Retiring with no investment strategy.  Expect that retirement will have a few surprises; the absence of a strategy can leave people without guidance when those surprises happen.

These are some of the classic retirement mistakes. Why not attempt to avoid them? Take a little time to review and refine your retirement strategy in the company of the financial professional you know and trust.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. Forbes.com, December 9, 2021
2. SSA.gov, January 24, 2022


Should You Downsize for Retirement? | Under 60

Some retirees save a great deal of money by doing so; others do not.

You want to retire, and you own a large home that is nearly or fully paid off. The kids are gone, but the upkeep costs haven’t fallen. Should you retire and keep your home? Or sell your home and retire? Maybe it’s time to downsize.

Lower housing expenses could put more cash in your pocket. If your home isn’t paid off yet, have you considered how much money is going toward the home loan? When you took out your mortgage, your lender likely wanted your monthly payment to amount to no more than 28% of your total gross income, or no more than 36% of your total monthly debt repayments. Those are pretty standard metrics in the mortgage industry.1

What percentage of your gross income are you devoting to your mortgage payments today? Even if your home loan is 15 or 20 years old, you still may be devoting a significant part of your gross income to it. When you move to a smaller home, your mortgage expenses may lessen (or disappear) and your cash flow may greatly increase.

You might even be able to buy a smaller home with cash (if finances permit) and cut your tax liability. Optionally, that smaller home could be in a state or region with lower income taxes and a lower cost of living.

You could capitalize on some home equity. Why not convert some home equity into retirement income? If you were forced into early retirement by some corporate downsizing, you might have a sudden and pressing need for retirement capital, another reason to sell that home you bought decades ago and head for a smaller one.   

The lifestyle reasons to downsize (or not). Maybe your home is too much to keep up, or maybe you don’t want to climb stairs anymore. Maybe a condo or an over-55 community appeals to you. Maybe you want to be where it seldom snows.

On the other hand, you may want and need the familiarity of your current home and your immediate neighborhood (not to mention the friends close by). 

Sometimes retirees underestimate the cost of downsizing. Even the logistics can be expensive. Just packing up and moving a two-to-three-bedroom home will cost about $1,250 if you are resettling locally. If you are sending it long distance, you can expect the journey to cost around $5,000, if not more. If you can’t sell or move everything, the excess may go into storage, and the price tag on that may be around $90 a month. In selling your home, you will probably pay commissions to both your agent and the buyer’s agent that add up to 6% of the sale price.2,3,4

Some people want to retire and then sell their home, but it may be wiser to sell a home and then retire if the real estate market slows. If you sell sooner instead of later, you can always rent until you find a smaller house that could save you thousands (or tens of thousands) of dollars over time.

Run the numbers as accurately as you think you can before you make a move. Downsizing always seems to have a hidden cost or two, but for many retirees, it can open a door to long-term savings. Other seniors may find it cheaper to age in place.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 - nerdwallet.com/blog/mortgages/two-ways-to-determine-how-much-house-you-can-afford/ [4/26/22]
2 - investopedia.com/articles/personal-finance/061914/downsides-downsizing-retirement.asp [9/16/21]
3 - moving.com/movers/moving-cost-calculator.asp [4/27/22]
4 - gobankingrates.com/saving-money/home/why-still-wasting-money-storage-units/ [8/31/21]

Couples Retiring on the Same Page | Under 50

Agreeing about what you want from retirement is crucial.

What does a good retirement look like to you? Does it resemble the retirement that your spouse or partner has in mind? It is at least roughly similar?

The Social Security Administration currently projects an average retirement of 18 years for a man and 21 years for a woman (assuming retirement at age 65). So, sharing the same vision of retirement (or at least respecting the difference in each other’s visions) seems crucial to retirement happiness.1

What kind of retirement does your spouse or partner imagine? During years of working, parenting and making ends meet, many couples never really get around to talking about what retirement should look like. If spouses or partners have quite different attitudes about money or dreams that don’t align, that conversation may be deferred for years. Even if they are great communicators, assumptions about what the other wants for the future may prove inaccurate. 

Are couples discussing retirement, or not? According to a recent survey by Fidelity, seven in ten couples say they communicate at least very well with their partner about financial issues. Couples that do communicate with each other are more than twice as likely to report that they expect to live a comfortable lifestyle in retirement. They are also more likely to report their financial household’s financial health as “excellent” or “very good.”2

If you’re having trouble building a retirement strategy with your significant other, working with a financial professional may help. According to the same survey, couples that work with a financial professional are more likely to talk about money with each other, feel confident about their finances, and agree on their visions of retirement. This may explain why nearly half of all Baby Boomers work with a financial professional.2

Be sure to talk about what you want for the future. A few simple questions can get the conversation going, and you might even want to chat about it over a meal or coffee in a relaxing setting. Dreaming and strategizing together, even on the most basic level, gives you a chance to reacquaint yourselves with your financial needs, goals and personalities.

To start, ask each other what you see yourselves doing in retirement – individually as well as together. Is the way you are saving and investing conducive to those dreams?

Think about whether you are making the most of your retirement savings potential. Could you save more? Do you need to? Are you both contributing to tax-advantaged retirement accounts? Are you comfortable with the amount of risk you are assuming?

If your significant other is handling the household finances (and the meetings with financial professionals about a retirement strategy), are you prepared to take over in case of an emergency? When one half of a couple is the “hub” for money matters and investment decisions, the other spouse or partner needs to at least have an understanding of them. If the unexpected occurs, you will want that knowledge.

Speaking of knowledge, you should also both know who the beneficiaries are for your retirement plans, workplace retirement accounts, and investment accounts, and you both need to know where the relevant paperwork is located.

A shared vision of retirement is great, and respect for individual variations on it is just as vital. A conversation about how you see retirement today can give you that much more input to prepare for tomorrow.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – SSA.gov, 2022
2 – Fidelity.com, 2021

Building a College Fund | Under 40

Do it smartly, without the all-too-common missteps.

According to Sallie Mae, U.S. families with one or more college students spent an average of $24,164 on tuition, housing, and linked expenses in 2015. That was 16% more than in 2014.1

Statistics like these underline the importance of saving and investing to fund a university education, but that effort has become optional to many. In its annual How America Saves for College survey, Sallie Mae found that only 48% of U.S. families with at least one child younger than age 18 were saving for college at all. Among those that were saving, the average 2015 amount was $10,040 – the lowest figure in the 7-year history of the survey. It is little wonder that 22% of college costs are covered by either parent or student borrowing.1,2

If you want to build a college fund, what should you keep in mind? What should you do? What should you avoid doing?

First, save with realistic assumptions. Outdated perceptions of college expenses can linger, so be sure to replace them with current data and future projections. 

Consider a tax-advantaged account. Remarkably, Sallie Mae’s 2015 survey found that just 27% of households saving for higher education had chosen 529 plans or similar vehicles. Nearly half of the households building college funds were simply directing the money into common savings accounts, giving those dollars no chance to significantly grow or compound through equity investment.2

If you open a tax-advantaged account, fund it adequately. Some states have established very low contribution minimums for their college savings plans. That does not mean your contribution should be at or near that level.3

Explore your options with regard to these accounts. You can participate in any number of state-operated college savings plans, not just the one in your state. Another state’s plan may offer you different tax breaks or incentives. Many of these plans now offer more investment choices than they once did, in addition to the traditional age-based options. You can also change the way you invest assets in these plans, sometimes as often as twice a year.3

Think twice about opening a custodial account. Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) accounts were fairly popular at one time. About 10% of parents saving for college still use them, but they have distinct drawbacks. They do not offer tax-advantaged growth, and until the child turns 24, account earnings above a certain threshold are taxed at the parents’ highest marginal rate instead of the child’s lower rate. The money inside the account is considered an irrevocable gift and an asset owned by the student – a real demerit when trying to claim financial aid. Also, when the student reaches the “age of majority” (typically 18 or 21), the money can be used for anything the student desires.4,5

Keep your retirement savings earmarked for retirement. In a 2014 Sallie Mae report, an alarming 30% of parents saving for higher education expenses said that their retirement savings would be their number one resource to pay college costs. Is this idea generous, or merely foolish? Sensibly speaking, eliminating your debt, starting a rainy day fund, and building up your retirement savings should all take precedence over amassing college savings.6

Set a specific savings goal – perhaps with certain schools in mind. Some parents build college savings without any real goal of how much to save, not knowing the university their children will attend. Defining the destination should be part of the strategy. It is perfectly okay to tell your children that you will be saving $X for college by the time they are 18, and that they may have to strive for scholarships and grants if they want to go to especially costly universities.6

The biggest blunder is not saving for college at all. As tuition costs continue to rise, getting any kind of head start on funding a university education is a must on a family’s financial to-do list. While financial aid is certainly available, it rarely absorbs 100% of college costs.3

If you save $300 per month for college for 10 years and that money earns 7% a year, your college fund will grow to $52,228 a decade from now. If you borrow that much in Stafford Loans, you will owe about $600 per month for the next ten years and pay about $20,000 in interest along the way. A notable contrast and an argument for building a college fund.6

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 - news.salliemae.com/research-tools/america-pays-2015 [2/4/16]
2 - news.salliemae.com/research-tools/america-saves-2015 [2/4/16]
3 - tinyurl.com/hyroj6n [6/9/15]
4 - time.com/money/4155733/the-3-biggest-mistakes-parents-make-in-saving-for-college/ [12/22/15]
5 - franklintempleton.com/investor/products/goals/education/ugma-utma-accounts?role=investor [2/3/16]
6 - forbes.com/sites/learnvest/2015/02/24/4-common-college-savings-mistakes-many-parents-make/ [2/24/16]