A pre-retirement checklist to make early (or earlier) retirement a reality As we make our way through 2022, maybe the dream of early retirement has begun to take shape in your mind. Maybe you’re researching when you might first qualify for Social Security retirement benefits (hint: for Social Security income, the youngest age when you can apply is 61 years and nine months old – you would then receive your first Social Security check four months later – one month after your 62nd birthday). But as attractive as monthly checks may be, seriously consider your financial position to be sure you can afford to walk away from the nine-to-five routine. When reviewing your retirement income, incorporate accurate Social Security figures into your financial equation. Keep in mind that Social Security benefits paid at an early retirement age will be less than the benefits paid at full retirement age (65–67, depending on your date of birth). To estimate your Social Security benefit amount, you can go to the Social Security Administration’s website at www.ssa.gov to use the agency’s online calculator. Think Beyond Social Security Beyond your Social Security benefits, however, are other major factors, such as your overall financial situation, prospects for future income, and satisfaction with your job. If early retirement seems a reasonable goal, determine how much income you can count on from savings to supplement your Social Security benefits. Remember to include income from employer-sponsored retirement plans, such as 401(k)s, Individual Retirement Accounts (IRAs), or annuities. Once you have determined your retirement resources, add up your current living expenses and calculate a rough estimate of how much income you may need during retirement. It is possible to live on

Valentine’s Day is one of the biggest holidays for romance and for lavishing gifts on that special someone in your life. While flowers and chocolates may be the most common gifts exchanged on that day, why not consider a gift that may grow in value year after year? Then you would truly be giving the gift that keeps on giving. Want to learn about some value-gaining gifts for your loved ones? Check out some of the ideas listed below. 1. Treasury Bonds Treasury bonds are one reliable gift that grows in value for those who are patient. Consider throwing in a bond with your Valentine’s card and give them a little bit of savings growth without any effort on their part.1 2. Jewelry A popular gift for Valentine’s Day is jewelry. High-quality jewelry made from precious stones, gold, silver, or platinum may make a great accessory and a good investment. If you do your research and find a reputable jeweler, you may have a piece that increases in value over time.2 3. Antiques Sometimes those old, unique, one-of-a-kind items are worth a lot now and even more in the future. While it may take some legwork and a lot of research to find an item or piece with a high potential to increase in value, you may have a gift that is likely to appreciate in value and be one they won’t soon forget.2 4. Artwork Artwork makes a beautiful and personalized gift for any occasion. If you get a piece from specific artists or time periods, you may end up with a piece that has the ability to appreciate in value for years to come. While it may not

When saving for retirement, it often makes sense to contribute to employer-sponsored retirement plans to take advantage of any available employer match opportunities. However, not everyone has access to an employer-sponsored plan. Even if you do, there are reasons you may want to consider using Traditional and/or Roth IRAs to supplement your retirement savings. There are important differences between the two types of accounts.[i] Understanding the potential benefits and drawbacks of each type of IRA can help you make more informed decisions. Potential Benefits and Considerations Regardless which type of IRA you choose, the contribution limits are the same, although Roth IRAs contributions are subject to income limits.[ii] Traditional IRA contributions are not limited by income levels unless you or a spouse was covered by an employer-sponsored plan during the year of the contribution. In 2022, the total amount you can contribute to your Traditional and Roth IRA accounts is the lesser of your taxable compensation for the year or $6,000 ($7,000 for those age 50 or older.)[iii] However, there are important differences in tax treatment for these accounts. If your income is below certain thresholds, you may be able to deduct some or all of your contributions to traditional IRAs, reducing your taxable income in the year of the contributions.[iv] Taxes on contributions and any growth are deferred until you begin withdrawing them. So, if your tax bracket in retirement is lower than in your earning years, you may pay less in taxes on your retirement dollars. In contrast, you cannot deduct contributions to a Roth IRA – those are after-tax contributions.[v] However, qualified distributions from Roth IRAs are not subject to federal income taxes, potentially lowering your tax

Today, many people are concerned about saving for retirement or paying for a large ticket item, such as a child’s college education. If you belong to this group, now may be the time to organize your finances. It is never too early to begin, and the sooner you start, the better. Consider the following steps to building a strong financial foundation:   Get organized. Smart money management begins with organizing your financial By grouping documents according to categories (e.g., insurance papers, account statements, bank statements, and tax returns), you will be able to find what you need quickly.   Determine your financial status. Once your files are organized, construct a net worth statement and a cash flow Your net worth is the difference between your assets (what you own) and your liabilities (what you owe). A cash flow statement itemizes all your sources of income (e.g., salary, interest, and rental income) and all your expenses (e.g., mortgage payments, food, clothing, etc.). A firm financial foundation includes having a positive net worth (meaning you own more than you owe) and positive cash flow (meaning you have more money coming in than going out). Even small steps toward improved money management can help you work towards a positive outcome. Look for areas where you can curb your expenses, and put that money toward savings.   Set financial goals. Once you become aware of your financial status, make the most of your money by establishing financial goals to direct your saving and spending patterns. Because your specific goals may change over time, be sure to re-evaluate your financial priorities on a regular basis.   Control your credit card spending. Although it is convenient

With inflation on the rise, the IRS increased the 2022 contribution limits for some retirement accounts. Although a 2021 Congressional report found that only about 8.5% of defined benefit plan participants and 4.7% of individual retirement account (IRA) holders max out their contributions each year, increasing the amount you put aside for retirement may help your financial independence.1 Here is what retirement savers need to know about the increases allowed in 2022. Changes to 401(k) Limits For 2022, the 401(k) limit for taxpayers under age 50 has increased by $1,000, to $20,500.2 Those age 50 and older may make another $6,500 “catch-up” contribution, for a total maximum contribution of $27,000. This contribution amount is individual, which means that a married couple may contribute a total of $41,000 to their 401(k)s plus $6,500 more for each person who is age 50 or older to a maximum of $54,000.1 Along with 401(k)s, this $20,500 contribution limit also applies to the 403(b), 457, and Thrift Savings plans available to government employees. No Changes to IRA Limits Though 401(k) limits increased, the IRS did not increase the contribution limits for traditional IRAs and Roth IRAs. These IRA limits remain the same, $6,000 for those age 49 and under and $7,000 for 50 and older.1 The deductibility of traditional IRA contributions depends on your household income, while your ability to contribute to a Roth IRA also depends on your income. And unlike the IRA contribution limits, these income thresholds have changed for 2022. For single taxpayers covered by a 401(k), 457, or another workplace retirement plan, a deduction of up to the $6,000 or $7,000 limit (age 50 or older) is available only if their

When you hear the term identity theft, the first thought that comes to mind may involve a data breach or opening a credit card in someone else’s name. But another common type of identity theft involves the use of someone’s Social Security number to unlawfully intercept their income tax refund. Unfortunately, this fraud often isn’t discovered until the victim tries to file their taxes. Instead of getting a quick refund, they may instead be facing a lengthy battle with the IRS. Below we discuss some common signs of tax identity theft and how to protect yourself. Guard Your Personal Information Tax identity thieves don’t need as much sensitive information as you might think. With little more than your full legal name and Social Security Number (SSN) ID thieves may be able to file a return using false income information to obtain a refund to which you’re not entitled. One of the keys to preventing this fraud is minimizing the number of people who have access to your SSN. Don’t provide your SSN to anyone over the phone, shred all documents containing this number (instead of throwing them away), and use multi-factor authentication to log into any online tax preparation accounts. Check Your Credit Regularly Although tax ID theft may not show up on your credit report, having other data breaches (like a stolen credit card number or accounts you don’t remember opening) may increase your risk of this type of theft. Looking over your free credit report occasionally or signing up for credit alerts may tip you off to any other data vulnerabilities you may have experienced. File Taxes Early When Possible The quickest way to thwart a tax identity

Regardless of whether you prepare your taxes yourself or use a professional’s services, it’s a good idea to gather the information and documentation you need well in advance of your actual tax filing date. Below, we’ve listed some key information you need when preparing this year’s taxes. Your Personal Information The personal information you may need to file taxes may contain information from your prior year’s return, including: Your Social Security Number (SSN), along with SSNs for your spouse, if applicable, and any dependents Last year’s Adjusted Gross Income (AGI) if you’re e-filing your taxes and need to confirm your identity Any tax filing PIN you may have. Your Income Information Your tax return typically requires documentation for all the taxable income you received the previous year. W-2 forms 1099 forms 1099-MISC for contract employees 1099-K for those who receive payment through a third-party provider like Venmo or Paypal 1099-DIV for investment dividends 1099-INT for investment interest 1099-B for transactions handled by brokers Receipts, pay stubs, or any other documentation on income that isn’t otherwise reflected. Your Deduction Information Next, gather information on deductions that help reduce your overall tax burden. These include, but aren’t necessarily limited to: IRA and other retirement contributions Medical bills Property taxes Mortgage interest Educational expenses like college tuition or student loan payments State and local income taxes or sales taxes Charitable donations Dependent care expenses Classroom expenses (for teachers) There are other state-specific deductions that may apply to your situation. Your Tax Credit Information Credits may further decrease your tax burden. Unlike deductions, which may lower your taxable income, tax credits simply credit you a portion of what you’d otherwise owe. Some available tax credits

Getting ready for retirement is both exciting and daunting. While you are likely looking forward to the enjoyment and relaxation that retirement may bring, you are also cautious about ensuring you have enough money to be able to retire in the comfort you anticipate. If your retirement years are on the horizon, below are a few new year’s resolutions that may help put you on track. 1. Add Funds to Your 401(k) and then to Your Individual Retirement Account Funding your 401(k) to the maximum limit means you take advantage of the maximum employer-matching contribution. The maximum employee contribution limit for 401(k) plans increases from $19,500 in 2021 to $20,500 in 2022.  If you are already maxing out contributions to your employer-sponsored 401(k), consider funding your individual retirement account (IRA) as well. You are permitted to have a 401(k) and an IRA; however, whether your contributions to your IRA are tax-deductible depends on your adjusted gross income. The IRS Publication 590-A, found on IRS.gov, shows how to calculate your deduction. For 2021 and 2022, the IRA contribution limits remain the same. All workers up to the age of 50 are able to make a regular contribution to their IRA of up to $6,000 per year. For those over the age of 50, the amount rises to $7,000, which is allowed as a catch-up contribution. If you have the means to add to your IRA each year, it is a great way to increase your account and build it up to your retirement date. 2. Run a Projection Analysis for Your Retirement Those dealing in the financial world run projections all of the time to help them stay on track and