With the signing of the Omnibus Appropriations package into law, both employees and employers can take advantage of more than 90 new provisions aimed at creating opportunities to create or modify workplace retirement plans and strategies. What to know about the Secure Act 2.0 that may impact you and your financial and retirement goals? Read below for a helpful overview of important information to know about the SECURE Act 2.0.   Key Points

• Catch-up contribution changes
• Enhancement of tax credits for small business
• Changes to required minimum distributions (RMDs)
• Student loan payment matching
• Expansion of auto-enrollment
• Emergency plan modifications through a 401(k) plan
• Distribution of excess 529 assets to Roth IRAs
• Employer contributions to be offered to employees on a Roth basis
• SIMPLE and SEP contributions to be made on a Roth basis
• Self-correction and IRA violations without submission to the IRS
• Benefits for part-time and low to middle-income workers

  Catch-up contribution increase and changes for earners over $145,000 Catch-up contributions allow you to put more money in your retirement savings accounts than the amount usually permitted for the year. This may enable people who have delayed saving or, for those who haven’t start yet, to “catch up” in pursuit of their retirement goals. There are two significant changes to the catch-up contributions. First, effective in 2024, all catch-up contributions for individuals earning more than $145,000 per year (indexed) must be made on a Roth, or after tax basis. This does not apply to SIMPLE plans.   Second, beginning Jan. 1, 2025, individuals ages 60-63 will be allowed to make catch-up contributions to their workplace plan of up to $10,000 or 150 percent of the standard catch-up contribution amount for 2024 or whichever is greater. The $10,000 amount will be indexed to inflation each year starting in 2026. For SIMPLE Plans, the contribution limit is $5,000 or 150 percent of the regular SIMPLE catch-up ($5,520 in 2023), whichever is greater. [i]   Currently, catch-up contributions to a 401(k) account for anyone 50 or older are $6,500 (2022), scheduled to rise to $7,500 in 2023. These amounts are in addition to regular 401(k) contribution limits: $20,500 (2022) and $22,500. [ii]   Enhancement of tax credits for small businesses starting and maintaining a retirement plan Employers with up to 50 employees will be eligible for a credit equal to 100 percent of the amount contributed by the employer, up to $1,000 per employee. The employer receives a credit equal to 100 percent for years one and two (this phases down over five years), 75 percent for year three, 50 percent for year four, and 25 percent for year five.   Small businesses with 51 to 100 employees are eligible for this tax credit for those above 50 employees and those earning less than $100,000 per year.   For up to 50 employees, the current three-year start-up credit is equal to 50 percent of plan expenses, and up to $5,000 cap is increased to 100 percent.   Changes to the required distribution age Currently, required minimum distributions amounts – that must be withdrawn annually according to the law – begin at age 72. However, with the clearing of the SECURE Act 2.0, this age is expected to rise to 73 in 2023 and then to age 75 in 2033. Along with a change in age, the penalty for failing to make a required minimum distribution is also subject to change beginning next year.   The penalty for failing to take an RMD will decrease to 25 percent of the RMD amount, from 50 percent currently, and 10 percent if corrected in a timely fashion. [iii]   Also, Roth accounts in 401(k) plans (different from Roth IRAs, which come with no RMDs during the owner’s lifetime) and other employer-sponsored plans will be exempt from RMDs starting in 2024. Additionally, beginning immediately, for in-plan annuity payments that exceed the participant’s RMD amount, the excess annuity payment can be applied to the following year’s RMD.   Matching contributions for student loan payments For some students, it is difficult to get into the routine of making student loan payments. However, a new provision in the SECURE Act 2.0 is aimed at encouraging younger workers to begin saving for retirement. Effective in 2024, employers will be permitted to make matching contributions under a 401(k), 402(b) or SIMPLE IRA plan based on a participant’s student loan repayments. Government employers would also be allowed to make matching contributions in a section 457(b) plan or another plan with respect to such repayments.   Required auto-enrollment and auto-escalation for most new plans Beginning in 2025, all new 401(k) and 403(b) plans will be required to include automatic enrollment for all eligible participants at a minimum of 3 percent and maximum of 10 percent of eligible compensation, and automatic escalation at one percentage point per year up to at least ten percent and a maximum of 15 percent.   Plans in existence before the date of enactment would be grandfathered and not subject to these requirements. There is also an exemption for government plans, church plans, and employers with 10 or fewer employees, and new businesses within the first three years of operation. Additionally, the bill does not require an employer to have a plan, but instead applies only to employers deciding to start a plan.   Building financial confidence through an emergency fund In life, most individuals have had that unexpected expense occur, forcing them to revise their monthly budget. If they did not have an emergency fund available because they found it difficult to save money and simply do not have that kind of liquid cash on hand, they may be tempted to dip into their retirement savings to cover the bills. Two changes within the retirement legislation can make it easier for employees to set aside emergency funds. One modification would allow retirement plan sponsors to automatically enroll employees to set aside up to $2,500 of post-tax money in a separate emergency savings alongside their retirement accounts. With this, workers could defer money to the emergency savings accounts automatically through their payroll deduction.   The other change would permit retirement plan participants to withdraw up to $1,000 from their retirement savings per calendar year to cover emergency expenses without being subject to any penalties. [iv]   The establishment of an emergency savings option within the context of a retirement plan is a progressive concept that can help employees become aware of the importance of setting aside savings for both short-term (emergencies) and long-term (retirement) needs.   Distribution of excess 529 assets to Roth IRAs Beginning in 2024, excess assets in a 529-qualified tuition program will be eligible for a tax-free distribution to a Roth IRA. Distribution is subject to the lesser of (a) the regular Roth IRA limits (without the income limits) or (b) the aggregate amount contributed to the 529 accounts over the previous five years (plus earnings). The beneficiary must be the same and maintained for at least 15 years. There is also a per-beneficiary lifetime limit of $35,000.   Permitting all employer contributions to be offered to employees on a Roth basis Effective immediately, employers can allow employees to elect for some or all of their vested matching and non-elective contributions to be treated as Roth contributions under a 401(k), 403(b), or governmental 457(b) plan.   Allowing SIMPLE and SEP contributions to be made on a Roth basis Effective for tax year 2024, SIMPLE and SEP contributions for employees and employers can be made on a Roth basis. The employee must elect for Roth treatment.   Self-Correction of Inadvertent Plan and IRA Violations without Submission to the IRS Effective immediately, all inadvertent plan violations may be self-corrected under the IRS’ Employee Plans Compliance Resolution System (EPCRS) without submission to the IRS. This does not apply if the IRS discovers the violation on an audit or if the self-correction is not completed within a reasonable period of time.   Benefits for part-time and low to middle-income workers Today’s workplace consists of a significant amount of part-time workers. Starting in 2025, part-time employees are required to work two consecutive years and complete at least 500 hours of service each year to be eligible to defer to their 401(k) plans. They will now be eligible to contribute to an employer-sponsored retirement plan. This is a modification of the SECURE Act’s three-years-of-service rule. Additionally, beginning in 2027, the SECURE Act 2.0 will revise the current Saver’s Credit. This credit provides millions of low and middle-income individuals with a “Saver’s Match,” which is a federal matching contribution deposited to a taxpayer’s IRA or retirement plan to encourage people to save for retirement. The change in the legislation alters the way you get the credit. Instead of having the credit applied against your tax liability when you file your tax return, the federal government will deposit a “matching contribution” directly into your retirement account. You get to pick which retirement account it goes into; however, a Roth account is not permitted, along with a few other stipulations. [v]   With so many new and modified provisions both immediately and soon-to-be available in the near future, it is encouraged that you consult a financial professional to help you navigate the legislation and see what may work for your retirement strategy and plans.   Important Disclosures: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.   The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.   All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.   This article was prepared by LPL Marketing Solutions   Footnotes: [i] Secure 2.0 Top 10 provisions (brandfolder.io) [ii] 401(k) limit increases to $22,500 for 2023, IRA limit rises to $6,500 | Internal Revenue Service (irs.gov) [iii] 5 RMD Changes Looming With Passage Of SECURE 2.0 Act (forbes.com) [iv] Emergency savings proposals in Secure 2.0 may boost financial security (cnbc.com) [v] Retirement Saver's Tax Credit Converted to "Saver's Match | Kiplinger   LPL Tracking # 1-05354651  

During the months of March and April, we want to help you identify planning opportunities (and spot potential issues) with your tax returns. If we work together now, we can help identify…

• If there was a change in your finances last year and you are paying excess estimated taxes;
• Additional ways to reduce your tax liability for this year; and
• Planning opportunities to discuss with your tax preparer.

  It is important to review your tax returns now because there is still time to address issues before next year (and you may have time to amend returns if needed). Reviewing tax returns can be daunting and difficult given the many state and federal complexities and often changing rules. Tracking your exposure to various taxes (e.g., ordinary income tax, capital gains tax, the alternative minimum tax, the net investment income tax, etc.), and your rights to various credits and deductions requires time and effort. To assist you in reviewing your filings, we have a checklist for retired taxpayers and one for taxpayers who are still working. Each checklist outlines nearly two dozen considerations to help guide you through your returns and circumstances.

Download Our Checklist for Retirees

Download Our Checklist for Someone Still Working

  While the checklists can help you spot great ways to identify all the different opportunities to consider, we are always available to meet with you and discuss your finances and goals and to identify what the best opportunities are for you. Please contact us today to schedule a time to discuss this further.     The opinions voiced in article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

Hopefully, you’re planning to give all of your loved ones plenty of affection this Valentine's Day. But what if you weren’t around? To make sure everyone is fully protected when you’re gone, you need an estate plan. This year, show everyone you care by making sure your plan is fully updated. Check out these tips to do this task properly. 1. Ensure your children will be taken care of This part of your estate plan will change as your children get older. When they are young, you may need to take out life insurance and nominate a guardian for them. As they get older, you may want to set up a trust that distributes assets slowly to them. At some point, you may decide that your kids are mature enough so that you don't need these provisions, even if you still want to make sure your assets go to them. 2. Make sure your estate plan reflects your current family Ideally, you should update your estate plan any time you have a major family event such as a marriage, divorce, birth, or death. However, often when these disruptive events happen, an already-completed estate plan is the last thing on your mind. This February, look over your estate plan and make sure that it includes – or leaves out – certain people. Keep in mind that in many cases, a will can define beneficiaries by relationship rather than a specific person’s name. For instance, you may have a will that stipulates all of your assets go to your children. It may automatically distribute assets to your grandchildren if a child passes away before you do. However, if you or your children have step-children, they are not automatically included in a will drafted this way. Although you may feel like they are family and want them to have the same rights as everyone else, you should structure your will to reflect this fact. Be aware of nuances like this when updating your estate plan. 3. Give some love to charity If you want some of your estate to go to charity, you need to ensure that the charities listed in your estate plan remain active. You may want to designate backups to be on the safe side. Consult with an estate planning professional to ensure that you maximize your contributions in a way that preserves your wealth and reduces your tax burden as much as possible. 4. Update your tax planning strategy Tax laws change all the time, and they heavily influence estate planning. When you check in with your estate plan, make sure that it works in the current tax environment. You don't want to pay more tax than you have to. At the same time, however, you don't want to pay for tax-shielding vehicles if your estate is below the threshold that necessitates those strategies. 5. Update the people involved in your estate plan In addition to the beneficiaries of your estate, your estate plan may also include several other roles for important people in your life. You may have a medical and financial power-of-attorney, a trustee, a substitute trustee, or even people named in your business succession plan. Review the roles you have designated for all of these people and make updates as needed. Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial. This article was prepared by WriterAccess. LPL Tracking # 1-05351241.

The beginning of the new year is the perfect time to discuss the various factors influencing your planning. For example, we can:

• Look at your progress toward your goals and consider any new goals you’ve set for yourself.
• Evaluate your insurance coverages to make sure your risks are minimized.
• Revisit your assets and debt and evaluate whether your risk tolerance continues to be appropriate.

Take a look at the Checklist: What Issues Should I Consider At The Start Of The Year 2023 I’ve included for you. In addition to the ideas above, we can organize you for tax season, so you have a smooth experience. There are many reasons why having a good conversation now can set you up for success later.  

Download Our Beginning of the Year Checklist

  Sometimes the incremental changes that occur year-to-year may not seem like a big deal. In reality, though, they can add up. The planning that we’ve done together can evolve to benefit and strengthen the people and organizations that are important to you. If the checklist I’ve included has helped you identify topics we should plan for, please get in touch to schedule a time for us to discuss them further.

Spring can be a fantastic time to refresh your retirement plan and savings habits. With 2023 bringing increased limits for 401(k)s, individual retirement accounts (IRAs), Health Savings Accounts (HSAs), and other tax-advantaged accounts, it's worth taking a closer look at your retirement savings. Below, we discuss three ways to refresh your retirement plan this spring.  

Maintain Consistent Savings

With inflation taking a bite out of just about everyone's paychecks, it can sometimes be tempting to decrease the amount you're contributing to retirement just to gain a bit of breathing room. However, maintaining a consistent rate of savings even through lean times can go a long way toward securing your financial future. When it comes to saving for retirement, time is on your side—and the more you can contribute at a younger age, the more time this money will have to grow.   If your savings rate has been at the same level for more than a few years, it may be time to revisit this contribution. You may discover that you can afford to set aside a little more; in other cases, it may make sense to switch from a tax-deferred account to a post-tax account like a Roth 401(k) or Roth IRA.  

Review Your Asset Allocation

When it comes to investing for retirement through an employer plan, the options available to you may sometimes seem overwhelming. Far beyond mere "stocks vs. bonds," employees are asked to choose from accounts ranging from growth to stability, domestic to international, and tech to blue chips. For some plans, the default option is to put contributions into a money market account rather than investing them in the stock market.   Does your asset allocation appropriately reflect your risk tolerance and investment timeline? It can be tough to know.   Fortunately, you don't have to do it alone. A financial professional can work with you on your strategies and goals, making adjustments where necessary to keep you on the right path. Don't wait until you get closer to retirement to realize you haven't been investing as efficiently as you would have liked.  

Check Your Beneficiaries

One last thing that is important to keep an eye on involves the disposition of your assets once you've passed away.   Many financial accounts like 401(k)s, IRAs, and even some bank accounts may require you to name a beneficiary. And for life insurance policies, the beneficiary is key—this is the person to whom the benefits pass, regardless what a marriage decree or executed will may say to the contrary.   If you've gotten married or divorced, had children recently, or if it's been more than a year since you evaluated your beneficiary designations, it's important to revisit each of your financial accounts to ensure your beneficiary designations continue to reflect your wishes. In many cases, a surviving family member has discovered too late that their loved one named an ex-spouse or estranged family member as their beneficiary, leaving those who depend on them in the lurch.     Important Disclosures:   The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.   Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.   The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.   An investment in the Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.  Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.   Asset allocation does not ensure a profit or protect against a loss.   This article was prepared by WriterAccess.   LPL Tracking # 1-05355828.

It does not matter how much money you have today; you still must know the details of what you are worth. Understanding your financial situation can help you develop a retirement plan, pay down debt, draft a comprehensive estate plan and live with financial independence. To figure out your net worth, you should calculate the amount by which your assets (what you own) exceed your liabilities (what you owe). If your assets are greater than your liabilities, you have a positive net worth and vice versa. Doing this can provide you with valuable insight into what you can do to continue the plan toward financial confidence, or maybe it is an eye-opener to overspending. This knowledge may allow you to see where you can adjust toward more beneficial financial decision-making. What are assets? Assets include real estate, bank accounts, investment instruments, retirement funds, brokerage accounts, and personal items like your car, boat, airplane, jewelry, or other collectibles. Remember to include those intangible assets you might own, like patents, intellectual property, trademarks, etc. What are liabilities? Liabilities include mortgages, credit card debt, student loans, medical bills, personal loans, settlements against you in court, etc. This may also include money you might owe to someone or an organization. Because we have so many different assets of varying values, assigning accurate values to your assets can become difficult. It is essential not to inflate your net worth, thus making it more challenging to prepare a strategy that you will be able to follow. One way to determine the value of what you own is by comparing your assets to similar assets in your area that are for sale or that have been recently sold. Over the years, your net worth will fluctuate. The immediate increases and decreases are less significant than the trend that develops over time. It is the trend that you want to learn how to expose and observe. As you grow older and earn more income from work and investments, build equity in your home, increase your assets and pay down your debt, your net worth can potentially grow, but it requires discipline, budgeting, and planning. It is never too early to get the guidance you need from an experienced financial professional. The following tips may help you take your first steps toward addressing your financial goals and needs: • Pay down debt • Spend carefully • Sell unused or unwanted assets • Recover outstanding payments • Save and invest wisely • Work with a financial professional to develop a financial strategy. • Monitor your progress regularly. Part of knowing what you are worth today is being able to build a customized financial strategy that works for your goals at your level of risk. A financial professional can help you make smart decisions by thoroughly understanding your financial situation. Consult a financial professional today. Important Disclosures The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by LPL Financial Marketing Solutions. LPL Tracking #1-05337832

As the year has still just begun, probably the last thing on your mind is filing your taxes in spring. But if you start assembling the necessary documents and information now, you’ll experience less stress and be in a far better position come April. Luckily, tax day is a few days later than usual in 2023—since April 15 falls on a weekend, and the following Monday is a holiday, the deadline for filing this year’s taxes is April 18. So even if you don’t get a refund, you’ll at least have a later deadline! Gather your tax documents and information Preparation is the key to keeping any tax-filing stressors at bay, so you’ll want to check your inbox and mailbox regularly in the coming weeks. As employers are obligated to issue W-2s by January 31, you may be receiving important tax documents within a few weeks. Also be on the lookout for other important documents you’ll need for filing your taxes, such as 1099 forms reporting any investment income and 5498 forms noting contributions and rollovers to individual retirement accounts. If you expect to be receiving multiple tax documents, consider having a large envelope or basket that you can keep the documents in as they arrive in the mail and creating a system for storing the ones you receive digitally. This way nothing will get misplaced before you file your taxes. You will also need the social security numbers for yourself, your spouse, and any dependents, so make sure you know these or have them noted in a safe place. If you plan to use a preparer for your 2022 taxes, be aware that some will ask you to provide them with the necessary documentation by a certain date so they can meet the April 18 filing deadline. Document your credits and deductions Deductions can lower your taxes since they reduce your taxable income, so claim as many as you legally can. Gather documentation for any donations, expenses for medical care, mortgage interest, retirement account contributions, and local and state taxes you paid in 2022. Store these documents with your other tax documents. You will also want to organize your documentation for any tax credits you plan to claim, such as the child tax credit, the child and dependent care tax credit, credits for tuition paid for education, the “savers credit” for contributions to a 401(k) or IRA, and credits for any energy-saving home improvements you made in 2022. Review your estimated tax payments If you are a freelancer or own your own business, you may have made quarterly estimated tax payments on your earnings to the IRS during the year, which you will have to note when you file your taxes. To help make the process smoother, make sure you know how much these payments were in advance. You can check by looking back over your bank or credit card statements from this year. Look ahead If you really want to be an overachiever, once you’ve gathered all the documentation necessary for filing your 2022 taxes, you can start getting organized for 2023! Put a system together now for saving next year’s pertinent receipts and information so you’ll have them at the ready when you need to file your taxes in 2024. Important Disclosures The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. This article was prepared by ReminderMedia. LPL Tracking #1-05352325

When was the last time you gave yourself a financial checkup? As the saying goes, there’s no time like the present. This is especially true when it comes to reviewing the current state of your finances and figuring out what you need to do to get – or stay – on track so you can pursue your financial goals. To do this requires you to take into account a variety of factors. Setting aside time to understand your financial condition and conduct an honest assessment of where you stand is a great way to get started. Before you jump right in, consider these seven steps that you can take to assist you in evaluating where you stand financially and to help you determine a reasonable course of action to plan for the future.   STEP 1: Evaluate Your Net Income, Income Sources, and Review Your Spending Habits Do you know your net income? After all the benefits, social security, and taxes are deducted from your paycheck; you are left with your net income. This can be an eye-opener for some people. Say somebody gets hired at $60,000 per year. You will not be bringing $60,000 home. Hypothetically speaking, if you live in South Carolina, you pay federal income taxes, state income taxes, social security, and Medicare which amounts to over $14,200. That $60,000 just became a little more than $45,500. Don’t forget: you also have to consider how much you pay for health insurance, vision, dental, and possibly life insurance if you have it. Knowing your net income is important because you have to be aware of how much money you bring in (income source) and, conversely, how much is going out. There are monthly bills, food, gas, entertainment, childcare, and more.   STEP 2: Recognize How Rising Inflation and Interest Rates Will Affect You The inflation rate has not been this high in nearly half a century. Interest rates are also rising. Because the cost of living is noticeably going up, there are a few things you can do to soften the burden on your wallet. Understanding your daily, weekly, and monthly spending habits and sticking to a budget may help you better manage your financial situation while you adjust to current inflation and interest rates. According to a survey by The Penny Hoarder, over 55 percent of Americans do not use a budget to manage their income, and 56 percent of respondents said they didn’t know how much money they spent last month. [i]That is a big difference. Here are a few tricks to help you manage your money and your spending habits:  

• Review your account statements and list the amount of money coming in.
• List the weekly and monthly expenses, including groceries, gas, entertainment, debts owed, and bills. Money can seemingly disappear if you are not taking account of your expenses, if you are not spending wisely, or if you are spending more than you are earning.
• If extra money is in your bank account, consider saving and investing it.
• In today’s technologically advanced world, there are even “apps” available that can be uploaded to help you monitor your spending and offer budgeting tips.
• Work on eliminating unnecessary expenses. Be honest with yourself about where the money is going.
• Consult with a financial professional to help you develop a financial plan that is appropriate for you and your specific situation.

  STEP 3: Consider Investing Investing is a way of taking money that you have saved and potentially growing your wealth over time. It is essential to understand the value of careful and knowledgeable investing instead of keeping your cash locked up solely in bank accounts that typically generate minimal returns and is tempting to spend. The real benefit of investing is the preservation and growth of your wealth. There are a few ways that you can invest. Having a diversified portfolio, especially in an unpredictable market, is wise in case one segment of the market falls harder than other industries. A few ways to invest include:  

• Stocks – Buying stock is having ownership in a company. When you purchase, say, five shares of Amazon stock, you have now become a partial owner of Amazon, and if they do well and the stock increases, meaning it is worth more than when you bought it, and you sell it, you just made money which is called capital gains (though it is recommended to hold stocks with the intention of being a long-term investment. Day trading, buying and selling, hoping stocks go up and selling for small profits is extremely risky!). There are a variety of different stocks that you can buy including common, preferred, domestic, international, penny, and more. [ii]

 

• Mutual Funds – A mutual fund is an investment company that pools the money of many investors together and invests the money in different assets, including stocks, bonds, real estate, and more. Each mutual fund consists of multiple companies. As an investor, you buy shares in the mutual fund, meaning that you are buying ownership in multiple companies compared to a stock that is one company. This type of investment generates income in two ways; one of them is through capital gains which, again, means that the value (the price) of the shares increases compared to the price you bought them. If you sell it when it is higher than when you purchased it, you make money. The second way is through dividends. Dividends are distributions of a company’s earnings to its shareholders. [iii]

 

• Retirement Accounts – These are savings accounts with tax advantages that focus on long-term investing and saving. They can be either through your place of employment or personal. A few types include 401(k), Roth IRA, Traditional IRA, SEP IRA, Simple IRA and Simple 401(k), a Solo 401(k), and more. [iv]

 

• Other Ways to Invest – Bonds, Education Accounts, Exchange-Traded Funds, Custodial Accounts, Real Estate, and more.

  STEP 4: Saving Enough Money for Emergencies in a Volatile Market There is always the possibility of an unexpected financial emergency, whether a medical bill, car issue, income loss, or other unforeseen challenges. Setting up an emergency fund is essential to prepare yourself for financial obstacles. The general rule of thumb is to keep enough money in your savings account to cover three to six months’ expenses. [v]   STEP 5: Pay Down Your Debt If you live an average life, it seems that accumulating some debt, whether a home mortgage, a car, or a personal loan, is just part of the equation. Some days it might seem like trying to climb Mount Everest in flip-flops, but there are techniques you can try that might help you gradually get ahead of the debt. These techniques include:  

• Debt Avalanche Method
  • You make the minimum payment on each account where you owe money but pay as much as possible to the one with the highest interest rate until it gets paid off. Then you apply this method with the second highest interest rate, and so on.

 

• Debt Snowball Method –
  • You pay off the smallest balance first and then work up to the largest.

    STEP 6: Keep Track of Your Credit Score A solid credit score is essential in pursuing your financial goals. Many people do not regularly monitor their credit or even know what their current credit score is, but making regular payments on accounts you owe has the potential to impact it tremendously. If possible, you want to try and pay off any credit card or personal loan balances in full. Stay on top of it, even if you cannot pay in full at this moment in time.   STEP 7: Work With a Financial Professional Trying to manage your finances and complete everything involved on your own can potentially be overwhelming. The hassle of collecting and organizing your financial information can be a nightmare by itself. Having an experienced financial professional in your corner may help you navigate the complexities of financial planning and you can work together to mitigate mistakes that could cost you in the long term. Take the time to research and consult with a financial professional so you can start planning today for you and your family’s future.   [i] These Budgeting Statistics Show Most of Us Don’t Track Our Spending (thepennyhoarder.com) [ii] Types of Stocks: Understanding the Different Categories (fool.com) [iii] Mutual Funds and ETFs (sec.gov) [iv] Types of Retirement Plans | Internal Revenue Service (irs.gov) [v] An essential guide to building an emergency fund | Consumer Financial Protection Bureau (consumerfinance.gov)         Important Disclosures   The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.   Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.   Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.   Investing in mutual funds involves risk, including possible loss of principal.  The funds value will fluctuate with market conditions and may not achieve its investment objective. Upon redemption, the value of fund shares may be worth more or less than their original cost.   Dividends payments are not guaranteed and may be reduced or eliminated at any time by the company. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.   Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.   All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.   This article was prepared by LPL Financial Marketing Solutions.   LPL Tracking #1-05335330

Whether you’re just starting your career or are planning to retire this year, it’s never too soon or too late to start preparing for your retirement. What this entails may be different from person to person, but there are a few essential tips everyone should keep in mind when saving up for their eventual retirement. Start early Saving for retirement isn’t something that most of us can do overnight. It takes time to build up the necessary funds, so it’s best to start saving sooner rather than later. While you don’t necessarily have to start saving in your twenties, you should seriously start investing into your retirement funds in your thirties and forties. This will give you time to add to and subsequently grow your 401(k), IRA, Roth IRA, or other high-yield savings accounts. With that being said, it’s also never too late to start saving for retirement. You might just have to be more aggressive with your savings to build up a fund that can prepare you for your next steps into retirement. Save, save, save While there’s no one right number for how much you’ll need to save for retirement, it’s generally estimated that retirees need between 70 and 90 percent of their preretirement annual income, which will be a combination of savings and social security. To help you reach this goal, you’ll want to save around 15 percent of your gross annual income every year. There’s always some flexibility to this number, but there’s also no such thing as saving too much. If you work for a business that offers a 401(k) company match, try meeting at least the minimum requirements of that match. This is additional money that you’ll be able to use when it does come time to retire. If you’re company doesn’t offer this benefit or if you’re self-employed, you can always open your own 401(k) or IRA retirement account that you can add to every month. Know what to expect from retirement It may not be easy to picture, but it can help in your quest to save for retirement if you have an idea of the kind of lifestyle you’ll want to live when you hit retirement age. Are you going to be moving states, traveling, or taking a part-time job? You’ll also have the expenses associated with the cost of living, such as housing, food, and healthcare, as well as taxes on Social Security and withdrawals from your retirement accounts. All this can impact the amount you’ll spend each month while in retirement, thus impacting the amount you’ll need to save before retiring. Even if you don’t yet know what retirement will look like for you, keep it in the back of your mind so you can adjust your savings and investments the closer you get to retirement age. Account for inflation No matter what general suggestions you follow, it’s always a good idea to save more than you think you may need. The cost of living tends to increase by at least 2 percent each year, though that can vary greatly depending on the state of the economy. By saving more, you’ll help to protect your future self and ensure your financial security so you can enjoy all that comes with retirement. Important Disclosures The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. This article was prepared by ReminderMedia. LPL Tracking #1-05351612

During January and February, we like to help clients identify proactive ways to start the year off right and save more. Perhaps you…

• Received a bonus or a raise and need guidance on how to save or invest the additional cash;
• Have a tax refund coming to you; or
• Want to consider ways to save more this year.

  Whatever the case, the beginning of the year is a great time to set your intentions and establish good habits to ensure you save for your financial goals. Identifying available savings opportunities and prioritizing across accounts can be complex and overwhelming. For example, do you know whether you are eligible for and taking full advantage of pre-tax health care savings accounts, such as HSAs and FSAs? Are you optimizing your retirement savings, choosing between traditional and Roth options, obtaining the total amount of any employer match, and maximizing your contributions? To help you spot ways to save more this year, we have a our Checklist: What Accounts Should I Consider If I Want to Save More? that outlines more than 15 strategies to consider when you have surplus cash or savings on hand.  

Download Our Savings Checklist

    While the checklist can help you identify different opportunities, we are always available to meet with you to discuss your finances and goals and determine what options best suit your unique circumstances. Don’t hesitate to contact us and schedule a time to discuss this further.     The opinions voiced in article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.