Posts by Marisa Mullis

One Last Gift: Wrapping Up All of Your Financial Contributions Before the New Year

The end of the year is not just a season for celebration and reflection but also a perfect time to ensure that our finances are in order. This includes crucial aspects such as wrapping up all financial contributions before the year-end for retirement savings plans such as Keogh, Solo 401(k), and 401(k) and making strategic decisions about selling stock to realize gains or losses.

Here’s how to ‘wrap up’ contributions and tax-savings strategies promptly before the year-end IRS deadline of December 31st.

Keogh Plan

A Keogh plan, or HR 10, is a tax-deferred pension plan available to self-employed individuals or unincorporated businesses. With these specialized plans, the contribution limit is up to a specific limit or 100% of earned income, whichever is lower.

The IRS determines the contribution limit each year, so it’s vital to consult with a financial or tax professional regarding this year’s limit. Remember, you must make your year-end contributions by December 31st.

Solo 401(k)

The solo 401(k) plan is another well-known retirement savings strategy for self-employed professionals. This plan allows one to contribute as an employee and employer, increasing the permissible IRS contribution limit.

As a business owner, you can contribute up to this year’s IRS limit through tax-deferred contributions, plus additional contributions as an employer that are tax-deductible to the business. As the year draws to a close, be sure you’ve managed your contributions to take advantage of the tax savings on contributions you and the company receive.

401(k), 403(b), and 457 plans

Managing your contributions is essential if you work in a job offering a traditional retirement savings plan such as 401(k), 403(b), or 457 plan. The total amount you can contribute each year is capped unless you’re over 50 years old, in which case the limit increases through a catch-up provision.

Your 401(k) contributions must be completed before December 31st. Contact your HR department or consult your financial or tax professional for this year’s limit.

Tax-loss harvesting

If you hold stocks or other investments, the end of the year is an excellent time to review your portfolio’s capital gains and losses. A strategy known as tax-loss harvesting aims to mitigate the investor’s total taxable income. Tax loss harvesting involves selling off an underperforming or losing investment to counterbalance the gains from a well-performing asset.

Timing is crucial to fully optimizing tax loss harvesting. Typically, it is employed near the end of the calendar year when individuals clearly understand their total income, capital gains, and losses.

While tax loss harvesting can be beneficial, investors must understand that it’s not a one-size-fits-all strategy. Before initiating this strategy, investors must consider their investment goals, risk tolerance, and tax circumstances. For this reason, engaging with financial or tax professionals is vital to help you understand whether tax loss harvesting is appropriate for your situation.

In conclusion, wrapping up your financial contributions before year-end is crucial to a confident financial future and can provide potential tax benefits. Take this time to reevaluate your goals, adjust your retirement savings contributions, and consult a financial professional to help you start the New Year with a well-designed financial roadmap.

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.

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 Fresh Finance.

LPL Tracking #644104

Sources:

https://www.investopedia.com/articles/taxes/08/tax-loss-harvesting.asp

Investing with Purpose: A Step-by-Step Guide to Creating an Investment Savings Plan

Creating an investment savings plan (ISP) is essential for keeping you on track toward your goals and building wealth. Whether you’re saving for retirement, a new home, or your children’s or grandchildren’s education, an ISP can help you grow your money over time as you work toward specific goals.

This comprehensive guide explains what an ISP is and how to create one that aligns with your financial objectives.

What is an ISP?

An ISP is a financial strategy that regularly sets aside money to invest in securities to help build wealth over time for specific goals. ISPs take advantage of compound interest and the market’s long-term growth potential. ISPs may change over time as you work toward goals. Part of this strategy is working with a financial professional to monitor investment performance and update your plan accordingly.

Here’s how to create an ISP:

Determine your goals and timeline.

The first step in creating an ISP is establishing clear and realistic financial goals. Determine how much money you can save and invest and the timeline for establishing these goals. Are you looking to generate passive income, build a retirement nest egg, or save for a significant purchase? Specific, measurable goals can help guide your decisions as you implement and monitor your ISP.

Setting the timeline for your ISP is also important. A timeline can help you stay motivated and focused, help you break down big goals into smaller tasks, and track your progress. It can also make you feel accountable for your progress and reduce the chance of procrastination.

Work with a financial professional.

A financial professional can provide personalized guidance based on your financial situation and goals. They can also help you update your ISP, monitor performance and risk, and determine a timeline for completing goals.

Evaluate your investing knowledge.

Assess your knowledge and understanding of different investment options. If you’re new to investing, consider educating yourself on fundamental investment principles and learning about various investment vehicles. This understanding can help you make informed decisions as you and your financial professional work toward building a well-diversified investment portfolio.

Assess your risk tolerance.

Understanding your risk tolerance—the degree of uncertainty you are willing to take on to accomplish your financial goals—is crucial in developing an ISP. Consider your comfort level with market fluctuations and potential investment losses. If you’re more risk-averse, you may consider more conservative investment options with lower potential returns, but also lower risk. On the other hand, if you’re comfortable with risk and have a longer investment horizon, you may consider more aggressive investment strategies with potentially higher returns. Keep in mind that every investment carries some level of risk.

Research investment strategies.

Work with your financial professional to research various investment strategies that align with your investment goals and risk tolerance. Evaluate individual stocks, bonds, mutual funds, and ETFs, and consider historical performance, management fees, and overall market conditions. Don’t forget the importance of diversification and spreading risk across different asset classes as you work toward creating your ISP.

Select suitable investment strategies.

Carefully choose investment strategies for your ISP based on your financial goals, risk tolerance, and timeline. Using your investment knowledge, diversify your ISP portfolio across asset classes to help manage risk and better position your returns.

• Stocks – Stocks are shares of a company. When you buy a company’s stock, you own a piece of that company.
• Bonds – Bonds are debt securities issued by a company or government entity. After a predetermined period, bond investors receive their initial investment back with interest.
• Mutual Funds – Mutual funds are managed portfolios where your money is pooled with other investors’ capital to buy a broad mix of stocks, bonds, or other securities.
• Real Estate – Real estate investing involves purchasing shares of securities or physical properties to rent out or resell at a higher price. Investors can also pool their investments with others in a Real Estate Investment Trust (REIT).

Investing in different investment strategies, sectors, and countries is key to spreading portfolio risk. Diversification helps offset losses if a particular strategy or sector performs poorly. A financial professional can help you spread risk across strategies as you work toward your ISP goals.

Monitor and adjust your ISP.

Once your ISP is in motion, regularly monitoring its performance is essential. Your circumstances and market conditions may change, so be prepared to adjust your ISP as needed. Periodic reviews with your financial professional and ISP adjustments can help you stay on track toward your goals.

In conclusion, an ISP can help you stay focused while pursuing your long-term financial objectives. ISPs enable you to set clear goals and establish a timeline for accomplishing them, assess risk tolerance, understand investment strategies, select suitable investments, and encourage regular review and monitoring of your progress with help from a financial professional.

Sources:

https://www.investopedia.com/articles/basics/06/reasonstoinvest.asp

https://smartasset.com/investing/how-to-make-an-investment-plan

https://www.investopedia.com/financial-edge/0113/how-to-save-to-start-an-investment-portfolio.aspx

https://www.schwabmoneywise.com/essentials/creating-an-investment-plan

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.

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.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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 Fresh Finance.

LPL Tracking #621359

Elevate Your Retirement Savings: What to Do After Maxing Out Your 401(k)

The 401(k) plan is an excellent way for HENRYs, high earners not rich yet, to save for retirement. Hitting the maximum contribution limit is a goal many work toward to reap the benefits of this tax-deferred saving strategy fully.

But what happens after you have maxed out your 401(k) contributions? What are your other options for saving for an independent and comfortable retirement? This article provides additional investment strategies for HENRYs seeking to elevate their retirement savings outside their 401(k) plan.

Additional retirement savings strategies

IRAs

One of the most common options when you’ve maxed out your 401(k) is contributing to an Individual Retirement Account (IRA). An IRA offers similar tax benefits to 401(k), where your contributions grow tax-deferred.

Roth IRA

The Roth IRA differs significantly from traditional IRAs and employer-sponsored 401(k)s, which are funded with after-tax dollars. The benefit of a Roth IRA comes at retirement, as you are able to withdraw funds, both contributions and accumulation, without incurring additional taxes, which is beneficial if you anticipate being in a higher tax bracket upon retirement.

To qualify for a Roth IRA, your income must fall within certain limits, which are adjusted annually. HENRYS must talk to a financial professional to determine if they can invest in a Roth IRA based on their income.

Health Savings Account (HSA)

An HSA is another great supplemental retirement saving strategy. These accounts are used with high-deductible health plans, giving individuals the advantage of triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, non-medical withdrawals are taxed at the regular income tax rate, turning the HSA into a supplemental retirement income account.

Taxable brokerage account

Investing in a taxable account is another saving strategy when you’ve maxed out your 401(k). Although these accounts don’t offer the same tax benefits as 401(k)s and IRAs, they provide increased flexibility in withdrawal times and without penalties. A balanced mix of stocks, bonds, and mutual funds in brokerage accounts can offer substantial accumulation over time.

Alternative investments

Suppose you have already maxed out your 401(k) and these above savings strategies. In that case, it may be time to consider alternative investment strategies, like buying a rental property or investing in real estate investment trusts (REITs) or private investments.

These alternative investments can provide a steady source of income and potential appreciation. However, HENRYs must conduct due diligence by consulting financial and tax professionals to ensure these strategies are appropriate for your situation as they come with risks.

Maxing out your 401(k) is a significant achievement toward securing an independent financial future. However, several other investment strategies offer tax advantages and asset accumulation potential so you can continue investing toward your retirement savings goal.

Whether you invest in an IRA, HSA, a taxable brokerage account, real estate, or private investments, the key is maintaining a diversified portfolio to spread risk and increase growth and asset accumulation opportunities. Consider enlisting the help of a financial professional to help navigate these decisions in line with your specific circumstances and objectives.

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.

Investing involves risks including possible loss of principal.

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.

Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

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 Fresh Finance.

LPL Tracking #597501

Sources:

https://www.investopedia.com/ask/answers/111015/can-you-have-both-401k-and-ira.asp#:~:text=Yes%2C%20you%20can%20have%20both%20accounts%20and%20many%20people%20do,and%20IRA%20each%20tax%20year. 

https://www.bankrate.com/retirement/using-your-hsa-as-a-retirement-plan/#:~:text=If%20you’re%20looking%20to,(k)s%20or%20IRAs.

How Much Money Should You Keep in Cash?

An adequate emergency fund helps provide both security and flexibility

We’re living through interesting economic times. On the one hand, markets can be unpredictable and volatile. On the other hand, economic conditions are constantly changing. More than ever, people are asking: “How much money should I keep in cash?”

Believe it or not, the answer is the same in turbulent times as it is in relatively calm periods. And it’s the same regardless of how “cautious” or “risky” your investment style might be. When it comes to how much you should keep in cash, you don’t want too much or too little — you want a “just right” amount based on your own budget and financial goals.

The Importance of Cash in Your Portfolio

Cash serves as the foundation of a solid financial plan. It can provide liquidity, safety, and confidence. Having cash on hand can help you manage everyday expenses, handle emergencies, and take advantage of investment opportunities without the need to sell off other assets.

Finding the “Just Right” Amount

Emergency Fund: Financial professionals typically recommend having three to six months’ worth of living expenses in an emergency fund. This ensures that you have enough to cover unexpected expenses like medical bills, car repairs, or temporary loss of income. If your job is less stable or you have dependents, consider aiming for six to twelve months’ worth of expenses.

Short-Term Goals: If you have short-term financial goals, such as buying a house, taking a vacation, or making a large purchase within the next year or two, it’s wise to keep that money in cash. This way, you won’t have to worry about market fluctuations affecting your ability to reach those goals.

Peace of Mind: Some people prefer to keep a little extra cash on hand simply for peace of mind. This isn’t necessarily about financial logic but rather about emotional comfort. If having an additional cushion makes you feel more secure, it’s worth considering.

Balancing Cash with Investments

While it’s important to have enough cash to cover your bases, keeping too much in cash can also be detrimental. Cash typically earns very low returns compared to investments like stocks or bonds, meaning you could be missing out on potential growth. Here are a few tips to help you find the right balance:

Assess Your Risk Tolerance: Your risk tolerance should guide how much you keep in cash versus investments. If you’re more risk-averse, you might prefer to keep a bit more in cash. If you’re comfortable with risk, you might lean towards investing more of your money.

Diversify Your Investments: Diversification can help manage risk while aiming for growth. By spreading your investments across different asset classes, you can potentially mitigate the impact of market volatility.

Regularly Review Your Financial Plan: Economic conditions and personal circumstances change, so it’s important to review your financial plan regularly. Make adjustments as needed so your cash reserves and investments align with your current goals and situation.

Determining the right amount of cash to keep on hand is a personal decision that depends on your unique financial situation and goals. By maintaining an emergency fund, setting aside money for short-term goals, and balancing your cash reserves with investments, you can navigate economic uncertainties with confidence. Remember, the goal is to find that “just right” amount that provides both security and opportunity, allowing you to pursue financial stability and growth.

Investing is a journey, and keeping a thoughtful balance of cash and investments is key to reaching your destination. If you have any doubts or need personalized advice, consider consulting with a financial professional to tailor a strategy that suits your needs.

So How Much Should YOU Keep in Cash?

The exact amount to keep in checking and savings will be different for everyone, but it’s always the sum of three things:

1. Money for Everyday Living Expenses. This is the cash you use to pay your bills and cover your everyday living expenses. It’s important to have enough in your checking account to handle your monthly outflows without dipping into your savings or investments.
2. Your Emergency Fund. An emergency fund is crucial for financial stability. The exact amount you need will vary depending on your personal situation, but we typically recommend aiming for three to six months’ worth of take-home pay. If you’re self-employed or have an irregular income, consider saving up to nine months’ worth of expenses.

Keeping your emergency fund separate from other funds set aside for other goals will give you a clear picture of how much you’ve reserved specifically for emergencies.

3. Money Needed Within the Next Two Years. Any money you’ll need within the next two years should also be kept in cash. This includes funds for short-term goals such as vacation savings, next year’s car insurance, or any other expenses you anticipate.

Investing is a long-term game, so it’s generally better to invest money for timelines longer than two years. As you approach the last year or two of a long-term investing goal, consider withdrawing it as cash or leaving it invested in a conservative portfolio. Discuss your best next move with your financial expert to help you make the most strategic decision.

Balancing Act

Determining how much cash to keep on hand involves balancing your immediate needs, emergency preparedness, and short-term goals. By ensuring you have enough for everyday expenses, an adequate emergency fund, and funds for short-term goals, you can pursue a balance that provides both security and flexibility. This approach allows you to navigate economic uncertainties and work toward your financial goals with confidence.

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.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

This article was prepared by FMeX.

LPL Tracking #596440

529 College Savings Plans: For Education and Estate Planning

529 College Savings plans are essential for saving for higher education expenses, and if used for education, accumulate tax-free. Since 529 plans came into existence in 1996, their popularity has continued to increase, with 529 plan assets crossing the $400 billion mark in 2021, according to Morningstar.

529 plans are qualified tuition plans that allow state and federal tax-free withdrawals of earnings and have the potential for tax deductions, which help offset the increasing cost of secondary education. 529 plans can be used in every state to pay for K-12 education expenses at private schools. Here is more about 529 plans you may want to know:

There are two types of 529 plans-

1. Pre-paid tuition plans- These 529 plans allow the account owner to purchase credits for later use at participating colleges or universities to pay for tuition.
2. Education savings plans. The federal government guarantees education savings plans but not against loss due to the investment’s performance. Education savings plans utilize an investment account to save for the beneficiary’s future qualified higher education expenses, including room and board, fees, and qualified equipment expenses. 529 plans can now be used in every state to pay for K-12 education expenses at private schools.

529 plans can be a strategy to transfer wealth-

Under the 2017 Tax Reform Act, an individual contributing to a 529 savings plan can frontload $75,000 (or five years’ worth of contributions) into one year without incurring federal gift taxes. A married couple who are parents, or grandparents, could contribute $150,000 into their grandchild’s 529 plan. It’s a unique way to transfer wealth for those who wish to make education a part of a legacy that provides a tax deduction and no federal gift taxes. The bonus is that this strategy can be for each child or grandchild.

Another feature of using a 529 plan inside an estate plan is that the contributor/account owner retains control of the assets and rights to the dollars in the 529 plan.

Typically, 529 plans allow the contributor/account owner to change the account’s beneficiary at any time. However, if the 529 plan is used inside a trust or as part of an estate plan, changing the beneficiary can have adverse effects if the trust or estate plan is ever contested. Therefore, using a 529 plan within an estate plan requires due diligence and should involve a financial professional, attorney, and tax professional before using this strategy.

Questions about 529 plans for college or estate planning? Contact our office today to discuss your situation and if a 529 plan is suitable for you.

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.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

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.

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 Fresh Finance.

LPL Tracking # 1-05261906

The Risks of Being Rich: Insurance Coverage Considerations for High-Net-Worth Families

Financial affluence often comes with various benefits and challenges, including the requirement for suitable insurance coverage. High-net-worth (HNW) families typically have a more complex risk profile than the average household, requiring a need for insurance to help preserve their wealth. HNW families tend to have various assets, each with its risk factors. These assets can range from luxury homes in different locations to yachts, private jets, fine art collections, jewelry, and vintage cars.

A unique family requires unique insurance.

HNW families may need additional coverage for increased liabilities and potential legal issues. Such realities make their insurance coverage requirements unique compared to most individuals’ insurance policies. Standard insurance products may not effectively address the elevated risk exposures.

Homeowners and auto insurance considerations

Conventional homeowners or auto insurance policies may fail to provide the appropriate level of coverage due to policy limits that do not match the value of the assets. For instance, a standard homeowner’s policy could limit certain valuables like art pieces or jewelry and, therefore, not fully cover these items in case of loss. Similarly, conventional auto insurance might need more coverage for high-end exotic vehicles.

Personal liability coverage

Another factor to consider is the global lifestyle often led by wealthy families. Assets and family members spread across multiple locations worldwide introduce an additional layer of risk that must be added to the coverage equation. More is needed to cover property and assets; personal liability coverage should also extend to account for incidents that may occur in diverse jurisdictions.

Customized insurance solutions

To mitigate these issues, HNW families need to consider tailored insurance coverage designed to address their unique needs. For example, an insurance plan that covers the singular risks associated with luxury properties, high-value possessions, and extensive international travel. Customization can also accommodate higher liability coverage limits to protect against potential lawsuits or claims.

Rely on professionals

Financial and insurance professionals with experience and expertise working with HNW clients can be helpful. They can help affluent families work toward establishing their coverage while maintaining cost-effectiveness. These professionals are also well-versed in the ever-evolving risk landscape, which is critical given the increasing cybersecurity threats targeting wealthy individuals and families.

HNW families must revisit and adjust their insurance coverage periodically. As a family’s wealth evolves, so too does its risk exposure. Regular policy reviews and updates help ensure that the coverage remains relevant and adequate despite any changes in family circumstances.

In conclusion, while considerable wealth can offer an independent lifestyle, it also introduces additional risks that require careful management. HNW Families need professional assistance to mitigate the risks associated with their affluence and safeguard their financial confidence.

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 Fresh Finance.

LPL Tracking #565207

Sources:

https://www.policygenius.com/life-insurance/high-net-worth/

https://www.insurancebusinessmag.com/us/news/breaking-news/what-are-the-top-concerns-of-highnetworth-individuals-470879.aspx#:~:text=Another%20major%20concern%20among%20HNW,an%20enhanced%20target%20for%20lawsuits.

Old 401(k), New Tricks: 6 Tips for Rolling Over Your 401(k)

The average American worker will change jobs more than once in their lifetime. While there are multiple options such as leaving your 401(k) in your former plan if allowed, cashing out the account balance, or transferring the 401(k), many decide to roll over their old 401(k) to their new employer’s plan or other investment vehicles such as an IRA, Roth IRA, or an annuity. Here, we provide tips to help the rollover process go quickly and smoothly for you.

1.  Check with the 401(k) custodian or plan administrator to see if a rollover is possible.

Considerations for a rollover include the time the account has been open and any fees associated with the outgoing transfer. If you’re still employed, and you want to move your 401(k) to another financial professional or custodian to manage, additional rules and fees may apply.

2. Request all transfer out paperwork from your HR department or the 401(k) custodian.

Also, ask if other signatures or a ‘signature medallion stamp’ will be required on the paperwork to complete the transfer. Signature Medallion stamps guarantee the account. Your 401(k) custodian, plan administrator, or fund company accepting the transfer can provide the medallion stamp for you.

3. Include the latest 401(k) account statement with your transfer paperwork.

This includes statements with your name, address, account number(s), and date within the last three to six months.

4. Realize you have options.

You have a choice of where to transfer your 401(k)’s assets, the type of account, such as an IRA, Roth IRA, or annuity, and the type of investment strategies available to you in each investment vehicle. If allowed, you may also roll over your 401(k) to your new employer’s 401(k). For this process, you will need to understand the investment strategies, fees, and timeline for transferring your old 401(k).

Discussing these options with your financial professional so they can assist you with the transfer is a good idea.

5. Understand the fees associated with transferring your 401(k) assets to a new account type.

Ask your financial professional to explain the fees to you during the rollover initiation meeting as you review the transfer form and associated paperwork.

6. Be patient.

Some custodians process their 401(k) very quickly, while others transfer very slowly. Ask your financial professional to keep in touch with you regarding your 401(k) transfer progress. If the transfer doesn’t occur within a month, check in with your financial professional or custodian where your 401(k) is transferring for follow-up.

An active role in financial planning includes bringing 401(k) plan assets from previous employers together, which may provide additional investment choices, rebalancing opportunities, risk analysis, and ongoing monitoring. It’s important to not leave your 401(k)s where you can’t actively manage them as you work toward your goals and retirement timeline.

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.

This article was prepared by Fresh Finance.

LPL Tracking #517756-02

6 Ways Prioritizing Your Health Can Save You Money

It can be easy to lose focus on your own health needs, especially if you have other obligations.

This can be an expensive mistake for several reasons. Consider these ways putting your health first can help you both physically and financially.

Outrun medical costs

While finding the time to exercise can pose a challenge, it can reap big rewards in the long run. That’s because leading an active lifestyle may help you dodge health conditions like heart disease, high blood pressure, and cancer, each of which can come with pricey medical expenses, such as for prescriptions and doctor visits. By staying healthy and avoiding these costs, you may have more money to contribute to long-term financial goals, such as saving for retirement or paying off your mortgage.

Reduce food bills

Preparing healthy meals for yourself may require careful planning, but you might find it’s worth the effort. Americans spent about $2,375 on restaurant and takeout food in 2022. Since food made at home is generally cheaper, you could save by preparing your own healthy meals. Then you could possibly put some money toward time away at a spa or other restful location.

Pay less for transportation

You can spend less on maintaining your car or for bus, cab, or train fare if you walk or bicycle instead when possible. Plus, you’ll enjoy numerous health benefits that can possibly stave off expensive medical care. The additional exercise can strengthen your lungs, muscles, and joints. You might also be able to enjoy the many benefits sunshine can provide, such as improving your levels of vitamin D, which can help regulate your blood pressure and blood sugar levels.

Maintain your weight

Weight fluctuations can be costly since these changes may necessitate a new wardrobe. If you can keep your weight steady through activities like exercising, watching what you eat, and getting enough sleep, you might find yourself putting more money in the bank and less toward what you wear.

Use your benefits

Failing to use your paid vacation time is like losing money you worked hard to earn. So take some time for rest and relaxation. Doing so could lower your stress, prevent burnout, and maybe even help you to earn more.

Don’t fund bad habits

Finally, if you break yourself of unhealthy and expensive routines, you might burn less money. For instance, those who quit smoking a pack of cigarettes a day could save about $3,033 a year. (They may also enjoy a longer life—studies show that a smoker might live at least ten years less than a nonsmoker would.) Or perhaps you could swap the soda you drink daily for free cups of water. Some changes like these might not be hard, but they can make a big difference—and you could even be happier, healthier, and richer for it.

This article was prepared by ReminderMedia.

LPL Tracking #478642

The Role of Insurance in Your Financial Plan

A critical part of financial planning that is often overlooked is insurance. Having various insurance policies will provide different benefits to your financial plan, ranging from protection to tax breaks. In fact, insurance is a component of most financial plans, and some financial professionals are licensed to sell it themselves. Read on to learn more about the role insurance plays in financial planning and what policies you might consider.

Risk Coverage

All insurance policies are designed to mitigate risks. They help offset the potential financial loss you may experience due to a foreseen event. From death to hospitalization to a house damaged in an earthquake, insurance will help to absorb some of the financial burdens.¹

Tax Benefits

Insurance policies also provide tax benefits for the holder as well. Money paid toward life insurance premiums will be able to be deducted under Section 80C of the tax code. The premiums you pay for your health insurance may also be deducted from Section 80D of the tax law. Additionally, any death benefit from a life insurance policy will be tax-free, so your loved ones won’t be saddled with an additional tax burden.²

Insurance Policies You Should Have in Your Portfolio

While there are insurance plans to cover everything from your jewelry to your long-term care, there are a few types of policies that you will want to have in your financial portfolio.

• Life Insurance: A term life insurance policy will provide a death benefit in the event of premature death. These policies are crucial to your financial planning as they will provide needed funds should the family’s provider pass away and the family faces a significant financial loss.
• Home Insurance: One of your most significant assets is your home, and the sudden loss of it would likely cause significant financial hardship. Home insurance may help repair your home in the event of major and costly damage and replace it in the event of a total loss.
• Health Insurance: Medical bills are one of the leading causes of debt among those without coverage and may add up quickly enough to eat away at your savings. Having a health insurance plan that covers at least major medical expenses will reduce the risk of depleting your savings to take care of health concerns.
• Auto Insurance: Vehicle insurance is a must and, in most states, a requirement to legally drive a vehicle. This type of insurance may help you repair your car if it becomes damaged in an accident, but even more importantly, it may cover medical costs for other drivers and passengers if you were found to be at fault for the accident.¹

Having proper insurance coverage is an essential part of life and your financial future. Not sure what coverage and how much you will need? Talk with a financial professional today to determine what policies will help complete your financial portfolio.

Important Disclosures:

This material contains only general descriptions and is not a solicitation to sell any insurance product(s), nor is it intended as any financial or tax advice. 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.

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 WriterAccess.

LPL Tracking #1-05370165

Footnotes:

¹ Insurance As The First Step In Financial Planning, Forbes, https://www.forbes.com/advisor/in/personal-finance/insurance-as-the-first-step-in-financial-planning/

² Role Of Insurance In Financial Planning, Outlook Money, https://www.outlookmoney.com/insurance/role-of-insurance-in-financial-planning-5723

3 Key Money Moves Every Parent Should Make

Whether you are expecting your first child or have been a parent for years, finances and building a future for your family go hand-in-hand. Luckily, there are money moves you can make now to help manage financial stress, support yourself and your loved ones, and help your children as they get older. Here are three key financial moves all parents should consider making.

Review and Update Your Life Insurance

For many, life insurance is a necessary but unmanaged expense for a good reason. It is not pleasant to consider a situation where your life insurance policy may become relevant to your loved ones. However, for parents, in particular, having adequate life insurance might be the difference between your children struggling or enjoying a comfortable future.

Many employers offer life insurance to their employees, often at a specific multiplier of their salary. For some families, this amount may be adequate; but in other cases, you may need to purchase an additional term policy that provides coverage until your youngest child is an adult. It is worth reviewing how much coverage you have, then comparing this with your average projected earnings over the next decade or so.

Also, update your beneficiaries after any major changes. A divorce decree does not remove an ex-spouse’s name from a life insurance policy. For any changes in your marital status or if a named beneficiary passes away, you must update your list of beneficiaries with your insurer.

Consider a College Savings Account

As anyone who is still paying their student loans could confirm, college costs may be a major expense. For many, student loans are second only to the cost of a home purchase. Fortunately, time is on your side when saving for college for those with young children. The funds you put toward your child’s future college education may have years to grow. In many states, contributing to a 529 college savings account might even provide you with a state tax credit.

Additionally, 529 funds do not have to be for a specific child. If your child gets a scholarship or decides not to attend college, you are free to change the beneficiary to someone else, even yourself. These accounts may also pass down and can be used by grandchildren.

Check Your Health Insurance Coverage

Health care costs might also be a huge part of any family’s budget. And while many employer-sponsored health insurance plans may provide you with decent coverage at a reasonable cost, this is not always the case. Some families with fixed annual health care expenses may benefit from a lower deductible plan that provides more coverage, while other families with infrequent health care costs might find a high-deductible health plan with lower premiums is an easier expense in their budget.

If you are not sure about your options, a financial professional or insurance broker may be able to provide more information.

Important Disclosures

The opinions voiced in this material are for general information only and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. 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.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

This article was prepared by WriterAccess.

LPL Tracking #1-05268284