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Lisa Avenevoli

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2024 Savings Goals

2024 Savings Goals

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When learning and honing a new skill, having the right coach makes all the difference. For example, maybe your kids have a hockey coach or math tutor to help them learn specialized skills; or maybe you have a personal trainer or dietitian to help you reach specific health goals. No matter what they are, achieving your goals can be difficult, and we all need assistance navigating certain aspects of our life. A good coach provides invaluable guidance, expertise, and motivation, pushing you to surpass your limitations and reach new heights. That’s why we believe having a financial advisor is so important for hitting your financial goals and maintaining an organized financial house.

If you’ve set your sights on specific savings goals for the year 2024 but find yourself unsure of where to start, let’s delve into the basic steps that are part of our coaching program, designed to keep our clients on the path to financial success.

Step One: Maximize your Employer’s 401k Match

If your employer offers a 401k match, you should be contributing, at minimum, enough to hit that matching percentage. This is essentially free money that you would otherwise be leaving on the table. By contributing at least the amount required to match your employer’s contribution, you’re ensuring you make the most of this valuable retirement plan benefit. Every business has their own plan in place with varying rules and options, so it is important to learn about and understand the one your employer offers.

Step Two: Build an Emergency Fund

An emergency fund acts as a financial safety net providing a sense of security and stability in the face of unexpected challenges. Life is unpredictable, and unforeseen circumstances such as medical bills, unplanned unemployment, or sudden car repairs can easily throw you off balance. A properly funded emergency fund serves as a buffer, allowing you to navigate these uncertainties without compromising your long-term financial goals. The general rule of thumb is

to save 3 to 6 months’ worth of expenses, depending on your life stage and the availability of other savings funds. This fund provides peace of mind and financial stability during unforeseen circumstances.

Step Three: Pay Off Debts

Debt repayment can be overwhelming, especially when faced with various types of debts like credit cards, car payments, and student loans. Prioritize paying off debts with the highest interest rates while continuing to make minimum payments on others. This strategy minimizes the overall interest paid and accelerates your journey to debt freedom.

Step Four: Consider an IRA (Individual Retirement Account)

In addition to your employer-sponsored retirement account, consider opening an IRA – either ROTH or Traditional. The tax advantages and flexibility offered by an IRA allows you to contribute either pre-tax or post-tax, therefore allowing your retirement savings to grow on a tax-deferred or tax-free basis. With more investment options and potential tax savings, an IRA can enhance your retirement savings allowing you to have more money to enjoy in your golden years.

Note that it is important to understand the rules and tax liability linked to both types of IRAs (Roth vs Traditional) BEFORE contributing to avoid unnecessary tax liability and penalties. A financial advisor can walk you through which option may be best suited depending on your overall financial picture.

Step Five: Create Saving Buckets for Other Goals

Beyond retirement, it is important to designate savings accounts or “buckets” for other specific goals. For instance, a 529 plan can be established for your child’s education and a slush fund savings account can be created for leisure activities, self-care days, or unexpected indulgences. While setting aside funds for future goals is essential, the journey to financial success shouldn’t come at the cost of enjoying life in the present moment. Remember that you should not only save for the future but have a plan to enjoy the present.

Working with a financial coach adds an extra layer of accountability to your financial journey. We want to be there so you can easily take care of your family’s short-term and long-term needs. At ARK Financial Wellness, we use a cash flow and savings bucket spreadsheet to help our clients keep everything organized and easy to read. This document helps us track your spending and saving habits so we can adjust your money mindset to better align with your overarching goals.

The path to financial wellness involves a strategic approach and the guidance of a trusted coach. By following these steps, we hope that you can set yourself on the right track to achieving your 2024 savings goals and building a secure financial future.

For a complimentary copy of our cash flow and savings bucket sheet to help turn your money goals from a wish into a plan, please email us at Lisa@ARKFinancialWellness.com.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
ARK Maximize Money Financial Wellness

Maximize Your Money

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How to Maximize Your Money

Maximizing your money is the key to achieving financial freedom and stability. But how do you go about it? Let’s discuss some strategies for making the most out of your finances so that you can achieve your financial goals.

Analyze Your Cash Flow and Budget

You have probably heard this before, but it always bears repeating. The most important step in maximizing your money is to track how much money is coming in and going out, otherwise known as budgeting. Since the word “budget” has a negative connotation and can feel restrictive to certain people, we prefer to use the term “cash flow.” By reviewing your month-to-month expenses, you can identify areas where you can cut back to redirect that money towards your financial goals. Your cash flow analyses should include taking stock of all your monthly expenses, including rent or mortgage payments, utilities, groceries, transportation, eating out, pet care costs, insurance, etc.

When you gain an understanding of what’s coming in versus what’s going out, it’s important to be realistic about your expenses and to account for any unexpected costs that may arise. You can use budgeting apps or spreadsheets to help you keep track of your spending and stay on track with your financial goals.

Invest in a Retirement Plan

Investing in a retirement plan is another way to maximize your money. Retirement plans, such as 401k plans and IRAs, offer tax benefits and can help you save for retirement. If your employer offers a 401k plan, you should contribute enough to take advantage of any employer match. If your employer does not offer a retirement plan, consider an IRA.

When choosing a retirement plan, it’s important to consider your risk tolerance, age, and the amount you’ll need to retire. Be sure to also have a solid understanding of your investment options, related fees, and how taxes factor in. There is no one size fits all option. A detailed financial plan can help you better understand what makes most sense for you!

Pay for Education using a 529 Account

Instead of paying for tuition out of pocket, consider putting money away in a 529 saving account. Your contributions could qualify for state tax savings, earnings in the plan will grow tax-deferred, and withdrawals are tax-free as long as they go toward qualified educational expenses like tuition and fees, books, computers, room and board, and special needs equipment for students attending a college or university. The IRS has also expanded qualified expenses to include K-12 tuition and student loan repayments – both with some caveats.

Every state offers at least one 529 plan option. You don’t have to invest in your state’s 529 plan, but it might offer extra tax savings if you do. 

Pay off High-Interest Debt

Paying off high-interest debt is another way to maximize your money. High-interest debt, such as credit card debt, can be a major drain on your finances. By paying off high-interest debt, you can free up money that can be redirected towards your financial goals.

One strategy for paying off debt is to focus on paying off the debt with the highest interest rate first, while still making minimum payments on your other debts. You can also consider consolidating your debt with a personal loan or balance transfer credit card to lower your interest rates.

Avoid Lifestyle Inflation

Lifestyle inflation is when your expenses increase as your income increases. While it may be tempting to upgrade your lifestyle as your income grows, doing so can prevent you from achieving your financial goals. Instead, focus on living below your means and redirecting the extra money towards your financial goals.

Take Advantage of Rewards Programs

Rewards programs can be a great way to maximize your money. Many credit cards offer cash back, points, or miles for purchases. You can also take advantage of rewards programs at retailers, hotels, and airlines. The key to taking advantage of credit card rewards is to always pay off your balance so you don’t fall victim to high interest rates. Treat your credit cards like cash, not like credit.

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
The Financial Future is Female

The Financial Future is Female

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A recent study1 by Mckinsey & Company found that women

A recent study1 by Mckinsey & Company found that women currently control more than $10 trillion of wealth. That number is expected to increase to nearly $30 trillion by the end of the decade as boomers age and assets change hands. That’s a staggering amount of wealth. Even where wealth is held jointly by couples, women are beginning to take control.  

The same Mckinsey study found a 30% increase in married women making household financial decisions over the past five years. Whether married or single and at every stage of life, women are carving out independent financial futures and making meaningful decisions to safeguard and grow their family wealth.

If you prefer to watch YouTube videos, we have a video on this topic as well! Click here to watch.

Women Aren’t Just Inheriting Wealth 

Women are creating their financial independence in record numbers. Whether they work for a company or start their own business, women are well on the road to achieving wealth from their efforts. Forty-four percent of women with a private net worth of more than $100,000 are self-made.2 Since 2007, the number of businesses owned by women has grown by 58%.3  And when they work for someone else, women are beginning to have a clear idea of what they are worth and are willing to ask for it. Of the more than one-third of women who say they’ve asked for a raise, 74% were successful.4

Financial Wellbeing

And They Feel Differently About Their Money

Women are primarily concerned about creating financial independence and maintaining it for their entire lives. The biggest motivating factor for women in creating wealth is financial security. While 59% of men identify financial security as their motivation, 72% of women do. This impacts all aspects of managing their money.5

  • Leaving a legacy isn’t the main concern 
  • Social status through wealth isn’t as prevalent 
  • Early retirement doesn’t come up as often 
  • Spending wealth on “toys” isn’t really a thing 

The same study cited in the stats above also found that generationally, women think similarly. Both Gen X and Boomer women cited “family security” as the primary reason for gaining wealth.

The Path to Financial Independence

Women have some advantages when it comes to investing and financial planning. They generally don’t trade as much as men do, so they have lower fees, and they aren’t as likely to engage in panic-selling during downturns. However, they also don’t take advantage of investing as much as they should- women tend to hold too much in cash. They also have some specific challenges that require a financial plan tailored to their needs.  

  • Longer lifespans mean retirement funds need to last longer – so saving sooner, saving more, and investing with more risk during working years are all key.
  • Healthcare costs more. Having kids and living longer is expensive. Setting up a Health Savings Account early on and consistently saving provides tax benefits and a source of healthcare funds in retirement.
  • Women have more education debt. They graduate from college at higher rates than men, but a consequence is that two-thirds of education debt in the U.S. is owed by women.6 Cash flow planning that links budgeting to short-and-long-term goals should be a priority.

Getting Started 

The best way to get started on a financial independence plan, no matter what stage you are at, is to get educated. Working with a fee-only financial advisor that focuses not just on the “what” but the “why” is a good place to start. Financial advice isn’t what it used to be. You aren’t stuck with either a glorified salesman (almost universally “man”) who works for a big firm or a robo-advisor that offers little to no planning. Fee-only fiduciary advisors have many different options for working with clients. Some options:

Women In Finance

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Financial Freedom

This is How to Achieve Financial Freedom

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Financial freedom usually means having enough money via savings, investments or cash to live the lifestyle you desire. Whatever your vision is, it’s achievable, however you have to take some steps to make those dreams happen.

The importance of financial freedom 

Financial freedom is sometimes used interchangeably with financial independence. Financial independence usually has a dollar value assigned to it. For example, “you need two million dollars before you can retire” or “you need to earn a certain amount of income per year to achieve your goals”. Financial freedom actually takes you beyond those numbers and forces you to think about and define the lifestyle that you want to be covered by your path of income. Essentially, financial freedom affords you the ability to live life on your terms. 

What does financial freedom mean to you?

Everyone’s definition of financial freedom is a little bit different. Some people may want to work part-time or work a different job, some people don’t want to work at all so that they can raise children, care for loved ones, start a business, or travel the world – you name it! 

So, what does financial freedom mean to you? Why do you want financial freedom? What do you wish you could achieve? What would you do with your life if finances didn’t matter? The path to financial freedom can be long and difficult, and knowing your “why” can give you the strength to push through those obstacles.

 
Investment Management

Create and write down your financial goals 

Many of your goals will and should support your desire to be financially free. Make sure your goals are SMART. SMART stands for Specific, Measurable, Attainable, Relevant, and Time-Specific. Click here to learn how to create SMART goals. 

Now you should write down all of your financial goals that will help get you to your “why”. If you end up having financial goals that don’t help you on your journey to financial freedom, maybe your “why” is different than you thought! 

Know your financial baseline 

Know what your net worth is. Know your income, expenses and have a good idea of what you can or are willing to save. Write all of these numbers down on a piece of paper or in an excel sheet so that you can easily update and look at it. Sound like a daunting task? We can help! Schedule your free introductory meeting today to learn more! 

Financial Advisor

Live below your means 

This means spending less than you earn. Although this is one of the simpler steps, it can be the most difficult. If you don’t know what you earn and you don’t know what you spend, then you don’t know what you can save. 

Take a look at your spending on debit and/or credit cards so that you can see how much you are spending in different areas. Then update your excel sheet (that you created in the previous step) with the amounts you spend in each area (groceries, gas, bills, entertainment, subscription services, etc.) so that you can adjust your spending and savings amounts. Now you have a budget! 

Increase your savings rate over time 

Whether you increase your income or decrease your spending or do a little bit of both, you want to grow the difference between the amount that’s coming in and the amount that is going out. 

You can invest in your career, pick up side hustles, do what is necessary to increase your income, scrutinize your budget and see what you can cut out to reduce your spending.

Wealth Management

Establish an emergency fund 

If you don’t have funds available for emergencies, you run the risk of dipping into non-emergency funds and de-railing your plan to achieve financial freedom. Hint: A rule of thumb is to have 3-6 months of expenses in an emergency fund. For help determining this amount, refer back to your excel sheet – or the one we’ll help you create! 

Open accounts and invest in a way that aligns with your goals 

Having all of your money invested in cash is not a good idea. Likewise, if you put all of your money in the stock market, you also run the risk of de-railing your plan if that’s what you’re depending on to fund emergencies or short-term goals. 

It is important to have a mixture of both. A financial advisor can help you figure out the exact percentage to save into both cash and the stock market based off your goals, your income, your risk tolerance, and your plan.

This is how ARK manages your wealth.

Pay off high-interest debt

This can include credit cards and many forms of loans such as student loans, auto loans, etc. The higher the interest rate, the more money you are paying your lender. The faster that you pay off your debt, the more money that you can save.

Monitor your credit score over time 

Monitoring your credit score provides for a better understanding of your credit position. Your credit score is what lenders look at to see if you are a favorable borrower or not. By regularly checking your credit score, you will start to understand the things you should do to get a better credit score.

Financial Self Care

Consider creating an estate or legacy plan

Do this to ensure that your legacy lives on in a way that you intend it to. 

An attorney can help you set up the necessary documents for an estate or legacy plan. Click here to find an attorney that fits your needs and budget. 

Be flexible and don’t get discouraged 

Adapt to life as it happens. Sometimes you have to pull back on your saving, and sometimes you have to increase your spending to make ends meet and that’s okay.

Financial Planning

Good luck on your quest for financial freedom 

As financial planners, we encourage you to invest in the future, but we also remind you to enjoy life as it is today. For help creating a financial plan, reviewing your investments, or determining where to start to attain financial freedom, reach out to us! You can find us at www.ARKFinancialWellness.com or call (314) 353-9924. We wish you the best on your quest for financial freedom. 

If you’d like to sign up to receive E-Wellness update emails every other week covering tips and guidance on achieving financial security and improving your overall return on life, then click here. There is no cost or obligation to request this information, and your email and/or phone number will not be sold or shared with any outside sources or solicitors. You also may opt-out of these communications at any time.

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Managing Through an Unexpected Job Transition with ARK

Managing Through an Unexpected Job Transition

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Getting laid off from a job upends almost every aspect of your world. Besides the financial impact, there may be emotional, psychological and even physical implications.  

The goal is to turn a loss into a successful transition to the next stage of your career. Having this happen as quickly as possible will alleviate some financial concerns, but it is important to allow yourself time to process the emotional and lifestyle affects.  

The key is to take it step by step. The first thing to know is that you will be okay. It is a process, like any other life change, and with some sound financial management and attention to yourself, you’ll get through it.

Things to Do As Soon As Possible 

Losing a job is a shock. You’ll have a lot of feelings, and we’ll get into how to deal with them, but there are some things you need to tackle right away.

You want to assess three things:

  • What are the termination benefits or severance details?  
  • What is your financial position (debt, savings, etc.) 
  • How can you reduce your expenses?
ARK Managing Through an Unexpected Job Transition

Severance and Unemployment 

Ongoing financial support can come from your company in the form of severance pay, and from claiming unemployment benefits. If your company offers you a severance package, you’ll need to understand the amount and the terms. Is it a lump sum, or are you paid through a certain period?  

Will you be filing unemployment? You should do this immediately. If you live in different state than where your company is located, you can still file through your own state.

Healthcare 

Your company may offer COBRA benefits, but it is less likely that they will continue to provide any payment towards healthcare. This may make your company healthcare plan unaffordable. The best option may be to sign up through an exchange. Keep careful note of when your company benefits will stop. 

Your Retirement Plan 

You should understand what will happen to your retirement plan, even if you don’t need to do anything immediately. Plans have specific rules, but you can often leave them in place and determine what to do when you join another company. If you will be paid through a certain number of months going forward, you may want to check whether you will still contribute to your plan with each paycheck.  

Click here to read more about what happens to your 401(k) when you leave your job. 

Take Stock of Your Debt and Savings – Be Proactive 

If you have an emergency fund, you’re ahead of the game. But even though this is the rainy day it’s there for, the longer you make it last the more time you’ll have to find the right path forward. The Bureau of Labor Statistics reports that it takes about five months for a successful job search – so plan to stretch things out as much as possible. 

Managing debt when you don’t have a source of income requires early intervention. Things like mortgages and car payments are most likely set. However, you’ll have to make some decisions if you have credit card debt. If you are paying more than the minimum, you may want to scale back until you have income. 

If you have a lot of credit card debt that you are paying on, the best course forward may be to call your credit card company, explain that you’ve been laid off, and ask them to put you on a payment plan. The company will close your account, but the trade-off is that your interest rates will be substantially lowered and your monthly payment amount will decrease. 

Cut Non-Essential Expenses

You’ll find that your definition of “essential” is likely to undergo some drastic revision. Budgeting with income is an entirely different exercise than budgeting against a fixed sum of money. Everything you can eliminate, no matter how small, adds to the amount you have available to spend on essentials – and gives you more time to land on your feet.  

One caveat – don’t cut things that directly relate to your mental and physical health, unless you can find a less-expensive substitute. You’ll have more time now, so hiking, running, etc. may be a good replacement for a gym membership. 

ARK Cutting Expenses

Build A Temporary New Routine with Your New Free Time 

Work isn’t just income. For many of us, it provides the central pillar of our life. As you navigate through this period, the more you can replace the space where work used to be with meaningfully spent time, the more comfortable this period may be. And that will be reflected in your attitude and demeanor in the interviews and networking you’ll be doing. 

It sounds like a cliché, but focusing on activities that are accomplishments will help tremendously. Humans are surprisingly hard wired to be goal-oriented, and the goal doesn’t matter. Be flexible, be creative. And getting out of your head by helping others can work wonders.  

Getting a New Job 

Take some time to work through your emotions about the job loss and any negative feelings about the company. Then turn that around by focusing on what you achieved and accomplished. Sit down and make a list of everything. This isn’t a resume updating exercise, it’s just to get you thinking about your skills. 

Once you’re ready, begin a search on LinkedIn, Indeed, Zip Recruiter, or other industry-specific or general job boards for jobs encompassing your skill set. Pay attention to titles, job descriptions, lists of necessary skills, and current buzzwords. Then sit down and update your resume, using what you’ve gleaned. Don’t be afraid to aim high. It’s not unheard of for people who’ve been laid off to get a new job with more responsibility and a higher salary. 

Don’t neglect the people side – stay in touch with colleagues, keep posting on social, keep reaching out to people and asking for their help and input.  

The Bottom Line 

Getting laid off isn’t usually a planned life event, but for most people it doesn’t turn out to be as much of a blow as it seems in the first few weeks. Take time to process and prioritize your emotions, get your finances in order, and plan an orderly job search. Build in routines and accomplishments to keep yourself moving forward, and don’t be afraid to explore options and use this time to rethink what you want your career to look like. 

Here at ARK Financial Wellness, we will meet with you to help navigate your finances and life planning, in every stage of life. Learn more about what we do and how we can help you achieve financial wellness. Schedule a no cost, no obligation meeting with us today! 

Do You Have Questions?

Let's Talk!

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
How Do You Create a Retirement Paycheck With ARK

How Do You Create a Retirement Paycheck

0

One question we hear most often from those nearing retirement, is some variation on this: 

“How do I get my money out of my retirement plan and into my checking account?” 

The question is not as simple as it appears – that’s why people ask it. They’re not asking about the mechanics of a 401(k) withdrawal. They want to understand the switch from saving to spending, and it’s an entire cascade of questions covering how to decumulate assets in retirement. These include:  

  • When should I take social security?  
  • How can I ensure I’ll have enough income for my needs?  
  • How can I invest for growth without taking too much risk?  
  • What about taxes?  

There are a lot of decisions to make and creating a financial plan for your retirement years means taking a comprehensive look at how those decisions affect the likely path of your retirement so that you can plan for things down the road.  

A good plan can adapt to changing market and economic conditions. It can also be flexible enough to work efficiently if your situation or choices evolve. It needs to ensure you have enough cash to meet income needs and that there are opportunities for growth. 

Start with Guaranteed Sources of Income 

There are generally only two sources of guaranteed income in retirement: social security and pension. They each have significant choices attached. There are trade-offs you need to understand, and these impact how much income you’ll receive.  

There are a lot of strategies for claiming social security. When it comes to maximizing this income source, pieces of the puzzle include whether you are married, if you are the same age as your spouse, who will claim first, and if one spouse is a higher earner. 

If you have a pension, you’ll have to decide whether to take it as a lump sum or a stream of income payments. It’s common to take a lump sum, but it’s a good idea to decide in the context of your entire financial picture.  

Getting a clear view of guaranteed income is critical because it will inform the investment strategy that makes up the rest of your retirement income plan. 

ARK Social Security

Social Security – the Basics of the Timing Decision

The premise is simple: the longer you wait to claim, the higher your monthly benefit. The Social Security Administration (SSA) considers the benefit to be “early” if you take it between age 62 and full retirement age (“FRA,” which for most people is between age 66-67, depending on date of birth) and “late” if you begin to claim benefits between your FRA and 70. By delaying social security, you are rewarded with an 8% increase in the benefit amount for each year you delay. Claiming early decreases your benefits from what you would be entitled to at FRA. 

However, when it comes down to making the decision, there are a lot of other factors to weigh: 

  • Your life expectancy 
  • Your health and wellness 
  • Your retirement lifestyle 
  • Sources of income until claiming Social Security 
  • Your budget 

The decision shouldn’t just be a financial one. The desire to retire at a younger age may outweigh the financial considerations, and social security may be a key piece of your budget. 

Asset Management in Retirement: Coping with Volatility 

While you were saving for retirement, market volatility made it unpleasant to open your 401(k) statement – but that’s as far as the damage went. You were still making regular contributions, and you weren’t taking money out. The long-term allocation set by your plan administrator was likely adequate. 

Retirement brings a new set of challenges. Contributions become withdrawals, and your timeframe is now shorter. This makes the impact of market volatility much greater.  

The key to a retirement asset management strategy is that it should be proactive and dynamic. The strategy needs to be flexible, goals-based, comprehensive across your assets, tax-efficient, and above all – you need to have confidence in it.  

A bucket approach, in which some of the assets are set up to provide income and capital preservation while others are focused on growth, may work well. Aligning goals to a specific timeframe and then tracking progress and outcomes can help to mitigate risk. It can also put you in a position to make necessary changes proactively instead reactively.  

Maximizing Tax Efficiency 

Creating a multi-year plan to pay less in taxes is like giving yourself a raise. And in retirement, it’s even more important than when you were working. While your overall tax rate may go down, it also may not. And tax rates tend to increase over time. Creating a tax-efficient retirement paycheck means thinking long-term and enacting strategies that work now – and in the years to come.  

Let’s start with tax-deferred retirement accounts. To avoid a penalty, you generally have to wait until age 59 ½ to make withdrawals. But there is an exception: if you retire at age 55 or above, you may be able to take distributions early and avoid the 10% penalty. This can be a source of income to help you delay taking your Social Security benefits. 

Your 401(k) plan can also be a source of tax-advantaged income in early retirement. Using these funds now will lower your account balance, which will keep the required minimum distributions (RMDs) lower. RMDs kick in at age 73, and they can be hefty. You’ll be claiming social security at that age and using Medicare, and both of those have taxable components based on your income.  

Another option is to roll these funds over into a Roth IRA, which allows them to grow tax-free throughout retirement and then be withdrawn with no tax consequences further down the road. The trade-off is the tax hit you’ll take when you move the funds from a tax-deferred to a tax-free IRA. The sweet spot for a Roth conversion is early retirement, before social security and Medicare begin.  

Click here to read more about the importance of tax-planning at the mid-point of your career. 

The Bottom Line

Creating a retirement paycheck means building a plan that can adapt and grow with you as your retirement lifestyle and goals change. Identifying guaranteed income, creating an asset management plan designed to mitigate volatility, and being sensitive to taxes are the broad strokes. There are a lot of details and customizations that make your plan work for you. Setting a solid foundation and then tracking and proactively making changes will keep your plan on pace with the lifestyle you want.  

Here at ARK Financial Wellness, we realize that healthy living and financial wellness are all about balance. We work to help you gain control of your financial house and accomplish what you can in light of proper planning and wealth management, no matter what stage of life you are in. 

Learn more about how we can help you achieve financial wellness and schedule your no cost, no obligation icebreaker meeting with us today! 

ARK The Bottom Line

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Savings with ARK Financial Wellness

Changing Jobs: What Happens to Your 401K?

0

There’s a lot involved in moving to a new company, and normal for some to put some of the more tedious housekeeping items on the back burner. Besides all the job-related changes, you need to understand your new health insurance and set up your new 401(k) to continue your annual contribution. 

But what happens to your old 401(k)? It stays where it is for many people, and they end up with multiple 401(k) accounts. There may be some benefits if the old plan offers investments that you prefer to keep or provide diversification from the new plan. However, it can also make record-keeping onerous, and it can become challenging to understand your accurate risk exposure. 

A better approach is to understand your options and make the best decision based on your tax status and the rest of your financial plan. 

The Options for 401(k) Portability 

You generally have four options for the vested assets in your 401(k) plan. Many employers allow you to leave the plan where it is. However, any unvested assets won’t continue on a vesting schedule. Vesting ends with your termination date, so your plan balance will be the amount you’ve contributed, any employer contributions that have vested, and any growth of the investments. 

There are three main options when it comes to portability: 

  1. If you decide to roll the plan over, you may be able to transfer the assets directly to your new employer’s plan if they accept transfers. This is straightforward. It’s called a “direct transfer,” and the amount you have invested rolls over intact, with no taxes deducted, if the old plan administrator makes the check payable to the new plan. 
  2. If the check is made payable to you, it’s called an “indirect rollover,” and the old plan will deduct taxes. You have 60 days to deposit the amount (along with any additional funds to make up for the taxes that were withheld) into your new plan. You may see this as an opportunity to make a short-term loan to yourself, and there are some circumstances where it might work – but it can be costly from a tax standpoint. If you miss the window and don’t contribute the funds to your new plan, you’ll get hit with penalties if you’re under 59 ½. Taking money out of your plan may also mean you fall short on retirement goals. 
  3. The final option is to cash out. At least 20% of taxes will be withheld, and you’ll get hit with a 10% penalty at tax time if you are under age 59 1/2. The extra income may also bump you into a higher tax bracket. 

Creating Diversification 

Thinking about your 401(k) investments as part of your comprehensive financial plan can help you create enhanced diversification. Take a careful look at the plan choices offered in each plan. You may decide that you can craft a more diversified strategy by keeping both plans. You could replicate your risk strategy in each or set up a new strategy by selecting different asset classes and funds in each that create a total risk profile you are comfortable with. Or you may prefer the investments offered in the new plan and choose to simplify your strategy by keeping everything in one place. 

If you are invested in a target-date fund, you may want to consider the rollover. The two funds may have the same target date, but the risk profile can differ from plan to plan. It’s hard to get a sense of what you are holding, so it may be beneficial to roll over the assets and consolidate them into one target-date fund. 

An Opportunity for Tax Planning

If you have been out of work for some time and have lower income, it may make sense to do a Roth conversion. Pulling money out of your 401(k) to convert it while you are still working doesn’t usually make sense because it can create a costly tax burden, so investors typically wait until early retirement. 

There are income limits on employer-sponsored Roth 401 (k) accounts, but you can convert to a Roth IRA without any income limitation. You’ll need to pay the taxes you deferred when you contributed to the traditional 401(k) account, plus the growth of the investments will also be taxed. But once you pay the taxes and deposit the funds into the Roth IRA, they grow tax-free, and you will not be subject to required minimum distributions starting at age 72. 

This can be a significant advantage for income planning in retirement, as it may help keep you in the lower tax brackets. 

Lifestyle Planning

The Bottom Line 

Thinking through your 401(k) rollover strategy should be part of the financial housekeeping you do when you join a new company. Understanding what you have and your risk profile can provide you with assurance during market volatility. It also ensures you stay organized. There are many options, so investing the time to identify what is right for you makes good sense. 

Here at ARK Financial Wellness, we will help you make the right decision for you and your family. As fiduciary financial advisors, we are legally and ethically bound to have your best interest in mind. Get started with a no cost, no obligation consultation today!

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Financial Plan

How to Choose the Right Financial Advisor… for YOU

0

While background, experience and credentials are important, it is also crucial to seek someone that you are comfortable working with. Continue reading to get help finding YOUR Financial Advisor, not just a Financial Advisor.

Figure out what parts of your financial life are keeping you up at night

Are you seeking financial organization, with general guidance on when and how to save? Are you looking for an orderly way to pay down debt? Do you want to obtain financial independence? Are you planning for retirement? Are you looking for assistance managing your investments? Do you need help with life-transition planning (after divorce or death)? Are you trying to establish a college fund? Do you want to take charge of your finances and future, but aren’t sure where to start? Consider what you want to accomplish so that you can seek an advisor who specializes in helping you fulfill your objectives.

Learn about the different types of financial advisors

Many refer to themselves as Financial Advisors, implying they have the qualifications to provide valuable advice with your best interests at heart. That said, it is important to understand what differentiates someone who is legally bound to provide advice that is truly best for you, and free from conflicts of interest. To do this, learn the difference between a fiduciary advisor and a non-fiduciary advisor.

An advisor who has a fiduciary duty is legally required to work in your financial best interest before their own. Fiduciary advisors are also fee-only (as you will read below).

Non-fiduciary advisors may give advice that is “suitable”, albeit with inherent conflicts of interests. An example of this is an advisor who has access to two investment products that accomplish the same goal for the client, however, one pays a higher commission than the other, increasing the overall cost to the client. This is called the suitability standard – not always in the best interest for the client, but generally a “suitable” product given client goals and objective.

Look to work with CERTIFIED FINANCIAL PLANNER™ professional (CFP®). This designation signifies that the advisor has met stringent education and experience requirements to better serve their clients’ comprehensive financial planning needs. They are also held to an ethical standard by the CFP Board (https://www.cfp.net/).

Consider and understand how the Advisor gets paid

It is important to learn the difference between fee-only advisors, advisors who make money by commission and fee-based advisors.

Fee-only financial advisors earn money from the fees you pay for their services. This fee can be in the form of a percentage of the assets they manage for you, or a fee for a particular financial planning service they provide. These advisors are fiduciaries (as discussed above). They, in turn, have an inherent interest to manage your money with the goal of increasing your account value over time since they are paid based on this value each year.

Advisors who make money by earning commission do this through a third party. They will sometimes label themselves as “free” advisors as they don’t charge ongoing fees for services. Note that these types of advisors are not fiduciaries… they work as salespeople for brokerage companies and make money based on each product they sell. So, rather than charging an ongoing fee to manage an account or provide financial planning services, this type of advisor receives a payout each time they recommend a buy, sell or the purchase of a product (annuity, life insurance, etc).

Fee-based advisors charge both fees and commissions (a combination of the above two definitions) – this NOT the same as fee-only.

Every investor has different goals and objectives. How an advisor is paid does not make them good or bad. The take-a-way here is to have a clear understanding of pay structure to ensure it aligns with your goals.

Talk with your friends and family

Friends and family are generally the ones that most people go to for advice and recommendations, so it is important to see if they have an advisor they enjoy working with and why… OR, as importantly, if they had a bad experience with an advisor and why.

Research financial advisors

Whether you have decided you’d like to work with a fee-only, fiduciary advisor or a commissioned advisor, be sure to use those keywords in your Google search. For example, type in the Google search bar “fee-only, fiduciary advisors in St. Louis, MO” or “women-owned, fee-only, fiduciary advisor”. Use the right words to help you find the type of advisor you are looking for.

Check the advisor’s credentials

Check the background of your financial professional at BrokerCheck or AdviserInfo. Both are free tools that provide the background and experience of individual advisors and firms. These sites will also tell you any disciplinary action the advisor has received. The CFP Board also maintains a list of disciplined CFPs by state on its website.

Seek an advisor with whom you are comfortable and confident working with

While an advisor may have all the credentials and experience you desire, their personality may not mesh well with yours. Working with someone who empowers you to create financial purpose and embraces your core values is crucial to ensure you achieve your most fulfilling return on life. 

What does this mean? Find someone you are comfortable meeting with to address your questions and concerns in a way that you understand. Far too many advisors like to hear themselves talk about how smart they are, rather than focusing on what is most important to YOU. 

As comedian, Bill Engvall would say…

Here’s your signs that it may be time to make a change from your current advisor…

Financial Planning

1) If your advisor talks during 90% of your ongoing meetings.

2) If you are falling asleep, doodling and/or feel your eyes glazed over during your advisor meetings.

3) If you walk out of the meeting and have no idea what you just discussed or what your advisor’s recommendations were.

4) If you are always worried about your money and investments, but are afraid to ask questions in this regard during your meetings.

5) If you completely dread your annual meetings with your advisor.

Meet with an advisor and don’t be afraid to ask questions!

Ask questions such as…

  • What are your company’s values?
  • Are you a fiduciary?
  • How do you get paid?
  • Are there any other fees that I have to pay?
  • What are your qualifications?
  • How often do we meet?
  • Have you ever had any complaints filed against you by past clients?
  • In managing my investments, what is your plan for my money in the event of high market volatility and/or a prolonged bear market?
  • Do you have a formal succession plan in the event something happens to you and/or your team?
  • What cybersecurity measures do you have in place to protect my personal information?
  • How frequently will you communicate with me?
  • How do you measure ‘success’ in a client relationship?
  • What resources are available to me as a client?
  • Will you collaborate with my CPA and Attorney?

Consider working with ARK Financial Wellness

At ARK, we believe that Financial wellness is the overall health and security of your finances, but it’s also the ways in which your finances commingle with your physical, mental and social well-being. It is a feeling of comfort and financial security for where you are today, as well as where you would like to be in the future. It means not losing sleep at night wondering how you’re going to absorb a financial shock, being on track to meet financial goals, and having access to the information and tools necessary to make good financial decisions.

Financial wellness represents a healthy approach to managing your financial life, including behaviors, attitudes, and knowledge. It is making sure that your finances have a positive reflection into all aspects of YOU.

Contact us today to schedule your no cost, no obligation wellness check to learn more about our values-based financial planning and wealth management services designed around your definition of health and wealth.

ARK has a FREE, printable checklist on this topic as well – click here to download!

References: https://www.cfp.net/

https://www.forbes.com/advisor/investing/how-to-choose-a-financial-advisor/

https://money.usnews.com/financial-advisors/articles/how-to-choose-a-financial-advisor

https://smartasset.com/financial-advisor/fiduciary-vs-suitability#:~:text=The%20suitability%20standard%20requires%20only,a%20similar%20low%2Dpriced%20option.

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Tax Planning

The Importance of Tax Planning at the Mid-Point of Your Career

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By the mid-point of your career, it is critical to have a financial plan that focuses on your goals and helps you achieve flexibility. Having a plan helps you realize the lifestyle you want now while keeping longer-term achievements on track. But an overlooked area of your plan is how much of your income you get to keep after taxes. 

As income increases, it becomes even more essential to ensure that you are optimizing your tax planning. And a good tax plan doesn’t just happen in April every year. Proactive planning throughout the year, and a strategic plan that takes a multi-year view, can make a big difference in keeping your lifetime taxes as low as possible. 

Moves you make now can create more income and greater tax efficiency now, and during your retirement years. No matter what your goal is – early retirement, optional-work, or one spouse temporarily or permanently leaving the workforce, focusing on effective tax planning can get you there sooner. 

Tax-Advantaged Savings and Investing Vehicles  

Retirement Savings

Maximizing tax-advantaged savings tools should be at the top of your tax planning list. A thorough review of tax-deferred (Traditional IRA, Annuity, etc.) vs tax-free (Roth IRAs) savings options should be part of your overall financial plan. Many factors come into play when choosing among these options -current income, future projected income, retirement plans and lifestyle, age of each spouse, beneficiary income and age, etc. A qualified financial advisor can help you determine which savings vehicles will provide the most tax-efficient planning strategy for you today, and in the future. 

Contributing the maximum amount to a 401(k) of $22,500 in 2023 (plus the catch-up amount of $7,500 for those 50+) may have an additional benefit this year. Asset values are lower, so your contribution will have more purchasing power. Keep contributions steady and consistent (bi-weekly, monthly or quarterly, for example), so you can minimize the impact of any further declines. 

If one spouse is no longer working, don’t neglect retirement savings in a spousal IRA. This is a regular IRA account in the non-working spouse’s name. It circumvents the IRS rule that you must have income to contribute to an IRA.  

Healthcare Savings

A Healthcare Savings Account (HSA) is a tax-advantaged way to put money away in an investment account for health-related spending in retirement. Qualified spending isn’t just on doctor visits or medical needs – it also includes long-term care policy premiums, so starting an account now is a great way to cover these premiums later.   

HSAs are triple-tax-advantaged. This means that money you put away reduces income in the year of the contribution – in 2023, that’s $3,850 for self-only and $7,750 for families, plus $1,000 catch up for those over 50. The money grows tax-free, and qualified withdrawals are also tax-free. 

The HSA requires a high-deductible health insurance plan, so you’ll need to review your coverage needs and ensure your plan meets the criteria.

Education Savings

Savings in a 529 plan grow tax-free, and qualified withdrawals are also tax-free. As of 2023, funding them with up to $17,000 annually keeps the amounts under the gift-tax exemption, so no taxes are due. In addition, some states provide tax benefits for contributing to a 529 plan.   

Keep in mind – these aren’t just for college anymore. The fund can be used for K-12 education as well (max of $10K/year). The tax-free growth lets you get ahead on education saving. Like any investment, as you get closer to the date when funds will be needed, you may want to adjust your investment mix for lower risk.

Financial Self Care

Charitable Giving

For many families, giving and service are part of their family tradition. By setting up a donor-advised fund, you can receive the tax credit in the year the contribution to the fund is made. But a key advantage is that the funds can be invested and grow inside the donor-advised fund. You can also select investments that reflect your values. You’ll have time as a family to decide what is most meaningful to you and when you want funds to transfer to the charities you choose. This is a terrific way to involve your kids in your family’s giving and to teach them about investing and the responsibility of donating. 

Where You Save Is as Important as How Much You Save

Planning for long-term tax savings means utilizing different types of investment accounts. At this point in your financial journey, you may already have the three main account types:  

  • Roth 401(k) or IRA set up earlier in career when income was lower  
  • Traditional 401(k) or IRA  
  • Taxable Brokerage/Investment Account 

Having all three accounts means you can match the investment profile to the taxable status of the account. The value is in holding your least tax-efficient investments in your tax-deferred accounts, where you won’t pay taxes. Taxable accounts should hold more tax-efficient investments.

Tax Planning

Here at ARK, the way that we manage money is different from many advisors, as our mission is to partner with and empower you to create financial independence by employing highly personalized planning strategies that embrace core values to achieve your most fulfilling return on life.  

Tax-Loss Harvesting Reduces Taxes – and is Part of a Diversification Strategy  

Deploying your taxable accounts to good use means offsetting capital gains with losses. Active planning as you rebalance your portfolio can help you keep your asset allocation in line with your risk tolerance and can save you money as you swap out investments that have appreciated. 

A solid tax-loss harvesting strategy can be a key feature of your diversification strategy if you have equity compensation. While employee stock purchase plans, restricted stock units, and stock options can be a powerful way to build wealth, they can also result in over-concentration in your company’s stock. Selling can create big tax bills. Tax-loss harvesting can help. When determining your concentration, if you intend to stay with your company for some time, don’t forget about unvested options. 

The Bottom Line 

Financial planning used to be something that people did at retirement to convert their savings into income. But lifestyles look different now, and the retirement trajectory is much shorter for many people. Starting early on your financial plan makes sense, and tax planning is a big part of building wealth that will last.  

ARK Financial Wellness will help you align your goals with your values to create a financial plan that best fits YOU! We help to make sure that you get the most from your taxes, and will refer tax professionals to you who can help with everything else. 

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT
Midlife Journey

SECURE 2.0 Act Enhancements Across the Retirement Continuum

0

It’s not the most imaginatively named legislation, but the SECURE 2.0 Act does a lot to make it easier to have a successful retirement. The legislation tackled retirement savings at several points on the financial journey, with a provision to enhance or facilitate saving and investing for almost everyone.  

Whether you have student loans, need to catch up in the final years before retirement, are facing taking required minimum distributions in retirement, or want to enact a charitable giving strategy, new rules create a smoother path.  

Combining all the different facets into one piece of comprehensive retirement legislation is an efficient way to enact changes, but it’s also a good reminder that retirement is never a “one-and-done.”

It is a continuum in which you spend the decades of your working years accumulating retirement savings, and then you flip to decumulation as soon as you retire. The two mindsets – of saving and spending – are very different. But the planning you do at each stage of the journey impacts the stages to come.

Just like taxes, retirement requires a multi-year financial planning strategy to keep you on track. Our quick read breaks down the major changes and will hopefully get you thinking about both your current stage and what you can do to maximize your retirement assets for the stages to come.

For a brief summary of this blog post, check out this 4 minute video of what the SECURE act is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

The Early Stages: Automatic Enrollment, Emergency Savings, and Student Loan Matching

Automatic enrollment in a retirement plan can mean building up invested savings from the earliest years of a career, which provides the longest amount of time to benefit from the power of compounding. Beginning in 2025, new employer-sponsored plans will be required to automatically enroll eligible employees, with a contribution rate of at least 3%. This is coupled with new rules around portability. These often lower-balance accounts will also be allowed to be automatically transferred to a new plan in the event of a job change.

The 10% penalty on withdrawals from tax-deferred retirement plans often puts saving for retirement in opposition to building up an emergency fund.

Financial Wellness

Not anymore. Starting in 2024, plans are allowed to add designated Roth accounts for emergency savings for non-highly compensated employees. Contributions are limited to a maximum of $2,500. The first four withdrawals in a year from the account will be penalty-free.

Student loan payments can be one of the bigger bites out of the paycheck in earlier career stages. Trying to pay off debt and contribute to retirement accounts is often out of reach. The new law mitigates this by allowing an employer to match student loan debt payoff amounts, so retirement savings can still accrue.

Late Career Catch-Up Contributions Are Increasing 

The catch-up contribution for those 50 and above is one of the best ways to increase your retirement savings in the later years of your career. For 2023, the catch-up amount is increasing to $7,500. Beginning in 2025, the catch-up for workers aged 60, 61, 62, or 63 will be even larger. These employees are allowed to contribute the greater of $10,000 or 150% percent of that year’s inflation-indexed catch-up amount.  

However, the tax treatment of catch-up contributions is changing. if prior-year earnings are more than $145,000, the age 50+ catch-up contributions must be made with after-tax dollars to a Roth account.

The Decumulation Phase Gets More Flexible 

Tax-deferred contributions to retirement accounts lower taxable income in the years when you make them, but the IRS eventually comes looking for their cut. The age to begin required minimum distributions (RMDs) is moving from 72 to 73 in 2023, providing an extra year for retirees that want to take advantage of lower asset values by converting some other of their savings in tax-deferred accounts to a Roth IRA. The amounts converted will lower the value of the account, which will reduce the amount of the RMD.

Beginning in 2033, the age for RMDs will move to 75. This expanded window can provide for significant tax-planning strategies, including the timing of asset sales and more time to convert additional funds to a Roth for income and tax planning.

Financial Services

The Bottom Line 

Starting early and taking advantage of the tax benefits – and the power of compounding – are the key features of the years in which you are saving for retirement. The goal is to retire successfully and have enough to live the life you want. But saving is just one piece of the puzzle. Thinking strategically about retirement at every stage can keep your plans on track.

Here at ARK, our goal is to empower you to reclaim time and purpose through financial security, and we can help you get your plans on track. Schedule a free 30-min ice breaker with Lisa today to learn more!

Conclusion

Maximizing your money requires discipline and a commitment to your financial goals. Remember, the key to maximizing your money is to be intentional with your spending and to make your money work for you. Keep in mind that achieving your financial goals takes time and effort, but with the right mindset and habits, you can achieve the life you want.

Disclaimer: 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. 

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

Lisa and Isabel at ARK Financial Wellness

This content not reviewed by FINRA 

ARK Financial Wellness, LLC is an independent firm with advisory services offered through Blackridge Asset Management, LLC, a Registered Investment Adviser. Blackridge Asset Management is an SEC Registered Investment Advisory Firm.

ARK’s YouTube Videos

SECURE Act 2.0 Highlights

What is the SECURE Act? Lisa shares a brief summary of what it is, what the original bill included and how the changes in the SECURE Act 2.0 can help you save for a more successful retirement.

Click here to check out our blog post on this topic.

How to Start Out on the Right Foot in 2023

Lisa shares some questions to ask yourself and your loved ones which will help you to grow financially and personally in the new year.

What is a Fiduciary?

Lisa talks about what a fiduciary is and why its so important to work with someone who is held to a fiduciary standard when it comes to managing your money.

Read more about our Fiduciary Commitment here.

The Financial Future is Female

Traditionally, men have handled the finances. But at ARK, we are finding that more and more women, regardless of their relationship status- Single, married, divorced, widowed – are making the big financial decisions and are managing the day-to-day finances. Watch this video to learn more about the unique challenges and the many opportunities that women have when it comes to our finances. Check out the blog post on this topic also.

Planning for Your Future…and for Your Today

We find that clients sometimes struggle with doing what is needed to save for their future needs and goals, but also having enough leftover to live for today. Watch this video to find out what it means to live for today.

How Much Should I be Saving and Spending at Age 40?

“Where should I be – financially – at age 40?” Or any age for that matter? We get this question a lot at client meetings. While Google and benchmarks can help you get started, they can’t give you the answers you need for your particular situation, lifestyle and goals. Watch more to get tips on how to save and spend your money wisely at any age!

Real vs Fake Financial Advisors

Set the bar high, and do your homework in seeking a Financial Advisor to aid in making crucial financial decisions for you and your family. Get a good understanding of their background, education, experience and services by using free online tools to help you differentiate real from fake Financial Planners/Advisors! 

If you have more questions about this, visit our FAQs page.

What else does ARK have to offer?

FIND OUT