12 Tips To Help Your Holiday Budgeting

12 Tips To Help Your Holiday Budgeting

Holiday spending and holiday budgeting go hand-in-hand. Holiday spending doesn’t just include gifts. Holiday spending on food, decorations, travel and more during the holiday season may often increase your monthly spending.

Don’t let the holiday season take a toll on your wallet and avoid a New Year’s Day debt hangover by using these twelve tips when you begin your holiday budgeting:

Tip #1

Determine an amount you feel comfortable spending this holiday season, then stick to it!

Tip #2

Make a list of everyone you’d like to buy gifts for and assign a dollar amount to each. Use your list to keep your spending on track with your budget.

Tip #3

Make gifts to save money and show the recipient what they mean to you by giving them something unique

Tip #4

On tip for holiday budgeting starts way before the holidays. Save ahead of the holiday season and utilize your bank’s automatic transfers to set up a holiday savings account.

Tip #5

If you plan to use credit, consider using a credit card that offers cash back or rewards. You may gain additional benefits or rewards to help lower the cost of spending.

Tip #6

Don’t settle for the first price tag you see when shopping for specific items. Research other local stores or search online to see if you can find a lower price.

Tip #7

Watch for sales or price cuts instead of waiting for Black Friday or Cyber Monday. Many retailers offer discounted items ahead of these one-day sales events.

Tip #8

Buying last year’s edition of a big-ticket item may save you money since retailers discount big-ticket items at the end of the year to make room for newer models.

Tip #9

Watch for travel specials on airlines or trains, or determine the cost of driving to your destination. Purchase tickets early, book hotels early, and set aside money ahead of the holiday travel season.

Tip #10

Shop for groceries that can be frozen or dry stored when they are on sale versus last minute. Consider using off-brand versus name-brand products if they will save you money.

Tip #11

Reuse decorations, extra cards, mismatched paper goods, and gift wraps to create a unique look and save. You can also check thrift stores for holiday items at a reduced cost or consider swapping these items with a friend to save even more.

Tip #12

The final holiday budgeting tip is. Don’t wait until the last minute, as rushing may lead to overspending.

SWG 2444322-0922a The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.

In addition, M3 Wealth specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Incorporating Giving Back Into Your Year-End Financial Planning

If you’re incorporating giving back as part of your year-end financial planning, there are many ways you can do so.

You can make an impact while receiving tax benefits by giving as part of an approach to charitable giving. You may want to consider philanthropic giving. Which addresses the root cause of social issues and requires a more strategic, long-term strategy, versus donating which tends to be more occasional giving.

Philanthropic giving often includes inviting younger generations to participate to become part of a family’s legacy. Here are actions to guide you as you work towards having philanthropy as part of your financial planning:

1. Identify Your Values

Determine your reason for incorporating giving and what you want to change. Since philanthropy is giving over time, determine how long you want to give and if you want it as part of your family’s legacy for the next generation to manage.

2. Define Your Goals

Your financial professional can help you define your goals and implement a giving plan as part of your financial plan. Each year, evaluate how much you intend to give and when. Depending on your circumstances, you may include a giving schedule, such as quarterly or a one-time contribution each year. Other things to consider when defining your philanthropic goals include:

  • Your giving in retirement
  • Icorporating giving through your estate plan
  • Including giving as part of a business-exit strategy

3. Select Your Charities

To ensure a charity is legitimate, ask the charity for details about their mission and how they’ll use your donation. The charity should also provide proof that it’s a 501(c)(3) public charity or private foundation so that your contribution is tax-deductible. As a second fact check on the charity, visit the IRS Tax Exempt Organization Search list to ensure it is a reputable, tax-exempt charity.

4. Understand How To Maximize Giving

Financial and tax professionals can help you determine how to maximize the tax advantages of giving. As tax laws change, your financial plan and giving plan may need to revise so that you receive the tax benefits of your gift. Here are a few ways to maximize when incorporating giving:

  • Qualified Charitable Distributions (QCDs)- If you’re age 70 1/2 or older, you can use a QCD to donate directly from your IRA to the charity of your choice. This strategy allows you to deduct the amount transferred to the charity from your taxable income. You can use a QDC each year versus taking the distribution and paying taxes.
  • Bunch your donations- By making charitable contributions for several years at one time, the total of your itemized deductions may exceed the standard deduction and offer some tax benefits.
  • Itemize your contributions- Charitable contributions can reduce your tax bill if you choose to itemize when filing your taxes. Work with your tax professional to determine how to itemize your giving if the total of your deductions plus charitable gifts equals more than the standard allowable deduction.

5. Determine Which Strategies To Use

There are strategies that you can use or establish to help you organize your giving within your financial plan, such as:

  • Donor-Advised Funds (DAF)- DAF allows you to donate cash or securities, which are non-refundable, to a nonprofit organization. You may claim a tax deduction for the year you contribute to the DAF rather than the year your contribution goes to the charity. Stay in touch with your financial professional, as proposed legislative changes may impact when donors can receive the tax deduction.
  • Charitable Trusts- A charitable trust allows you to donate assets to a chosen tax-exempt organization to help you minimize taxes. Consult your financial and legal professionals to help you understand how trusts work and if you intend to include giving securities as part of your giving plan.
  • Private Foundations- A private foundation (PF) is a nonprofit charitable entity created by an individual or a business. An initial donation, known as an endowment, is used to generate income to make grants to charities per the foundation’s charitable purpose. Consult with your financial, legal, and tax professionals to determine if a PF is appropriate for your situation.

6. Consider Giving Other Assets

Also there are other assets you can give as part of your financial plan that are not associated with securities:

  • Real Estate- If you have a property you no longer need, you can donate it to charity.
  • Cash- With a cash gift, you may receive a tax deduction equal to the amount of money you donated minus the value of any products or services you received.
  • Life insurance- You can name a charity as the beneficiary on your life insurance contract or choose to donate the cash value accumulation each year.
  • Art and collectibles- Gifted art and collectibles can be auctioned to raise money at charity events. To use either as part of your giving, have a certified appraisal completed with reporting.  You can submit the appraisal information and the donation documentation at tax time, indicating the value of your donation. Consult your tax professional regarding how to value and report these specific assets.

A benefit of incorporating giving in your financial plan is that it helps to ensure that your goals are listed. In addition a plan implements appropriate strategies, and progress towards your goals is monitored. Contact your financial professional to start your on-going year-end giving plan today.

Disclosure

SWG 2444322-0922d The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.

In addition, M3 Wealth specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Thinking About Delaying Retirement? Here’s What To Consider

If you’re unsure about retiring and are considering delaying retirement, you must consider if you have enough retirement savings. Do this before making your decision. Examining retirement savings benchmarks and having a comprehensive financial plan that outlines specific actions are the first steps toward knowing if you should delay your retirement. Also, some questions to ask yourself to help determine your retirement readiness include:

  • Do you save money to cover unforeseen emergencies?
  • Do you follow a monthly budget?
  • Is your saving and spending in balance?
  • Have you discussed significant financial decisions with others before making them?
  • Do you have a financial plan that you monitor and adjust?
  • When was your last annual money checkup?
  • Do you work with a financial advisor?

Other Indicators For Retirement Readiness

In addition, there are several indicators of retirement readiness beside the above topics. All in all, knowing if you are on track or should delay retirement should include age-based benchmarks aligned with your goals and your unique situation. To determine your unique retirement savings benchmark, you will need the following information:

  • How much you’ve saved
  • Your age
  • Your gross yearly income

Income Replacement Strategies

Another key point is to aim to replace 80% of your income in retirement as a starting point for your retirement savings.  This may help you maintain the same lifestyle you have today. Once you determine how much you will need in retirement, adjust your retirement savings benchmark up or down. Although adjustments are based on your unique situation and account for all sources of retirement savings income in your calculation:

  • 401(k)
  • IRA
  • Roth IRA
  • Annuities
  • Pension
  • Social Security
  • Other retirement savings

In addition here’s an example of how age-based benchmarks work:

Current Age retirement savings need retirement savings benchmark
Age 55 7 times your yearly salary =
Age 60 8 times your yearly salary =
Age 65 9 times your yearly salary =
Age 67 10 times your yearly salary =

Source: Forbes

Consult With A Professional Before Delaying Retirement

Once you have considered your retirement readiness and age-based benchmarks and delaying retirement. In addition, work with a financial professional to help you identify the actions necessary to pursue or delay your retirement. Your financial professional may also include:

  • Insurance analysis
  • Tax analysis
  • Inflation scenarios
  • Identifying retirement savings strategies
  • Managing portfolio risks

However, financial planning is about saving enough for retirement and determining specific retirement income goals, strategies, and actions to achieve them. In addition. deciding if you should be delaying retirement, comprehensive planning considers your future expenses, liabilities, and life expectancy. Therefore once you have the information, you can make an informed decision about your situation.

SWG 2444322-0922e The sources used to prepare this material are believed to be true, accurate, and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of the information provided on this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.

In addition, M3 Wealth specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. All in all, contact us today to schedule an introductory meeting!

Drawing Social Security Early And Still Working? Here’s What You Need To Know.

Some people decide to retire early and start drawing Social Security early. Many people are unable to live out their retirement plans due to inadequate retirement savings. In addition, many are spending retirement working another job.

However, some people enjoy working and want to do so during retirement. It’s appealing to be able to work part-time or where you have an interest. Or even start a small business while making an income and receiving Social Security retirement benefits.

Early Retirement

While early retirement and a part-time job may be of interest to you, they can affect your Social Security Retirement benefits. If you aren’t at full retirement age. Your Social Security retirement benefits may be subject to taxes if your combined income, Social Security, and wages exceed a certain threshold. Combined income is your adjusted gross income plus one-half of your Social Security benefit plus any income earned from tax-exempt interest income. There is no age limit, including income from all sources, earned or unearned.

Often, retirees are confused about the impact of working in retirement. You can still collect Social Security benefits, but earning above a certain amount may reduce your monthly benefit. Here are a few things you need to know about working and drawing Social Security Retirement benefits:

  • If you are drawing benefits and you are younger than your full retirement age (FRA), Social Security will deduct $1 from your benefits for every $2 or $3 you earn above a certain amount.
  • After you reach full retirement age, Social Security will increase your benefits to account for the money it withheld earlier.
  • Earned income is income from work or self-employment and includes your salary, bonus, or net self-employment income.
  • Any benefits that reduce due to too much earned income are not truly lost and will be added to your benefit once you reach your FRA.

Source: What Income Reduces Social Security Benefits? Investopedia

Test Calculator

Use the Social Security Retirement Earnings Test Calculator to determine if you are at risk for reduced Social Security benefits if you continue working. Social Security can be confusing, and if you have any questions regarding your benefits, including when to claim them.  Contact your local Social Security Administration office to schedule a meeting.

Taking Benefits Early

Suppose you plan to take Social Security Retirement benefits early and continue to work. In that case, you can modify your financial plan to reflect how working may or may not benefit you. Once your financial professional has run your Social Security Retirement benefits and income scenario, you can make a more informed decision. Contact your financial professional today regarding how working in retirement may impact your situation.

Disclosures

SWG 2444322-0922b The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of the information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.  This article is not endorsed or approved by any other Government Agency.

In addition, M3 Wealth specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

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