Financial Confidence Or Luck? How Actions & Traits Help You Pursue Your Goals

Financial Confidence Or Luck? How Actions & Traits Help You Pursue Your Goals

Some people view financial confidence and building wealth as mere luck, but there is more to it than just being lucky. Building wealth doesn’t happen overnight or by chance, and there are no secrets or shortcuts to building wealth.

Wealth isn’t bought or instantaneous unless you ‘get lucky’ and win the lottery; however, the odds of winning may not be in your favor. Building wealth and financial confidence takes time and may happen with these time-tested, comprehensive actions:

  • Planning- financial planning, budgeting
  • Consistency- regular contributions
  • Strategy(ies)- investments such as a 401(k), Roth IRA, Annuity, and other investments suitable for you.
  • Actions- trading, rebalancing, and other actions
  • Monitoring- watching the progress and revising investment strategies or your plan when appropriate.

In addition to the above actions, these four traits may help you work toward financial confidence:

Self-Discipline

Self-discipline is the ability to control one’s thoughts and actions and pursue what one thinks is right, despite temptations. People that practice self-discipline can deter gratification; for example, they consistently save a portion of their income versus spending it all. Their gratification will come when they have saved for a goal, for example, retirement, and can retire with financial confidence versus having to work the rest of their lives.

Focus

Focus is the ability to concentrate on something, regardless of distractions. For example, focus on your goal of building wealth, one step at a time, by consistently investing each month.

Risk Management

Risk management identifies, evaluates, and prioritizes risks that can hinder pursuing of your goals. Evaluating risk is essential to identifying investment strategies that align with your risk tolerance, goals, and financial situation.

Expertise

Expertise is knowledge in areas such as investing, accounting, or taxes. However, expertise doesn’t mean one is an expert but is open to professional advice from others specializing in specific areas—for example, financial professionals, tax professionals, advisors, or business advisors. People with the expertise trait seek education from books, seminars, or others and value learning.

Building wealth and financial confidence can take decades to establish. But with appropriate planning, short-term and long-term goals, strategy, and execution, you’re on your way toward your goal. Good luck!

SWG 2726910-0223d 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!

Women & Money: Closing The Gender Investing Gap

In the U.S., men are investing and accumulating wealth at a greater pace than women, fueling the gender investing gap. It is important that women accumulate enough retirement savings since women have a life expectancy of 80.2 years compared to men having a life expectancy of 74.5 years, according to WorldData.info. Below are five Issues and five ways to work toward closing the gender investing gap.

 

Women must be active investors to accumulate more retirement savings to last their long lives.

If women invested at the same rate as men, there would be an extra $3.22 trillion of assets under management today, and $1.87 trillion additional capital into responsible investments, according to a BNY Mellon Study. There are numerous reasons for the gender investing gap that, as a society, we must work toward bridging. Here are five problems women may face when it comes to investing and how to fix them:

1. Women’s Investable Income Expectations Are Off

Many women think they need a few thousand dollars in disposable income each month before they invest. The same study found that many women believe the IRS limit for IRAs is the amount they must invest, which isn’t accurate. Also, women who describe their financial health as poor are less likely to invest.

The fix- Financial professionals can help bridge this gap by encouraging women to start investing- regardless of income and at any amount. Fund companies can market that investing consistently; even a small amount can add up over time thanks to the power of accumulation. Financial education at work and in schools are great avenues to illustrate that no income is required to start investing.

2. Investment Strategies Aren’t Always Designed For Women

Women are motivated by an investment’s impact, for example, socially responsible investments, but often have difficulty finding investment strategies that align with their values. Or, some investments they choose may not produce the consistent positive returns that help women accumulate wealth.

The fix- The financial industry must develop funds and investment strategies that align with women’s values that impact people and the planet. These strategies may produce returns that enable women to be financially confident and provide for those they love and the causes they care about. Also, fund companies must market to women by depicting confident women making an impact on our world and its people through their investing.

3. A Gender Pay Gap

In 2022, for every $1 that men make, women earned 0.82 centsThe U.S. Census Bureau has found that even though Equal Pay Day has brought awareness to the gender pay gap, women would need to work three additional months to catch up to men’s pay. With less money to invest, women may invest less or not participate in the markets due to having fewer investable assets.

The fix- Companies can help close the pay gap by allowing women to participate in leadership and assess their pay and employee benefits programs to be inclusive to all. Hiring third-party consultants to review employee pay, develop programs to reduce hiring biases and pay discrepancies, and implement new policies can help bridge the pay gap.

Developing employee leave programs that benefit women and all caregivers with leave pay when they are absent from work to care for family members. Program benefits, including short-term insurance and a ‘pay bank,’ where employees donate their unused leave to benefit others, can help provide paid leave, and flexible work schedules can become policies.

4. Female Investor Confidence Lags

Many women feel they don’t understand investing. They also feel more comfortable saving in savings accounts or investing in property and less comfortable investing in market-driven investments, according to the BNY Mellon Study. There are also biases in marketing investments to men versus women, which can deteriorate their investing confidence.

The fix- Creating company financial education initiatives and marketing wealth-building programs to women is an excellent start. Encouraging financial professionals to specialize in working with women and encouraging more women to join the financial services industry can help. Awareness in marketing to include women in advertisements, financial education in schools and better communication that women must invest in their futures can help female investor confidence.

5. Women Tend To Avoid The Risk

Women feel less confident about investing in the stock market, alternative investments, and REITs. They often view investing outside their employer’s retirement plan as risky. When it comes to risk tolerance, women also have a lower tolerance to market risk than men:

  • 9% of women report a high level of risk tolerance.
  • 49% have moderate risk tolerance.
  • 42% have a low-risk tolerance.

Source– The Pathway to Inclusive Investment, BNY Mellon

The fix- While risk, performance, and results are part of investor reporting, it isn’t appealing to women. Instead, education and marketing directed toward women about risk, performance, and results must include the reason for investing.

While risk, performance, and results are part of investor reporting, it isn’t appealing to women. Rather, education and marketing directed toward women about risk, performance, and results must include the reason for investing. Many women invest in a cause to make the world a better place, which requires taking some risks.

One thing that may help fix the gender investing gap is for women to invest in their future by consistently saving and investing. Working with a financial professional can help women develop a financial plan and design a portfolio of strategies that align with their values and produce positive returns.

SWG 2726910-0223c 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!

What The SECURE Act 2.0 Means For Retirement Savings

One of the most noteworthy retirement savings legislation in years, the SECURE Act 2.0, is now law. The SECURE Act is one of the most significant changes to retirement savings plans since Congress allowed for the automatic enrollment of employees and the addition of Target Date funds to retirement plans in 2006.

 

The legislation provides changes that aim to help strengthen the retirement system and financial retirement readiness for Americans. Here’s how the Secure Act 2.0 will help Americans plan save for retirement:

  • Offer more investment options to plan participants
  • Access to financial education
  • Change the retirement plan’s required minimum distribution (RMD) to age 73 in 2023 and 75 in 2033.
  • In 2024, RMDs will no longer be required from Roth IRA accounts in employer retirement plans.
  • Mandated employee retirement plan participation for both full-time and part-time employees.
  • Automatic enrollment and portability. The legislation requires businesses adopting new 401(k) and 403(b) plans to automatically enroll eligible employees, starting at a contribution rate of at least 3%, starting in 2025.

What Are The Main Features Of The SECURE Act?

Increasing the RMD (Required Minimum Distribution) age to 73 in 2023 and 75 in 2033.

Section 529 education savings account owners will be allowed to use retirement accounts to cover the costs of homeschooling, qualified student loan repayments of up to $10,000 (siblings included), private schools, and apprenticeships for the account beneficiary. The catch is a 529 plan must be in place for the retirement account to be used for education with no tax or early withdrawal penalty.

New 10-Year Rule

Retirement accounts must distribute all benefits within ten years after a retirement plan participant dies or an IRA owner dies, except when the beneficiary is a spouse, disabled or chronically ill, a child who hasn’t reached the age of majority, or a beneficiary not more than ten years younger than the deceased owner.

Employees Can Make Contributions Until Their RMD Age

Employees can make contributions until their RMD age to their retirement accounts. The Act would help workers who plan to continue to work into their 70s save additional money for retirement.

401(K) Plans Will Offer Annuities

401(k) plans will offer annuities as an investment choice to help workers help guarantee a portion of their retirement savings from market risk. Annuities are backed by the insurance company’s claims-paying ability and are an insurance product.

Matching Roth IRA Accounts

Employers can provide employees the option of receiving vested matching contributions to Roth accounts. Previously, matching in employer-sponsored plans was made on a pre-tax basis. Contributions to a Roth retirement plan are made after-tax, after which earnings can grow tax-free. Unlike Roth IRAs, RMDs from an employer-sponsored plan are required for Roth accounts until the tax year 2024.

Parents Would Be Allowed To Withdraw $5000 Penalty-Free

Parents would be allowed to withdraw $5000 penalty-free from a 401(k) to pay for expenses related to the birth of a child or a new child through adoption. Under the new SECURE Act 2.0.

Emergency Savings

Defined contribution retirement plans could add an emergency savings account that is a designated Roth account eligible to accept participant contributions for non-highly compensated employees starting in 2024. Contributions would be limited to $2,500 annually (or lower, as set by the employer), and the first four withdrawals in a year would be tax and penalty-free.

Part-time workers working 500 or more hours per year for at least three consecutive years would be allowed to participate in their company’s retirement plan.

Sources: Fidelity,Kiplinger

The SECURE Act aims to help Americans save more for retirement through their employer’s savings plan. Your retirement savings plan combined with strategies for your situation may help make the difference between having financial security throughout retirement, and not. Contact our office today to schedule a retirement savings and financial plan review.

SWG 2689191-0123d The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This brochure is designed to provide general information on the subjects covered.  Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement.  The information is not endorsed or approved by other Government Agency. You are encouraged to consult your personal tax advisor or attorney.  

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!

5 Signs That Signal Interest Rates May Rise

In 2022 The Fed raised interest rates seven times, with the possibility of raising interest rates again in 2023 as they pursue cooling inflation. December 2022’s inflation rate was 6.5%, with the Fed Funds rate increasing to 4.4%, the rate banks borrow from The Fed.

Consumers borrow from banks at a marked-up rate, generally 2% or more, depending on the borrower’s creditworthiness. While a potential interest rate may occur or plateau, raising rates can take a toll on consumers. Here’s what to watch for that may signal an interest rate increase is on the horizon:

Mortgage Rates Start To Increase

The 30-year fixed mortgage interest rate is based on the long-term outlook for interest rates. When rates increase, prospective buyers will see their costs rise. Homeowners with fixed-rate mortgages will be spared, but those with adjustable-rate mortgages may want to consider locking in their loan’s interest rate.

Credit Card Rates Rise

All credit cards have adjustable rates and when interest rates rise, so do credit card interest rates. There is no federal law that limits the interest rate that a credit card company can charge. Therefore, consumers carrying balances may want to initiate a plan to pay off their debt or look for zero-interest rate balance transfer offers and transfer their debt. But read the fine print, as the offer may charge back interest if the balance isn’t paid in full by the offer’s balance payoff deadline.

Bond Markets Fall

Bond markets tend to decline as interest rates rise. In May 2022, Fed Chair Jerome Powell announced that the central bank would start to reduce its $9 trillion in Treasury bonds and mortgage-backed securities to reduce market liquidity further. Investors using bond strategies in their portfolio may want to monitor their portfolio and adjust holdings if appropriate as they continue to watch interest rates throughout 2023.

Personal Loan Rates Increase

Personal loan rates may increase as the Fed Funds rate rises as banks borrow at a higher rate and pass that rate along with their markup to consumers. It will become more expensive to finance a car, college education, or consolidate debt. Home equity loan rates also increase as interest rates rise.

Bank Deposit Product Rates Increase

Money market accounts, savings and checking accounts, and CD rates rise. Banks often raise interest rates on these products to attract new customers or bring in more money. Consumers with lower-rate CDs or money market accounts may want to consider laddering- staging CDs to come due at different times to help accumulate more interest during rising rates versus being locked in at a lower rate. Also, determine if cashing out a CD, paying the penalty, and reinvesting in a new CD is appropriate for their situation.

While there is uncertainty if and when interest rates will go up, there are things you can do to help lessen the effect, such as:

  • Paying off debt
  • Refinancing debt now versus waiting
  • Add inflation risk products such as fixed-indexed annuities to your portfolio
  • Consider strategies that may provide accumulation based on a guaranteed rate and an index

Contact our office for a portfolio review today if you have concerns about rising interest rates and your portfolio.

SWG 2689191-0123c 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!

The 2023 U.S. Economy- A Guessing Game

Throughout 2022, the U.S. economy experienced high inflation, economic expansion and contraction, low unemployment, and narrowly avoided a recession. But even economists with insight have mixed feelings about what the 2023 U.S. economy may be like- it’s a guessing game this early in the New Year.

The Federal Reserve has been working to slow the economy by raising interest rates seven times during 2022 to help cool down inflation. However, future interest rate increases in 2023 may catalyze a recession. Here’s what to watch over the next few months that may impact how the U.S. economy fares this year:

A Potential Rise In Unemployment

Layoffs at employers like Amazon, Salesforce, and Meta (Facebook), are due to numerous factors such as over-hiring, personal and business spending declining, and the current economy. According to new research from Goldman Sachs, the U.S. Labor Department’s job openings report may need to capture the recent increase in layoffs. Interestingly, Goldman Sachs has also recently laid off workers.

Home Sales

Home sales declined 35% to 2020 levels before the housing market uptick during COVID-19. The rapidly soaring home prices have now leveled, a trend that economists anticipate will continue through 2023 and may resort back to a buyers’ market once again.

New Construction

Single-home construction declined every month during 2022, with building permits at a two-and-a-half-year low. Spring 2023’s Q2 home start data will indicate how new home construction may impact the economy as seasonal building slow-down once again picks up.

The Stock Market

The S&P lost 20% of its value in 2022, but the New Year’s optimism provided a short-lived rally in the first week of 2023. Closely watch for signs that The Fed may increase the Fed Funds rate creating a ripple effect in stock market performance.

Manufacturing

Manufacturing is declining as Americans spend less on items such as new cars, furniture, and appliances previously in demand early on during the pandemic, reflected in the Gross Domestic Product (GDP) score. The GDP measures the health of the U.S. economy quarterly.

While we have yet to determine how the U.S. economy will fare in 2023, right now is a great time to review your portfolio’s allocations and take appropriate actions for your situation. Contact our office today for a consultative meeting.

SWG 2689191-0123b 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!

2023 IRS Retirement Savings Contribution Limits

The start of the New Year is a great time to focus on retirement savings contribution limits. Thanks to the power of compound interest. The more you save this year, the more financially secure you may be during retirement.

Are you ready to make more headway on your retirement savings in 2023? Make sure to note the new IRS 2023 limits for how much you can contribute.

401(K), 403(B), 457 Plans, And The Thrift Savings Plan

The contribution limit for 2023 is $22,500, up $2000 from $20,500 in 2022. Individuals age 50 and older are eligible for catch-up contributions of $7500 for a total of $30,000.

Traditional Or Roth IRA

For those who contribute to retirement savings accounts outside of their employer, annual contribution limits have increased for both traditional IRAs and Roth IRAs. In 2023, eligible individuals can contribute up to $6,500, up from $6,000, to their IRAs.

Eligibility For Traditional Or Roth IRA Contributions

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Accounts (IRAs), to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2023.

Traditional IRA

Taxpayers can deduct contributions to a Traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work. The deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2023:

  • If you are a single taxpayer covered by a workplace retirement plan, the phase-out range is increased to between $73,000 and $83,000, up from between $68,000 and $78,000.
  • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $116,000 and $136,000, up from between $109,000 and $129,000.
  • If you are an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $218,000 and $228,000, up from between $204,000 and $214,000.
  • And lastly, for a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

Roth IRA

The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000. In addition, for married couples filing jointly, the income phase-out range is increased to between $218,000 and $228,000, up from between $204,000 and $214,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

The income phase-out range for contributions to a Traditional or Roth IRA for single filers is $138,000 to $153,000. For married couples filing jointly, it’s $218,000 and $228,000.

The Saver’s Credit

The 2023 income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $73,000 for married couples filing jointly, up from $68,000. The limit is $54,750 for heads of household, up from $51,000. In addition, the limit is $36,500 for singles and married individuals filing separately, up from $34,000.

Simple IRA

The contribution limit for 2023 is $15,500, up $1500 from $14,000 in 2022.

Source: https://www.irs.gov/newsroom/401k-limit-increases-to-22500-for-2023-ira-limit-rises-to-6500

In conclusion, if you have any questions about 2023 contribution limits or how maximizing your contributions can help reduce your taxable income, visit your financial and tax professionals. In addition, if you have a Roth IRA or Traditional IRA, you can still make contributions for 2022 before Tuesday, April 18th, 2023.

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Disclosure

This article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.

The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed. 

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!

6 Reasons Why You Need Life Insurance

Life insurance provides a strategy to protect your assets against premature liquidation. If a loss from death occurs, the assets you’ve worked hard for may face early liquidation.

While health insurance protects you if you are injured or become ill, and other insurances protect against damages or loss of an asset, life insurance protects your beneficiaries from financial loss when you pass away.

Life insurance is worth the investment, even if you’re young and in good health. Above all, if someone depends on you financially, life insurance can help reduce financial hardship, provide a way to leave an inheritance, fund funeral expenses, and more. In addition, here are six reasons why you may need life insurance, depending on your situation:

1. For Retirement Funding

If you own whole life insurance, you can borrow against the policy’s cash value (without tax consequences) to supplement your retirement. You will still have some remaining death benefits if you don’t use all of the cash value or surrender the policy. Talk to your insurance professional to understand the details of using life insurance for retirement funding. In order to understand how it may or may not be an option for you, given your situation.

2. To Help Pay For Long-Term Care

Adding a rider to a life insurance policy can help pay for long-term care. Therefore by using a particular dual-insurance product, long-term care combines with life insurance so that the cash value can help cover long-term care costs. If the unused cash value is available at death, the policy pays a death benefit to beneficiaries.

3. To Provide Benefits If You’re Terminally Ill

Standard on many terms and whole-life insurance contracts, ‘living benefits’ allow those with a life expectancy of fewer than twelve months to access a portion of the death benefit before death.

4. For Estate Planning

If you have a large estate, you want to ensure that the estate remains ‘intact’. This help to ensure beneficiaries don’t have to liquidate assets to pay estate taxes. It can help pay estate taxes and settle outstanding debts while not jeopardizing the estate’s assets. It also provides an easy way to remove beneficiaries from dealing with these situations. In conclusion, using life insurance in estate planning involves working with an attorney and financial and tax professionals to determine if this is appropriate for your situation.

5. For Business Succession Planning

If you are a business owner and plan to pass on the business to a family member or other key employees, life insurance can be part of the purchase agreement by the intended new owners. Using life insurance in this way should involve a tax professional. In addition, this will help to fully understand IRS code implications and an attorney to help ensure the business succession planning is done correctly. Business succession planning involving life insurance is often part of the business owner’s retirement or estate plan.

6. To Help Fund College

If you’re a parent or grandparent, life insurance can fund part or all allowable education expenses for the insured (child). This can be done without tax consequences, assuming interest applies to the cash value. If the child doesn’t use it for education funding, you give them the gift of life insurance. In other words, this can be for themselves or their beneficiaries.

In conclusion, check with your financial professional or the life insurance carrier about turning the policy ownership over to the child when they’ve reached adulthood since they must own the policy when they’re an adult.

Disclosures

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This article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.

Guarantees are backed by the financial strength and claims paying ability of the issuing company.

Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject ordinary income tax. Withdrawals are generally income tax-free, unless the withdrawal amount exceeds the amount of premium paid. Tax laws are subject to change. Clients should consult their tax professional.

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!

Social Security’s 2023 COLA Increase: What You Need To Know About Future Benefits

Social Security Retirement and Supplemental Security Income (SSI) benefits will increase by 8.7 percent in 2023, the most significant increase since the 1980s. The last time the cost-of-living adjustment (COLA) was higher was in 1981, when the increase was 11.2%. The increase, due to inflation, will result in a Social Security benefits increase of an extra $146 per month, or $1,827 for 2023, up from $1,681 in 2022.

Social Security benefits are adjusted yearly for inflation based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W index measures the monthly price change in a market basket of goods and services, including food, energy, and medical care. With the current inflationary prices, the Social Security Cost of Living Adjustment may feel like little for many Americans receiving monthly benefits.

How Social Security Retirement Is Funded

Social Security funds through a payroll tax of 12.4 percent on eligible wages; employees and employers each pay 6.2 percent, and self-employed people pay 12.4 percent. The maximum work income subject to the Social Security tax is currently $147,000 for 2022 but will increase to $160,200 for 2023.

Today’s workers fund Social Security for those currently receiving benefits; each working generation supports the past generation ahead of them. Our decreasing younger generations and aging population are a reason for concern that the Social Security fund may not have sufficient funds in the future to pay out at the current benefit rate.

Is Cost Of Living Adjustment Enough To Keep Up With Inflation?

Inflation risk is the risk that will reduce the future real value (after inflation) of an investment, asset, or income stream will be reduced. Inflation risk may impact your savings and investments in these ways:

  • Since prices increase over time and more significantly during high inflation, you cannot buy as much as before.
  • Your net worth may decrease because inflation reduces your purchasing power.
  • Inflation hurts the performance of investments with a set annual return. Such as a bond or certificate of deposit (CD), since you receive the same return each year.

Fixed-Indexed Annuities May Provide A Strategy For Inflation

Fixed-Indexed annuities are an appropriate strategy for retirees seeking income and safety to offset inflation risk. A Fixed-Indexed annuity is a contract issued and guaranteed by an insurance company and backed by the insurance company’s claims-paying ability. Here are other integrated features of Fixed-Indexed annuities:

  • They provide growth potential through the features of their sub-accounts, which helps determine the performance (net of expenses) and the amount of money to be paid out. This unique feature helps provide growth, even during periods of inflation, and payments may increase over time.
  • FIAs offer a tax advantage by allowing the owner to save more through tax deferral by offsetting their income. They have higher contribution rate limits than traditional pre-tax retirement savings accounts.
  • FIAs may help smooth out a portfolio’s return pattern over time, regardless of market performance and inflation.
  • They are tax-deferred accumulation vehicles. Whose growth benchmarks to a stock market index rather than an interest rate.

Inflation-Protected Annuities (IPA)

Inflation-protected annuities (IPA) are indexed for inflation risk through an inflation rider which is capped for inflation. IPAs earn more when inflation goes up and less when inflation goes down. However, this inflation rider feature comes with an additional price. Your financial professional can help determine if an indexed inflation rider is appropriate for your situation.

Contact our office if you have any questions about Social Security benefits. The 2023 Cost of Living Adjustment increase. Or questions on how Fixed-Indexed annuities may provide a strategy for inflation depending on your situation and your financial plan.

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Disclosures:

The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.

This article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to non-qualified distributions. Consult a tax advisor for specific information.

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!

Holiday Season Deplete Your Savings? Here’s How To Recover

If you’re like many, overspending during the holiday season may deplete your savings. It is important for you to recover your savings so you’re financially prepared for unexpected expenses. Here are tips to help you spend less and send more money to your savings:

Use Automation To Save

You can recover your savings account by funding it through payroll deduction similar to how you use direct deposit into your checking account. Check with your employer to see if this is an option for you. Or, your bank’s automation to deposit a set amount from your checking account to your savings account each payday. Remember to continue to build your emergency savings fund and regular savings account over time.

Cancel Unused Memberships And Subscriptions

If you have subscriptions for streaming services or gym memberships you don’t use, cancel them. Even if they are small amounts, they can add up over time and deplete your savings.

Monitor And Estimate Utility Bills

With this year’s energy costs high, monitoring your heat and air conditioning temperature can help you save on your electric and gas bills. Another often-overlooked utility is a water heater that can cost you over time if turned up high. The safe and optimal temperature is 120 degrees to 130 degrees plus optimal for your wallet!
Shop and switch internet, cable, and other providers- Don’t forget internet and cable as part of your monthly budget. If you have internet or cable packages higher than you’d prefer, shop around for another provider’s package. Phone, cable, and internet are often bundled together but may not be the best package if separately each service costs you less. With more people having cell phones, paying for a phone line may be wasted money.

Use Coupons And Shop For Sales

Redeeming coupons can help you save money on items that you usually purchase anyway. Coupon offers may be on new items manufacturers want you to try instead of your usual brand. Coupons are easy to redeem through apps from your favorite stores. Shopping for sale items, last year’s model or open-box items can save hundreds of dollars on consumer goods that tend to be seasonally priced.

Transfer Credit Card Balances To A Zero-Interest Card

With interest rates increasing, credit card companies are enticing debt consumers to transfer their outstanding balances to their credit cards. While these offers may be for one year with zero interest, read the fine print to fully understand the offer as your rate will be impacted after the offer ends. If you’re confident you may be able to pay off the balance in full, consider the transfer to save you money.

Budget For Spending And Shopping

If you enjoy spending and shopping, make it part of your monthly budget, and stick to the dollar amount you budgeted. Create shopping lists- Creating a shopping list helps in a few ways. A shopping list helps keep you on track so you don’t overspend and helps ensure you don’t have to run out to get items you forgot that might cost you more at a convenience store.

SWG 2568567-1122d 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.

Don’t Deplete Your Savings This Holiday Season

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!

8 Financial Strategies For The New Year

The start of the New Year is a great time to implement financial strategies toward improving your life. Whether you’re already saving or trying to pay off debt, making the right financial resolutions and working towards them can help you achieve your goals. Use these eight financial strategies to improve your financial health in the New Year.

#1- Improve Your Financial Education.

Financial literacy is the confluence of the economic, credit, and debt management knowledge necessary to make financially responsible decisions that are integral to our everyday lives. A lack of financial education is one of the reasons why people struggle with saving and investing. The more you know, the more likely you will make good decisions. Here are a few financial literacy resources to keep in mind:

  • Smart About Money (SAM) is a web-based, self-directed financial literacy program that provides financial information, tips, and skills necessary to be financially stable.
  • Mint is an application that allows you to see your financial life on one platform. Mint helps you manage your money and save and makes recommendations that can help you save based on your lifestyle and goals.

#2- Create A Monthly Budget.

A budget lets you check your income and expenses over time, such as each month. It is a tool to help keep your finances on track as you adjust to changing financial situations. A budget is a simple but effective financial strategy.

#3- Work With A Financial Professional.

A financial professional can help evaluate your financial situation and provide ideas to become financially well. Work with them to create a financial plan to help prepare you for the future by examining your financial stability today.

#4- Eliminate Debt And Control Credit Card Use.

Interest rates and fees can negatively impact your finances, especially if you’re working toward a secure financial future. High-interest rates cost you more, so work toward paying higher interest rate debts off first or negotiating a lower interest rate. If appropriate, consider refinancing or finding a new lender to consolidate debt at a lower interest rate and then transfer credit balances.

#5- Fully Fund An Emergency Fund.

Ideally, you should have three to six months of living expenses saved in an easily accessible account that you intend to use only for emergencies. Once you reach six months of emergency savings, continue to save. Right up until you reach another milestone, such as one year of living expenses.

#6- Save For Retirement.

Saving for retirement by participating in your employer’s retirement savings plan and on your own is essential. Ensure you save enough to receive your employer’s match and automatically increase your contributions yearly through automation. Consider contributing to a Roth IRA with after-tax dollars and work towards maximizing your contributions.

Your financial professional can help you by assessing your financial situation today. By offering suggestions to get your finances on track, and helping you prepare for the future with a financial plan. And develop financial strategies best for your situation.

#7- Purchase Life Insurance.

Life insurance is one way to protect your family from financial hardship if you die prematurely. To determine how much life insurance death benefit you should have, factor in the cost of caring for your children each month and their cost after you are gone each year until age 21. Several types of life insurance to consider are term, guaranteed, or indexed universal. Financial and insurance professionals can help you find insurance that meets your unique needs and budget. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

#8- Have Essential Legal Documents Drafted Or Updated.

Generally, a will determines who will care for your children if you die. While an estate plan details how your assets will distribute to beneficiaries. A power of attorney document gives someone the legal right to make decisions on your behalf while you are still living. Consider a medical directive or medical power of attorney document to handle your medical decisions. If you cannot do so yourself. Work with a legal professional to determine which documents are appropriate for your situation.

SWG 2568567-1122c 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!

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