Buckets of Savings!

When saving for retirement, most people save to their employer retirement plans, knowing they are reducing current taxable income, typically receiving an employer match on their contributions, and deferring taxation until retirement.  However, if this is the only place where retirement savings takes place, you can be in for a surprise when reaching retirement.  If all your usable savings resides in a tax-deferred bucket, every dollar you take out to meet expenses will be subject to income taxation at ordinary income rates, thereby forcing you to take additional money out to pay the taxes.  It can also be a shock to find that your retirement income tax bracket isn’t much different than your income tax bracket when you were working.  Additionally, higher taxable income levels in retirement will also impact the amount of your Social Security benefit which is subject to taxation and can also result in higher Medicare premiums. So what should you do differently to give yourself more flexibility and lower overall taxation in retirement?  There is great benefit in having multiple buckets of savings in retirement, each Read on! →

Cheryl Sherrard quoted in recent online article

Cheryl Sherrard was recently quoted in an article entitled “Here’s Why It’s Taking so Long to Hit your Money Goals”, in Grow Magazine.  She offered advice regarding employee deferrals to 401(k) plans, reminding readers that contributing only up to your employer match amount is not likely to be enough for your eventual retirement.  This is an area where employees can make changes to save more quickly for the future. To see the article in it’s entirety, click here.

3 Ways to Maximize Your Finances This Summer

Before you check out for summer vacation, consider taking advantage of your free time this summer to do a quick check-in on your financial health. Between packing up the beach chairs and planning your next family outing, see if you can fit these 3 action items onto your summer checklist. Doing so will help ensure you are on solid financial footing and pay benefits as you head into the second half of 2015. Set aside time with your significant other to talk about money Money is one of the leading causes of conflict in a marriage. It can cause anxiety, stress, regret and even shame. But if we get ahead of issues by establishing common goals and the steps to achieve them, your mindset around money can shift from negative feelings to feelings of joy, excitement and fulfillment. Try setting aside 30 minutes each week to talk about big expenses coming up, financial concerns, priorities, and goals. It may seem silly at first, but this exercise can quickly open the door to more healthy and natural conversations around money and Read on! →

Add Life to your Retirement Years

A recent article in the Encore section of the WSJ, entitled “How to Add Life to Longer Lives” talks about the scientific advances which are extending our lives.  The point made by the article is that although these advances are being made and the first person in modern times who will live to 150 is alive today, as a society we are not prepared to deal with all the associated aspects that significantly longer lives will impact. The idea that we, as a society, are unprepared for longer lifespans is not something just for future generations to ponder and solve, it is a conversation that needs to be elevated and discussed today. Over the past 15 years, we have seen most large employers freeze pension plans for their employees, eliminate these plans for all newer employees, and put more of the responsibility for retirement savings on the employee themselves, through 401(k) only options.  The boomers who are retiring today are among the first who don’t have the safety net of an employer pension and in many cases did not adequately Read on! →

Extra Income? What to do before it’s gone.

As spring’s arrival gets closer, you may also be anticipating the arrival of a large inflow of “extra” income.  This may be in the form of an income tax refund, pay raise, annual bonus, stock grant or restricted stock vesting.   Before this extra income actually hits your bank account, take some time to consider the best use for these additional assets.  Otherwise, it is too easy for the additional dollars to erode away while they sit in your checking account commingled with your regular income. Tax Refunds: In the case of a tax refund, let’s first examine the circumstances surrounding a big refund.  If this is a rare occurrence, then you need to consider the best use for your one-time windfall.  This might include a contribution to a Roth IRA, rebuilding your emergency savings or setting aside for an upcoming car purchase. If a sizeable refund is an annual event for you, consider the following.  By withholding more tax than you need on all your paychecks throughout the year, not only are you forfeiting use of that money, but typically Read on! →