Financial responsibility isn’t always easy to learn, but it’s an essential part of taking control of your finances and using your income to its fullest. This responsibility can lead to better spending tendencies that can, in turn, help you pay off your debts faster and build up savings to protect you in the future. So if you’ve struggled to stay on top of your spending, here are a few key ways you can adjust your habits and mindset to better meet your financial goals.

Create and stick to a realistic budget

Budgeting is a great first step toward managing your finances. In fact, according to a survey conducted by the Certified Financial Planner Board, people who budget feel more financially secure and confident than those who don’t. When you budget, you’re being strategic with your spending and controlling where your money goes each month. Budgeting strategies like the 50/30/20 method—where 50 percent of your income goes toward necessary living expenses, 30 percent is spent on your additional wants like eating out and entertainment, and 20 percent is put directly into savings—can help you create a realistic budget and become more financially responsible and secure.

Keep all your monthly expenses in one place

It’s essential to know what bills you must pay each month and when they’re due since missing one can hurt your credit score and end up costing you more money. It’s a good idea to have a spreadsheet that lists all your recurring expenses and their due dates. If spreadsheets aren’t your thing, you can instead use an app like Mint or even just make a note on your phone to better track your recurring expenses. It’s also important to automate your payments so you won’t have to actively think about them. Whatever method you opt for, tracking bills and expenses can help you keep up with your spending and give you an idea of how much will be coming out of your account and when.

Start giving yourself a weekly allowance

Many people receive an allowance growing up, but this tends to stop when you’re an adult and start earning a paycheck. However, setting up a weekly spending allowance for yourself can help you cut back on excess spending. You can set aside cash for each week or simply have a set number in mind to put on your debit or credit card. Either way, an allowance shows you how much money to dedicate to lunches, coffee, home goods, and anything else that you might want to buy in a given week. Having a specific number helps you to say no to that extra dinner out and instead save money by making something at home. 

Consider saving as a payment to yourself

Setting aside a specific portion of your income each month can help you save for an upcoming trip, additional spending during the holidays, or emergency expenses. Putting money directly into your savings can give you a sense of security, so look at it as a payment to your future self. You’re preventing potential headaches down the road when it comes time to spend extra money on something, and you’ll be grateful that you had the forethought to put money away when you did. 

Plan for larger purchases

Before making an expensive purchase, be it for a new piece of furniture or a nice outfit, it’s important to think it through. You don’t want to make a rash decision, especially if the item far exceeds what you’re used to spending. Give yourself some time to consider the purchase and plan out how you’re going to save for it. You can set aside money every paycheck for the item, allocate funds outside of your usual savings, or, if you’re dipping into your savings, check to make sure the purchase won’t bring the total amount too low for comfort. Taking control of your spending is about being strategic with your purchases and giving big expenses more consideration than you may have in the past.

Pay off your credit cards every month

Credit cards can be a great financial tool to have, but paying off the full balance every month is an important part of being more financially responsible. Just as important, they often have high interest rates that can significantly increase your debt if you don’t pay the entire balance—so it’s important to manage them the best you can. If you find that you can’t pay the full amount each month, consider adjusting your spending habits. Instead of picking up coffee every morning, eating all your lunches out, or adding a new item to your virtual cart every day, you can save money by making your own coffee and lunches and cutting back on your online shopping. These expenses may not seem like a lot in the moment, but they can quickly add up and create a high monthly balance that isn’t always easy to pay in full.

Regularly review your spending

To make sure that you’re continuing to stay on top of your finances, you want to regularly review your spending. Look at your credit card statements and your savings and checking accounts, and see what you are spending your income on each month. Carefully reviewing your accounts can help you better understand your financial habits and see where perhaps you’re spending too much and need to cut back. It’s simply a way to hold yourself accountable, allowing you to adjust your spending accordingly.

By taking a few easy steps to better control your spending, you can manage your finances and become more financially secure.

This article was prepared by ReminderMedia.

LPL Tracking #1-05370392

Just as a winning team meticulously plans its Super Bowl plays, individuals and families may benefit from developing a comprehensive plan for their estate. Estate planning isn’t just for the wealthy. Estate planning is a strategic move for everyone to use that helps to see your wishes honored, your assets managed, and your loved ones taken care of. Here are a few benefits of having a well-thought-out game plan for your estate.

Define Your Goals

Just as a football team sets its sights on the Super Bowl trophy, individuals need to define goals for their estates. Whether preserving wealth, providing for family members, or supporting charitable causes, having a clear set of goals helps guide the process and lets you focus on your ultimate goals.

Manage Your Assets

In football, defensive plays try to prevent the opposing team from scoring. An estate plan also acts as a defense, managing your assets to avoid undesirable issues such as excessive taxation, attacks by creditors, and lawsuits. You could safeguard your wealth for future generations through mechanisms like trusts and strategic gifting.

Ensure a Smooth Transition

A well-executed game plan ensures smooth transitions between plays and helps your team adapt to unforeseen challenges. Likewise, an estate plan facilitates a seamless transition of assets to heirs, manages confusion, and lowers the risk of any potential disputes down the line. Having clearly outlined instructions on asset distribution, beneficiaries, and contingency plans could help you and your loved ones navigate any unexpected life events.

Quarterback Your Legacy

In football, the quarterback is the leader on the field, directing plays and making split-second decisions. Likewise, you can act as the quarterback of your estate plan, making critical decisions on important items such as a power of attorney, healthcare directives, and guardianship for minor children. Taking charge now is an opportunity to see your legacy unfold according to your vision.

Use Special Teams

In football, special teams play a targeted role in handling kickoffs, punts, and field goals. In estate planning, specialized tools like life insurance, charitable trusts, and family limited partnerships act as the “special teams,” providing additional avenues to help you work toward your financial goals.

Adapt to Changing Conditions

Just as a football team adjusts its strategy based on the game’s dynamics, an effective estate plan should be adaptable. Regular reviews and updates determine if your plan reflects changes in laws, family circumstances, and financial goals while allowing flexibility.

Avoid the Two-Minute Warning

In football, the two-minute warning signals the game’s imminent end, and teams must act quickly. Similarly, you shouldn’t wait until the last minute to create an estate plan. Procrastination may lead to missed opportunities and added stress for loved ones. Planning ahead can help put you more in control.

From defining goals and managing assets to quarterbacking your legacy, the parallels between a winning game plan and an effective estate plan couldn’t be clearer. By recognizing the importance of early and thoughtful planning, you could work to manage your financial future and your loved ones’ future and leave a lasting legacy that may even rival the triumph of a Super Bowl victory.

Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article was prepared by WriterAccess.

LPL Tracking #516318-04

While protecting your financial data has always been important, it grows even more critical as you start planning for retirement. From preserving your retirement savings to maintaining financial independence to avoiding stress, you want to keep all the assets you’ve accumulated by hard work. Here are a few steps you may take to protect your financial information now and in retirement.

Shred Sensitive Documents

Although most financial fraud is committed over the internet these days, some scammers still rely on old-fashioned approaches—and there’s no need to make it easier for them! Always shred financial statements, old tax returns, and any other documents containing personal or financial information before you dispose of them.

Secure Your Mail

On a similar note, you should have a way to secure regular mail, especially if it’s delivered to an unlocked mailbox. Be sure to collect your mail promptly to prevent theft of sensitive documents or financial statements. If you travel frequently and cannot get your mail the day it’s delivered, consider investing in a locking mailbox with a slot.

Secure Your Personal Identification

Keep your Social Security card, passport, and other sensitive identification documents in a secure place, such as a locked safe. Don’t carry these cards or documents in your wallet or leave them in your car unless absolutely necessary, such as when traveling.

Use Strong Passwords and Two-Factor Authentication

Create complex and different passwords for each financial account. Consider using a password manager to store and manage your passwords securely. Whenever possible, enable two-factor authentication for your online financial accounts. This adds an extra layer of security by requiring you to type in a code texted to your phone or sent to your email.

Beware of Phishing Scams

Always be cautious about unsolicited emails, texts, or phone calls requesting personal or financial information. One of a scammer’s most effective tools is a false sense of urgency. Financial agencies understand that you may need to verify that a request is legitimate. Scammers pressure you to make a quick decision by telling you your accounts will be locked, or your credit cards will be canceled if you don’t immediately comply with their requests.

Secure Your Devices

Protect your computer, smartphone, and other devices with strong, up-to-date security software. Encrypt your data and use screen locks with PINs or biometrics. Always avoid conducting sensitive financial transactions on public wireless networks. If you absolutely must use public Wi-Fi, use a VPN.

Consider a Credit Freeze

If you’re not actively seeking new credit, consider placing a credit freeze on your credit reports. This restricts access to your credit information, making it far more difficult for identity thieves to open new accounts in your name.

Taking these precautions can significantly reduce the risk of falling victim to identity theft as you approach retirement. Consider consulting with a financial professional to manage your accounts. Have them set up in a way that manages the risk of fraud and provides a secure transition into retirement.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was prepared by WriterAccess.

LPL Tracking #502472-03

When you think of identity theft, you may think of unauthorized credit card payments or new lines of credit. However, tax identity theft is one of the most common types of identity theft — and it’s also the most common fraud attempt during tax filing season.1

If your identity is stolen for tax purposes, you can find yourself waging battle on two fronts: against the identity thief and the IRS. Fortunately, protecting your tax identity doesn’t have to be difficult. Below, we explain a couple of ways you can theft-proof your ID.

Identity Protection PIN

The IRS can issue an identity protection pin (“IP PIN”) that will prevent anyone else from filing a tax return using either your Social Security number or your individual taxpayer identification number (“TIN”).

Only you and the IRS will know your IP PIN, and the identity verification process required to qualify for an IP PIN helps prevent fraud. Your IP PIN is valid for just one calendar year, and the IRS will generate a new PIN each year for as long as you’d like one.

To get an IP PIN, you can either confirm your identity through an online process or file an application in person at a local IRS office.2 Keep this PIN in a secure place, since entering the wrong IP PIN on your electronic or paper tax return will cause it to be rejected. Also remember that the IRS will never ask you for your IP PIN, so don’t reveal this PIN to anyone but your tax professional.

Identity Protection Software

Along with the IP PIN issued by the IRS, there are several different types of identity protection software that can prevent your SSN from being used anywhere without your consent. These programs will ensure you receive notifications whenever someone is trying to use your personal information for their own gain.

These programs aren’t specifically for protecting your tax identity, however; they will also lock your credit at credit bureaus to prevent others from taking out loans or lines of credit using your personal information. This means that whenever you’d like to apply for a new credit card or refinance your mortgage, you’ll need to have this credit lock temporarily lifted and then re-applied.

Because of the above factors, if you’d prefer to protect only your tax identity—not your total identity—an IP PIN may be the way to go.

Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 1-05345916.

Footnotes

1  “Identity Theft Reports by State, 20022,” IPX 1031, https://www.ipx1031.com/id-theft-by-state-2022/

2 “Get an Identity Protection PIN,”  Internal Revenue Service, https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

Do you consider yourself a high-net-worth individual (HNWI)? Most people tend not to categorize themselves or see themselves as anything more than a spouse, parent, sibling, neighbor, boss, or business owner. However, society does classify people. HNWIs typically have at least $1 million in cash or assets that can be converted to cash easily, which could make planning for retirement more complex. Organizing your financial life can seem daunting at first, so here are 6 ideas to help you get started.

1. Goal setting and money management

People of significant means are often interested in wealth preservation and growing their savings and investments. They are also noticeably concerned with the social impact their money will have on the world. According to the Oxford Press, wealth managers have shifted their focus from specific investment vehicles and strategies to a more holistic investment approach and goal setting. With goals in place, cash flow projections with inflation adjustments will be easier to design.

Historically, inflation averages around 2.5% annually; however, recently, this average has deviated. A financial professional can help you adjust your long-term strategy to include a rise in future inflation and assist with planning how to save enough money to stretch 30+ years without getting sidetracked by expenses such as college tuitions or weddings. Thirty-four percent of U.S. HNWIs claim retirement savings as a top goal, while 26 percent cite preserving wealth for their children as their highest priority. The reality is that creating a comprehensive plan can be challenging and careful planning is critical.

2. Max out your retirement accounts

A 401(k) can be a powerful tool. If you have access to a plan through your employment, it may be beneficial to max out your 401(k) each year and take advantage of any match offered by your employer. The contributions are tax-deductible in the year that they are made. Any money left over can be put into an individual retirement account (IRA), health savings account (HAS), annuity, or another taxable account.

Some retirement accounts have required minimum distributions (RMDs) which, by law, you must withdraw once you attain age 73. In some cases, you may be able to delay RMDs until after you retire if you are still working at 73. Other complexities may arise if you inherit a retirement account, but consulting a financial professional can help you determine how to proceed depending on your relationship with the account holder, the type of account, and the decedent’s date of death.

The following accounts generally required minimum distributions after a certain age:

• Traditional IRAs

• SIMPLE IRAs

• Inherited IRAs (typically, however, there are some exceptions)

• Simplified Employee Pension IRAs (SEPs)

• Qualified stock bonus plans

• Qualified pension plans

• Qualified profit-sharing plans, which include 401(k) plans

Section 403(b) and Section 457(b) plans

3. Stay up to date with tax law changes

• Estate and gift tax changes – As of January 1, 2023, the federal gift/estate tax exemption increased to $12,920,000, while the federal annual exclusion amount increased to $17,000 per person per parent. So, in effect, any individual may receive up to $34,000 per couple per year. Any amount over the $34,000 threshold can be put toward the lifetime exemption amount. Utilizing this benefit now may be a good idea as come January 1, 2026, unless Congress decides otherwise, these high exemptions are scheduled to sunset and return to the previous Tax Cuts and Jobs Act amounts.

• Modifications to charitable deductions – Currently, you are permitted to deduct 60% of adjusted gross income (AGI) for cash contributions held for over a year. For non-cash assets (property and long-term appreciated stocks), you generally deduct, at fair market value, up to 30% of your AGI for charitable contributions to an IRS-qualified 501 (c)(3) public charity if you select to itemize, which means forgoing the standard deduction. To account for inflation, the standard deduction is higher in 2023, up to $13,850 for individuals, $20,800 for head of household, and $27,700 for married couples who file joint returns. When you itemize, you should expect the sum of your itemized deductions to be greater than the standard deduction.

• Home sale exclusion for primary residence (Statue 26 U.S. Code 121) – Exclusion of gain on the sale of principal residence allows an exclusion of $250,000 (for individuals) and a $500,000 (for married couples) on home sale gains. People who own a home as a primary residence for at least two of the five years immediately before selling their home can qualify for capital gains tax exclusion. There are many moving parts and rules to this exclusion, and getting help from a financial professional is highly encouraged.

• The impact from Medicare surtax – Taxpayers that are above certain income thresholds of $125,000 (married and filing separately), $200,000 (single, head of household or qualifying widow or widower with dependent child), or $250,000 (married and filing jointly) may be subject to the Medicare surtax of an additional 0.9% tax rate. This can be a bit confusing. HelpAdvisor gives a good example; if you make $150,000 per year and are married and filing separately, you pay the standard 1.45% on the first $125,000 and 2.35% (1.45% + 0.9%) on the remaining $25,000.

• Other expenses that qualify for deductions along with charitable donations include:

• State and local tax

• Mortgage interest

• Medical and dental expenses

4. Confirm and communicate your charitable goals

• An estimated 95% of HNWI gives to charity. A financial professional will want to know the details about your philanthropy efforts to help you get the most out of your giving strategy.

o   How are you involved in a charity? Are you just a donor, or do you sit on the board?

o   Why do you support the charities that you do?

o   What types of assets do you typically donate?

o   Have you always donated, or do you plan to wait and donate after you die?

5. Create a withdrawal strategy

The question many retirees have is, “How do we deal with withdrawing our money when the time comes”? When it comes to your retirement, having a well-defined plan can help mitigate stress and frustration and potentially preserve wealth.

Some of the concepts you may want to explore include:

• Focusing on the lower tax brackets first – Typically, the income of a high net-worth individual will dip after you stop working. Depending on your age and other requirements, you can consider withdrawing from your IRA and paying the taxes at the lowest marginal tax rate, especially in that window before social security benefits kick in. And if you can, delay taking social security benefits until the maximum age, maximizing the amount you will receive.

• Review where your assets are located – Where are your stocks and bonds, for example, located? Are they in a tax shield IRA account where you may benefit because the bonds produce income taxed at ordinary income rates?

• IRA Conversion (Traditional IRA -> Roth IRA) and Recharacterization (Roth IRA -> Traditional IRA) – A potentially helpful strategy, albeit complicated, involves converting assets from an IRA to a Roth IRA in what is called a Roth conversion. You pay taxes on any assets converted, and money is withdrawn later tax-free. This strategy could be beneficial if you suspect you may be in a higher tax bracket in the future. A recharacterization is converting assets from a Roth IRA to a traditional IRA. So, for example, you convert assets to a Roth account, and the market happens to drop after your conversion. You can recharacterize those assets back to a traditional IRA, removing the tax liability resulting from the conversion.

• Don’t get bullied by the tax rates – You can’t predict the future of the tax rates and where you will be within them down the road. If taxes happen to go up, which they tend to do, then your tax-deferred money suddenly has less value than before since it gets taxed at a greater rate upon coming out of the account. Because this is possible, you should consult a financial professional and let them help you create a strategy that aligns with your financial goals.

6. Seek professional financial guidance

Managing your finances in an ever-changing world can be overwhelming, especially if you are someone with significant wealth. It would help if you had someone to guide you along your financial journey. Working with a financial professional can help you mitigate risk, consider options you might not have considered before, and stay aligned with your financial goals. Schedule a meeting with a financial professional and get the help you need to start your retirement planning journey today.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

An annuity is a financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

Sources:

Medicare Tax Rate 2023 | HelpAdvisor.com

For high-net-worth investors in America, planning is key to confidence in financial goals (rbcwealthmanagement.com)

How to Receive a Charitable Tax Deduction | Fidelity Charitable

2023 Tax Rules and Tips for Easier, Cost-Effective Charitable Giving | UNICEF USA

Tax Considerations for High-Net-Worth Individuals in 2023 – CPA Practice Advisor

High-Net-Worth Retirement Planning Guide – SmartAsset

You Can Contribute Even More To Your 401(K) In 2023, But Should You? (forbes.com)

High Net Worth Individuals and Donor Advised Funds (aefonline.org)

Avoiding capital gains tax on real estate: how the home sale exclusion works (hackyourwealth.com)

Guardrails Approach: A Flexible Retirement Withdrawal Strategy (cnbc.com)

LPL Tracking #1-05374400

Tax planning might be complex, but it’s also essential—especially for high-net-worth families, where missing tax breaks or failing to optimize income could cost significant dollars, maybe millions, over a lifetime. And even in the short term, with the highest marginal federal tax rate sitting at 37% for 20241 (plus additional state and local taxes), a lack of tax planning could mean you keep less than half of every dollar you earn. Here are four tax planning tips that may help you optimize your finances.

Allocate and Diversify Your Taxable Assets

High-net-worth families tend to have a broader range of assets than other families. These assets may include stock, real estate, alternative investments, businesses, and assets held in trust. By putting each asset in a helpful category for tax purposes, you’ll be able to manage your tax liabilities.

For example, many investors hold tax-efficient investments like municipal bonds, ETFs, and tax-managed stock funds in taxable accounts. Because these underlying investments are already tax-efficient, paying taxes on any earnings at year-end won’t take much of a bite out of your investment. Meanwhile, tax-inefficient investments (or those that tend to lose more of their returns to taxes) are possibly held in tax-advantaged accounts, like 401(k)s and IRAs, where you might be more strategic about when to take withdrawals.

Consider Other Tax-Efficient Investment Strategies

Along with effectively allocating your taxable assets, it’s important to take advantage of tax-efficient investment strategies, such as tax-loss harvesting, to offset gains with losses and manage capital gains tax. Consider investments that generate qualified dividends and long-term capital gains since these are typically subject to lower tax rates than short-term capital gains or regular income.

Plan Your Estate

Estate planning is important at all income levels, as it helps guide your assets to those you want to have them. But for high-net-worth families, creating a comprehensive estate plan becomes even more crucial, as estate taxes may come into play.

If you pass away in 2024 or 2025 and leave more than $12.92 million (the current exemption) to your loved ones, they may be required to pay taxes on any amount above this exemption. And remember, you are allowed to give your loved ones up to $17,000 per year (or $34,000 if you’re married)2 without it counting against this lifetime exemption, so feel free to begin transferring assets while still alive.

Shift Your Income

High-net-worth families may use income-shifting strategies to distribute income among family members in lower tax brackets. This might involve setting up family partnerships or trusts—but be careful about the “kiddie tax” rules that apply to unearned income for children under 18.

It’s important to remember that these are general guidelines, and tax planning should be tailored to your specific financial situation and goals. Because tax laws change almost every year, you must stay informed of these changes and adapt your tax strategy accordingly.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The tax-loss harvesting and other tax strategies discussed should not be interpreted as tax advice and there is no representation that such strategies will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing.

The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #502472-01

Footnotes

1 Get Ready: Sneak Peek Of 2024 Tax Rateshttps://www.forbes.com/sites/matthewerskine/2023/09/14/get-ready-sneak-peek-of-2024-tax-rates/?sh=3ccb57e54912

2 The Estate Tax and Lifetime Gifting https://www.schwab.com/learn/story/estate-tax-and-lifetime-gifting

Whether you are just entering your golden years or are already several years in, setting goals to stay on track and maintain your health, happiness, and finances is essential. So why not use the New Year’s holiday to turn these goals into resolutions you will work on for the upcoming year? Ready to get started tackling some new goals to help improve your mind, body, and finances? Below are a few resolutions worth considering.

Create a Budget

Creating a new budget each year is an excellent idea as it will allow you to review your expenses and income, see areas where you may need to cut back and determine if your current budget is working or is time for a little revamp. If you have not created a budget before, you will need to write down all of your monthly expenses and your monthly income. It may be beneficial to list your monthly costs in order of importance if you need to find places to trim some excess. Ensure to include everything, including the money you put away in monthly savings and money allocated for clothing and entertainment.1

Get Active

Staying active is vital to physical and mental health, but as you age, you may become less active than before. Even if you have physical limitations, you will still be able to find some way to stay physically active. Enjoy daily walks or go swimming when you have the chance. You may also want to consider physical hobbies and sports that interest you, such as golf or tennis. Sports are a great way to stay physically active, get social interaction, and stay mentally sharp.2

Review Your Insurance Policies

Your insurance needs will change over time, so giving them the once-over each year is an excellent practice to make sure you have the coverage you need for each stage of life you are at. Ensure you have enough coverage and the correct coverage so you don’t have a significant financial burden after a loss.1

Stimulate Your Mind

A healthy mind leads to a healthy body, and for many, as they age, mental stimulation is less common in their day-to-day life. Consider joining a group such as a book club or gaming club where you will be able to enjoy activities that stimulate your mind and also provide you with social interaction.2

Review Your Estate Plan

Estate planning is an important piece of retirement planning. Without a plan, you may find that your final wishes are not fulfilled or that an undue burden has been placed on your family, who may have to make medical and financial decisions without knowing what you would want. If you don’t have one in place, now is the time to have one created. If you currently have one, ensure it still aligns with your current situation and wishes.2

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

 All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #490820-01

Footnotes

1 “12 Financial New Year’s Resolutions for 2023,” US News Money, https://money.usnews.com/money/personal-finance/saving-and-budgeting/slideshows/financial-new-years-resolutions

2“Tip Sheet: Top 10 Healthy New Year’s Resolutions For Older Adults, Healthy Aging.org, https://www.healthinaging.org/tools-and-tips/tip-sheet-top-10-healthy-new-years-resolutions-older-adults

In Charles Dickens’s timeless classic, “A Christmas Carol,” Ebenezer Scrooge transforms from a miserly old man to a generous and empathetic soul. Along the way, he encounters the Ghosts of Christmas Past, Present, and Yet to Come, who reveal important lessons about life and, surprisingly, financial planning. Join us on a journey through Scrooge’s experiences to learn valuable financial lessons regarding the past, present, and future.

The Past: “Financial Regret and Missed Opportunities”

In the first part of Scrooge’s journey, the Ghost of Christmas Past shows him scenes from his earlier years. Scrooge witnesses moments of missed opportunities and poor financial decisions, like turning down his nephew’s invitation to celebrate Christmas or neglecting to help those in need. These glimpses from his past remind us of essential financial planning lessons.

Opportunity Cost

Scrooge’s obsession with money causes him to miss life’s most precious moments. The lesson is that financial planning should balance saving/investing for the future with enjoying the present.

Generosity Pays Off

Scrooge’s transformation began when he realized the joy of giving. Charitable giving may benefit others but also bring personal fulfillment.

The Present: “Finding Joy in Financial Balance”

In the second part of his journey, Scrooge is visited by the Ghost of Christmas Present, who shows him the joyous celebrations of others, including the Cratchit family. Despite their meager means, the Cratchits find happiness in their modest Christmas feast and love for one another. From the present, we may learn these lessons.

Family and Relationships Matter

Money should not be the sole focus of our lives. Building and nurturing relationships with loved ones can bring lasting happiness that no amount of wealth can replace.

Living Within Your Means

The Cratchits make the most of what they have. Living within your means and budgeting wisely is crucial for financial stability.

The Future: “Consequences of Neglected Financial Planning”

Finally, Scrooge is confronted by the foreboding Ghost of Christmas Yet to Come, who shows him a future where his death is met with indifference and scorn. This bleak vision is a stark reminder of the importance of long-term financial planning.

Estate Planning

Scrooge’s neglect of estate planning led to a chaotic distribution of his wealth. Proper estate planning ensures that your assets are passed on to your chosen beneficiaries as you wish.

Preparing for the Unexpected

The future is uncertain, but investing wisely, having insurance coverage, and saving for retirement may help you prepare for life’s twists and turns.

Just as Scrooge’s journey led to his character’s transformation, it also offers valuable financial planning lessons. From the past, we learn to seize opportunities and embrace generosity. In the present, we find the importance of balancing economic goals with life’s joys. And in the future, we are reminded of the need for careful planning and preparation.

Let’s take a page from Scrooge’s book this holiday season and consider the financial lessons that Dickens cleverly wove into his tale. May your financial journey be balanced, generous, and prepared, ensuring a brighter future for you and those you care about.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

This article was prepared by WriterAccess.

LPL Tracking #490820-02

The holiday season is a time of joy and headaches, celebration, fatigue, and togetherness mixed with a few knock-down drag-out fights. On top of the emotional rollercoaster ride can come a big wallop of financial stress. From buying gifts to hosting parties and traveling to see loved ones, plus filling up a cabinet with booze, expenses can quickly add up, leaving many overwhelmed.

However, with careful planning and a few practical strategies, you may manage your finances, keep all your hair, and enjoy the holidays without breaking the bank or accumulating excessive debt. Here are five strategic to-do’s that are worth considering.

To-do Number One — Create a Realistic Budget

The emphasis is on being realistic instead of maxing out your credit cards. Start by listing all the holiday-related expenses you anticipate, including gifts, decorations, travel, and hosting expenses if you’re entertaining guests. Be sure to account for any regular monthly bills and ongoing commitments.

Once you estimate your anticipated expenses, set a spending limit for each category. You might allocate more funds to the most important aspects of the holidays, such as gifts for loved ones. However, a thoughtful and meaningful gift doesn’t always have to come with a hefty price tag. Cut back on less essential items like an out-of-this-world outdoor holiday display that makes the energy bill sky-high.

To-do Number Two — Start Saving Yesterday

Procrastination may lead to last-minute financial stress. Start saving for the holidays well in advance. Open a separate holiday savings account. Even small, regular contributions add up, perhaps making a significant difference when the holiday season arrives.

Consider automating your savings by setting up direct deposits or automatic transfers to your holiday fund. This way, you won’t be tempted to spend the money on other foolish things, and you’ll have a financial cushion when the holidays arrive.

To-do Number Three — Creative Gift-Giving

Gift-giving is a cherished holiday tradition but may also be a significant source of financial stress. To alleviate this pressure, consider more creative and budget-friendly gift-giving options.

Create thoughtful and personalized gifts such as handmade crafts, baked goods, or photo albums. Suggest to friends and family that you draw names and only buy a gift for one person rather than purchasing something for everyone. Establish a cap on how much you and your loved ones spend on gifts to keep expenses in check. Instead of physical gifts, consider gifting experiences like concert tickets, a cooking class, or a spa day.

To-do Number Four — Sales and Discounts are Your Friend

The holiday season is known for its numerous sales and discounts. Keep an eye out for Black Friday and Cyber Monday deals and pre-holiday sales. Make a list of the items you need to purchase and research prices to help get better deals.

Additionally, consider using cashback and rewards programs credit cards offer to save money on purchases. Pay off your credit card balance in full before interest charges apply to avoid accumulating interest charges.

To-do Number Five — Manage Expectations

The pressure of high holiday expectations may drive you to financial stress. To alleviate this, open a line of communication with your loved ones about your budget constraints. It is OK to admit you’re broke. Explain how you’d like to enjoy the holidays without so much focus on material things.

Encourage friends and family to participate in budget-friendly activities or opt for more meaningful, non-material gifts. You may manage to foster a spirit of understanding and a true holiday spirit of being grateful for what you have.

This article was prepared by WriterAccess.

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In the world of investing, the “holiday effect,” as it is often referred to, is a phenomenon where stock prices see an increase right before a major holiday. There are many theories on why this may occur. It could be from trading volume being down due to investors taking a vacation or maybe because investors are becoming more averse to risk during the holiday season and off-loading their riskier investments.

No matter the cause of this uptick, it is essential to be prepared for it and follow simple dos and don’ts when investing during a holiday.1

Do Focus on Long-Term Wealth Building

Investing and risk come hand in hand, so while it is essential to only risk within your comfort level, you need to weather some short-term fluctuations that come with the holiday to stay on the path toward more considerable future gains. Riding out the “holiday effect” and sticking to your long-term wealth-building plan is the ideal course of action to keep you on track to work toward your future financial goals.1

Don’t Attempt to Time the Market

Since the holiday season is often considered a more volatile time in the stock market and a time when your mind is focused on other issues, you don’t want to attempt to anticipate how your stocks may perform during this time. Trying to do so may result in heavier losses as the seasonal effects are likely temporary. Avoid the impulse to suddenly change your portfolio unless it was already planned as part of your long-term investing goals.1

Don’t Base Your Risk on Daily Volatility

Your portfolio should be set up to weather certain periods of volatility. That being said, risk tolerance may change over time, and you may find your portfolio riskier than you are currently comfortable with. While there are easy ways to lower the risk of your portfolio, it is essential to consider how you define your risk. If you measure risk based on daily volatility, you may play it too safe to work toward your long-term financial goals.

The holiday swing may produce greater volatility than you are used to, which may cause you to make moves that may hurt your financial future when the better course of action may have been to stay put where you are.2

Do Plan a Reassessment After the Holidays

After the “holiday effect” has subsided and the effects of trading volume or risk aversion have lessened, it is a good idea to reassess your portfolio and make sure that it still involves the amount of risk you are comfortable with, the mix you want to have, and the potential return to help you with your long-term financial goals. It is the perfect New Year’s resolution and will help you stay on track with your goals.2

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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Footnotes:

1 How the stock market behaves during the holiday season, Fortune https://fortune.com/recommends/investing/how-the-stock-market-behaves-during-the-holiday-season/

2 8 Do’s and Don’ts During Market Volatility, US News Money, https://money.usnews.com/investing/buy-and-hold-strategy/slideshows/8-investing-dos-and-donts-during-market-volatility

Loss aversion, or the phenomenon of experiencing losses much more severely than gains, can lead to unwise investment decisions. Whether you’re hanging on to a loser of a stock for longer than you should or are afraid to invest at all for fear of purchasing at a high point, making emotion-based investment decisions could mean leaving money on the table.

Below, we discuss how fear and anxiety can negatively impact your investing decisions, as well as some steps you can take to minimize this impact and reduce the stress of investing.

How Loss Aversion and Other Fears Can Impact Investing

Fear of losing your hard-earned money may lead to irrational behavior and bad decisions. In behavioral psychology, loss aversion is incredibly common; this means that most people will be more upset about losing $100 than they would be happy to find $100.

For investors, this means you could find yourself hanging onto an investment you’ve lost money on, despite the opportunity cost of having that money tied up, just because you don’t want to cash out and realize the loss. This not only risks a further decline in the investment, but it can also prevent you from allocating these funds in a wiser way.

Loss aversion also comes into play during recessions, depressions, or other volatile markets. No one wants to lose money on an investment, so the temptation to cash out when the market is on a downswing can be overwhelming. However, this also may mean that you may be equally reluctant to re-enter the market when it’s back on an upswing. This approach has a double negative impact: instead of buying low and selling high, you’re selling low and buying high.

How to Manage Emotional Investing

Investing with your heart instead of your mind could result in losing money. Instead of letting emotions drive your investment decisions, try the following strategies:

• Review asset allocation. If the way your funds are invested no longer meshes with your risk tolerance and investment timeline, rebalancing your funds could help avoid making snap decisions.

• Consider a buy-and-hold or “set it and forget it” approach. The more closely you monitor your investment balances, the more tempted you may be to take action. By checking investments periodically to ensure they still fit into your desired asset allocation, then consciously leaving them alone until the next scheduled checkup, you should be able to reduce a great deal of financial stress.

• Work with a financial professional. Having a financial professional on your team can make investing less scary and provide an appropriate check on your decision-making process. A financial professional can help talk you through investing decisions to make sure they make logical sense and fit into your overall wealth-building strategy.

• By focusing on rational, prudent trading strategies, you can mitigate many of the most common traps that can arise when loss aversion and other psychological phenomena may impact your judgment.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Asset allocation does not ensure a profit or protect against a loss.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

This article was prepared by WriterAccess.

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