Useful Information “Nuggets” From 2023 Webinars

Every few months, I review my personal learning journal and summarize notes taken from various webinars. Below are 12 nuggets of information that I gleaned from 2023 webinars:

Getting Going- Some people procrastinate on saving for financial goals because goals seem too big and intimidating. Flip this around, focus on small do-able steps, and start doing something.

 

529 Plan Myth- Some people think having a 529 plan lowers chances for college financial aid. In reality, only 5.64% of parents’ 529 account balance is reported as an asset on FAFSA forms.

 

Savings Account Labels- Naming a savings account for a financial goal (e.g., vacation fund) and posting pictures of the goal can provide increased motivation and accountability.

 

Estate Non-Planning- More than 60% of Americans have no estate plan. #1 reason: thinking they don’t have enough assets. $70 trillion is expected to be transferred in the next two decades.

 

Property Transfers- There are 4 ways to transfer property: by contract (e.g., beneficiary designation), by law (e.g., joint tenancy with right of survivorship), by a trust, and by probate.

 

Debt Avalanche- This is where you list debts from highest interest (APR) to lowest and aggressively tackle high APR debt first by making extra payments beyond the minimum. With a debt snowball, you list debts by outstanding balance and pay extra on smallest balances first.

 

Workplace Roth Accounts- Effective January 1, 2024, no required minimum distributions (RMDs) are required from workplace Roth accounts (e.g., 401(k), 403(b), 457b, and TSP). This change, therefore, aligns workplace Roth account rules with Roth IRA rules.

 

Tax Uncertainty- The tax code is written in pencil. Income taxes are headed higher in 2026 if Congress does not pass a new tax law and the 2017 Tax Cuts and Jobs Act expires. This adds a sense of urgency to tax planning strategies such as Roth IRA conversions.

 

Romance Scams- These often start on social media and move to messaging apps. Soon, fraudsters talk about a future together (but they never meet) and then come requests for money.

 

Social Security Formula- Work in your late 60s and 70s can increase your Social Security benefit by replacing years with “0” earnings or low-earning years from your teens or early 20s.

 

Individualism- The U.S. is the most individualistic culture in the world. The opposite of individualism is collectivism (i.e., a high value on group work). Americans are expected to take care of themselves instead of relying on family members (although many eventually do).

 

Behavioral Finance- Three major behavioral finance biases are confirmation bias (seeking validation to support what you already believe), overconfidence (thinking you know more than you actually do and are “above average” compared to others) and loss aversion (feeling the pain of a loss more than the joy of an equivalent gain).

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.