Highlights of Recent Webinars

 

It’s that time again! Every so often, I like to review and summarize my notes from recent webinars and classes. Below are some interesting tidbits that caught my attention from recent programs:

Financial Education- Financial educators don’t teach content- we teach human beings- and our authentic self is an advantage. Share stories of your struggles as well as your successes to accrue trust over time. As Dr. Shaun Murphy noted in the final episode of The Good Doctor, “When you touch one life, you don’t just touch one life, you touch every life that that life touches.”

 

Cash Assets- The right amount of cash to hold in an investment portfolio is a personal decision. Ideally, this money is for emergencies and short-term goals. Some people hold much more than that in cash but the trade-off is losing an opportunity for growth. Ultimately, investors need to determine an asset allocation that makes sense for them, track it, and rebalance as needed.

 

Consumer Spending- When people feel comfortable with their finances, they spend more. Consumer spending has been robust because many older adults have paid off mortgages and many other homeowners have low-interest mortgages and are unaffected by current high interest rates.

 

Election Year Finances- The most important influence of Presidential elections on financial markets is policies that result from them (e.g., tax laws and retirement account rules) rather than elections themselves. In addition, financial markets are typically more affected by what Congress and the Federal Reserve do compared to the President.

 

Tax Planning- Run projections of next year’s tax liability and make fourth quarter adjustments, if necessary. SALY (same as last year) is rarely a good strategy. Good times to accelerate income to reduce taxes are early retirement years before required minimum distributions (RMDs) begin, sabbaticals with lower income, years with large losses, and the last year of filing a joint tax return.

 

IRMAA- About 8% of Medicare recipients pay a higher premium called the income-related monthly adjustment amount (IRMAA). There is a two-year income lookback so start paying attention to this at age 63. IRMAA is not a tax, per se, but it is a drag on older adults’ bottom line.

 

Financial “Rules”- Many financial “rules” (guidelines) are too deflating for people (e.g., saving three months’ expenses in an emergency fund). They feel like a failure, throw up their hands, and give up. It is far better for people to have a series of “small step” goals that they can succeed at.

 

Retirement Savings- The more money that people can save for retirement, the more likely they can replicate- or even exceed- their pre-retirement lifestyle. People are often amazed how much they can save when they put some structure in place and save automatically. Just remember that tax-deferred defined contribution plans and traditional IRAs are “a lifelong partnership with the IRS.”

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.