Is How You Use Your Money Aligned With Your Values?

A hamster in a wheel.

Have you ever watched a hamster running in a wheel? All that running, all that effort, day after day after day … But the poor little critter never really gets anywhere, does he?

Many of us feel the same way about our money.

More specifically, we feel that way about the work we do to get that money. We spend forty hours every week on a wheel, running after a paycheck. And then, first thing Monday morning, we’re back on the wheel, and the whole thing starts over again.

Many folks just keep repeating this cycle, over and over, until they finally retire. They think that stepping off the wheel just isn’t an option because they have bills to pay, college expenses to save for, and a dream to be “financially set” before retiring from work. It begs the question if he we use our money is aligned with our values.

How much is enough?

These are all persuasive arguments that keep people on the wheel. And the hope is that someday, you’ll be able to stop running and enjoy the fruits of all that hard work.

Unfortunately, more often than not, “someday” never comes. If your focus in your work and in your financial planning is just having enough money, you’ll never feel like you have enough. There’s always another dollar to chase, another way to economize so that you can save more.

But for what? Is having more and more money, in and of itself, something that you really value? Does having more make running on the wheel worth it?

You might think that this “never enough” mentality ends once a person retires. In fact, it just transitions into a new, related worry: “Am I going to run out of money?” Again, that “someday” gets pushed back in favor of more saving, more super-conservative living. You might not be working any more, but you’re still just chasing after money.

The wind in your sails.

At the end of the day, your money is not the shore we’re sailing for. It’s not the sea you’re sailing on. It’s not even the boat you’re steering.

Your money is the sail. It’s the tool you use to get where you want to go.

And the wind in that sail is your values.

Just like a good sailor learns how to maneuver the sails to catch the most wind, aligning what’s most important to you with your financial resources is the key to successful financial planning.

So instead of asking yourself if you have enough money, or if you will run out of money, ask yourself a better question:

Am I managing my money in a way that’s improving my life?

We don’t want you just to “have enough money.” We want you to live the best life possible with the money you have.

That starts with thinking about what’s really important to you. The people whom you love. The causes that are dear to your heart. The activities that keep you feeling fit and full of energy. The hobbies that put your unique skills to their highest uses. The opportunities for learning and self-discovery that enrich your understanding of the world and of yourself. The wisdom that you will pass down to your children and grandchildren so that they live their best possible lives as well.

We believe that aligning your financial plan with these values is every bit as important as analyzing your tax situation or managing your investments. Come in and see how our interactive tools can you help plan for your whole life and get more from your money than just more money.

For more resources to help you align your money with your goals, and increase your return on life visit our video library.

4 Ways to Feel More “At Home in Your Home”

4 Ways to Feel More “At Home” in Your Home

Lou Desepoli, President & Founder of Heritage

Do you feel “at home” in your home?

Your home is often the biggest financial purchase you’ll ever make. But is it also giving you the emotional payoffs you hope for?

Your home is an important part of your financial plan because we have to consider your rent or mortgage, utility bills, maintenance, and taxes as part of your monthly and long-term financial picture. But to get the best life possible with the money you have, your home should also be a safe place that makes you feel comfortable and relaxed.

Here are four things to consider when trying to make your residence feel more like home.

Your personal touches.

In this age of social media humblebrags and free two-day delivery, it’s never been more tempting to get sucked into “Keeping up with the Joneses.” But if you’re always trying to surpass you neighbor’s latest big splurge, you won’t be creating a space that’s truly yours. You’ll just be buying a copy of someone else’s idea of home.

Forget about the celebrity Instagram boards, and instead think about how to make your house reflect your family’s passions and stories. Turn an unused bedroom into a crafting workshop or personal study. Bring those old family photo boxes down to a framer and breathe new life into your walls. Brighten up shelves with mementos from favorite trips.

If you’re considering additions or backyard amenities, try thinking about these changes in terms of the experiences they can create for you and your loved ones. Sure, a swimming pool sounds nice. But a new deck and some green space might be a more versatile and welcoming environment for big family parties. Upgrading your kitchen might allow your inner gourmand to blossom into a truly talented cook.

Or maybe you create a personal space at a second home, like a lakeside cabin for fishing trips, or a condo with access to world-class golf and tennis.

Your personal comfort.

Sometimes less flashy upgrades to your living space have the biggest impact. A brand-new mattress isn’t as exciting as a backyard hot tub, but you’re certainly not going to spend 8 hours every day soaking!

If you’ve been sleeping in the same bed and slumping on the same couch for close to a decade, do some furniture shopping. Get some new pillows and sheets, or an ergonomic computer chair. These improvements aren’t just cosmetic – they’ll help you rest better and feel better.

Many of us also live with little quirks that have a negative impact on how we feel about our homes: that room in the back that doesn’t get warm enough in the winter, a leaky faucet, a living room with enough lighting for TV but not enough to read by, that nightmare hallway closet that’s going to explode someday. Minor household repairs and good old-fashioned spring cleaning can bring some welcome calm to the clutter we all accumulate.

Your personal geography.

Real estate pros like to say the three most important qualities in a home are: location, location, location. But the perfect spot for your first home out of college might not be the perfect place to get married, raise kids, and start your own business. Once your kids move out of the house and have families of their own, your feelings about where you live might change yet again.

Your home city or state might become more or less appealing to you over time as well. Beloved businesses and restaurants close. New establishments take their place. Friends come and go. The cost of living can fluctuate.

If your community no longer provides you the same comfort, activities, social circle, and engagement that it once did, it might be time to consider a move. This could be another reason to explore buying a second home for extended weekends closer to your family or vacations that allow you to explore your passions.

Your personal journey.

As your life changes, your experience of home will change along with it, especially as retirement nears. The big family homestead might become a difficult empty nest for you and your spouse to maintain as you age. The familiar comforts of home might start to create a restless sort of discomfort. You might feel drawn to new places, new people, and new experiences to keep your golden years fresh and stimulating.

Or, like more and more retirees, you might decide that your current home truly is where your heart is. You might “retire in place” and give your current home some TLC that will prepare it for the next phase of your life.

So what does “home” mean to you? Make an appointment to come in and talk to us about creating a financial plan that will provide you with as much comfort as your favorite reading nook.

You can make request an appointment with us by clicking HERE

For more great resources from the AARP, check out their website.

Savings: Does Your Desire to Save Match Your Reality?

Mike Desepoli, Heritage Financial Advisory Group

“The only money that’s really yours is the money you spend.

Everything else goes to somebody else.”

-Teddy Chafolious

That piggy bank we remember from childhood wasn’t just a place to store our birthday money and spare change: it was a lesson, a way our parents encouraged us to get into the habit of saving. Many parents even go so far as to deposit half of any monetary gifts their children receive directly into a savings account, just to drive the point home. Adults who took that lesson to heart might set up automatic deposits into long-term savings or retirement accounts from their paychecks every month – a modern mechanism for implementing this age-old lesson.

But the quote from Teddy Chafolious raises an important point: What are we saving FOR? Many new investors come to their financial advisors with a number in mind: “I want to save $1 million before I retire.” There’s even something of a fad among millennials who work as hard as they can, save as much as they can, and try to retire before age 50.

But why? After all, “you can’t take it with you.”

It’s important to have financial goals, and committing to a regular savings plan is good first step towards achieving them. But if you treat your long-term financial planning as just a series of targets to hit, or numbers you have to drive up as much as possible, your return on investment is going to be a lot higher than your Return on Life – the feelings of happiness and fulfillment that your financial planning should provide you.

How much are Americans saving?

According to the US Bureau of Economic Analysis, Americans today are saving a lot less than they have in years past. Personal savings in the United States averaged 8.29 percent from 1959 until 2017. The rate for 2017 is hovering around 3 percent. Experts tie this historically low savings rate to increased household spending, which continues to outpace wage increases, and high levels of revolving debt, like credit cards.

Figures like these drive many people to the opposite end of the spectrum: they save as much as they possibly can, especially if they’re nearing retirement.

Finding balance.

We tend to think that the person saving more is doing a better job of managing his or her money than the person saving too little. But neither extreme is going to maximize your Return on Life. Spend too much enjoying the now, and you might end up having to work much longer than you want to – maybe even all the way through retirement. Save too much too early, and you and your family might miss out on the experiences that you deserve to enjoy with your hard-earned money: big family vacations, a new home, creature comforts, entertainment and culture that will enrich all of your lives.

Worse, new retirees who have spent their lives stuck in “savings mode” often have trouble transitioning to the reward mentality that should provide for a meaningful retirement. These retirees worry so much about running out of money that they often neglect their own wants and needs, to their emotional and physical detriment.

Reality check.

So how do you find that balance between enjoying today and preparing for tomorrow?

First, ask yourself if your rate of savings is in line with your reality. Are you saving so much that you’re not enjoying life as much as you could be? Or are you hovering around that 3 percent savings figure, telling yourself that you’re putting enough money away when you know, deep down, that you’re not?

Next, make an appointment with your Advisor to talk about your financial goals, and your vision for a dream retirement. Work together to find that saving/spending balance that’s going to align your savings with your reality, and hopefully, your goals and dreams. Find that sweet spot, and your money won’t just be numbers on a balance sheet. It will be yours. Don’t have an advisor? Here is a helpful article to show you what to look for.

When Was Your Last Financial Check Up?

The Importance of an Annual Financial Check Up

By Kristi Desepoli, Heritage

It’s crazy to sit back and think about everything that can happen in a year. With all of the curveballs that life throws your way, it’s important to adjust accordingly. When it comes to financial success, it’s critical to have a plan in place and make adjustments as things change. What may have been important last year, may not be as important this year, and it’s imperative to assure your plan aligns with what is significant to you and your goals.

Here are three reasons why an annual financial check up should be at the top of your to-do list:

Your retirement plan may no longer reflect your goals.

Along with everything else, our priorities tend to change. What many see retirement looking like at one point, can often change drastically after the addition of grandchildren, real estate purchases, or any other major life-changing event. Even in the event that your goals remain the same, and no major life changes occur, sitting down annually to review and make any necessary adjustments is critical in assuring that your retirement dreams become a reality.

Your insurance needs and beneficiaries may need to be updated.

Insurance can serve as a great protector against the unexpected, but it is always smart to sit down and take a look at your needs annually. Make sure that you have the proper amount of coverage in all of the right places. For example, when it comes to life insurance, as your family grows it may be best to increase your amount of insurance to protect your loved ones. Additionally, although most people typically make changes to their wills after major life changes, more often than not other accounts get overlooked when it comes to those changes. Assets in retirement accounts pass directly to the beneficiaries that you designate within the account. Because of this, it is vital that you review your beneficiaries annually to be sure they are up to date.

Your investing goals might have changed.

Since our priorities change from time to time, during your annual financial review it is important to evaluate your current investment strategy. If things have changes, you can be sure to make adjustments as necessary. Even in times where your goals may have remained steady, it is vital to also look at different economic factors. Real estate conditions, interest rates and inflation, all determine whether your portfolio needs adjusting based off of those factors.

For more information on financial wellness check out The #AskTheAdvisor Show Episode 22

Majority of Americans Living Paycheck to Paycheck

By Kristi Desepoli, Heritage Financial Advisory Group

Making ends meet seems to be a struggle for most people these days, no matter how much they seem to be earning.

According to a recent report from CareerBuilder, seventy-eight percent of full-time workers said they live paycheck to paycheck, which is up from seventy-five percent just last year. From a debt perspective, last year sixty-eight percent of U.S. workers overall said they were in debt, which has risen to seventy-one percent for this year’s research. Only forty-six percent say that their debt is manageable, while fifty-six percent say they are in over their heads.

These issues are no stranger to those making over six figures either. About 1 in 10 of those making at least $100,000 said that they live paycheck to paycheck, with fifty-nine percent of them claiming to be in the red.

Most financial professionals would advise saving at least a six-month cushion for emergency purposes to take care of any unexpected expenses- such as car repairs or medical expenses. However, if you are a business owner or head of the household, six months may not be enough. Household incomes have been growing over the past decade, however they have not been able to keep pace with the rise in cost-of-living expenses over that same time period.

What about savings?

Surprisingly, about fifty-six percent of people save $100 or less per month. Many claimed they have cut back on their 401k contributions and personal savings in the past year, with about one-third of workers who have not been putting money away for retirement at all. Although not entirely to be blamed, personal responsibility has played a huge role in Americans’ financial problems. The surveys have found that only one-third of workers actually stick to a budget.

With the statistics rising over time, it can be hard not to fear that these circumstances may affect your financial future. With a sound financial plan and a strategy to reach your goals, both present and future, you can feel confident that you are prepared for what lies ahead.

5 Cost Saving Tips for Business Owners

Every small business owner is concerned about retaining profit, and how to make their bottom line grow. One of the ways that small business owners are able to run their business in a profitable manner is by strategically apply cost-saving practices.

Here are five cost-saving tips for small business owners:

Seek Used Equipment

One of the big ways that businesses can save money is by purchasing used or refurbished. When looking to replace electronics, such as a printer or copier, it is always smart to research refurbished options. In most cases, these items have been repaired or had parts replaced, and typically come with some type of warranty. When in the market for office furniture, there can be a huge price savings between new and used.

Teleconference

Meetings can be costly, and really add up quicker than you realize- especially when they aren’t local. Rather than spend the extra money on travel and hotel-stay, opt for a teleconference. Many different providers offer teleconferencing services- both for conference calls, as well as video. This can be a great option to help save both money and time.

Reduce Paper Use

Not only is cutting down on paper use good for your company’s bottom line, but also for the environment. A few ways to implement this includes: printing/copying double sided, reusing wasted paper for notes, and customizing margins to get the most printed on one page.

Pay Invoices Early

Many different vendors offer discounts to incentivize businesses to pay invoices early. The most common offer would be a 2% discount off of the total when businesses pay in full within the first 10 days of the 30-day window. This can provide a huge cost-savings to businesses.

Utilize Social Media for Advertising

In comparison to traditional advertising, such as television commercials and billboards- social media advertising can be just as effective and much more affordable. The cost to run an ad can be significantly less expensive, and producing the ads is also relatively cheap. It is also very popular to utilize social media for advertising without actually paying for promoted advertising space. With time and effort, you can build a following organically to reach many current and prospective clients without actually spending any advertising dollars.

About the Author

Kristi Desepoli is an associate financial advisor at Heritage Financial Advisory Group. Heritage specializes in investment management and financial life planning for business owners, executives, and doctors.

Retirement Income – Do You Have Enough?

Here’s a million dollar question: How will you transform your savings into income that will last throughout your retirement?

There are probably as many answers to that question as there are retirees. However, all retirees may rely on some of the same income sources and strategies. For instance, we all hope Social Security benefits will provide a portion of our income during retirement. Many people plan to combine those benefits with other sources to generate a reliable stream of income over several decades. As a result, they plan on having several income sources. These sources include:

Social Security Benefits

The Social Security Administration estimated the average monthly Social Security benefit paid to retired workers in January 2017 to be $1,360. The maximum benefit paid at full retirement age (FRA) is estimated at $2,687. Talk with your tax or financial professional about whether you’re likely to owe taxes on your benefits.

Make sure you know your FRA. For Americans born between 1943 and 1954, FRA is age 66. However, if you were born in 1955, FRA is 66 years and 2 months. The FRA increases (in two-month increments) until age 67, which is FRA for Americans born after 1960.

Employer-sponsored Lifetime Income Solutions

It’s likely the vast majority of your retirement savings are invested in your 401(k) plan or another employer-sponsored plan. Consequently, some of these plans offer lifetime income options that are intended to help plan participants create streams of income. For instance:

Systematic withdrawals

Are offered by 73 percent of plans. Many plan sponsors offer systematic withdrawal options that allow participants to take regularly scheduled distributions from their accounts. Depending on plan provisions, payments may be made in specific dollar amounts or determined by a set withdrawal percentage or a specific period of time. In some plans, participants are provided with modeling tools to help them determine payment amounts. Furthermore, participants can choose to work with a financial professional to determine how much to take each year.

In-plan managed payout options

are offered by 15 percent of plans. These investments are usually managed to “provide sustainable retirement income, either over a fixed time horizon or over the lifetime of the investor.” Income is not typically guaranteed.

Qualifying longevity annuity contracts, or QLACs

are deferred income annuities that begin making required payments no later than age 85. Retirees who want reassurance they will not outlive their savings may want to consider investing a portion of their savings in a QLAC.

Health Savings Accounts (HSAs)

HSAs should not be confused with flexible spending accounts (FSAs). They are not the same. You must participate in a high-deductible health plan to have an HSA, and you can contribute more to an HSA than to an FSA. Contributions are tax-deductible, interest and earnings may grow tax-free, and distributions are tax-free for qualifying medical expenses.

Best of all, you can accumulate assets into retirement and use your HSA as a healthcare fund. Distributions used to pay for healthcare are tax-free, and those used for living expenses after age 65 are penalty-free.

Individual Retirement Accounts (IRAs) (Traditional, Roth, and other types)

Many people have substantial assets tucked away in IRAs. They can be systematically withdrawn, invested for income or growth, used to purchase annuities, or utilized in other ways. Your age and the type of IRA you have may affect the role it plays in your retirement income strategy. Many people choose tax-efficient retirement income strategies, which means they try to minimize taxes during retirement. Tax-efficient strategies typically affect the order in which assets are withdrawn.

The strategy you choose to create retirement income should be tailored to your specific lifestyle and financial goals. As a result, it should also balance the level of risk you’re willing to accept against the level of income needed. If you would like assistance formulating your retirement income strategy, please contact your financial professional.

25 Ways to Save Hundreds on Your Holiday Shopping

Tips to Save Hundreds on Your Holiday Shopping

You’re not alone. A recent study found that 39% of Americans feel pressured to spend more than they can afford during the holiday season.

That’s no wonder, with the average U.S. adult planning to drop $830 on Christmas gifts this year, and 30% of people planning to spend upwards of $1,000, according to a November poll.

To help you make the most of every gift-giving dollar, we’ve asked shopping experts for their smartest strategies. We will explore how to score deals and outsmart retailers at their own tricks. Here are many ways to save during this years shopping season.

1. Track the items you want

One of the easiest ways to save is to avoid impulse buys. Start by making a gift list, then comparison-shop . You can also use price tracking tools to see the highest and lowest prices an item is currently selling for. That way you know whether to whip out the card now or wait till closer to Christmas.

2. Set up price alerts

Want something that’s still too pricey for your budget? Use the web to set up email alerts that will notify you when the price drops.

3. Ask for a price match

Once you know the lowest price an item is selling for, ask your local merchant to match it. Most stores will price-match with their direct competitors. You can even compare prices while you’re out shopping by using mobile apps like Price Grabber or Shop Savvy.

4. Shop from a cash-back site

Plenty of websites will give you cash back for shopping at certain retailers as long as you enter the shop’s site through them first. You’ll typically get between 1% and 5% of the purchase back, though sometimes retailers will run specials that bump that figure up to 20%.

You may have access to a similar deal through your credit cards. Discover’s Discover Deals program, for example, includes several retailers who offer between 5% and 15% cash back when you click through Discover’s site to the retailer. As with the sites above, these offers are on top of your usual credit card rewards.

5. Subscribe to store emails

It can be well worth the spam to sign up. Major retailers offer special loyalty coupons and early sale access to frequent customers. Just keep in mind that come-ons for 40% off clothing or housewares could cause you to ramp up spending even as you hunt for bargains. Avoid the temptation by keeping these emails in a separate folder that you check only when you actually need something.

Retirement Strategies: 4 Things You Can Control

4 Things You Can Control In Retirement

Retirement is supposed to be an exciting new chapter in our lives. We’d like to think we can live well within our means once we stop working. But when we hear that most Americans will never be able to retire, our alarm bells go off – even when the rational side of our brain tells us to stay calm, that things will work out.

It doesn’t help to realize how much of the situation is completely out of our hands: Ordinary individuals can’t change the direction of interest rates or stock prices. All the same, we have more control over how our retirement will play out than many people think, even as it’s about to start. Four decisions you can make yourself can have a huge impact on how comfortable you will be in this next chapter of your life. They have nothing to do with the stock market or the economy.

Timing for Retirement Success

Knowing where you stand financially, then using those data as a starting point, will help you figure out when to trigger each of these four events. Timing is everything.

When to quit working

Work out the math, or consult a fiduciary financial advisor who specializes in retirement income planning, to determine when or if you can stop working. Work doesn’t have to be a grind if you do something you truly enjoy. It doesn’t need to be full time either. The longer you can bring in outside income, the longer you can leave your own savings alone to grow. Deciding to work an extra two or three years can add as much as 30% to your total income once you do stop working.

When to start tapping your nest egg

It’s bit like trying to land an airplane at just the right spot on the runway. Most retirees don’t know precisely when to start withdrawing from their savings and investments. The Wall Street Journal reported in 2005 that many start withdrawing at the age of 62. For most people, that’s too early. Many experts now use age 95 for financial forecasting purposes. It all depends on how much you have saved and what types of outside income sources you have. Even at age 65, most people probably have another 30 [years] to support themselves after they stop working.

When to start taking Social Security to get maximum benefits

Understanding how Social Security works before you’re eligible to start taking is important. Right now, the earliest age you can start taking Social Security is 62. However, full retirement age is usually 66. Every year you can hold off on taking benefits between the ages of 62 and 70 increases your monthly check. The Social Security Administration’s website explains how retirement ages work. If you have complicated financial family relationships – or you’ve lost a spouse or have remarried – it can be worthwhile to get some solid advice. A qualified fee-based fiduciary advisor can run “what if” scenarios using sophisticated software. That can help pinpoint the optimal time to start taking your benefits.

Investment & Wealth Management

10 Tips to Boost Your Savings

Looking to boost your savings? Here are a few strategies to focus on to get on the right track.

1. Focus on starting today!

Time is your best friend when it comes to growing your savings so don’t wait any longer and get to it!

2. Contribute to your 401(k)

If your employer offers a 401k plan that allows you to contribute pre tax money, ENROLL IN IT! Your future self will thank you for this.

3. Contribute enough to get a “match” from your employer:

If your employer offers to match your 401k contributions, make sure you contribute at least enough to take full advantage of the match….IT’S FREE MONEY!

4. If you don’t have access to a 401k, open an IRA:

Consider establishing an Individual Retirement Account to help build your nest egg. You will be saving for your future and you will also be eligible for a tax deduction. Double WIN!

5. Take advantage of catch up contributions if you are age 50 or older.

6. Automate your savings and pay yourself first:

Make your retirement contribution automatic each month and you’ll have the opportunity to potentially grow you nest egg without having to think about it.

7. SPEND LESS:

Examine your budget and evaluate what is a want, versus what is a needs. Rein it in.

8. Set GOALS

9. Create a rainy day fund

10. Consider delaying social security as you get closer to retirement:

For each year you delay taking social security, your benefit will increase up to a certain point, consult your advisor or accountant for help.

A Startling Stat!

No emergency savings?

Americans are starting 2016 with more job security, but most are still theoretically only ONE paycheck away from living on the street, due to a lack of emergency savings!

According to bankrate.com, 63% of Americans have NO emergency savings for things such as a $1,000 emergency room visit, or a $500 car repair. That represents an increase over 2014! How in the world did we get to this point. Well, for starters the increased used of credit cards certainly doesn’t help the trend. Many rely on credit limit availability in the event they face a hardship.

That is some scary stuff, folks. Do you have a savings plan in place? If you need some savings tips…. we can help! Visit Wealth Management Services to see what we can help with.