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Understanding the Secure Act 2.0
SECURE ACT 2.0 was rolled out at the end of 2022. This new legislation provides a host of changes designed to substantially improve retirement savings options as well as help strengthen the retirement system overall. While there are dozens of provisions, several elements potentially have a greater impact on our clients, such as automatic 401(k) enrollment, an increase in the age for taking RMDs, along with significant tax benefits for employers. Further key SA2.0 modifications were established with the goal of helping younger people pay off student debt and making it easier to move accounts from employer to employer. In turn, allowing people to save within their retirement accounts for emergencies.
Am I Too Young for a Financial Advisor?
There is a misconception that financial advisors are only for people who have already built all their wealth. This thought process prevents individuals from seeking high-quality financial advice, and instead causes them to rely on friends and co-workers to make sense of financial decision-making.
Finding Your Spaghetti
My first job after my undergraduate degree was with a hedge fund as a risk analyst. When I first started the job I wanted to understand the culture and hopefully find my place to fit in. One of the common things many people were doing was going out to lunch at a local “fast casual” restaurant for about $10-$12 each day. I was newly graduated, I was married, and our budget was tight. I followed the common trend for a couple weeks before I started to really consider the cost of this tradition.
Volatility Goes Both Ways
We regularly encounter a logical fallacy (more specifically, the strawman) offered by those who believe that buy-and-hold is the best way to succeed in the financial markets. When discussing different approaches, such as dynamic allocation strategies, one will typically hear something like, “But, what about the best 10 days rule?”
The Cost of Waiting Five Years
Most people in life are in a perpetual balancing act between their family, work and personal lives. With so many competing needs for time and money, it can be difficult to make the commitment and get started investing. However, each year we wait results in a significant decrease in earnings growth over time. The table below shows what happens for every 5 years an individual waits to start saving.
Crossing Your Fingers is Not a Strategy
There is no doubt that circumstances in life will make it more difficult for some people to stay on track and achieve their goals. The vast majority of people can take proactive steps to influence their financial outcomes – even when they feel like the outcome is very uncertain.
How to Take Advantage of Inflation
It has been several decades since inflation has taken center stage in our lives like it is right now. It’s important to realize that the headwinds we are facing are MORE than just inflation and in totality we have quite a few fronts to work through before we find an equilibrium (fuel shortages, food security, and asset valuation to name a few).
Here’s what you should focus on: What is inflation? Why is inflation important? What can you do to benefit from the current inflationary environment?
Financial Anxiety is Real
The reality is that a financial advisor cannot stop world events from taking place – and cannot anticipate every possible negative event. However, an advisor should be creating a plan with the client that is built around their individual goals.
There’s No Such Thing as a Runner’s High
When the markets are volatile, it is easy to think about quitting, or changing up your plan. It is especially important to stay focused and unwavering as you push through. Nothing in the short term can derail your long term goals as long as you stay true to those goals. Whether it is running or investing, making a commitment to do what it takes to reach your runner’s high will help clarify the steps necessary along the way, even when you encounter tough days.
