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In July 2021, consumer prices rose by 5.4% compared to the same month last year. According to the U.S. Department of Labor, the cost of dining out experienced its biggest one-month jump in four decades. Meanwhile, the cost of making meals at home has risen compared to last year as well, with beef increasing by 6.5%, pork by 7.8% and whole milk by 8.1%.1
Higher prices have a way of eroding our buying power. While today’s higher inflation is largely attributed to pandemic-related supply chain issues (including labor) and increased consumer demand, that is little consolation for households trying to make ends meet on the same budget they had last year. For retirees on a fixed income, this can be particularly challenging. If you’re looking for ways to squeeze more income out of your assets, give us a call. We can help brainstorm ideas for using income-generating insurance products.
One popular strategy is the zero-sum budget, when you set up a budget that basically consumes your entire household income, with no room for excess discretionary spending. Every dollar is either spent or saved, leaving you with a balance of $0 at the end of each month. This strategy can help identify your expenses to the dollar and figure out where you tend to overspend. Moving ahead, the zero-sum budget can help prioritize how you spend your money and increase your savings efforts.2
Another tactic popular among young adults is what amounts to a “layaway” app. These smartphone-based services — such as Klarna, Quadpay and Affirm — are designed to be a payment intermediary between retailers and consumers. The consumer can purchase a product and take it home immediately but spread the cost throughout four installments in a six-week period without having to pay interest or fees. The app makes its money by taking a percentage of the purchase price from the retailer, similar to how credit cards work. This tactic is very appealing to Millennials and Generation Z consumers because they can buy now and pay later without having to pay interest. According to Credit Karma, about 42% of Americans have used a so-called layaway app at least once.3
Also consider retaining some of the household changes you made in the past year and a half, even as the economy continues to open up. After all, some of the “investments” we’ve made throughout the last year are still worth continuing and can have a great effect on our long-term health — both physical and financial. For example, staying home and watching streaming services is a lot cheaper than going out to movies — especially considering the cost of popcorn and snacks.
Working from home and fewer dining choices led approximately two-thirds of households to eat more meals at home. In fact, a recent survey found that 92% of families say they plan to continue eating at home at the same rate post-pandemic. Many families started gardening more, shopping less and spending more time exercising at home instead of paying gym fees.4
If you were inclined, like many Americans, to spend excess savings on home improvements in the past year, consider that money well spent on increasing your home’s value.
The Federal Reserve Bank of Kansas City reported that Americans increased their savings from 7.2% in December 2019 to a record high of 33.7% by April 2020. In designing your monthly budget going forward, think about continuing those savings, maintaining a healthy emergency account and retaining the habits that generated those extra savings.5
Fresno Financial Consultant Takeaways
Fresno portfolio advisor- Soutas Financial appreciated these points:Higher prices have a way of eroding our buying power. While today’s higher inflation is largely attributed to pandemic-related supply chain issues (including labor) and increased consumer demand, that is little consolation for households trying to make ends meet on the same budget they had last year.Another tactic popular among young adults is what amounts to a “layaway” app. These smartphone-based services — such as Klarna, Quadpay and Affirm — are designed to be a payment intermediary between retailers and consumers.Also consider retaining some of the household changes you made in the past year and a half, even as the economy continues to open up. After all, some of the “investments” we’ve made throughout the last year are still worth continuing and can have a great effect on our long-term health — both physical and financial.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient, Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1113440 – 11/21
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Our firm is not affiliated with the U.S. government or any governmental agency. Individuals are encouraged to consult with a qualified professional before taking any withdrawals from their retirement assets or insurance policies.
Content prepared by Kara Stefan Communications.
1 CBS Miami. Aug. 11, 2021. “Cost Of Living Continues Rising.” https://miami.cbslocal.com/2021/08/11/cost-living-continues-rising/. Accessed Aug. 15, 2021.
2 Taylor Locke. CNBC. Aug. 9, 2021. “Did you overspend this summer? Zero-sum budgeting could help you save more.” https://www.cnbc.com/2021/08/04/what-is-zero-sum-zero-based-budgeting-.html. Accessed Aug. 15, 2021.
3 Sasha Hupka. Los Angeles Times. Aug. 11, 2021. “Sleek, new credit apps target a young generation already drowning in debt.” https://www.latimes.com/politics/story/2021-08-11/sleek-new-credit-apps-target-a-young-generation-already-drowning-in-debt. Accessed Aug. 15, 2021.
4 Jami Farkas. Go Banking Rates. Aug. 13, 2021. “Extra Fees You Took on During the Pandemic That Are Still Worth Budgeting For.” https://www.gobankingrates.com/money/financial-planning/extra-expenses-you-took-on-during-the-pandemic-worth-including-in-budget/. Accessed Aug. 15, 2021.
5 Ibid.
The mid-year U.S. economic recovery numbers look strong. On Wall Street, analysts predict that our economy will expand by trillions of dollars and create 2 million good-paying jobs throughout the next 10 years. However, despite nearly 1 million jobs reported in July alone, the White House cautioned that the resurgence in COVID-19 cases among unvaccinated Americans could set us up for an economic relapse in the remainder of the year.1
While the U.S. lags in vaccination numbers, other countries are starting to pick up the pace. This could mean that our foreign competitors excel for the rest of the year while the U.S. plateaus. Overall, experts say the world economy is nearly restored to its pre-pandemic size, showing remarkable resistance in the wake of the first global pandemic in memory. Unfortunately, the International Monetary Fund (IMF) reports that the recovery is lopsided due to the rate of vaccinations. At the end of July, 40% of the population in advanced economies had been fully vaccinated whereas only 11% of emerging market (EM) economies could say the same.2
We can view this lopsided recovery in two ways. One is to be cautiously optimistic and invest in well-established performing securities that have weathered difficult events in the past. The other is to look at weak areas of the market as investment opportunities. When you believe a company, industry or geographic region is well-poised to eventually recover, buying shares now at a bargain price could prove rewarding for those with a long-term outlook. However, your investment style is as unique as your financial circumstances, so it’s best to consult with an investment advisor to help you determine appropriate strategies for your situation. Contact us for advice today.
The market analysts at T. Rowe Price appear bullish on China, which currently has more than 5,200 public companies listed on the country’s exchanges — more than in the U.S. Despite the economic fallout from the pandemic, nearly 900 Chinese companies launched initial public offerings (IPOs) between the end of 2018 and June of this year.3
According to Merrill Lynch, consumer spending in developing countries will be a tremendous market influence once we’re on the other side of this pandemic. The United Nations reports that the developing world now constitutes about 41% of global personal consumption expenditures. This is the reason the wealth manager believes growth investors should allocate some portion of assets to EM equities.4
The United Kingdom had to initiate multiple lockdown restrictions starting last spring but was able to reopen its economy by the end of July thanks to higher vaccination rates. And yet, as of early August, there were six countries in the European Union that had actually exceeded the U.K.’s vaccinated population levels: Malta, Belgium, Spain, Portugal, Denmark and Ireland. In recent months, the vaccine rate in France nearly doubled after their president imposed rules that banned citizens without proof of vaccination or a negative test from visiting restaurants, movie theaters, museums or travel on long-distance train routes. Denmark, Italy, Greece and Germany have all adopted similar penalty-based vaccination plans.5
Interestingly, the U.S. has now entered an economic phase for which consumers are likely to be the greatest influence on our growth prospects in the near term. That’s a rather unique phenomenon — and an opportunity to yield control over our own destiny.
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Fresno Retirement Consultant Takeaways
Fresno portfolio advisor- Soutas Financial appreciated these points:On Wall Street, analysts predict that our economy will expand by trillions of dollars and create 2 million good-paying jobs throughout the next 10 years.We can view this lopsided recovery in two ways. One is to be cautiously optimistic and invest in well-established performing securities that have weathered difficult events in the past. The other is to look at weak areas of the market as investment opportunities.According to Merrill Lynch, consumer spending in developing countries will be a tremendous market influence once we’re on the other side of this pandemic. The United Nations reports that the developing world now constitutes about 41% of global personal consumption expenditures.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage strategic wealth management as well as retirement annuity designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax Efficient Strategies IRA, 401(k) & 403(b) Rollovers Life Insurance Annuities Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial your top financial advisors in Fresno, Ca., to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
Content prepared by Kara Stefan Communications.
1 Christina Wilkie. CNBC. Aug. 6, 2021. “Biden skips victory lap after strong July jobs report, warns of economic peril from rising Covid cases.” https://www.cnbc.com/2021/08/06/biden-warns-of-economic-peril-from-covid-despite-july-job-gains.html. Accessed Aug. 6, 2021.
2 Tom Fairless, Stella Yifan Xie and Aaisha Dadi Patel. The Wall Street Journal. July 30, 2021. “World Economy Caps Extraordinary Return From Covid-19 Collapse.” https://www.wsj.com/articles/world-economy-caps-extraordinary-return-from-covid-19-collapse-11627643509. Accessed Aug. 6, 2021.
3 T. Rowe Price. June 2021. “Positioning for a New Economic Landscape.” https://www.troweprice.com/content/dam/iinvestor/resources/insights/pdfs/positioning-for-new-economic-landscape.pdf. Accessed Aug. 6, 2021.
4 Merrill Lynch. July 2021. “Whispering Winds.” https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/Viewpoint_July_2021_Merrill.pdf. Accessed Aug. 6, 2021.
5 Jon Henley. The Guardian. Aug. 6, 2021. “Six EU states overtake UK Covid vaccination rates as Britain’s rollout slows.” https://www.theguardian.com/world/2021/aug/06/six-eu-states-overtake-uk-covid-vaccination-britain-rollout-slows. Accessed Aug. 6, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1113440 – 11/21
Young adults have weathered difficult times the past two decades: mass school shootings, extreme weather conditions, student loan debt and a global pandemic. But now they’re witnessing an unprecedented job market, where even those with little to no work experience can dictate their own terms.
It’s important that we steer our young adults to good saving and investing habits now, while they have the capacity to earn increased income. This job market may not always be the reality, so it’s good to build a treasure chest when they have the opportunity. Here are some tips to get them started:
Invest when you’re young. You don’t have to wait until you have a lot of money — power of compounding interest makes time your greatest ally. When you start early, you can accumulate substantially more wealth with less invested capital than if you start investing later. In fact, you can start small — $50 to $100 a month — and increase the amount as you earn more. Investing regularly and automatically allows your money to work even harder than you do. The advantage of starting an investment program before you start making a lot of money is that you learn to live on less. Always strive to live below your means.1
Many graduates just starting out in the work world barely earn enough to make ends meet. There is one way to empower your ability to save a portion of what you do earn: Take control of your vocabulary. Instead of saying, “I can’t spend that much money” for something you want, say “I don’t want to spend that much money.” The second version implies that you are making a choice, and you choose not to overspend.2 We’d be happy to help you open an investment account and determine where to invest your savings every month. It’s never too early to start and no amount is too small to get started.
Diversify. Don’t invest all your money on one big stock tip you read about or receive from a friend. Spread it out over a portfolio of investments, which is less likely to lose money. The market will go up and down, but the way to protect your portfolio is to have some investments performing well while others don’t. The easiest way to do that is through a mutual fund or exchange-traded fund (ETF).3
At some point, you’ll want to establish a strategic asset allocation. There are three basic types of assets: stocks, bonds and cash instruments (like CDs and money market accounts). Stocks represent the biggest risk — meaning a higher chance of losing money for the potential of higher gains — followed by bonds, then cash. As a general rule, the younger you are, the more you’ll benefit from a higher allocation to stocks, but you may want to allocate a portion to bonds and cash as well.
It’s particularly important to establish an emergency fund for your cash account. That way if any big expense comes up — like a car repair — you won’t have to tap your investments to pay for it. The longer your money stays invested, the better its potential to grow (and the lower your risk of losing it). Asset allocation is similar to diversifying your investments, but it’s more strategic because you maintain that balanced mix of stocks, bonds and cash.
Consider investing deferred. Even if your employer doesn’t offer a retirement savings account, you can open your own. Anyone with earned income under age 50 can contribute up to $6,000 a year to an Individual Retirement Account (IRA), in which you choose which securities to invest. With a “traditional” IRA, you can deduct that amount from your current income taxes, and the account grows tax-deferred until the money is withdrawn. If you open a Roth IRA, you don’t get the tax deduction, but you won’t have to pay taxes on withdrawals (as long as you don’t take out money for at least five years from your first contribution).5
Whether graduating from high school or college, or transitioning with some time off, don’t get too wrapped up in the pursuit of money. Pursue your interests, and the money will likely follow. Invest time in learning about the job(s) that interest you while also investing in meaningful friendships and worthwhile hobbies that develop healthy habits and expose you to new opportunities. Start now and your rewards will grow with time. Your career, friends, family and activities are all seeds you plant now for a secure and happy future.6
Fresno Retirement Advisor Takeaways
Soutas Financial your Fresno financial planner would like to remind you of these points:It’s important that we steer our young adults to good saving and investing habits now, while they have the capacity to earn increased income. This job market may not always be the reality, so it’s good to build a treasure chest when they have the opportunity.You don’t have to wait until you have a lot of money — power of compounding interest makes time your greatest ally.The longer your money stays invested, the better its potential to grow (and the lower your risk of losing it).
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage stop spend down as well as long-term care strategies designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient Strategies, IRA, 401(k) & 403(b) Rollovers, Life Insurance Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 John Woerth. Vanguard. June 18, 2021. “Investment advice for recent grads.” https://investornews.vanguard/investment-advice-for-recent-grads/. Accessed July 5, 2021.
2 Vanguard. January 12, 2021. “Want to set financial goals that stick this year? Start with one word.” https://investornews.vanguard/want-to-set-financial-goals-that-stick-this-year-start-with-one-word/. Accessed July 5, 2021.
3 John Woerth. Vanguard. June 18, 2021. “Investment advice for recent grads.” https://investornews.vanguard/investment-advice-for-recent-grads/. Accessed July 5, 2021.
4 Vanguard. January 11, 2021. “Choosing an asset allocation.” https://investornews.vanguard/choosing-an-asset-allocation/. Accessed July 5, 2021.
5 Fidelity. 2021. “IRA contribution limits.” https://www.fidelity.com/retirement-ira/contribution-limits-deadlines. Accessed July 5, 2021.
6 Chasity Holt. Fidelity. April 19, 2019. “5 tips for new grads.” https://www.fidelity.com/spire/career-building-tips-college-graduates. Accessed July 5, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1113440 – 11/21
Life insurance is important – and worth having before you really need it. If you’re nodding in agreement but also wondering How much life insurance do I need? you’re not alone!
Even though we can’t predict when our time is up, we can control how much of a life insurance payout our loved ones will get when we die. What better way is there to lift those financial worries from your family’s shoulders?
How Much Life Insurance Do I Need?
Let’s get straight to the point: It can be best to get coverage that’s equal to 10-12 times your annual income. And make it a level term life policy that lasts for 15-20 years.
Why 10-12 times your annual income? Because it replaces your salary if you die and gives your family a financial cushion to help them get back on their feet. It gives them some funds to invest, where the interest coming in every year could provide vital income in your absence.
The reason we say 15-20 years is simple: if you have young children, by the time the term life policy is over they’ll be out of college and able to support themselves. The only coverage they’ll need is during those 15-20 years in between – when they’re totally dependent on you.
If you’re following our baby steps you’ll be busy investing your money during those 15-20 years in areas like mutual funds. So by the time your term life insurance plan is over? You’ll be “self-insured” and won’t need life insurance.
What Does Life Insurance Cover?
If you have life insurance coverage equal to 10-12 times your annual income it replaces your income 10-12 times over for your loved ones if you die. It covers the bills, expenses and everything else essential for your dependents to get by on because you’re no longer there.
Keep these tips in mind as you calculate your coverage needs:
- Think of life insurance as part of your overall financial plan. That plan should take into account future expenses, such as college costs, and the future growth of your income or assets.
- Don’t skimp. Your income likely will rise over the years, and so will your expenses. While you can’t anticipate exactly how much either of these will increase, a cushion helps make sure your spouse and kids can maintain their lifestyle.
- Talk the numbers through with your family. How much money does your spouse think the family would need to carry on without you? Do your estimates make sense to them? For example, would your family need to replace your full income or just a portion?
- Consider buying multiple, smaller life insurance policies, instead of one larger policy, to vary your coverage as your needs ebb and flow. For instance, you could buy a 30-year term life insurance policy to cover your spouse until your retirement and a 20-year term policy to cover your children until they graduate from college. Compare life insurance quotes to estimate your costs.
Fresno Financial Consultant Takeaways
Fresno portfolio advisor- Soutas Financial appreciated these points:: It can be best to get coverage that’s equal to 10-12 times your annual income. And make it a level term life policy that lasts for 15-20 years. If you have life insurance coverage equal to 10-12 times your annual income it replaces your income 10-12 times over for your loved ones if you die. It covers the bills, expenses and everything else essential for your dependents to get by on because you’re no longer there. Think of life insurance as part of your overall financial plan. That plan should take into account future expenses, such as college costs, and the future growth of your income or assets. Don’t skimp. Your income likely will rise over the years, and so will your expenses. While you can’t anticipate exactly how much either of these will increase, a cushion helps make sure your spouse and kids can maintain their lifestyle.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient, Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
–1058561– 9/21
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Our firm is not affiliated with the U.S. government or any governmental agency. Individuals are encouraged to consult with a qualified professional before taking any withdrawals from their retirement assets or insurance policies.
Although the legislative landscape changed rapidly during the COVID-19 pandemic, when it comes to tax planning, many individuals are now looking at how potential changes may impact their 2022 tax return.
While we don’t yet know what actions Congress will take this year, there are tax planning strategies that individuals can leverage now to help prepare. We recommend talking them over with your CPA and financial advisor to help ensure you leverage the best strategies for your unique situation.
Why is Tax Planning Important?
The reason why tax planning is important is simple: it saves money and helps you avoid overpaying your taxes. Aside from that, however, tax planning will help you better understand what you’re spending money on and how you can get rewarded for planning for retirement or advancing your education.
1. Convert traditional IRAs into Roth IRAs
If you’re anticipating that tax rates will go up, converting traditional IRAs into Roth IRAs will allow you to take advantage of lower current tax rates. Unlike a traditional IRA, a Roth IRA does not have required minimum distributions when you reach age 72, and the distributions are not taxed when you take a withdrawal in retirement. When planning for your Roth conversion, be mindful of where you lie within your tax bracket. If you’re on the lower end, you have room to make a Roth conversion without getting bumped into the next tax bracket.
2. Use your estate tax exemption
Many people are concerned that the lifetime estate and gift tax exemption of $11.7 million ($23.4 million for a married couple) will decrease to $5 million, $3.5 million or potentially as low as $1 million. If you have a sizable estate, gifting assets to your children or into a trust this year can allow you to use the exemption while it’s still at $11.7 million. Gifts made under current law would be grandfathered in, even if the exemption does decrease.
3. Set up a SEP-IRA for your business
Small business owners should also consider setting up a retirement account for their business. A SEP-IRA allows employers to contribute to traditional IRAs set up for employees — including the business owner — up to the lesser of 25% of the employee’s compensation or $58,000 for 2021. This amount is much higher than the $6,000 limit ($7,000 if age 50 or older) individuals are allowed to contribute annually to a traditional or Roth IRA, making them a very attractive tool for retirement savings.
Finally, if you receive a regular paycheck, you can look into increasing your withholding. This helps you avoid owing large sums when tax season comes around and if you go over, you’ll end up getting a larger refund when the time comes. Since most people and small businesses pay too much in taxes every year, tax planning is essential.
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Fresno Retirement Consultant Takeaways
Fresno portfolio advisor- Soutas Financial appreciated these points:The reason why tax planning is important is simple: it saves money and helps you avoid overpaying your taxes. Aside from that, however, tax planning will help you better understand what you’re spending money on and how you can get rewarded for planning for retirement or advancing your education.If you’re anticipating that tax rates will go up, converting traditional IRAs into Roth IRAs will allow you to take advantage of lower current tax rates. Unlike a traditional IRA, a Roth IRA does not have required minimum distributions when you reach age 72, and the distributions are not taxed when you take a withdrawal in retirement. When planning for your Roth conversion, be mindful of where you lie within your tax bracket. If you’re on the lower end, you have room to make a Roth conversion without getting bumped into the next tax bracket.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage strategic wealth management as well as retirement annuity designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax Efficient Strategies IRA, 401(k) & 403(b) Rollovers Life Insurance Annuities Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial your top financial advisors in Fresno, Ca., to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
via 6 tax planning strategies to maximize next year’s tax return
via Basic Tax Planning Strategies to Use Now and in the Future
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1058561 – 9/21
Some people stay in place when they retire, while others buy a second home or relocate entirely. If you’re thinking of buying a new home, should you plan the purchase before you stop working, or is it possible to get to a mortgage after you’re retired?
Plenty of retirees can qualify for a mortgage while on a fixed income, but it can be more difficult. It’s easier if you’re looking to buy a primary residence, as a vacation home could be more of a challenge if you still have a mortgage on your main home. In this scenario, you’ll probably need a higher down payment and will likely be subject to more restrictive income and credit criteria.
If you’re no longer working, a lender will typically ask for documentation of recent Social Security, pension income, dividends, and interest payments. If you’re drawing income from retirement assets, you’ll need to provide documentation for both regular withdrawals and statements demonstrating your entire net worth. This is to show that you won’t run out of income any time soon. Your lender will divide about 70% of the value of your assets (minus what’s needed for your down payment and closing costs) by the number of months of the mortgage to ensure you’ll be able to pay off the loan.1
As you develop plans for your retirement, it’s important to consider the costs of mortgage payments, property taxes, homeowner’s insurance, maintenance, and repairs. Buying a second home can cost just as much or more as maintaining your first home, and that can be a lot to take on in retirement. We’re happy to help you evaluate your financial picture and determine ways to maximize your assets to plan a retirement lifestyle that you can enjoy and afford.
For example, instead of buying another home, consider renting wherever you’d like to spend your summers or winters. Renting may end up costing a lot less, plus offer the flexibility to travel or try out different homes each year at your favorite destination. At the very least, it’s a good idea to rent until you decide if you definitely want to buy a second home in that location.2
Beyond the question of what you can afford, consider if a move would really give you the lifestyle you desire. While another location may be beautiful, many people regret leaving friends and family with whom they often spend time. Before relocating, think about how you’ll spend your days, with whom you’ll spend them, how difficult it may be to visit family and if you’ll have easy access to medical care. And finally, ask yourself what you would miss most if you moved away – and how important those things are to you.3
Also, consider whether downsizing is a good idea for your lifestyle and budget. After all, you don’t have to move far away, but you could downsize in your own community. This offers several advantages. You can cash in on the equity of a larger home and use that money to help fund retirement expenses. Moving to a smaller, more manageable property can reduce the time (and/or money) you spend to keep a larger home cleaned, repaired, maintained, and insured – with the added benefit of lowering your property tax bill. Plus, you’d be able to see your friends and family and maintain the same routines you currently enjoy.4
However, downsizing does involve going through all of your stuff and deciding what to keep. Seasoned downsizers say it’s best not to rush this process. Start the process a year or so before you plan to move, and take it room by room.5 Also recognize that your children may not want your discarded items. A recent study found that the list of things adult children tend to pass on include sewing machines, film projectors, porcelain figurines, decorative plates, silver-plated objects, sterling and crystal, fancy dinnerware, linens and even printed photographs.6
Fresno Retirement Advisor Takeaways
Soutas Financial your Fresno financial planner would like to remind you of these points:Plenty of retirees can qualify for a mortgage while on a fixed income, but it can be more difficult.As you develop plans for your retirement, it’s important to consider the costs of mortgage payments, property taxes, homeowner’s insurance, maintenance, and repairs.Also, consider whether downsizing is a good idea for your lifestyle and budget. After all, you don’t have to move far away, but you could downsize in your own community.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage stop spend down as well as long-term care strategies designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient Strategies, IRA, 401(k) & 403(b) Rollovers, Life Insurance Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Kiah Treece and Rachel Witkowski. Forbes. June 21, 2021. “How To Get A Mortgage After Retirement.” https://www.forbes.com/advisor/mortgages/get-a-mortgage-after-retirement/ Accessed June 24, 2021.
2 Bob Carlson. Retirement Watch. March 16, 2020. “Should you buy or rent your winter home?” https://www.retirementwatch.com/buy-or-rent-your-winter-home. Accessed June 24, 2021.
3 David Rae. Forbes. Oct. 10, 2018. “8 Questions to Help You Decide Whether to Move in Retirement.” https://www.forbes.com/sites/davidrae/2018/10/10/move-in-retirement/?sh=6c1ff45c4ef4. Accessed June 24, 2021.
4 Jill Cornfield. CNBC. Sep. 8, 2020. “‘This gained us 8 to 10 years of not having to work’. Here’s what you need to know about moving in retirement.” https://www.cnbc.com/2020/09/08/escape-winter-save-money-plan-for-aging-why-people-move-in-retirement.html. Accessed June 24, 2021.
5 Liz Taylor. Pods. Sep. 14, 2020. “Relocating after retirement? Smart moving tips from retirees who’ve done it.” https://www.pods.com/blog/2020/09/retirement-relocating/. Accessed June 24, 2021.
6 Raymond James. March 17, 2021. “10 Things Your Kids Don’t Want When You Downsize.” https://www.raymondjames.com/commentary-and-insights/lifestyle-technology/2021/03/17/10-things-your-kids-dont-want-when-you-downsize. Accessed June 24, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1058561 – 9/21
It would be nice if the Roth IRA had been around long as the traditional IRA. Imagine the long-term benefits of tax-free growth throughout a 40-year career. Annual contribution limits for IRAs are relatively low ($6,000; $7,000 for 50-plus), but the Roth is a good complement for investors who also contribute to an employer-based retirement plan. While 401(k) contributions are made from tax-deferred income, Roth contributions are derived from previously taxed income. Both vehicles are permitted to grow without taxes on earnings; however, in retirement, you don’t have to pay any taxes on Roth distributions, whereas all 401(k) distributions are taxed at your then-regular income tax rate.1
That tax bite during retirement can feel pretty punishing when you’re on a fixed income. It’s one reason why the Roth has an edge over the traditional IRA — which also taxes distributions in retirement. One of the key strategies that has emerged in the Roth IRA era is tax diversification in retirement: Try to invest in such a way that not all your income is taxable. This can help avoid taxes on Social Security benefits and keep you from having to pay higher Medicare premiums.2
Everyone has different circumstances, and you should build your financial portfolio to reflect your needs and objectives. Since the total amount you can contribute to an IRA each year — traditional, Roth or a combination — is limited, it’s typically a good idea to pick one that best meets your needs. Another viable strategy for reducing taxes in retirement is later converting a traditional or rollover IRA to a Roth. Investors also should consider the advantages of both versions for estate planning purposes. If you have any questions, or would like help developing a long-term IRA strategy, please contact us.
Distributions from a Roth IRA can increase your income during retirement since qualified withdrawals are not taxed. Moreover, if an investor doesn’t need to use his Roth funds during retirement, those assets and all potential tax-free earnings they generate can be left tax-free to heirs. Whatever amount he passes on can continue growing tax-deferred and eventually be withdrawn tax free. Note that non-spouse beneficiaries of a Roth will need to take full distribution within 10 years of inheriting the money. However, when beneficiaries have the discipline to leave that money in the inherited Roth for the full 10 years, it can continue to grow for an even larger inheritance with no tax consequences.3
By contrast, traditional IRA distributions to heirs are considered taxable income in the year(s) withdrawn.4 So don’t just think about reducing your own taxes with a Roth; consider its tax-free advantage for your heirs.
Be aware that you can contribute only earned income to an IRA. That precludes Social Security and pension income, dividends, etc. You may continue to contribute throughout retirement as long as you’re earning some income — and may only contribute up to amounts earned, subject to the contribution limits. Also bear in mind that there are income limits for making Roth IRA contributions. Single tax filers must earn less than $140,000 (in 2021); the married and file jointly income limit is 208,000.5
In a Roth conversion, you can move money from a 401(k) into a Roth IRA, converting all or a portion of assets throughout time, but there are considerations. For example, you’ll have to pay taxes on the money you move in the year it’s converted. That’s a good reason to only move a portion at a time; try not to tip your reported income into a higher tax bracket each year. If you conduct the conversion once you’re retired, your taxable rate will be lower.
However, Roth funds are subject to a five-year rule. If you convert 401(k) funds to a Roth you’ve already owned for five years or more, you can go ahead and use that money. But, if you must open a new Roth to make the conversion, you must wait five years before you can tap that account, or funds tapped will be subject to a 10% early withdrawal penalty.6
If you are considering a Roth conversion for any retirement account funds, remember that income tax rates are relatively low right now. If there are any changes in the near future, rates are more likely to go up than down. That’s a good reason to start a conversion now if you and your advisor believe that’s a good strategy for your situation, especially if you plan to roll over funds gradually throughout several years.7
Fresno Financial Consultant Takeaways
As your Fresno retirement plan consultant, we felt the following ideas were top notch:Annual contribution limits for IRAs are relatively low ($6,000; $7,000 for 50-plus), but the Roth is a good complement for investors who also contribute to an employer-based retirement plan.Everyone has different circumstances, and you should build your financial portfolio to reflect your needs and objectives. Since the total amount you can contribute to an IRA each year — traditional, Roth or a combination — is limited, it’s typically a good idea to pick one that best meets your needs.If you are considering a Roth conversion for any retirement account funds, remember that income tax rates are relatively low right now. If there are any changes in the near future, rates are more likely to go up than down.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage strategic wealth management as well as retirement annuity designed to help accomplish those goals.
Are you trying to find an investment advisor? Look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planner is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Dayana Yochim and Andrea Coombes. NerdWallet. April 28, 2021. “Roth IRA vs. Traditional IRA.” https://www.nerdwallet.com/article/investing/roth-or-traditional-ira-account. Accessed July 21, 2021.
2 Phil Lubinski. ThinkAdvisor. June 10, 2021. “6 Ways to Help Clients Avoid Medicare’s IRMAA Surcharges in Retirement.” https://www.thinkadvisor.com/2021/06/10/6-ways-to-help-clients-avoid-medicares-irmaa-surcharges-in-retirement/. June 23, 2021.
3 T. Rowe Price. Summer 2021. “The Simple Move That Has Significant Advantages.” https://www.troweprice.com/content/dam/iinvestor/planning-and-research/Insights/investor-magazine.pdf. Accessed June 23, 2021.
4 Dayana Yochim and Andrea Coombes. NerdWallet. March 17, 2021. “Inherited IRA: How It Works & Distribution Rules for Beneficiaries.” https://www.nerdwallet.com/article/investing/roth-or-traditional-ira-account. Accessed July 21, 2021.
5 Charles Schwab. 2021. “2020-2021 Roth IRA Contribution Limits.” https://www.schwab.com/ira/roth-ira/contribution-limits. Accessed June 23, 2021.
6 Cathy Pareto. Investopedia. April 9, 2021. “Must-Know Rules for Converting a 401(k) to a Roth IRA.” https://www.investopedia.com/articles/retirement/08/convert-401k-roth.asp. Accessed June 23, 2021.
7 Sarah O’Brien. CNBC. May 20, 2021. “These strategies can reduce the taxes you will pay on retirement accounts.” https://www.cnbc.com/2021/05/20/these-plans-can-reduce-how-much-tax-you-will-pay-on-retirement-account.html. Accessed June 23, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173 This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1058561 – 9/21
Many families do not anticipate long-term care needs until a family member needs it immediately. While crisis long-term care planning is possible, the best time for thinking about long-term care is before you (or a loved one) need it. Planning for the potential need gives you time to learn about the wide variety of services and their costs. It also allows you the authority to make significant care decisions while you are still capable, as opposed to another person making the decisions for you.
What Is Long-Term Care?
Long-term care encompasses a broad spectrum of services and supports necessary for an individual’s personal care needs. The care involves day-to-day help needed by people with illnesses that endure over time. These illnesses tend to be chronic, physical infirmity, or cognitive disability — reducing the individual’s capacity to care for themselves.
Funding Long-Term Insurance Expenses
Medicare
A common misconception about long-term care is that Medicare will ultimately pay for it. Some people expect that Medicare pays long-term care expenses for Medicare recipients. While Medicare may cover limited costs of short-term care, Medicare does not pay for non-skilled nursing home care. This means Medicare does not pay for non-skilled assistance with ADLs, which make up the overwhelming majority of long-term care services.
Medicaid
Medicaid (TennCare in Tennessee) may pay for long-term care services, but eligibility depends on the individual’s financial and medical condition. Medical eligibility is contingent on the applicant’s ability to perform ADLs. The scoring system varies in each state. In Tennessee, this means that TennCare may cover nursing home services for eligible applicants. TennCare may also cover home and community-based services for people who would need to be in a nursing home if they otherwise did not receive home care services. Finally, TennCare may also cover services that will help the applicant remain in his or her home if eligibility is met.
Avoid the Risk
Unfortunately, growing older is a fact of life and healthcare concerns increase with age. Clients can embrace a healthy lifestyle to reduce the risk, but nobody can completely avoid the risk with any certainty. Clients can also choose to live in denial that a LTHC incident may never happen to them and do nothing to protect themselves. Unfortunately the odds do not favor this approach, given that about 70% of individuals over age 65 will require at least some type of long-term care services during their lifetimes and 20% will need five years or more of care (US Dept of Health and Human Services; see Long Term Care.
Transfer or Share the Risk
Clients can pay a credible entity, typically an insurance company, to cover some portion of the risk.
Of course, it is incumbent on us as comprehensive advisors to help clients understand these options and guide them toward making the most effective decision for their situation.
The good news is that a number of recent innovations have made LTHC insurance more economically attractive to share the risk of a LTHC incident with a financially sound insurance company.
Fresno Financial Consultant Takeaways
Fresno portfolio advisor– Soutas Financial appreciated these points:Long-term care encompasses a broad spectrum of services and supports necessary for an individual’s personal care needs. The care involves day-to-day help needed by people with illnesses that endure over time.A common misconception about long-term care is that Medicare will ultimately pay for it. Some people expect that Medicare pays long-term care expenses for Medicare recipients. While Medicare may cover limited costs of short-term care, Medicare does not pay for non-skilled nursing home care.Medicaid (TennCare in Tennessee) may pay for long-term care services, but eligibility depends on the individual’s financial and medical condition.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient, Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
-1028383 – 9/21
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Our firm is not affiliated with the U.S. government or any governmental agency. Individuals are encouraged to consult with a qualified professional before taking any withdrawals from their retirement assets or insurance policies.
What is Asset Protection?
Asset protection refers to a set of techniques, strategies, and laws that aims to protect assets belonging to individuals and businesses against the claims of creditors who are attempting to legally seize the assets.
If you have substantial assets or are coming into a windfall from a sudden wealth event such as an inheritance, lawsuit, stock options sale, business sale or from a sports/entertainment contract, there are several money moves you should consider to best protect your new wealth against lawsuits and from others.
How Does Asset Protection Work?
Asset protection planning is based on the analysis of various factors that determine the degree of protection required. The following diagram shows the most important factors:
Identity of the Debtor
If the debtor is an individual, it is important to consider any transmutation agreements (agreements that determine whether properties are equally shared by spouses or separate) between the individual and their spouse. It is also important to consider the likelihood of a lawsuit for each spouse – so that property rights for assets can be transferred to the ‘safer’ individual before lawsuits are filed.
If the debtor is an entity, then the individual who guaranteed the repayment is liable to asset seizure in the event of a lawsuit. For asset protection planning, it is important to take note of any clause that obliges an individual to personally repay an organization’s/entity’s debt and the likelihood of creditors seizing personal assets.
Identity of the Creditor
The identity and type of creditor are important for asset protection planning. If the creditor is a powerful organization, like the government, they are likely to possess more power over asset seizure compared to private lenders. Individuals who are liable to an aggressive creditor may require stronger asset protection strategies and vice versa.
Nature of the Claim
The specific types of claims and limitations included in lending agreements determine the strength and type of asset protection required. For example, dischargeable claims (claims that can be written off or “injuncted” by the court) can be used to protect personal assets in the event of bankruptcy and require a relatively lower degree of asset protection.
Consider keeping assets separate. Depending on the state in which you live and the source of your windfall, if you deposit the money into a joint account with your spouse, this money could instantly become half theirs. For some, this isn’t an issue, but for others, this could pose a problem. For example, if you have children from a previous marriage and commingle an inheritance you receive with your new spouse, your children may get less than you expect when you pass away. This problem becomes even more damaging if you are contemplating a divorce.
Review all jointly held accounts. Any money you deposit into a joint account with your children, elderly parents, roommate, or business partner is at risk. If the joint owner files for divorce, incurs a tax lien, or lawsuit judgment, the entire account could be wiped out.
Create business entities to shield assets. If you have a small business or do part-time work on the side without having a formal business structure such as an LLC or a corporation, you are operating as a sole proprietorship. The “sole” means it’s just you, so unlike a partnership, you don’t have to worry about a partner’s actions . . . but all of your personal assets are at risk if you are sued.
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Fresno Retirement Consultant Takeaways
Fresno portfolio advisor– Soutas Financial appreciated these points: If you have substantial assets or are coming into a windfall from a sudden wealth event such as an inheritance, lawsuit, stock options sale, business sale or from a sports/entertainment contract, there are several money moves you should consider to best protect your new wealth against lawsuits and from others. Asset protection planning is based on the analysis of various factors that determine the degree of protection required.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage strategic wealth management as well as retirement annuity designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax Efficient Strategies IRA, 401(k) & 403(b) Rollovers Life Insurance Annuities Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial your top financial advisors in Fresno, Ca., to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
via 6 Asset Protection Strategies To Shield Your Wealth
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
1028383 – 9/21
While there’s a lot of planning involved in the short-term, your financial decisions in your “younger” years have an impact on how your retirement and stream of income will pan out. If you’re actively thinking about your future retirement plans, here are a few wealth accumulation strategies that will help lead you on a smooth path. Here are 6 suggestions to remember.
Lower Debt, Increase Income
The debt to income ratio is always one of the most important financial indicators when it comes to wealth management. It’s merely your monthly debt expenses compared to your monthly gross earnings. For wealth accumulation purposes, lowering debt is essential.
Save on Vehicles
I was very fortunate that I learned this lesson when I was still in college. This led to me driving a 1998 Chevy Lumina that was completely paid for because I inherited it from my deceased grandmother.
Not having a car payment allowed me to invest into myself, my Roth IRA, and my 401(k).
According to Jason Fogelson for Forbes: “The biggest mistake a car buyer can make, especially in the age of the Internet, is to buy a car without doing research first. Some buyers are so eager to get through the car-buying process that they don’t take the time to find out everything they can about vehicle reliability, pricing and financing.”
I agree. But let’s focus on the financing part for a minute. Car loans come with ridiculous interest rates that nobody should have to pay for to obtain transportation. Car loans can easily be one of the highest-cost debts of many American households.
Too many people view the car payment as “normal.” Sure, it’s normal, but “normal” won’t help you produce wealth, my friend. Instead, consider doing what I did and drive a car that you own outright. It’ll be easier on your pocketbook over the long-term – I promise.
Regular Investment Activity
Investing is a key factor in wealth accumulation. While you may have a steady full-time job or even more than one stream of income, where you put a portion of the income matters.
Save a Percentage of Your Income
Savers like my wife and I are definitely in the minority. Very few people save a substantial amount for the future, but if you think we’re in the minority, then check out Pete from MrMoneyMustache.com who advocates that you should be saving between 30 to 50% of your income. While that’s definitely on the extreme side of things, Pete is just another example of how it can be done.
Granted, the more you make the larger a percentage you can save. The point here is to make some steep sacrifices so that you can put more of your wealth toward investments that are right for you.
Multiple Retirement Contributions
It’s important to remember that while a 401(k) is a great start to making retirement contributions (especially if your company has a matching plan), it doesn’t have to end there. Retirement accounts can come in different forms, from 401(k) accounts via an employer to traditional and ROTH IRAs.
Fresno Retirement Advisor Takeaways
As your Fresno financial advisor we thought this was a good takeaway:For wealth accumulation purposes, lowering debt is essential. Car loans come with ridiculous interest rates that nobody should have to pay for to obtain transportation. Car loans can easily be one of the highest-cost debts of many American households.Granted, the more you make the larger a percentage you can save. The point here is to make some steep sacrifices so that you can put more of your wealth toward investments that are right for you. Retirement accounts can come in different forms, from 401(k) accounts via an employer to traditional and ROTH IRAs.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage stop spend down as well as long-term care strategies designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient Strategies, IRA, 401(k) & 403(b) Rollovers, Life Insurance Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
via 9 Ways To Build Wealth Fast (That Your Financial Advisor Might Not Tell You)
via Three Important Wealth Accumulation Strategies
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
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Talk to your financial professional and your tax advisor about how Social Security benefits can fit into a complete retirement income strategy. Financial professionals are able to provide you with information but not guidance or advice related to Social Security benefits. We are not affiliated with the U.S. government or any governmental agency.
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