Planning Matters Radio

The end of the year is a great time to start thinking about your taxes for the upcoming year. That's why Peter with Richon Planning and Erin Kennedy are sharing 4 tax saving tips you can do now, to help you get on track for 2024.

1. Max Out Your Roth IRA
2. 2. Tax Loss Harvesting
3. 3. Consider Your Tax Filing Status
4. 4. Seek Tax Efficient Investments

If you have any questions about Roth Conversions, or if you'd like to talk through specific tax efficient investments, including Health Savings Accounts, 529s, or Qualified Charitable Distributions, please reach out to Peter by calling (919) 300-5886 or visit www.RichonPlanning.com

#RothTober #TaxTips #WealthManagement #YearEnd

We talk a lot about the benefits of Roth accounts. A Roth IRA allows you to save for retirement with after-tax dollars. That means you pay taxes on your contributions now, but your withdrawals are tax free in retirement.

There are also several benefits to inheriting a Roth IRA, as Peter with Richon Planning explains to Erin Kennedy; the distributions are tax-free, and they won't affect your taxable income. However, with a few exceptions, you'll still have to drain the inherited account within 10 years.

If you are inheriting a Roth IRA, here's a quick action plan:

1. Understand your beneficiary type (this will determine your distribution options)
2. Consider your tax situation  
3. Invest the money wisely 
4. Get professional help

As with all inheritances, it's important to know how distributions will affect your taxes and how to best invest that money. If you'd like to talk through the benefits of a Roth account, or if you recently inherited a tax-free or tax-deferred retirement account, please reach out to Peter to talk through the best options specifically tailored to your financial situation and goals. Call him at (919) 300-5886 or visit www.RichonPlanning.com

Fueled by COVID lockdowns and the rise of commission free brokerages like @Robinhood, online trading, or "day trading" has seen a huge rise in popularity in the last few years. However, according to several recent financial studies, almost all "day traders" lose lots of money, particularly after accounting for fees and taxes.

If you're considering self-directed investing, @peter with @richonplanning and @erinkennedy break down the pros and the cons, and Peter offers these considerations before you create an online trading account:

1. Consider Your Approach and Expectations: if your expenses are covered by income and you are making contributions, downturns can actually be opportunities! Whereas, if you're taking income and withdrawing during downturns, that can represent a distinct disadvantage
2.  Consider Your Risk Tolerance: how much loss are you comfortable with?
3. Consider the Risks: specifically, Behavioral Finance which has proven that average investors underperform investors that utilize an advisor. And secondly, Taxes... most "day traders" move money without knowing that they're creating "taxable events." If you'd like to talk to Peter to determine if some self-directed investing makes sense for you and how to create pre-determined "guardrails" that are in line with your risk tolerance, please give him a call at (919) 300-5886 or visit www.RichonPlanning.com
4. #DayTrading #InvestingTips #WealthManagment

More Americans are tapping their 401ks because of financial distress. In fact, the number of people who made a hardship withdrawal surged 36% from the second quarter of 2022! If you're thinking of tapping your 401(k) early, Peter with Richon Planning and Erin Kennedy explain how it works and the risks, including:

-How can I withdraw money from my 401k without penalty?

-How the passage of the SECURE Act made hardship withdrawals even easier

-The lost "opportunity cost" of tapping your 401(k)

Keep in mind, if you're not 59.5 and you make a withdrawal, not for a hardship, you're going to face a 10% penalty and income taxes! Whereas, with a Roth account, you can always tap your contributions without facing any penalties. If you're looking to find some supplemental income, please feel free to chat with Peter about your best options; there may be some strategies you haven't considered. Book a complimentary consultation by calling (919) 300-5886 or by visiting www.RichonPlanning.com

Many retirees are surprised to learn that above a certain income, Social Security is taxed. In retirement, it's important to know how all your income streams will be taxed, and how to mitigate those taxes. In this video, Peter with Richon Planning explains 3 strategies to Erin Kennedy:

1. Convert to a Roth IRA
2. 2. Consider Shifting Income Investments
3. 3. Delay Claiming Your Social Security Benefits

Another strategy to consider is a Qualified Charitable Distribution. Determining which strategy is right for you is a very personalized calculation, and it's something we specialize in at Richon Planning. For your detailed and personalized retirement tax plan, please give Peter a call at (919) 300-5886 or visit www.RichonPlanning.com

#Retirement #WealthManagement #SocialSecurity #Taxes

There are many reasons people put off saving for retirement; it's hard to imagine your life 40 or 50 years into the future. But there are also many reasons to start saving as soon as possible. So what are the five steps young investors can take today? Peter at RichonPlanning breaks it down with Erin Kennedy:

1. Track Your Budget: it's important to know what's coming in and what's going out before you make any financial decisions
2. 2. Set Aside Money for Big Expenses: would you like to save for a down payment? A wedding? A nice vacation?
3. 3. Open a Roth account: you'll probably never be in a lower tax bracket, so pay your taxes now!
4. 4. Contribute to a 401(k): at least up to the company match
5. 5. Focus on the Long Term: the sooner you start saving, the sooner you can reap the long-term reward of compound interest, which allows your principal investment to grow thanks to compounding dividends

And don't forget to create that "emergency fund," which should be 3-6 months' worth of expenses.

If you'd like to talk about your investing strategy, or if you're trying to make up for lost time, please feel free to reach out to Peter for a complimentary consultation at www.RichonPlanning.com or call (919) 300-5886.

#investingtips #younginvestors #CompoundInterest

Scams targeting older adults are on the rise. In 2021, there were almost 93 thousand older victims scammed out of $1.7 billion! In a recent report from the BBB, romance scams continued to be the riskiest scams for people 55-64, other common scams include government impersonation scams, sweepstake scams, and robocall scams.

In this video, Peter Richon with Richon Planning walks through several scams with Erin Kennedy, and offers this advice:

-Watch out for phone fraud

-Research before making an investment

-Be on guard for "sweetheart" swindles

-Reach out to someone you trust -Guard your personal information

Older adults are often targeted because of their greater financial resources. And sadly, one third of elderly people who've been scammed are too ashamed to tell anyone. Be vigilant. These scams are sophisticated and are designed to play to your emotions. If you have any questions about how to keep your finances safe, please feel free to give Peter a call at (919) 300-5886 or set up a free appointment at www.RichonPlanning.com

#Scams #ElderlyScams #WealthManagement #SweetheartSwindle

Before you exchange your annuity, there are several questions you should consider first. As Peter with Richon Planning explains to Erin Kennedy, there are many situations where an exchange or transfer makes sense, and there are many instances when exchanging your annuity is not a good idea. So before you do anything, watch out for these red flags:

-You're still within surrender charge period -You are offered a "bonus" or "premium" payment -You think you might need money from the annuity soon -You're not offered added benefits or a guaranteed lifetime rider -You pay higher charges for new features or features you don't need -You're told the "market value adjustment" negates the surrender charge

It's important to know that annuities do generate a commission for the advisor. Which is why some unscrupulous advisors push annuity exchanges; the exchange or transfer generates another commission for the advisor. If your advisor is not upfront about how he or she is compensated, that is another red flag. At Richon Planning, we value transparency. And we would be happy to offer a second opinion if you're being told you should exchange your annuity. For a free conversation, please reach out to Peter by calling (919) 300-5886 or schedule an appointment at richonplanning.com

#annuities #financialplanning #wealthmanagement

The Social Security fund is set to run out of money by 2033. One measure that could help keep the program afloat would be to raise the retirement age, possibly to 70 years old! In this video, Peter with Richon Planning and Erin Kennedy break down the 3 ways this could affect your financial plan:

1. An early retirement could be even more costly
2. 2. You may have to work longer than you're able
3. 3. You may run out of savings

And remember, claiming social security early will become even more costly! For example, if your full retirement age is 67, claiming Social Security at age 62 will result in a permanent 30% reduction in benefits. If the full retirement age were pushed to 70, claiming benefits at age 62 would lead to a permanent reduction that surpasses the current 30% mark!

Designing a holistic financial plan that accounts for all these variables is something we specialize in at Richon Planning. If we do see the full retirement age pushed back, we can help you determine how long you'll need to keep working, or whether you can retire early. To talk through your unique financial goals and to find out whether you're on track, please reach out to Peter by calling (919) 300-5886 or by visiting www.RichonPlanning.com

#socialsecurity #wealthmanagement #financialplanning

You've heard it before: the best time to buy Long Term Care Insurance is before you need it. Now, you may not have an option. Thirteen states are considering taxing you, if you don't have a long-term care insurance policy. And as Peter with Richon Planning explains to Erin Kennedy, he believes we will see more and more states adopt the tax.

However, there are ways to prepare for the tax and for the cost of LTC Insurance. Following the passage of the SECURE Act, you may be able to buy LTC insurance directly from your 401K! Distributions from those plans would be exempt from the 10% penalty on early distributions as long as they're used to pay premiums for high quality, long-term care insurance.

Having a plan for long-term care is vitally important; seven out of ten people will need long-term care at some point in their life. If you'd like to talk through your options for healthcare or long-term care insurance, please call Peter at (919) 300-5886 or make an appointment by visiting www.RichonPlanning.com