Retire With Ryan

Energy costs have risen substantially over the past year. However, there are certain things that you can do to lower your energy usage. Some with little to no effort at all! On this episode, I’m going to cover five things that you can do to specifically lower your electric bill and save hundreds of dollars a year.

• Shopping for a better supplier rate [2:17]
• Requesting a home energy audit [8:53]
• Upgrading to a smart thermostat [10:40]
• Using LED light bulbs [12:51]
• Unplugging vampire appliances [14:07]

If you pay the utility bill in your household, it’s evident that natural gas and heating oil prices have risen dramatically over the past year. The cost to fill up your tank at the gas station is another major indication of skyrocketing costs. While we’re powerless to control the cost of oil, there are things we can do to lower our energy and electricity usage. 

First, you should check to see if you live in a state with a deregulated energy market like Connecticut. If you live in one of the 26 states that do, there are two components to your electric bill. The first component is known as the delivery rate. This is considered the “regulated” portion of the bill that consumers have little control over. The second potion is the supplier rate. Consult your electric bill to determine the kilowatt per hour cost. That is the rate you want to shop around for! You should be able to use a resource like Connecticut's energizect.com to evaluate which providers in your area have the best supplier rate and make the switch. 

Another great way to cut down your energy costs is to install a smart thermostat. These relatively easy-to-install devices learn your heating and cooling habits to use the most efficient amount of energy possible, ultimately lowering your monthly bill. Additionally, if you leave the house for an extended period of time and forget to set your thermostat accordingly, it’s easy to adjust the temperature from afar, saving you from a costly spike in your electric bill.

Connecticut residents have the added benefit of requesting a home energy audit through Energize CT. For a $50 inspection fee, a home inspector can examine your home for possible pitfalls such as air leaks, insufficient insulation, and inefficient appliances. They also provide professional insight on how to fix these issues if they are present. If you implement these upgrades to your home, you can significantly decrease your electric bill and heating costs by up to $200 per year. Listen to this episode for more energy saving tips!

• 7 Ways To Cut Your Monthly Bills, #111
• Energize CT
• How Much do LED Lights Save?

www.MorrisseyWealthManagement.com/contact

The end of 2022 is quickly approaching! This means time is running out to take advantage of money-saving tax breaks. On this episode, I’ll highlight seven year-end tax moves to consider before the ball drops on December 31st. Don’t miss these invaluable tax tips that could make 2022 your best fiscal year yet!

• Contribute to a traditional IRA [1:12]
• Contribute to a state-sponsored 529 Plan [3:02]
• Fully fund your Health Savings Account [5:17]
• Take a tax loss on any investments outside of retirement accounts [8:16]
• Consider a Roth conversion [9:10]
• Take advantage of the 401k profit-sharing limit [12:03]
• Write off a business use vehicle [14:13]

Thanksgiving is over. The all-out sprint through the holidays towards the end of the year has begun! Now is the time to start planning your final tax moves for 2022. The first move I’d recommend before the year ends is contributing to a traditional IRA. Especially if you’re self-employed or don't have access to a retirement plan through work. If you have earned income in 2022, you can make a traditional IRA contribution up to $6,000 if you're under 50 and $7,000 if you're over 50. All of this as a pre-tax deduction, of course!

If you don't have earned income for 2022, but you’re married to someone who did, they can make what's known as a spousal IRA contribution. With an adjusted gross income under $204,000, you can make the full $6,000 or $7,000 contribution depending on your age. That contribution amount gets proportionately phased out until your income exceeds $214,000. You also have the potential to make this contribution if you are covered by an employer-sponsored plan through work. As a single filer, if your adjusted gross income is below $68,000, you can make the full contribution, and if you're a joint filer, that adjusted gross income limit is $109,000.

Another year-end tax tip I highly recommend is fully funding your Health Savings Account (HSA). HSAs have a single and a family plan maximum. The single plan maximum for 2022 is $3,650, and the family plan maximum is $7,300. Additionally, if you're over the age of 55, you can add up to $1,000 as a catch-up contribution. I'm such a big fan of doing this because HSAs are considered a triple tax-free account. You get a tax deduction when the money goes in, and a tax deduction for health-related costs when it comes out. The money also grows tax-deferred!

To really take advantage of this, I would suggest investing the money and leaving it in the account for as long as possible. Be sure to track your health savings account expenses so you can reimburse yourself years after you've made the contributions. The goal is to invest the money in some type of stock-bond portfolio so that it grows in your account. This way you're only actually spending your gains and not the principal. Listen to this episode for more year-end tax moves!

www.MorrisseyWealthManagement.com/contact

Do you have old retirement plans or 401ks that you've lost track of, but you're not sure where you can find and gain access to those accounts? On this week's episode, I'm going to cover four ways you can locate those old retirement plans and discuss how to put them to their best use.

• The three places your old retirement account money could be [1:49]
• Using your social security number [3:35]
• Searching unclaimed property databases [5:51]
• An exciting solution from the industry's leading retirement plan providers [6:57]
• What to do with your money when you find it [8:32]

It's been estimated that there are billions of dollars sitting in old retirement plans that people have forgotten about. If you have an old 401k or retirement plan that you’ve lost track of, there are three places where that money could be right now. If your employer is still in business, it's easy to track them down and find out where your old 401k has gone. However, the size of the balance left in your retirement account will most likely determine where the money is.

If you have less than a $1,000 balance, your 401k provider can cash in that account and send a check to you. If this is the case, you want to follow up because the original check is likely invalid, and there could be tax consequences for not rolling the money over within 60 days of the original check being issued. If you had a balance between $1000 and $5,000, the old retirement plan provider can't send you a check, but they can move that account to another IRA. Finally, having a balance over $5000 is the easiest option because chances are it's still with the employer-sponsored retirement plan. It's simply a case of you gaining access to that account.

What do you do if you don’t know who your old 401k provider is anymore? Maybe it’s been a few years. Maybe your former company has merged a few times, or they went out of business altogether. It still might be a good idea to contact your old 401k provider to see if they still have an account open for you. If you're unable to locate your 401k through your administrator, your next step is to try and look it up with your social security number through various unclaimed retirement benefit registries. And if all else fails, there are several multi-state unclaimed property databases that could be helpful.

Hopefully, one of the three options above yields results, but it can be a lot of work. Recently, a trio of the industry's largest 401k administrators (Fidelity Investments, Vanguard, and Alight Solutions) have teamed up to try to alleviate some of the stress and tax problems that go along with old 401k balances. They've put together a clearing house of sorts where anytime you leave a job with an old 401k balance, after a certain period of time these companies will talk to each other and automatically try to transfer that money over to a new qualified window quickly. If it's less than $1,000, but they don't know where to send it, or it comes back because it was in cash, they would take care of that. And if you have another retirement account with them, they'll try to automatically move that money over to that plan for you.

• 'Billions of dollars get left behind': The 401(k) industry now has a 'lost and found' for your old retirement accounts
• National Registry of Unclaimed Retirement Benefits
• Contacting PBGC About Unclaimed Pensions
• FreeERISA
• MissingMoney.com
• Find your old 401ks
• 4 Things To Know Before Doing A 401k Rollover, #40

www.MorrisseyWealthManagement.com/contact

Simultaneously saving for retirement and your child’s college education requires delicate and intentional planning. You want to ensure you and your student will get a quality return on the sizable investment you’re making. On this episode, I sit down with educational planning expert Beth Probst of At The Core to discuss the rising costs of college tuition, setting up high school seniors for success, and the tool she created to help college-bound students get the most out of higher education.

• Setting high school seniors up for success and the misnomer of “good schools” [1:48]
• Ryan’s college selection experience, the rising cost of tuition, and questions to answer before investing in higher education [9:07]
• Beth’s Guided Self-Assessment and why students should plan before they leap [20:11]

It’s hard to believe that college ever cost $6,000 a year. Today you would be lucky to pay that per semester for tuition alone. With the average annual cost for the complete college experience (tuition, books, room, and board) coming in around $35,000, you want to know that you and your student will get the most out of that investment before you sign on the dotted line. Parents will want to do everything they can to help their students not only get into college, but leave that place with the training and skills needed to have a successful career.

One way to do that is through students taking AP classes in high school. These classes of increased difficulty are taught by high school teachers to prepare students for a three-hour test administered at the end of the year. Students can receive college credit for the subject area depending on their score out of five and the preferences of the institution they are enrolled at. Another option to prepare students for college is dual enrollment. This is where students take actual college classes for credit during high school hours at a significantly reduced rate.

While AP classes and dual enrollment can help prepare students for the college academic environment, knowing why they want to be there in the first place is the key to making a solid academic investment. It’s easy to walk onto a gorgeous college campus and fall in love with an $80,000-per-year school, but unless your student can financially justify the price tag, a less expensive option is probably a better investment. The idea that some schools are better simply because they cost more is nothing but clever marketing. The best school is the one that sets your student up for success without crippling debt.

It’s so important for college-bound students to know who they are and what kinds of careers could be a great fit. College is way too expensive for them to just show up and figure it out. That’s why Beth started At The Core. Her guided self-assessment allows students to dive deep into their strengths, struggles, interests, preferences, values, and lifestyle goals through a series of five one-hour interviews. Then Beth and her team compile that information into a report, giving students a snapshot of who they are and potential careers tied to their natural inclinations. Walking into college with solid career goals and objectives for their educational experience helps students get the most out of their educational investment. For more information listen to this episode and visit the links below!

• Follow Beth on LinkedIn
• At The Core
• Call At The Core 

www.MorrisseyWealthManagement.com/contact

The secret to anyone’s life is cash flow. But what if that cash could flow into your bank account through passive income? On this episode, I’m joined by Dustin Heiner of Master Passive Income to discuss investing in real estate through rental properties. We’ll discuss his real estate investment journey, obtaining financing for rental properties, and the best ways to manage those properties.

• Getting to know Dustin Heiner and how he became successfully unemployed [0:42]
• Obtaining financing to purchase a rental property [5:04]
• The logistics of managing a rental property [15:33]
• Simplifying the real estate investment process [23:05]
• What about reserves for rental properties? [31:02]
• Final thoughts [33:22]

When deciding whether to invest in a rental property, one of the scariest aspects is financing. Saving up enough money for a down payment of 25 to 30 percent can feel daunting. However, that’s only one way to do it. Dustin has used 14 different ways to finance a rental property, including mortgages, conventional loans, commercial loans, signature loans, private loans, and even credit cards. He admits that the last one is a bad idea unless you know you’re going to make money. 

One financing avenue I didn’t realize was possible for rental properties is using an FHA loan. Buying a home with a 3% down FHA loan is a fantastic way to get into a property. But don't sell it! If you refinance the property to get out of the FHA loan, you can buy and move into a second house with a new FHA loan and a 3% down payment. Then simply rent out the first home and repeat the process with the second. Another financing option Dustin recommends is using private money. He suggests approaching someone you know that can reliably invest in the property and find out what they need to invest. This could be 10% interest, points up front, or equity in the deal. You want to give them a good return while using as little of your own money as possible.

Dustin attributes all of his success to a simple principle: build the business first. Most people think the first step to investing in a real estate property is buying the property. But this is actually the LAST step in Dustin’s process. Once he establishes an area he wants to purchase in and how much he needs to charge for rent to cover all expenses with at least $250 in positive income, he seeks out local experts to ensure he can rent the property for the right amount. But don’t count websites like Zillow as experts! You want to find and hire experienced property managers who know the area and can give you insight into whether or not it’s a good investment before you buy.

The other reason you want quality property managers is that they will end up running the day-to-day of your business. They interact with tenants, collect rent, facilitate most repairs, and even deal with evictions if necessary. A common question for Dustin is how he affords property managers? The short answer is: he doesn’t. Everything needed to maintain the property, including its managers, is baked into the cost of rent. Listen to this episode for more on investing in rental properties for extra income!

• FREE Real Estate Investing Course

www.MorrisseyWealthManagement.com/contact

Housing is the number one cost and chief concern for people in retirement. What if you could use the equity in your home to generate income and put your mind at ease? On this week’s episode, join me for a conversation with Mutual of Omaha’s Mitch Cooper to discuss reverse mortgages. We’ll dissect the pros and cons and give you the information you need to decide if a reverse mortgage makes sense for your retirement.

• Who is eligible for a reverse mortgage and what are the logistics? [2:01]
• The most strategic use of a reverse mortgage [8:18]
• Does a reverse mortgage have a downside? [19:37]
• Final thoughts [23:00]

The average American has two-thirds of their wealth tied up in home equity. So the biggest question becomes how do you access that equity safely and strategically? Enter the reverse mortgage! The simplest way to think about a reverse mortgage is as a lien on your property. You still own your home, but you pay off the loan when you sell, and there is no required monthly payment as long as you still live there. Once the last borrower leaves the home, the loan is due. However, be aware that there is still interest accruing monthly!

One of the biggest factors for reverse mortgage eligibility is age. The minimum age requirement for an FHA reverse mortgage is 62 years old. Some proprietary programs go down to age 55, but that will vary by state. Unlike traditional loans, reverse mortgages won’t give you access to 80% of your home’s value. The amount of a reverse mortgage loan depends on age and interest rates. The older you are and the lower the interest rates, the more equity you will have access to. Typically, a 62-year-old can liquidate around 30% of their home's value through a reverse mortgage.

The most strategic use for a reverse mortgage is using it to open a line of credit. Let’s say you own your house free and clear, and you qualify for a $200,000 reverse mortgage. With no existing mortgage payment, you could leave that in the line of credit, giving you a liquid tax-free bucket that can be used for several retirement income strategies. One of which is using a line of credit from a reverse mortgage to pay for long-term care if needed. Or as an insurance policy in case of emergencies.

Ultimately, reverse mortgages should be viewed as an asset protection tool. With the stock markets seeing losses as high as 20%, a reverse mortgage can be used as a timely shield to prevent your IRA from getting drained in down markets. Using a reverse mortgage alongside other assets makes both last longer. Research shows that using a reverse mortgage in this strategic manner actually increases the value of your estate because of how it can protect your other assets. Listen to this episode for more on reverse mortgages!

• Retire With Ryan Podcast 2022 Listener Survey
• Email Mitch

www.MorrisseyWealthManagement.com/contact

There’s a new cost of living adjustment for both Social Security benefits and Medicare! But what does it mean? And how will these changes impact your retirement? On this week's episode, I'm going to address the recent announcement from Social Security regarding the 2023 cost of living adjustment and answer a listener's question on signing up for Medicare while using COBRA insurance.

• How Social Security cost of living adjustments are determined [1:22]
• Cost of living adjustments for Medicare [3:42]
• What is the Social Security Wage Base Cap? [6:34]
• COBRA or Medicare: What should you choose? [8:48]

Every year, the Social Security Administration (SSA) performs a cost of living adjustment (COLA) for Social Security benefits. The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) to determine the adjustment. They take the average of the indexes for July, August, and September, and then subtract the average for the same period from the previous year. That is how the recently announced 8.7% increase in Social Security benefits was formulated. Thankfully, you don’t have to wait to get your statements to find out how this impacts your benefits. Simply go to SSA.gov and log in or create an account to view the changes.

Additionally, if you are not yet collecting Social Security benefits, the COLA will not show up directly on your statements. Rather, when your Social Security benefit is calculated annually, it will be increased by the cost of living adjustment so that when you actually claim your benefit, they will be adjusted for this increase. If you’re still planning to delay your benefit, then any future cost of living adjustments will increase the amount you could receive.

Aside from Social Security benefits, Medicare beneficiaries also received a cost of living adjustment. The base premium for Medicare Part B actually decreased to $164.90 from last year’s $170.10. Usually, when we have inflation, there's an increase in Social Security benefits, but the cost of Medicare goes up as well. This Medicare decrease is a welcome relief for retirees struggling to keep up with the current rate of inflation. 

Another facet of this Medicare announcement is a change to the income-related monthly adjustment amount (IRMA). This is the additional amount you may have to pay on top of the standard Medicare Part B premium if your income exceeds a certain level. For this year, single filers will have to pay the surcharge if their income is over $97,000 (up from $91,00), and joint filers will have extra fees with an income over $194,000 (up from$182,00). They also announced that the maximum amount for this surcharge is $395.60 per month per person for Medicare Part B. Listen to this episode for more on the Social Security and Medicare cost of living adjustments!

• Retire With Ryan Podcast 2022 Listener Survey
• SSA Press Release on Cost of Living Adjustment
• Avoid Overpaying For Medicare In 2021 And Beyond, #31 

www.MorrisseyWealthManagement.com/contact

Have you ever gotten a suspicious text or email that felt real and didn’t know what to do? When was the last time you changed your online bank account password? In honor of Cybersecurity Awareness Month, I thought it would be the perfect time to talk about the seven steps you can take to protect yourself from becoming a victim of cybercrime. 

• Are your passwords strong enough? [2:57]
• Who is managing your passwords? [4:14]
• The power of two-factor authentication [5:38]
• How to avoid malicious emails [7:05]
• When was your last data backup? [9:07]
• The risks of public Wi-Fi [10:10]
• What if I’ve already been hacked? [13:06]

As we continue to move at breakneck speeds into an increasingly digital age, digital security should be one of our top priorities. One of the first ways to stay protected is to know the most common cyber schemes employed by the internet’s criminals. The most common technique is called phishing, where an attacker uses generic spam emails or targeted communications to acquire your personal information. Spoofing is similar to phishing, but it’s more complex in that the attackers mimic a specific organization or website to get your information or to install ransomware or malware. 

Ransomware is software that criminals use to lock you out of your system or important files and extort you for money to regain access. Malware is software that actually gives attackers control of your system and opens the door for even more damage. The final thing to keep on your security radar is IoT or “Internet of Things” hacking. This type of hacking is done by accessing your computer and stealing data through other connected devices like smartphones and smart appliances that are connected to the same wireless network. The terms and conditions for some apps even give companies permission to do this kind of data mining, so be careful what you download!

It’s 2022, yet the most common digital password is still 123456. That fun fact is only fun if you're a hacker. Professional cybercriminals have software that can easily guess simple passwords like this. You want to make sure the passwords guarding your important accounts are complex and at least eight characters long. That goes double for your smartphone! Our entire lives are on these things, and major damage can be done if they fall into the wrong hands.

The most common complaint about having quality passwords is that they are too difficult to remember. That’s why it’s essential to use a password manager such as 1Password or Bitwarden on your computer and mobile devices. Apple users have an advantage through the password management software called Keychain built into every device. Not only does it store all of your passwords using biometrics (i.e. fingerprint or Face ID), it will help you generate and save advanced passwords to keep all of your information safe. Listen to this episode for more cybersecurity tips!

• Retire With Ryan Podcast 2022 Listener Survey
• 3 Ways to Protect Your Money From Hackers With Devin Kropp (Part 1), #45
• 3 Ways to Protect Your Money From Hackers With Devin Kropp (Part 2), #46
• NordVPN 

www.MorrisseyWealthManagement.com/contact

Despite our industry's best efforts to protect investors from scams and bad recommendations, good people are being taken advantage of every day by shady financial advisors. On this episode, I’m going to address the 10 questions you need to ask any financial advisor you want to hire or are currently working with and give you my answers so that you stay protected from financial predators. 

• Are you a fiduciary and a fee-only firm? [1:51]
• Do you have any disclosures or complaints? [5:00]
• Do you have any specific certifications? [5:34]
• Do you have any specialties and what services do you offer? [7:41]
• How are you compensated for your services? [8:33]
• What other charges will I potentially incur? [9:22]
• What’s your investment philosophy? [10:54]
• Where do you keep your client’s money and how can they see it? [11:51]
• How often will we communicate? [13:40]
• How many clients do you advise and how long has your oldest client been with you? [14:40]

One of the most important questions you can ask a potential financial advisor is if they are a fiduciary. This means that as an advisor, they are required to put their client’s interests ahead of their own at all times. Unfortunately, non-fiduciary advisors make recommendations to their clients that solely benefit them every single day. It’s extremely important to verify that any potential or current financial advisor is a fiduciary because they will be legally and ethically bound to handle your money responsibly.

The second and equally important question you should ask a financial advisor you’re looking to hire is if they are a fee-only advisor working for a fee-only firm. This means neither the firm nor the advisor accepts commissions for recommendations they make or for managing their client’s portfolios. However, some fiduciary advisors maintain insurance and brokerage licenses that allow them to receive commissions for the recommendations that they make. I believe this creates an unhealthy conflict of interest and that being a fee-only advisor is the way to go.

Another great piece of information to know about a potential financial advisor is if they have any specialties and what services they offer. You want to select a financial advisor whose expertise matches your needs. If you’re hoping to start a small business you don’t want to go with someone who specializes in people going through a divorce. My specialty is retirement planning. I help people within five years of retirement through comprehensive financial planning and wealth management services. The right financial advisor is the one that matches your goal.

Finally, you need to know where your financial advisor keeps their client’s money and how you can see it. Bernie Madoff ripped off so many people because he was personally holding their investments in an account with unrestricted access. I urge all investors not to allow their advisor or their advisory firm to hold their investments directly. Rather, their investment should be held by an independent third party known as a custodian like TD Ameritrade or Charles Schwabb. Never personally write a check to your financial advisor. Any fees for services should be made out to the firm itself. Listen to this episode for more insights on hiring a financial advisor!

• Retire With Ryan Podcast 2022 Listener Survey
• Top 10 Interview Questions When Hiring a Financial Advisor (Blog)
• Investment Adviser Public Disclosure Website
• BrokerCheck
• CFP Board

www.MorrisseyWealthManagement.com/contact

Wouldn’t it be nice if every investment was a winner? While not every investment will make you money, there are strategies to help you make the most of a loss. On this episode, I’m going to show you the dos and don’ts of tax-loss harvesting so you can lower your income taxes and soften potential losses in the market.

• What is tax-loss harvesting [1:10]
• Examples of tax-loss harvesting [2:30]
• Four things to be aware of when developing a tax-loss harvesting strategy [4:29]
• Do your tax-loss harvesting homework [8:13]

Tax-loss harvesting is one of the many tax strategies you should consider as an investor. It works by selling investments that are down in value from your purchase price. You can use the loss to offset other taxable capital gains from that year or reduce your ordinary income for that year by up to $3,000. Then you have the option to reinvest that money into a similar investment or purchase the same investment after 30 days to avoid missing any recovery.

This strategy can be used for both short-term and long-term investment losses to soften the blow and stay invested in the market. Let’s say you have a long-term capital loss of $15,000 and you sell it off. If you have no other capital gains for the year, take $3,000 of that $15,000 loss as a deduction on your taxes this year against your ordinary income. The remaining $12,000 loss would carry over to use the following year off any other gains, or you could continue writing off the remaining loss up to $3,000 per year until it's used up. Long-term losses don't have limitations either, so you can keep using them over your lifetime to offset future gains or to write them off as ordinary income deductions. 

While tax-loss harvesting in the current economic climate feels like a no-brainer, there are some things you need to be aware of when developing this strategy. The first is that tax-loss harvesting cannot be used with retirement accounts such as 401ks, IRAs, Roth IRAs, SEP IRAs, Simple IRAs, 403 B's, etc. Secondly, losses need to be first used to offset like gains. If you have long-term losses, those losses first need to be applied against any long-term gains, and vice versa for short-term gains and losses.

For instance, if you believe the soft drink industry is a solid investment despite your current losses, you could sell Coke to buy Pepsi. It’s a little more complicated with things like funds. Let’s say you’re invested in an S&P 500 index fund. You could sell that fund and buy a "different enough" index fund that tracks a different index, such as the total stock market index or the Russell 1000. You just have to ensure that you don’t buy a substantially identical investment within 30 days of the sale, or that loss is disallowed for current income tax purposes. For more on this and other tax-loss harvesting tips, listen to this episode!

• Retire With Ryan Podcast 2022 Listener Survey
• What Is The Difference Between An Index Fund And An ETF?, #113 
• IRS Revenue Ruling 2008-05

www.MorrisseyWealthManagement.com/contact