I am Maxing out my 401k, Now What? Money Not Math Client Success Story 2

I love to help people have more confidence in their future and it is my mission to provide the highest quality advice and service possible to my clients. To accomplish this, I limit myself to having 100 active clients or less that I have a fiduciary responsibility to at all times.

One way I hope to provide value to good people is to periodically write a client success story. So that no matter what is troubling you today, you can see there is light at the end of the tunnel, and it is possible to improve your financial future.

After I gave a retirement planning presentation to a group a few years ago. A 35-year-old doctor from the group reached out to me afterwards and basically said, “I am maxing out my 401k, HSA, and IRA, now what?” So, we scheduled a meeting to discuss their current planning and determine if it might make sense for us to work together. In that meeting I found out a few key pieces of information about this person that would impact their planning. They were motivated to be a good steward of their money so they could help others, they wanted to travel, and they wanted to retire as early as possible so they could go on mission trips and volunteer to help those in need across the world.

This was great news and a problem at the same time. It was great news because this was obviously an incredible human that cares about others that I would enjoy working with. But the problem was, like many people, their life aspirations and current savings strategies did not align and were not working together. They were maxing out their 401k, IRA, and HSA. Which is an impressive display of discipline and saving for their future. However, the problem is their primary goals in life were to help others, travel, and retire as soon as possible which means they would need access to their money and liquidity before they are 59.5 years old. Unfortunately, their max contributions to their 401k and IRA would not be completely liquid without penalty or taxes until they were 59.5. Plus, they had no current medical issues or expenses so even though their HSA savings would be valuable in the future, they were not overly impactful when it came to achieving their shorter-term goals. Therefore, a majority of their current savings were not going to help them achieve their goals and they did not have any strategies in place to help them achieve their goals.

They decided they wanted to work together so we got to work reviewing savings strategies and options for them to consider that would help them achieve their goals by growing their wealth while staying liquid or accessible when they wanted. Since that time, they continued saving into their 401k, IRA, and HSA while also adding two additional tools to their strategy that will grow, balance their exposure to the market, and stay accessible for them to use to help others, travel, and retire as soon as possible rather than waiting until they are 59.5 years old. Plus, they also completed their estate planning, and we continue to meet once or twice a year to maintain and update their planning.

Thank you and I hope you have a wonderful day,

Drew Erickson

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation. Please reach out if you have questions or would like to discuss any of the details mentioned in this client’s story. Out of respect to the clients, I kept names and specific details out of this story while leaving enough information to hopefully provide value. This story would not have been written without the consent of my clients about whom it is written. And as always, everything my clients do with me is confidential at all times and is not shared with any of my other clients or people I know without their consent.

Your 2024 Tax Fact Sheet and Important Dates. Money Not Math 148

2024 Important Tax Facts for All Taxpayers. Do you know the difference between your marginal and effective income tax rate?

2024 Important Tax Facts for Investors. Is it better for you to pay income or capital gains tax rates?

2024: Important Tax Dates to Remember

• Jan. 1: New IRA, retirement plan, and HSA contribution and income limits go into effect for the 2024 tax year, as listed above.

• Jan. 16: Estimated tax payments due for the fourth quarter of 2023.

• April 15: 2023 individual tax returns due, last day to contribute to IRA and SA for 2023.

• June 17: Estimated tax payments due for the second quarter of 2024.

• Sept. 16: Estimated tax payments due for the third quarter of 2024.

• Oct. 15: Individual tax returns due for taxpayers who received a six-month extension on their 2023 returns.

• Dec. 31: Retirees age 73 and older must take required minimum distributions from traditional IRAs and 401(k)s; those RMDs are based on their balances at the end of 2023. Last date to make contributions to company retirement plans (401(k), 403(b), 457) for the 2024 tax year.

Article referenced, https://www.morningstar.com/personal-finance/your-2023-tax-fact-sheet-calendar?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_morningdigest&utm_content=50748

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

Priorities and timing are everything. Money Not Math 147 with Joe Hedrick - TRF Airport Manager

Listen to this Money Not Math conversation to learn more about Joe, how the airport works, and the lessons Joe has learned running this $1,000,000 per year business.

What brought Joe to TRF and how did he become the manager of the TRF airport?

From compliance to snowplowing to shaking hands with the governor… you may be amazed by all that goes into Joe’s job!

Did you know the TRF airport has doubled how many people fly out of TRF and quadrupled the cargo that’s shipped?

Check this episode out to hear the exciting developments coming to the airport next! Did I hear a DELTA in there?

What is the greatest financial lesson Joe has learned?

Joe’s greatest piece of advice is…

What is Joe’s definition of being successful?

Consistency or Fairness, Positive Mindset, Sober Optimism, Passion, and Pragmatism are some great core values. Is your glass half full or half empty?

Thank you for supporting the airport!

#MoneyNotMath #Money #retirement #RetirementPlanning #revenue #GrowthMindset #time #priorties #FinancialBurden #taxes #TaxLevy #PositiveMindset #advocate #rotary

I love to help people have more confidence in their future and it is my mission to provide the highest quality advice and service possible to my clients. To accomplish this, I limit myself to having 100 active clients or less that I have a fiduciary responsibility to at all times. Rather than trying to sell as many hot dogs (or products) to as I can to as many people possible even if they do not need or want them.

One way I hope to provide value to good people, whether they are my clients or not, is to periodically write a client success story. So that no matter what is troubling you today, you can see there is light at the end of the tunnel, and it is possible to improve your financial future.

Nine years ago, back in 2014, I met with a couple for the first time. During that meeting they expressed to me their number one financial planning goal was to retire comfortably in their early to mid-60s. However, due to a pile of credit card and student loan debt plus not having a plan they were not sure if they would ever be able to retire much less in their 60s. In that meeting they almost shrugged off the idea of ever retiring due to their situation looking so bleak and said, “we don’t want to be a prisoner to what we owe to our debt.”

These clients were familiar with the financial industry and had even met with “financial planners” in the past. However, due to life getting busy with work and raising their kids plus the “financial planners” never calling them again after selling them a product. Their financial plan and confidence to retire went by the wayside. To avoid leaving them with products and strategies they would not remember how to use in the years to come and to improve our ability to reach their financial and retirement goals. We agreed in our first meeting to have at least one annual review and one check-in call per year minimum.

Over the next nine years we worked together on their investments and 401k planning, budgeting, insurance protection, and debt reduction goals together. With our ability as an independent company that can use the strategies, we believe fit our clients best and shop around to almost any company we want for investments, insurance, structured notes, and annuity options. We were able to bring them from wondering “if they would ever be able to retire and stop being a prisoner to their debt” to choosing when and where they want to retire. To go from wondering if they will have to work until the day they die, to choosing where in the country they want to live and what they want to live in throughout the different seasons of the year. All with a healthy portion of their retirement portfolio paying them guaranteed income for life that they cannot outlive. Plus, a healthy portion of their retirement portfolio allocated to fight inflation and be available for their legacy to their family and/or charity. Giving them the confidence, they hoped for to retire when they wanted to, how they wanted to, and where they wanted to when we met nine years ago.

Money does not buy happiness. However, when used correctly and with discipline, it can be an amazing tool to help us build the lives we dream of and have ...

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation. Please reach out if you have questions or would like to discuss any of the details mentioned in this client’s story. Out of respect to the clients, I kept names and specific details out of this story while leaving enough information to hopefully provide value. This story would not have been written without the consent of my clients whom it I written about. And as always, everything my clients do with me is confidential at all times and is not shared with any of my other clients or people I know without their consent.

#MoneyNotMath #money #retirement #RetirementPlanning #Integrity #Learning #Generosity #Relationships #Legacy #Gratitude

Tough Times Can Lead to Amazing Opportunities. Money Not

How a failed business plan and everything falling apart led

How the journey of self-discovery led to the value John

What it looks like to be a life insurance product-centric

John believes in safety, control, and passive income. Do you

It’s all about getting or doing what’s best for the client

How and Why did John start his financial planning business? Gaining

What is the best financial lesson John has ever learned?

What is the one piece of financial advice John would give to

What is John’s definition of being successful? What does it

To contact John or learn more about him go to jumponwithjohn.com

#MoneyNotMath #5StoneFinancialGroup #retirement

What is a Backdoor Roth IRA and how should I set it up? Money Not Math 145

When should you avoid this strategy?

What makes a backdoor Roth IRA Different?

Do you pay taxes on backdoor Roth IRAs?

Are backdoor Roth IRAs worth it?

How much can I contribute?

What are alternatives to backdoor Roth IRAs?

Article referenced, https://investor.vanguard.com/investor-resources-education/article/how-to-set-up-backdoor-ira#:~:text=Backdoor%20Roth%20IRA%20income%20limits&text=The%20phaseout%20occurs%20between%20%24138%2C000,for%20joint%20filers%20in%202023.

#MoneyNotMath #5StoneFinancialGroup #DavidVsGoliath #Retirement #RetirementPlanning #BackdoorRothIRA #RothIRA #IRA #Roth #Taxes #Investing

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

What would a recession mean for stock returns? Money Not Math 144

Recession concerns have been a fixture in the news lately and pretty much always are because it’s easier to sell ads with negativity rather than optimism.

Investors should be aware that recession announcements are backward-looking compared to the markets that are forward-looking. In fact, recessions are often announced after the market is already on the path to recovering. Did you know the 3-year average return of the S&P500 is better after a recession has started?

Watch the video or listen to the podcast for data from 1947 and an example from 2008.

I believe investors who ignore headlines and stick to a long-term plan built for them are better positioned for success.

#MoneyNotMath #Money #Retirement #RetirementPlanning #5StoneFinancialGroup #Recession #stocks #StockReturns #optimism #investors

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

Secure Act 1.0 adds new considerations for spouse beneficiaries.

The spouse beneficiary is among the few eligible to take RMDs from inherited accounts over their life expectancy rather than within 10 years.

Three options available= 1) Beneficiary IRA 2) Treat-as-own 3) Rollover to their own.

Choosing the Right options: “Ultimately, which option is right for a spouse beneficiary depends on their beneficiary profile, including whether they need to avoid the 10% additional tax and/or minimize distributions.” – Denise Appleby

Article referenced: “What is the Right Option for a Spouse IRA Beneficiary?” https://www.morningstar.com/financial-advice/what-is-right-option-spouse-ira-beneficiary

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

#MoneyNotMath #Money #Retirement #Beneficiaries #taxes #MemorialDay #Remember #SecureAct

“The Cost of Claiming Social Security Before Full Retirement Age… The median loss from early claiming in the present value of household lifetime discretionary spending was a whopping $182,370.”

“Why aren’t more people delaying social security claims? In 2021, 31% of retired worker claims were made by people age 62…”

“What Raising the Full Retirement Age Would Mean for Younger Workers… Every 12-month increase in the FRA roughly equates to a 6.5% cut in benefits.”

“The bottom line for today’s younger workers: If you hear a politician talking about a plan to “save” Social Security by cutting benefits, grab your wallet.”

Article quoted, “Would Raising the Full Retirement Age Really Save Social Security?” by Mark Miller https://www.morningstar.com/articles/1149457/would-raising-the-full-retirement-age-really-save-social-security?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_morningdigest&utm_content=44041

Disclaimer, this content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

#MoneyNotMath #Money #Retirement #RetirementPlanning #5StoneFinancialGroup #SocialSecurity #benefits

How to Invest Better and Live Better. Money Not Math 141

Referencing the 2023-Dimensional Matrix Book. David Booth, Founder and Chairman of Dimensional. - “Having a good investment experience is about more than returns. What matters just as much—maybe even more—is how people feel along their financial journey.”

The Power of Compounding by Stacey Winning, Chief Talent Officer

Control What You Can by Bryce Skaff, Co-Head of Global Client Group.

“On that fateful day, I controlled what I could by staying calm, trusting my body, and letting the doctors do their job. The experience was a reminder of how preparation, discipline, and quality professional guidance can help us weather any storm. “

Planning over Prediction By Savina Rizova, Global head of Research

Uncertainty and Opportunity by Brad Steiman, Head of Wealth Management Group, Canada

“Life’s setbacks are rarely as bad as you fear. Stay focused on the important things. The rest will come.”

The Value in Flexiblity by Bhanu Singh, CEO, Australia; Head of Asia Pacific Portfolio Management.

Disclaimer, past performance is not a guarantee of future results. Indices are not available for direct

investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. This is an example for conceptual learning around the power of Compounding only. This content is not legal, tax, or investment advice. You should always consult a qualified professional regarding your personal situation.

#MoneyNotMath #Money #5StoneFinancialGroup #Retirement #investing #wealth #enjoy #compounding #control #planning #prediction #uncertainty #opportunity #flexibility #invest #live #better