If you’ve ever worried about money, you’re not alone. In fact, 90% of Americans say their personal finances affect their stress levels, according to a recent study from Thriving Wallet.

Unfortunately, excess financial stress can lead to sleepless nights, anxiety, and even physical health problems. Moreover, it can strain relationships and make it harder to focus on work or enjoy life.

The good news is there are ways to manage financial stress, so your money doesn’t end up controlling you. In this article, we’ll explore six steps you can take to feel better about your finances while setting yourself up for long-term financial success.

Why Are So Many People Stressed About Money?

Financial stress can ebb and flow over the course of one’s lifetime, oftentimes in relation to major life events and external circumstances. While the specific causes are often personal, there are several broad factors that can lead to excess money worries.

For instance, people often stress over money when they think they don’t have enough of it. These concerns can be particularly acute for those nearing retirement, who run the risk of outliving their financial resources if they don’t plan carefully.

Poor financial decisions can also increase stress levels, even if they feel like good decisions at the time. For example, many people stretch themselves financially to purchase their dream home, only to worry about how they’ll cover all the costs that go along it once they move in.

Then there are circumstances beyond our control that create financial stress, like economic shocks and persistently high inflation. Indeed, 52% of U.S. adults say their financial stress levels are higher now than they were before the Covid-19 pandemic began, according to a recent CNBC/Momentive survey.

Fortunately, a little self-awareness and financial self-care can go a long way when it comes to reducing financial stress. By developing a healthier relationship with your money, you can start to make decisions that better serve you and the financial future you desire.

6 Ways to Reduce Financial Stress

#1: Identify Your Sources of Financial Stress

The first step in reducing financial stress is identifying its source. Is it mounting debt? Lack of savings? Uncertainty about retirement? Perhaps it’s due to bad habits, like impulse spending or living beyond your means.

By pinpointing the root cause of your stress, you can develop a targeted plan to address it. If you know that unexpected expenses are a major source of anxiety, for example, you might prioritize building your emergency fund.

In some cases, accumulating wealth can cause financial stress as your planning needs become increasingly complex. By acknowledging these challenges, you might also give yourself permission to seek expert help, so you no longer need to make tough financial decisions on your own.

No matter the source of your stress, you can’t effectively address the problem without first identifying its cause. Understanding where your financial stress is coming from can help you take steps to reduce it and prevent it from resurfacing in the future.

#2: Assess Your Financial Health

Facing the reality of your financial life may be the last thing you want to do, especially if you’re already stressed about money. However, ignorance isn’t bliss when it comes to your finances.

If financial missteps or shortcomings are causing you stress, ignoring the problem won’t make it go away. To get where you want to be financially, you must first understand your starting point.

There are several key metrics you can use to assess your current financial health, including net worth, credit score, debt-to-income ratio, cash reserves, and retirement savings. These measures will help you understand where you’re doing well financially and where you may need to adjust your habits.

For example, if your debt-to-income ratio is relatively high and your credit score is suffering as a result, you may need to create a plan to get out of debt. On the other hand, if your net worth is increasing but your emergency fund and retirement savings have remained stagnant, this may be an indication you need to boost your savings targets.

Tracking these metrics over time also allows you to measure your progress, which can help boost your financial confidence. Furthermore, understanding the underlying elements of your financial health can help you make better decisions, so you’re less stressed moving forward.

#3: Get Clear on Your Financial Priorities

Now that you have a better understanding of your stressors and financial position, the next step is to get clear on your financial priorities. In other words, what matters most to you when it comes to your money?

For some people, staying out of debt may be more important than living a lavish lifestyle. Others may be willing to make sacrifices today so they can retire ahead of schedule.

Once you have a better understanding of your financial priorities, ask yourself if your actions tell a different story. For instance, if it’s important for you to retire on time but you tend to spend more than you save, this disconnect may be a source of stress.

It’s important to be honest with yourself as you take inventory of your values, goals, and financial habits. Aligning these three factors can help you reduce financial stress and feel better about your money long-term.

#4: Save Enough Money to Help You Navigate Tough Times

Another way to reduce financial stress is to ensure you have adequate emergency savings. An emergency fund can provide peace of mind if you incur an unexpected expense or experience a financial setback like a job loss.

Unfortunately, only 48% of Americans say they have enough emergency savings to cover living expenses for three months. Meanwhile, 22% have no emergency savings at all, according to a recent Bankrate survey.

Most experts recommend saving enough to cover at least three to six months’ worth of expenses. However, the exact amount will vary depending on your lifestyle and risk tolerance.

If a lack of savings or the possibility of losing your income is keeping you up at night, be sure to take stock of your emergency fund and give it a boost if necessary.

#5: Embrace Communication

Finances are the number one cause of stress in a marriage, according to a study by SunTrust. Moreover, the Institute for Divorce Financial Analysis reports that money issues are the third leading cause of all divorces.

If financial stress is taking a toll on your home life, consider opening the lines of communication with your partner or spouse about your concerns. For example, if your spouse’s spending habits are getting in the way of your savings goals, having an open and honest discussion about it may help realign your interests.

Even if your relationship isn’t suffering from money worries, talking to someone about your issues can help relieve the burden you’ve been carrying and reduce financial stress. Plus, you may gain valuable advice and insights that give you a new perspective on your financial situation.

#6: Engage a Financial Advisor like Benchmark Wealth Management to Reduce Financial Stress

Finally, if money is a constant source of stress in your life, consider seeking professional support. A trusted financial advisor like Benchmark Wealth Management can help you navigate the complexities of your financial life and develop a plan to secure your financial future.

Our goal is to ease your financial apprehensions and help you achieve your goals by providing holistic financial planning and investment management solutions. If you’re looking for more guidance and peace of mind when it comes to your finances, we encourage you to contact us to learn more about how our team can help you reduce financial stress.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Travel has many benefits that can improve your health and overall well-being in your golden years. Here are our tips for planning for travel and adventure in retirement.

The transition into retirement can be both exhilarating and overwhelming. With decades of hard work and perseverance behind you, a life of freedom can be an incredibly rewarding payoff. Yet retirement can also bring about feelings of listlessness and isolation, especially if your career was a big part of your identity and social life.

To make the most of your next phase of life, it’s important to have a plan for how you’ll fill the potential void of no longer working. Many retirees choose to fill this void through travel and adventure.

However, exploring new places, experiencing different cultures, and creating lasting memories aren’t just ways to fill the time. These pursuits offer a multitude of benefits that can make your golden years even more fulfilling than you thought possible.

In this blog post, we’ll explore the benefits of travel in retirement and share financial tips and strategies to help you prepare for your new life of adventure.

The Benefits of Travel in Retirement

Traveling in retirement provides an opportunity to explore the world at your own pace, without the constraints of a 9 to 5 job. Not only do you have the freedom to set your own schedule, but the ability to travel during off-peak times can also result in significant cost savings.

However, the benefits of travel in retirement extend far beyond flexibility and price shopping.

Indeed, numerous studies suggest that travel and adventure can contribute to your overall well-being, from improving your physical health to sharpening your cognitive abilities. Taking vacations can even help you live longer, according to the Helsinki Businessman Study, one of the longest follow-up studies in the world.

Moreover, travel can provide a sense of purpose and engagement, which is crucial in retirement. It allows you to learn new things, meet new people, and have new experiences, all of which can lead to increased happiness and satisfaction in life.

Planning for Travel in Retirement

To reap the many benefits of travel and adventure in retirement, careful planning is key. The following tips and strategies can help you prepare financially for your travel goals.

#1: Budget for Travel

Creating a retirement budget is crucial for determining how much income you’ll need to cover your expenses. Once you understand your income needs, you can adjust your savings and investment approach accordingly.

Start by listing your current expenses, including everything from housing and food to healthcare and entertainment. In addition, be sure to account for occasional expenses like gifts, home and car repairs, and periodic upgrades.

Next, adjust your expenses for retirement. For example, if you plan to pay off your mortgage before you retire, your housing costs may decline significantly. Meanwhile, your healthcare expenses may rise depending on your insurance coverage and overall health.

Finally, consider how travel factors into your budget. Think about how often you’d like to travel, as well as your ideal destinations.

As you develop your retirement travel budget, feel free to dream big. The goal isn’t to limit yourself but to gain clarity on how much money you’ll need to support your desired lifestyle. You can always make changes down the road if necessary.

#2: Review Your Savings Targets

Now that you have a better idea of what your expenses will be in retirement, you can determine if your savings are on track or if you need to start saving more aggressively.

First, review your current savings rate. How much do you contribute each month to qualified retirement plans like a 401(k) or individual retirement accounts (IRAs)?

If you aren’t contributing up to the respective limits and can afford to save more, try to max out your account contributions. In 2023, you can contribute up to $22,500 to a 401(k) plan ($30,000 if you’re aged 50 or above) and $6,500 to an individual retirement account ($7,500 for those 50 and above).

If you still have additional funds to spare, you can always stash excess cash in a separate savings account to use exclusively for travel in retirement.

#3: Make Sure Your Investments Align with Your Retirement Goals

In addition to saving diligently, one of the most effective ways to achieve your retirement goals is to develop an investment plan that’s aligned with your objectives and risk tolerance. Essentially, this means having the right mix of stocks, bonds, and other assets in your portfolio to preserve and grow your wealth over time.

When it comes to planning for travel in retirement, consider designating a separate investment account for travel-related expenses. Since you may be making more frequent withdrawals from this account, a Roth IRA or taxable investment account may be more tax-efficient than a traditional IRA. (Distributions from traditional IRAs are treated as ordinary income.)

In addition, you may want to take a different investment approach to achieve your travel goals than your approach to fund your general retirement needs. A fiduciary financial advisor like Benchmark Wealth Management can help you craft an investment plan that considers your objectives and tax situation.

#4: Delay Claiming Social Security Benefits If Possible

The age at which you claim Social Security benefits affects the amount of income you receive throughout retirement. If you can afford to wait until your Full Retirement Age (FRA) or later to claim your benefits, the additional income may help supplement your travel costs in retirement.

When deciding when to claim your Social Security benefits, be sure to consider factors such as your other sources of retirement income and projected living expenses. You can also use the Social Security Administration’s Retirement Estimator to help you determine the best time to start taking benefits.

#5: Consider Your Insurance Needs

While travel and adventure in retirement have many benefits, there may be risks involved as well. For example, if you fall ill or suffer an injury before or during a trip, you may incur substantial cancellation or medical treatment costs.

Travel insurance can help protect you financially if your plans change unexpectedly due to illness, injury, or other unforeseen circumstances. In addition, many travel insurance policies offer 24/7 travel assistance services, which can assist with medical emergencies, lost passports, or legal troubles. This can be incredibly helpful if you’re traveling in unfamiliar locations or countries where you don’t speak the language.

Lastly, if you have an existing health condition, make sure you have a plan for how you’ll manage it while traveling. Since Medicare coverage outside the United States is limited, you may need to purchase supplementary health insurance if you plan to travel abroad.

Benchmark Wealth Management Can Help You Plan for Travel and Adventure in Retirement

By understanding the costs associated with travel and saving and investing accordingly, you can make your retirement dreams a reality. But remember, planning for travel in retirement isn’t just about managing your finances wisely. It’s also about making the most of your retirement years and living life on your terms.

Whether you’re dreaming about a grand adventure around the world or simply want to visit your grandchildren more often, Benchmark Wealth Management can help you make travel a part of your retirement plan. Contact us today to learn more about how we can help you reach your retirement goals.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

In this article, we explore what diminished financial capacity is, how to spot the warning signs, and what steps to take if you suspect a loved is experiencing cognitive decline.

As our loved ones age, their ability to make sound financial decisions can decline, posing risks to their financial well-being. In fact, a recent Wall Street Journal article asserted that cognitive decline is the biggest financial risk facing Baby Boomers who manage their own nest eggs.

Thus, understanding how to recognize diminished financial capacity in an aging parent or spouse is crucial to safeguarding their assets and ensuring their financial security.

What Is Diminished Financial Capacity?

The Consumer Financial Protection Bureau defines diminished financial capacity as “a decline in a person’s ability to manage money and financial assets to serve his or her best interests, including the inability to understand the consequences of investment decisions.” Often, this is due to age-related cognitive decline, dementia, or other health issues.

Unfortunately, diminished financial capacity can make individuals more susceptible to financial exploitation, poor investment choices, and challenges managing their everyday expenses. Consequently, recognizing the warning signs early is essential to protect your loved one’s financial well-being and overall quality of life.

How to Spot the Signs of Diminished Financial Capacity

There are several warning signs that can indicate diminished financial capacity in an aging parent or spouse. Examples include:

• Forgetfulness. Forgetting to pay bills, deposit checks, or manage financial accounts may be signs of cognitive decline. If you notice your loved one has unopened bills or receives late payment notices, it could indicate a bigger problem.
• Difficulty with simple financial tasks. Struggling with basic financial tasks, such as balancing a checkbook or understanding a bank statement, can be a sign of diminished capacity.
• Confusion about financial matters. If your loved one becomes confused or overwhelmed when discussing financial topics or making decisions, this can be a red flag.
• Uncharacteristic spending. A sudden change in spending habits, such as making large purchases or giving away money without a clear reason, may also suggest a problem.

Financial Elder Abuse: A Growing Concern for Older Adults

One of the most significant risks that often accompanies diminished financial capacity in older adults is the increased potential for financial exploitation. As their cognitive abilities decline, these individuals may be more susceptible to scams, manipulative tactics, or high-pressure sales pitches.

Indeed, financial elder abuse is an alarming and growing issue that affects millions of older adults each year. In fact, the National Council on Aging estimates that victims of financial elder abuse lose at least $36.5 billion annually in aggregate.

Financial abuse can take many forms, including theft, fraud, and coercion. By understanding the connection between diminished financial capacity and financial elder abuse, you can take proactive measures to safeguard your loved one’s financial security.

How to Protect Your Loved Ones If You Spot Signs of Diminished Financial Capacity

Ideally, you can prepare for diminished financial capacity well before you see the warning signs.

If possible, consider having an honest conversation with your aging parent or spouse about the risk of cognitive decline so they can communicate their intentions openly and clearly if they begin to show signs. You may also want to document these intentions with a trusted financial advisor or attorney.

In addition, it may be helpful to make a list of important accounts, documents, and passwords before warning signs appear. These details can be difficult to track down once a loved one starts to decline.

If your aging parent or spouse begins to show signs of diminished financial capacity, the following steps can help you protect them from poor decision-making and financial exploitation:

• Be vigilant. Keep an eye on your loved one’s financial activities and watch for suspicious transactions or changes in spending habits.
• Organize important documents: Ensure that your loved one’s financial documents, such as wills, trusts, and power of attorney, are up-to-date and accessible.
• Maintain open communication. Encourage regular conversations about financial matters and educate your loved one about the common scams targeting seniors.
• Collaborate with professionals: Work with a trusted financial advisor, attorney, or geriatric care manager to put safeguards in place and provide guidance in managing your loved one’s finances.
• Report suspected abuse: If you believe your loved one has been a victim of financial elder abuse, report it to the appropriate authorities, such as Adult Protective Services, local law enforcement, or your state’s attorney general.

Diminished capacity can be a sensitive subject—especially for the person experiencing it. Like most family matters, open and honest communication is often the best approach. Nevertheless, it’s important to take potential warning signs seriously and not dismiss them as normal symptoms of aging.

Benchmark Wealth Management Is Here to Help

Watching a loved one decline can be an emotionally tolling experience for all involved. Unfortunately, it can also have devastating financial consequences for the affected individual. Understanding how to spot the warning signs of diminished financial capacity and taking steps to protect your loved one can help them avoid scams, abuse, and other risky financial decisions.

At Benchmark Wealth Management, we understand the challenges families face when dealing with diminished financial capacity. Our team of fiduciary, fee-only financial advisors can help you navigate these complex issues and create a plan to safeguard your financial future. Schedule a call with us today to learn more about how we can help.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Achieving financial freedom often requires a solid understanding of a few key financial truths. Yet despite the importance of financial literacy, many Americans lack the knowledge and skills necessary to make smart decisions with their money.

In fact, a report from the National Financial Educators Council revealed that on average, financial illiteracy cost Americans $1,819 in 2022. Meanwhile, 15% of those surveyed said their lack of financial know-how set them back by at least $10,000.

Unfortunately, most of us weren’t taught basic personal financial principles in school. Only recently have some states begun to require financial literacy education before graduation.

Since April is Financial Literacy Month, we thought it would be helpful to share a few important concepts that can help you build wealth and achieve your financial goals. By understanding and applying these financial truths, you can get your finances on track and set yourself up for long-term financial success.

Financial Truth #1: Compound Interest Is a Powerful Force

When you save or invest money, your interest earns interest, leading to exponential growth over time. Indeed, even small contributions can turn into substantial sums of money due to compound interest.

For example, suppose you invest $10,000 today. If your investments earn an average annual return of 6%, you’ll have just over $32,000 after 20 years. That’s more than three times your initial investment!

By starting early, contributing regularly to your savings and investment accounts, and letting the power of compounding work for you, you can build a sizeable nest egg for retirement. Plus, if you invest within a tax-deferred account like a 401(k) or individual retirement account (IRA), your money can grow even faster.

A compound interest calculator can help you see how quickly your money can grow if you save and invest wisely.

Financial Truth #2: An Emergency Fund Can Help You Navigate Unexpected Financial Setbacks

If you don’t have an emergency fund, you’re not alone. According to a recent Bankrate survey, more than two-thirds of adults say they’d be worried about having enough emergency savings to cover a month’s worth of living expenses.

Unfortunately, lacking an emergency fund means you may have to take on additional debt or tap into your retirement resources if you experience an unexpected financial setback. Both scenarios can be costly.

Since credit cards tend to have high interest rates, any balances you carry can grow rapidly—an example of compound interest working against you. Meanwhile, there may be tax consequences and/or penalties associated with early retirement withdrawals.

Consequently, most financial experts recommend saving enough cash to cover at least three to six months’ worth of living expenses. Having this cash readily available can provide peace of mind and keep you on track toward your long-term financial goals.

Financial Truth #3: Tracking Your Spending Is a Necessary Evil

Few people have the discipline to create and stick to a formal budget. Nevertheless, tracking your spending is essential for long-term financial success.

Indeed, you don’t need to earn a lot of money to achieve financial freedom. But one of the most important financial truths in life is that you must spend less than you earn.

When you know exactly where your money is going each month, you can identify opportunities to cut back your expenses and increase your savings. In addition, tracking your spending can help you:

• Prioritize your expenses. Tracking your spending can help you make more informed financial decisions and ensure your spending aligns with your values and goals.
• Avoid high-interest debt. When you’re aware of your spending, you’re more likely to live within your means so you don’t accumulate high-interest credit card debt.
• Plan for the future. Tracking your spending isn’t just about looking backwards. It can also help you develop a realistic plan to achieve your future financial goals.

Financial Truth #4: Your Credit Score Can Meaningfully Impact Your Financial Well-Being

Of all the financial truths, the importance of a strong credit score is one that many tend to overlook.

Depending on your financial goals, a strong credit score can save you thousands of dollars or more over the course of your lifetime. Not only can a strong credit score help you borrow money more easily, but it can also significantly lower the cost of taking on debt.

According to Experian, credit scores above 670 are good, while a score over 800 is excellent. If your credit score needs a boost, the following tips can help.

• Pay your bills on time. One of the most important factors in determining your credit score is your payment history. Make sure to pay your bills on time every month to avoid late payments and maintain a strong credit score.
• Keep your credit utilization low. Credit utilization is the amount of credit you use compared to your total credit limit. To keep your credit score healthy, experts recommend using less than 30% of your available credit.
• Don’t close old accounts. The length of your credit history is another important factor in determining your credit score. Closing old credit accounts can shorten your credit history and potentially lower your score.
• Monitor your credit report. Regularly monitoring your credit report can help you identify errors or fraudulent activity. You can request a free credit report from each of the three major credit bureaus once a year.

Financial Truth #5: “An Investment in Knowledge Pays the Best Interest” -Ben Franklin

Finally, prioritizing ongoing financial education can significantly improve your overall financial health.

Indeed, personal finance is a complex and ever-changing field. Yet by understanding key financial truths and principles, you can make better financial decisions and avoid costly mistakes.

There are many resources that can help you boost your financial literacy, including books, podcasts, and online courses. However, if you don’t have the time or energy to invest in financial education, consider partnering with an expert who can help you achieve your financial goals.

According to a recent report from Edelman Financial Engines, 83% of people who work with a financial professional say they’re less stressed about money because of the help they receive. At Benchmark Wealth Management, we believe this sense of security is the true value of expert financial advice.

To learn more about these financial truths and see if we’re the right fit for your financial planning needs, please contact us. We look forward to helping you develop a comprehensive plan to achieve your financial goals and aspirations.

 

This article is for educational purposes only and is not intended to be specific tax, legal, or investment advice.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

In this article, we’re sharing four steps you can take to prepare for the high cost of healthcare in retirement.

For most Americans, healthcare is one of the biggest—if not the biggest—expense in retirement. Indeed, the average 65-year-old retired couple may need roughly $315,000 to cover healthcare expenses, according to a 2022 Fidelity report. Depending on your overall health and other factors, your healthcare costs may far exceed this estimate.

Planning for future healthcare expenses is full of unknowns, making it a difficult task. Nevertheless, there are steps you can take as you prepare for retirement to help ensure you don’t deplete your savings prematurely.

To prepare for the high cost of healthcare in retirement, consider the following steps:

#1: Understand What Medicare Does and Doesn’t Cover

Once you and your spouse stop working, Medicare will likely be your primary insurance provider. Unfortunately, many people don’t realize that Medicare doesn’t cover everything.

Parts A & B cover most inpatient hospital care and medically necessary and preventative services. But even if your service is covered, you’ll typically need to pay a deductible, coinsurance, or copayment.

Moreover, Medicare doesn’t cover long-term care, most dental care and dentures, or eye exams related to prescribing glasses. It also doesn’t cover cosmetic surgery, acupuncture, or hearing aids.

You may not need all of these services as you age, but you’ll likely need some. In other words, planning for healthcare in retirement may require you to look for supplemental insurance beyond Medicare.

#2: Avoid IRMAA to Lower the Cost of Healthcare in Retirement

IRMAA, short for income-related monthly adjustment amount, is a surcharge Medicare beneficiaries must pay each month if their income exceeds a certain threshold. This surcharge can meaningfully increase your healthcare costs in retirement if you have too much taxable income.

Fortunately, there are strategies you can leverage to lower your income in retirement and avoid paying IRMAA. For example, you can strategically donate to charity or convert part or all of your traditional retirement account funds to a Roth account.

You may want to consider working with a financial planner who can help you develop a tax-efficient income strategy in retirement. A financial professional can also help you identify other strategies to prepare for the high cost of healthcare in retirement.

#3: Contribute to a Health Savings Account

A health savings account (HSA) can be an effective way to plan for the high cost of healthcare in retirement—if you qualify.

To be eligible for an HSA, you must be covered under a qualified high-deductible health plan (HDHP). You also can’t be currently enrolled in Medicare.

If your employer offers a qualified HDHP, you may want to consider enrolling to take advantage of an HSA. Not only do HSAs offer triple tax savings, but any funds you contribute are yours to use for life.

Here’s how it works:

• First, you contribute pre-tax dollars to your health savings account.
• You can then invest the funds you contribute on a tax-deferred basis.
• Lastly, withdrawals are tax-free, so long as you use them for qualifying medical expenses.

Since an HSA offers similar benefits to an individual retirement account, it can be an efficient way to boost your retirement savings. But keep in mind some of the tax benefits go away if you withdraw funds for non-healthcare-related expenses.

#4: Consider Long-Term Care Insurance

According to LongTermCare.gov, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years. Moreover, PWC estimates that the average lifetime cost of formal long-term care is $172,000.

Thus, you may want to consider buying long-term care insurance to offset the potentially high cost of healthcare in retirement.

Long-term care insurance covers expenses related to everyday personal care assistance—for example, help with activities of daily living such as bathing, dressing, or eating. It also covers assisted living and nursing home care.

Long-term care insurance may be a good option if you don’t have or want to burden family members if you can’t take care of yourself. It also tends to be expensive, and not everyone qualifies. Thus, you may want to consult a financial planner or insurance specialist to determine if long-term care insurance is right for you.

Benchmark Wealth Management Can Help You Plan for the High Cost of Healthcare in Retirement

One of the best ways to prepare for the high cost of healthcare in retirement is to start growing your financial resources now. If you’re not sure how much money you’ll need in retirement, start by creating a budget with realistic estimates of your future medical expenses.

Then, see how your projected healthcare costs compare to your current savings. You may need to increase your savings rate to cover the shortfall or leverage other financial planning strategies.

A trusted financial advisor like Benchmark Wealth Management can help you develop a long-term financial plan that prepares you for retirement and beyond. To see if we may be a good fit for your financial planning needs, please contact us. We’d love to hear from you.

This article is for educational purposes only and is not intended to be specific tax, legal, or investment advice.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Ben Franklin famously said, “In this world, nothing is certain except death and taxes.” Indeed, the 2023 tax season is officially here, which means most taxpayers will be filing their tax return within the next two months.

If you tend to stress about squaring up with Uncle Sam, you’re not alone. Fortunately, there are steps you can take to help ensure the process goes as smoothly as possible this year.

Consider these tips for a smooth 2023 tax season:

#1: Start Preparing Early

It’s tempting to wait until the last minute to file your tax return. After all, the deadline isn’t until mid-April. However, most of the documents you’ll need to file your return this 2023 tax season start arriving in January, with investment-related 1099s typically available in February.

That means it’s possible to file your return by mid- to late February in many cases. Plus, the sooner you start preparing this year’s tax return, the more time you’ll have to address issues or questions that come up along the way.

If you’re expecting a refund, filing early may help you get your money faster if the IRS isn’t bogged down by last-minute filers. Alternatively, if you owe the IRS money, completing your return early gives you time to prepare if you need to raise cash or move money between accounts.

Lastly, many people don’t realize that filing your taxes early can help you avoid fraud.

If someone steals your identity and submits a false return in your name to claim a refund, you’ll run into issues when you submit your real return. At that point, the onus is on you to prove to the IRS that the first return was fraudulent.

To avoid identify theft altogether, be sure to keep your personal information secure and periodically check your credit report for suspicious activity. Still, if you’re concerned about a potential breach, filing your taxes at the beginning of the 2023 tax season gives potential scammers less time to file ahead of you.

#2: Keep Important Documents Together in a Safe Place

Depending on the nature of your employment and your investment activity last year, you may have several tax documents arriving in your mailbox this 2023 tax season. As they arrive, store them in a folder for safe keeping.

In addition, consider scanning a copy of each document so you also have an electronic version. This makes it easier to archive your tax return once it’s complete. You’ll also have backup copies of your tax documents in case you lose or damage them.

If you’re self-employed, start gathering receipts and review last year’s credit card and bank statements as soon as possible to tally up your business-related expenses. You can deduct these expenses on your tax return, plus you’ll have a detailed record of them in case the IRS audits you.

If you itemize, you can also start to compile a file of deductible expenses at the beginning of the 2023 tax season. Examples may include state and local income taxes, medical expenses, and/or charitable donations.

Just be sure to record the exact amounts you paid rather than estimate your expenses. Round numbers can be a red flag with the IRS, potentially triggering an audit.

#3: Know What’s Changing This 2023 Tax Season

Keep in mind there may be changes to the tax code each year due to new and expiring legislation. Being aware of these changes is especially important if you do your own taxes so you can take advantage of new tax incentives and avoid costly missteps.

For the 2023 tax season, key changes include:

• Refunds may shrink this year for some taxpayers. Many taxpayers will likely receive a smaller refund this year as several Covid-19-related tax credits, including an expanded child tax credit and enhanced child and dependent care tax credit, expire this year.
• You may not get a tax break for your charitable donations. Last year (tax year 2021), taxpayers could take a special charitable deduction of up to $300 for individuals and $600 for joint filers—even if you took the standard deduction. For the 2022 tax year, taxpayers who take the standard deduction won’t get a tax break for their charitable donations.
• Electric vehicle (EV) and other energy tax incentives are changing. If you purchased a new EV in 2022, the Inflation Reduction Act stipulates that the final assembly of the vehicle must take place in North America to qualify for a tax credit. However, if you entered into a binding contract to buy a new EV before August 16, 2022, and took delivery before January 1, 2023, this rule doesn’t apply. Additional rules and incentive programs will go into effect for the 2023 tax year.
• The IRS delayed 1099 gig-economy reporting changes until 2023. The IRS delayed a new law requiring e-commerce platforms such as eBay, Etsy and Airbnb to report information on users with more than $600 in revenue until 2023. For 2022, the old rules apply. Platforms must only report user information to the IRS if they had more than 200 transactions and $20,000 of revenue in 2022.

#4: Streamline the Tax Preparation Process

If you prefer to do your own taxes, there are ways to streamline the process and make it easier on yourself this 2023 tax season.

First, consider using tax preparation software to prepare and file your tax return. Many of these programs automatically pull in last year’s return, which can be a helpful starting point. They’ll also review your return—either for free or for an additional fee—to identify potential audit risks.

In addition, it’s typically a good idea to file electronically and sign up for direct deposit—especially if you expect a refund. Filing electronically can help you avoid errors and speed up the IRS’s processing time. Meanwhile, you’re likely to get your refund faster if you sign up for direct deposit.

#5: Consult an Expert This 2023 Tax Season

Your tax situation often gets more complicated as your income and net worth increase. If you aren’t comfortable doing your own taxes or simply don’t have the time or energy, the value of hiring an expert may far exceed the cost.

For example, a tax professional may be able to identify lesser-known tax savings opportunities that significantly reduce your tax bill. He or she will also make sure your tax return is complete so you can avoid delays and potential penalties.

However, don’t wait until the last minute to enlist the help of a tax professional. Experts tend to book up in advance, so procrastinating may cost you.

A Fiduciary Financial Advisor Like Benchmark Wealth Management Can Help

While the IRS says it’s made progress in reducing backlogs, many experts are predicting more frustration and delays for taxpayers this year. Following the above tips can help ensure the 2023 tax season goes as smoothly as possible—despite unavoidable headwinds.

In addition, a fiduciary financial advisor like Benchmark Wealth Management can help you stay on top of important tax deadlines and proactively plan for the future. If you don’t currently partner with a financial planner, we encourage you to consider the potential benefits of doing so and contact us to see if we may be a good fit for your financial and tax planning needs. We look forward to hearing from you.

This article is for educational purposes only and is not intended to be specific tax, legal, or investment advice.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Setting financial goals can help you develop healthy money habits and make smarter financial decisions. Here’s how to set meaningful financial goals—and achieve them—in the year ahead.

For many of us, January presents an opportunity to reflect on our successes and setbacks from the previous year and set intentions for the year ahead.

Indeed, many of us are well practiced in making (and perhaps breaking) New Year’s resolutions. However, setting financial goals may not be at the top of the priority list when the clock strikes midnight on January 1^st.

Admittedly, financial goals aren’t always as exciting or motivating as other personal goals, like training for your first marathon or applying for your dream job. But they are arguably just as important—if not more so.

Setting clear financial goals can help you develop healthy money habits and make better financial decisions in the year ahead. You may even feel compelled to make positive changes in other areas of your life as you start to build momentum.

The good news is it’s never too late to set new goals. Here are our tips for setting financial goals you can achieve this year.

When it comes to setting financial goals, consider the following tips and best practices:

#1: Assess Your Current Financial Situation

Setting effective financial goals requires a clear understanding of your current financial situation. Establishing a baseline doesn’t just help you set more realistic goals. It also helps you assess your progress as you work towards achieving them.

Here are a few key metrics you can review to better understand your starting point:

Spending

According to a recent survey by OppLoans, 73% of Americans say they don’t regularly follow a budget. Fortunately, you don’t necessarily need a formal budget to succeed financially. However, you do need to manage your spending.

First, review your spending activity from the last year. An easy way to do this is to download an expense tracker app like Mint or Goodbudget. These apps connect to your bank account and credit cards to record and categorize your expenses, making it easier to see where your money goes it month.

Once you have a better understanding of your spending habits, you can identify potential opportunities for improvement.

Earnings

Your current income can also serve as a helpful baseline for setting financial goals. If you’re finding it difficult to save enough money because of your income and have already cut back your spending, you may want to explore opportunities to boost your earnings this year.

Ultimately, financial success is only possible if you spend less than you earn. Otherwise, headwinds like debt and savings shortfalls can make setting financial goals less than inspiring.

Net Worth

Your net worth can provide a powerful snapshot of your current financial health. If you’re making good choices with your money like saving, paying down debt, and sticking to your investment plan, your net worth will improve over time. But if you tend to spend more than you earn or save, your net worth will suffer.

To calculate your net worth, first tally up the value of all your assets—for example, your home and other property, investment accounts, and anything else you own that has financial value. Then do the same for any debts you owe, whether you have a mortgage, outstanding loans, or lingering credit card debt.

The difference between these two numbers is your current net worth. This number can be an extremely helpful financial goal setting tool, especially if you can identify trends in your net worth over time.

#2: Identify Your Top 3-5 Financial Goals

Setting one or two financial goals for the year ahead may be sufficient if your personal finances are in good shape. On the other hand, setting too many goals can be overwhelming, no matter the state of your finances.

For many people, the sweet spot for setting financial goals is focusing on three to five goals. That way you can address the key components of financial success—for example, spending, saving, investing, and eliminating debt—without setting yourself up for failure from the get-go.

You can use your findings from the previous step to help you set meaningful financial goals. For instance, you may realize you’ve been overspending in certain areas. Therefore, one of your goals may be to rein in your spending and contribute the difference to an emergency fund instead.

Or you may find that you’re in more debt than you thought. If so, you can use a debt payoff calculator to help you set realistic goals for paying down your balances.

Once you’ve decided on your goals, be sure to write them down and keep them visible. According to one popular study, you’re 42% more likely to achieve your goals just by writing them down.

#3: Make Sure Your Goals Are SMART

Setting SMART goals helps ensure your financial goals are clear and achievable. In other words, make sure your goals are Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART).

For example, suppose one of your goals for next year is to reduce your overall debt. Although this is a noble goal, it’s too vague to be meaningful.

For financial goal setting to be effective, you need to set clear parameters around your goals. In this case, setting a goal to pay down your high-interest credit card balances by the end of the year may be better than simply saying you want to reduce your debt. Plus, the clearer your goals, the easier it is to create a plan to achieve them.

#4: Create a Plan to Achieve Your Financial Goals

As the saying goes, “A goal without a plan is just a wish.” Once you’ve identified your top three to five goals, the next step is to develop a clear plan for how you’re going to achieve them. This will serve as your roadmap throughout the year and help you assess your progress along the way.

Building on the example above, suppose your goal is to pay down your high-interest credit card balances by the end of the year. If you’ve successfully calculated your net worth, you already have a clear picture of what you owe.

From there, you can work backwards to develop a plan. In other words, how much will you need to pay towards credit card debt each month to eliminate your balances by the end of the year? Moreover, will you have enough free cash on hand to contribute that amount each month? (If not, you may need to set a more realistic goal.)

No matter your financial goals, creating a plan will help you replace old habits with better ones and guide you in making smarter financial decisions.

#5: Set Yourself Up for Success

Setting financial goals doesn’t need to be difficult, nor does achieving them. Here are a few best practices to set yourself up for success:

• Think small. This may sound counterintuitive, but the best goals don’t require you to overhaul your entire life. Rather, small, consistent actions tend to produce big results over time. In fact, in his book Atomic Habits, James Clear highlights that if you can improve your habits by 1 percent each day for one year, you’ll end up thirty-seven times better by the end of the year. In other words, aim for progress—not perfection.
• Automate what you can. If you’ve ever opted for takeout at the end of a long workday instead of the healthy meal you planned to prepare, then you’ve experienced decision fatigue. Indeed, the quality of our decisions tends to deteriorate after a day full of decision-making. Thus, if you must constantly decide to make smart money choices, you’re less likely to do it if you have competing priorities. To improve your chances of success, it’s often helpful to automate as many financial decisions as you can.
• Acknowledge your wins. Lastly, setting financial goals doesn’t mean you can’t enjoy your money. It’s simply an opportunity to create better habits and make smarter decisions with your money more often than not. Be sure to celebrate your wins as you work towards achieving your financial goals. Acknowledging your successes—no matter how big or small—will help you stay motivated throughout the year.
• Track your progress. Reviewing your goals and progress towards them regularly can help you stay motivated and inspired. It also allows you to make adjustments if you find yourself falling off track.
• Be flexible and adaptable. Life is full of unexpected twists and turns. As your life and financial circumstances evolve, your goals may change as well. It’s important to stay flexible, so you can adapt your financial plan to meet your ever-changing needs and objectives.

Setting financial goals is an ongoing process. An experienced financial advisor can help.

You don’t have to go it alone when it comes to setting financial goals and planning for your future. An experienced financial advisor like Benchmark Wealth Management can help you set meaningful goals and develop a plan to achieve them. We can also help you proactively identify opportunities to improve your financial wellbeing and help you make smart decisions for your future every step of the way.

If you’d like to learn more about how we help our clients and if we may be the right fit for your wealth management needs, please contact us. We’d love to hear from you.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

In this article, we’re sharing five tax-efficient charitable giving strategies that may help you reduce your 2022 tax bill.

If you’re charitably inclined, you know that giving back can be both personally fulfilling and impactful. It can also be financially beneficial for donors who approach their philanthropic goals strategically.

Specifically, donors who itemize on their 2022 tax return may deduct cash donations up to 60% of adjusted gross income (AGI) and non-cash donations up to 30% of AGI. If you exceed these limits, you can carry the additional amount over to the next tax year for up to five years.

Indeed, charitable donations can provide valuable tax benefits for savvy donors. Yet careful tax planning is essential. Fortunately, there are strategies that can help you reduce your year-end tax bill while also doing good for others.

As we near the end of another calendar year, consider adding the following tax-efficient charitable giving strategies to your to-do list:

#1: Donate Appreciated Non-Cash Assets

In the United States, cash makes up only 7% of total wealth, according to data from the St. Paul & Minnesota Foundation. Yet 85% of charitable contributions are cash donations.

Many charities also accept donations of securities like stocks, bonds, and mutual funds, as well as real estate and business interests. In many cases, donating these types of assets can benefit your charities of choice just as much as cash can. Plus, your tax benefit for donating non-cash assets may far exceed the potential benefit for donating cash instead.

When you sell an asset outside of a qualified account, you may be subject to the capital gains tax if your income exceeds a certain threshold. In 2022, the capital gains tax rate is 15% for most taxpayers and 20% for the highest earners. Thus, if you purchased an asset for $25,000 (your cost basis) and sell it for $50,000, you’re responsible for paying taxes on the $25,000 gain.

However, you can avoid the capital gains tax by donating the appreciated asset if you’ve owned it for at least a year. You can also deduct the fair market value of the donation on your tax return, up to 30% of your AGI, if you itemize. Meanwhile, the charity can convert the asset to cash tax-free.

Indeed, this win-win makes donating appreciated non-cash assets one of the most tax-efficient charitable giving strategies available. Yet donating non-cash assets can have other benefits, too.

For example, if you participate in an ESOP or have otherwise accumulated an outsized position in company stock, donating a portion of your shares can help you diversify your portfolio and potentially reduce risk. Alternatively, you may choose to donate appreciated securities and repurchase them at a lower price to maintain your allocation while reducing your potential tax liability.

#2: Bunch Your Charitable Contributions

To take full advantage of these tax-efficient charitable giving strategies, you must itemize deductions on your tax return. However, itemizing only makes sense if your deductions exceed the standard deduction. In 2022, the standard deduction is $12,950 for single filers and $25,900 for married taxpayers filing jointly.

If you need to boost your deductions so you can itemize this year, one option is to bunch your charitable donations. Bunching is a strategy that involves making two or more years’ worth of donations in one tax year so you can realize the full tax benefit. Then, you may choose to take the standard deduction in years when you don’t donate.

For example, say you plan to donate $5,000 to charity each year for the next several years. If you have extra cash on hand this year, you may want to consider donating $10,000 or more to your charity of choice so you can itemize your deductible expenses. Then, next year, you can skip your regular donation and take the standard deduction.

#3: Contribute to a Donor-Advised Fund (DAF)

Donor-advised funds (DAFs) are becoming an increasingly popular giving strategy. In 2021, charitable assets in DAFs totaled just over $234 billion—a 39.5% increase from the previous year—according to NP Trust.

When you contribute cash or non-cash assets to a DAF, you can take an immediate tax deduction in the year you make the donation. However, like other tax-efficient charitable giving strategies, you can only realize the full tax benefit if you itemize.

Thus, similar to bunching, a DAF allows you to front-load several years’ worth of donations and deduct the full amount on this year’s tax return, up to IRS limits. You can also donate non-cash assets like highly appreciated stock to a DAF and avoid paying the associated capital gains tax.

Yet unlike bunching or gifting non-cash assets directly to charity, contributing to a DAF means you don’t have to decide immediately which organizations receive your donation. Instead, your funds can grow tax-free within the DAF until you direct them to a specific charity.

#4: Realize Capital Losses and Donate Cash Proceeds

Years like 2022 can be difficult for investors to endure, especially when most asset classes decline in value. However, down markets can provide an opportunity to sell certain investments at a loss and lower your overall tax bill.

The IRS allows taxpayers to offset capital gains and up to $3,000 of ordinary income with realized capital losses. This strategy—often referred to as tax-loss harvesting—can meaningfully reduce your taxable burden at year-end if you’re also selling appreciated securities.

At the same time, realizing capital losses and donating the proceeds can be a tax-efficient charitable giving strategy. In addition to offsetting taxable capital gains or income, you can deduct the amount you donate, up to 60% of AGI, if you itemize.

Be sure to consult a financial professional prior to selling securities, however. Altering your asset allocation can introduce other potential risks to your portfolio that diminish the tax benefits of this strategy.

#5: Make a Qualified Charitable Distribution (QCD)

If you’re age 72 or older, the IRS requires you to take distributions from your traditional IRA each year. Required minimum distributions (RMDs) can increase your taxable income and potentially push you into a higher tax bracket.

However, if you don’t need the extra income this year, you can donate your RMD to charity via a qualified charitable distribution (QCD). A QCD allows IRA owners to transfer up to $100,000 directly to charity each year, thus reducing your taxable income.

At the same time, a QCD can help you reach the necessary threshold to itemize on your tax return. This may allow you to take advantage of additional tax-efficient charitable giving strategies that otherwise wouldn’t benefit you if you took the standard deduction.

It’s important to note that the IRS considers the first dollars out of an IRA to be your RMD until you meet your requirement. If you take advantage of this tax planning strategy, be sure to make the QCD before making any other withdrawals from your account.

A Trusted Financial Advisor Can Help You Identify Tax-Efficient Charitable Giving Strategies

For many of us, year-end provides an opportunity to reflect on the progress we’ve made over the last 12 months and set goals for the year ahead. If you’re charitably inclined, it may also be your last chance to achieve your philanthropic goals while taking advantage of the associated tax benefits.

A trusted financial advisor like Benchmark Wealth Management can help you proactively identify tax-efficient charitable giving strategies throughout the year. We can also help you develop a long-term plan to meet your philanthropic goals and other financial objectives.

To learn more about how we can help, please contact us. We’d love to hear from you.

 

This article is for educational purposes only and is not intended to be specific tax, legal, or investment advice.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

As we near the end of the year and prepare for the holiday season, Tax Season may be the last thing on your mind. But in many ways, the final months of 2022 may be your last chance to reduce this year’s tax liability. To avoid overpaying Uncle Sam and preserve more of your hard-earned income, consider the following year-end tax planning strategies for 2022.

To potentially reduce this year’s tax bill, consider the following year-end tax planning strategies for 2022:

Strategy #1: Identify Changes to Your Tax Situation

In 2022, the standard deduction is $12,950 for single filers and $25,900 for married taxpayers filing jointly. A general rule of thumb is if you can deduct more than the standard deduction amount in eligible expenses from your taxable income, you should itemize. Otherwise, it’s typically easier and more valuable to take the standard deduction.

If your income and circumstances have been relatively stable since last year, you likely know already if you plan to itemize or take the standard deduction this year. However, if you’re on the fence, there are year-end tax planning strategies you can utilize to reduce your tax liability.

For instance, consider pre-paying certain deductible expenses—for example, charitable donations or out-of-pocket medical expenses—this year so that itemizing makes more sense.

Let’s say you plan to donate $5,000 to charity each year for the next several years. If you have extra cash on hand this year, you may want to consider donating $10,000 or more to your charity of choice so you can itemize your deductible expenses. Then, next year, you can skip your regular donation and take the standard deduction.

The same is true for out-of-pocket medical expenses. If you know you have certain expenses looming for 2023, you can pay them this year to make the most of the associated tax benefit.

Strategy #2: Harvest Capital Losses

Capital gains taxes can eat away at your investment returns over time—specifically in non-qualified investment accounts. Fortunately, the IRS allows investors to offset realized capital gains with realized losses from other investments.

That means you can realize profits on your top-performing investments while selling poor performers to reduce your tax bill this year. If you have substantial losses, you may be able to completely offset your gains and potentially lower your taxable income. Plus, in years like 2022 when markets have struggled, you may have more losses than you think.

We proactively take advantage of tax-loss harvesting to help clients with year-end tax planning.

Strategy #3: Review Your Charitable Giving Plan

Currently, taxpayers who itemize deductions can give up to 60% of their Adjusted Gross Income (AGI) to public charities, including donor-advised funds, and deduct the amount donated on this year’s tax return.

You can also deduct up to 30% of your AGI for donations of non-cash assets. Moreover, you can carry over charitable contributions that exceed these limits in up to five subsequent tax years.

When it comes to year-end tax planning, donor-advised funds (DAFs) can provide opportunities to meaningfully reduce your overall tax liability. For example, if you plan to donate $10,000 each year to your favorite charitable organization, it may be more beneficial to take the standard deduction when you file your taxes.

On the other hand, you can front-load a donation of $50,000 to a donor-advised fund and request that the DAF distribute funds to your chosen charity each year for five years. In year one, you can receive a more favorable tax break by itemizing on your tax return. Meanwhile, you can continue to meet your charitable goals each year via the DAF. Indeed, this strategy can be particularly beneficial in above-average income years.

Better yet, you can donate non-cash assets like highly appreciated securities to a DAF and avoid paying the capital gains tax. In addition, you can take an immediate tax deduction for the full value of the donation (subject to IRS limits). This strategy can also help you diversify your investment portfolio without triggering an unpleasant tax bill.

Strategy #4: Look for Opportunities to Reduce Income

Maxing out your qualified investment account contributions is no doubt important for meeting future financial goals like retirement. However, it can also be a valuable year-end tax planning strategy.

First, be sure to check the contribution limits on your employer-sponsored or self-employed retirement plans for 2022. You can also contribute up to $6,000 to an individual retirement account in 2022 (or $7,000 if you’re age 50 or over).

In addition, individuals with qualifying high deductible health plans are eligible to contribute to a health savings account (HSA).

An HSA can be another great option to save and grow your money since these accounts offer triple tax benefits. Specifically, contributions, capital gains, and withdrawals are all tax-free if you use your funds for eligible healthcare expenses. And like qualified retirement accounts, you can deduct your contributions from your taxable income in most cases to reduce your overall tax liability.

Meanwhile, depending on your compensation plan, you may want to consider deferring part of your income to reduce your taxable income in 2022.

Employees with deferred compensation agreements typically pay taxes on the money when they receive it—not as they earn it. That means if your employer pays you a lump sum per your distribution agreement, you could potentially get hit with a hefty tax bill.

Your distribution schedule depends on your agreement with your employer and can usually be found in your plan documents. If you haven’t reviewed your plan details recently, you may want to revisit them as you do your year-end tax planning to avoid any surprises.

Strategy #5: Take Advantage of Lower Income Years and/or Down Markets with a Roth Conversion

The IRS allows individuals to convert a traditional IRA to a Roth IRA via a Roth conversion. A Roth IRA conversion shifts your tax liability to the present. As a result, you avoid paying taxes on withdrawals in the future. In addition, Roth IRAs don’t require minimum distributions.

With a Roth conversion, you pay taxes on the amount you convert at your current ordinary income tax rate. That’s why it can be a particularly powerful year-end tax planning strategy in tax years when your income is below average.

Similarly, a down market can provide a great opportunity to take advantage of a Roth conversion. Since account values typically decline in a negative market environment, so does the amount on which you’ll pay taxes when converting to a Roth. At the same time, there’s greater potential for future appreciation and withdrawals that are tax-free.

After you convert your traditional IRA to a Roth, any withdrawals you make in retirement will be tax-free if you’re over age 59 ½ and satisfy the five-year rule. In addition, you can leave your funds to grow tax-free until you need them since Roth IRAs don’t have RMDs.

While a Roth conversion can be a valuable tax planning strategy, it doesn’t make sense in every situation. Be sure to consult a trusted financial advisor or tax expert before initiating this strategy.

Strategy #6: Strategically Transfer Wealth to the Next Generation

If you expect to leave significant wealth to your heirs, proper estate planning is key. Fortunately, there are year-end tax planning strategies you can leverage to help minimize your estate’s potential tax burden.

In many cases, gifting is one of the simplest ways to efficiently transfer wealth while reducing your estate. Each year, the annual gift-tax exclusion allows you to gift a certain amount (up to $16,000 in 2022) to as many people as you like without triggering the federal gift tax. Plus, spouses can combine the annual exclusion to double the amount they can gift tax-free.

Cash gifts are generally most common. However, you can also use the annual exclusion to transfer personal property or contribute to a 529 college savings plan.

Alternatively, the IRS allows you to pay educational and medical expenses on behalf of someone else without incurring federal taxes. The only caveat is you must pay the institution directly.

Trusts can also help you transfer wealth strategically while reducing your family’s taxable burden. However, trusts can be varied and complex. Thus, it’s important to consult your financial planner or estate planning attorney to determine if a trust may be an appropriate year-end tax planning strategy for your estate.

Strategy #7: Donate Your Required Minimum Distribution (RMD)

The IRS requires individuals to begin taking minimum distributions from certain qualified retirement accounts once they reach a certain age. As of 2020, required minimum distributions (RMDs) begin at age 72.

You can withdraw more than your RMD amount in any given year—but be prepared for the potential tax consequences. On the other hand, the IRS imposes a penalty of up to 50% if you fail to take your full RMD before the deadline.

Both scenarios can be costly. Fortunately, careful year-end tax planning can help you manage your RMDs to avoid high taxes and other penalties.

If you don’t need the extra income, for example, you can donate your RMD to charity. This is called a qualified charitable distribution (QCD). A QCD allows IRA owners to transfer up to $100,000 directly to charity each year.

QCDs can satisfy all or part of your RMD each year, depending on your income needs. You can also donate more than your RMD amount up to the $100,000 limit. Since QCDs are non-taxable, they don’t increase your taxable income like RMDs do.

It’s important to note that the IRS considers the first dollars out of an IRA to be your RMD until you meet your annual requirement. If you leverage this strategy, be sure to make the QCD before making any other withdrawals from your account.

Looking for Additional Year-End Tax Planning Strategies? Consider Consulting a Trusted Financial Advisor.

This isn’t an exhaustive list of year-end tax planning strategies. However, these ideas can help you determine if there may be opportunities to reduce your taxable burden in 2022.

At the same time, a trusted financial advisor like Benchmark Wealth Management can help you identify which strategies are right for you within the context of your overall financial plan. To learn more, please contact us. We’d love to hear from you.

This article is for educational purposes only and is not intended to be specific tax, legal, or investment advice.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

In this article, we’re sharing six key metrics you can use to evaluate your financial health.

This year has been anything but calm for investors. Inflation, rising interest rates, and ongoing volatility have made it difficult to find a silver lining in financial markets.

Still, it can be helpful to take stock of your finances at year-end to make sure you’re still on track towards your financial goals. That way you can effectively prepare for the year ahead and make adjustments to your financial plan if necessary.

Just like with your physical health, there are certain vital stats that you can check to assess your financial health and well-being.

Here are six metrics to assess your financial health and well-being:

 

#1. Your Net Worth

Net worth is simply the sum of your assets minus the sum of your liabilities. If you’re making good choices when it comes to your finances, like saving, paying down debt, and sticking to your investment plan, your net worth will improve. This simple truth is why net worth is such an important measure of your overall financial health.

If you don’t know your net worth, there’s a simple way to calculate it and improve it over time.

First, tally up the value of all your assets—for example, your home and other property, investment accounts, and anything else you own that has financial value. Then do the same for any debts you owe, whether you have a mortgage, outstanding loans, or lingering credit card debt. The difference between these two numbers is your current net worth.

Next, identify the factors that are benefiting your net worth, as well as any areas that can be improved. For instance, perhaps you’re saving enough but you’re under-invested. Or maybe a financial setback depleted your savings. This exercise is to make you aware of any trends—positive or negative—in your financial habits that may be affecting your financial health.

Finally, choose one new habit to improve your net worth over the coming months. As an example, try automating your savings and investment account contributions. Or avoid stores that tend to trigger overspending, so you can focus on paying down credit card debt.

You may be surprised how quickly your financial health begins to improve by simply tracking your net worth, being aware of your financial habits, and making conscious decisions about your money.

#2. Your Credit Score

Your credit score is one of the most powerful financial tools you have available to you. A strong credit score can save you a substantial amount of money over your lifetime. On the other hand, a weak credit score can make anything from getting a credit card to buying a house challenging and expensive.

As a measure of your financial health, your credit score indicates how responsible you are with repaying and managing debts. It also determines how likely you are to qualify for a loan under the best terms.

Someone with a credit score greater than 800 will likely have no issues obtaining a loan with low interest rates. However, if your credit score is below 670, you may struggle to obtain any type of credit financing without collateral or very high interest rates.

To obtain a great credit score, be sure to make your debt payments on time and try to keep your credit utilization below 30% of what’s available to you. In addition, check your credit report at least annually to avoid setbacks due to identity theft or fraud.

#3. Your Debt-To-Income Ratio

Your debt-to-income ratio reveals how much of your monthly income goes towards paying off debt. This includes good and bad debt—for example, mortgage payments, student loans, and credit card debt. In general, the lower your debt-to-income ratio, the better your financial health.

Debt-to-income becomes increasingly important as you near retirement since you’ll need all available financial resources to support your lifestyle after you stop working. To get your debt-to-income ratio to a healthy level, make sure you’re diligent about paying down unnecessary debt.

Alternatively, you can lower your ratio by increasing your monthly income. However, depending on your circumstances, your income level may be harder to control.

#4. Your Emergency Fund

An emergency fund is just that—a way to cover unexpected financial setbacks, such as a sudden job loss, a medical bill that isn’t covered by insurance, or an unexpected home repair. It’s generally advised to have at least three to six months of living expenses set aside to cover these types of events. If you’re self-employed or your income is less predictable, you may want to have an even larger cash reserve set aside.

One benefit of an emergency fund is it allows you to recover more quickly from a financial setback. If you’re unprepared, taking on debt or dipping into retirement savings can undo years of progress towards your financial goals.

To build a cash reserve, first set your savings target. How much will you set aside each month or each paycheck for your emergency fund? Once you come up with this amount, set up automatic transfers from your primary checking or savings account to your designated cash account. You can also set this up via direct deposit if your employer allows it.

#5. Your Retirement Savings

Your retirement savings is an important metric of your financial health if you plan to stop working someday. As lifespans and healthcare expenses increase, having sufficient financial resources later in life is essential.

According to a 2020 TD Ameritrade report, nearly two-thirds of 40-somethings have less than $100,000 in retirement savings. Meanwhile, 28% of those in their sixties have less than $50,000. Compare this to the rule of thumb that you’ll need about 80% of your annual income in retirement to maintain your lifestyle, and it’s easy to see why so many people outlive their savings.

Indeed, the earlier you start saving for retirement, the better. That’s because you can let the stock market do most of the work for you.

However, if you’re behind on your retirement savings, it’s never too late to catch up. If you’re over 50 years old, the IRS allows you to make catch-up contributions to help bridge the gap.

#6. Your Financial Stress Level

Lastly, your financial stress level is a critical measure of your financial health. If your finances are keeping you up at night or affecting your physical health, you may need to make some changes.

This is where the true value of financial advice often comes into play. A trusted financial advisor can help you develop a long-term plan for your finances and proactively keep you on track towards your goals. Additionally, an advisor can help alleviate stress by saving you time, energy, and useless worry.

As a fiduciary financial advisor, Benchmark Wealth Management provides our clients with holistic financial planning and investment management solutions. We strive to make your life better by offering unmatched client care and attention.

If we can help you develop a long-term plan to improve your financial health, please don’t hesitate to get in touch. We’d love to hear from you.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.