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In the 18+ years I’ve worked in the financial planning industry, many things have changed – and some things have stayed the same. For example, some of the tools and technology have changed, but the basic principles and the things that keep women up at night when it comes to their finances haven’t.

The good news is that there are ways to alleviate some of these worries and the answers might be simpler than you realize.

Let’s look at the top four things that might be causing you stress and figure out some solutions.

What if I’m not saving enough for retirement?

Hang on; “enough” is too broad to get a handle on. That’s because “enough” for one person is not enough for another.

My clients and I work together to identify monetary needs in retirement. Then we take a look at how likely you are to have those needs met based on current and future savings, hypothetical market returns, inflation, and other factors.

Lastly, we can plug and run different scenarios to get to an actual amount you need to be saving (or have already saved!). If that isn’t currently possible, we craft a plan to get you to that savings rate. Having numbers, facts, and a plan goes a long way in alleviating worry.

Am I covered when it comes to healthcare?

While I am not a healthcare or health insurance expert, I can help identify tax-advantaged ways to save money on healthcare costs, such as using an HSA as an investment vehicle to pay for premiums in retirement. I also have a network of professionals to whom I can refer you to select and purchase health insurance.

Will I be okay if the market fluctuates?

Financial advisors often joke that half of our job is to keep our clients from making poorly timed market mistakes. We jest, but this is truer than not.

Being able to speak with a trusted advisor who is familiar with your situation when the market is volatile is invaluable. I guide my clients back to the plan that we outlined, which already accounts for market fluctuations. An adjustment may or may not be called for, but I am able to bring rationality and experience to the situation. Rash decisions based on fear are rarely the right move.

How should I prepare for my future? Will I need long-term care?

It is understandable that this is one of women’s largest fears. There are so many variables and unknowns:

“Will I have anyone to help care for me?”

“Will I even need care?”

According to the US Department of Health and Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and women need care longer (3.7 years) than men (2.2 years) (Source). It is pretty likely that you will need some kind of care; I work with clients on identifying what that may cost, and if you will be able to pay for those costs with your savings and investments.

Long Term Care Insurance policies are a great tool for bridging the gap between what you have and what you may need. LTCI policies have come a long way in recent years and are no longer just “nursing home insurance.” I work with my clients on finding a policy that is affordable to you and have benefits that either you or your heirs can use if you do not need the policy for care for yourself.

This ONE THING can help you with all of these concerns

When it comes to most financial issues that are keeping you up at night, there is one answer that can solve almost any problem.

Education.

Financial education does seem to help women worry less about their financial security. Many women worry about their finances several times a month, but less so when they know wealth-building strategies – 50% of women who were aware of these steps were worried several times a month, versus 80% who were not aware of these strategies, the survey found. Another seven in 10 women said they worried when they didn’t know how to make their money last, compared with 45% of women who did have an understanding of preserving their wealth. (Source)

Ask questions. Seek out resources. Yes, I know that paying money for guidance can sometimes feel odd when what you’re trying to do is save money – however, working with a professional can often save you more than you’re spending on their services.

We’re moving into vacation time when many of us start slowing down and enjoying the summer months. Couple that with people exploring options that allow them to work from anywhere and that means people might be considering purchasing a vacation home.

My parents were in the same boat 30 years ago as they looked for ways escape winters in Chicago. Eventually, after visiting different areas, they decided that St. Thomas was the right fit for them. They loved to swim and snorkel, and the weather and water is always warm enough to do so. It is also a United States territory which makes traveling and living there easy.

Here's a Different Way to Enjoy a Vacation Home

While my parents knew they wanted to be regular “snowbirders” in St. Thomas, they also hesitated to purchase a second home. Once they retired and were able to spend multiple weeks at a time at the beach, they opted to rent a condo.

Why Didn’t They Get a Place of Their Own?

Even though they have spent decades going to the same place, they were never interested in buying a vacation home in St. Thomas. The annual hurricane insurance alone is about what they spent renting. Beyond that, they have no worries about finding renters when they were not using it, dealing with the repairs, and many other headaches that come with owning property.

Less important, but part of the equation for my parents at least: the family from whom they have been renting for the last 20 years have not raised the rental rates; my parents were guaranteed income for them, and they treated the home like their own.

For example, one time the refrigerator broke during their stay, and they called the owners in New York. The owners asked if my parents could go buy a new one and they would pay them back. My parents said “Sure!” and took care of it. Having that relationship is a win for everyone.

Let’s Talk About YOUR Situation

How we want to spend our leisure time becomes more and more important as we age and start thinking about retirement.

When we work on a financial plan, many of my clients have purchasing a vacation home on their “wishes” portion and that’s great! For some people it’s a good fit. But I always like to make sure my clients know their options. I want their retirement to be as “headache-free” as possible – so that might mean considering renting rather than purchasing a second home.

Here are some benefits to renting:

Enjoy Spending Stress-Free Time with Family

One of the perks of my mom spending every January thru March in St. Thomas is joining her there! Family and friends visit when they can and I’m no different. This March I was able to work from her condo for 10 days and sneak in time to snorkel each day.

The best part? I was there at the end of my mom’s trip and when we left, all we needed to do was pack. We didn’t need to clean out the fridge, change the sheets, or anything.

We just packed our bags and headed home.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

If you’re a younger investor looking at the current market volatility, you might be alarmed but you’re probably not panicking.

It might be a different story if you’re someone nearing retirement.

For most investors, the advice financial planners give is along the lines of “stay the course” or “keep your long-term horizon in mind.” This is all true and good advice - but what if your time horizon isn’t long, or you just want to take advantage of next-level techniques for using market swings to your advantage?

Here are three questions I’ve been answering for people over the last few months:

If I’m living off of my investments because I’m retired or just really wealthy (good for you!), do I need to review my cash position?

Having too much cash on hand can be counter-productive, especially in times of high inflation. However, if you can strategically hold enough cash to sustain you while the market is down, that can make the low return worth it.

When it comes to your investments, it’s best to try and “stay the course” and not move to cash. Remember that selling stocks while they are down guarantees that you won’t have an opportunity to recoup those losses.

What if I have a traditional (aka, pre-tax) 401(k) or IRA?

When valuations are low, it can be a good time to consider a Roth conversion of some or all of those assets. On that same note, if you are unemployed this year, a Roth conversion may make sense while you are in a lower tax bracket. This can be complicated, so be sure to check with a financial advisor.

What if I have some non-retirement assets with a tax loss?

If that’s the case, consider harvesting the loss, which could reduce your tax liability. “Tax Loss harvesting” is essentially selling off some of your holdings that have decreased in value and using that loss to offset investments that have increased in value. This can alter your asset allocation, so this is also a good time to check in with your advisor.

While these are common questions, I know that your financial situation is unique. Market volatility like we’ve experienced these last few months is a good reason why it’s important to talk to a trusted advisor. Getting your specific questions answered could make the difference between panicking and knowing you’re on the right track.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success of protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

While 2021 wasn’t everyone’s cup of tea (okay, it wasn’t ANYONE’S cup of tea), there were some good things that came out of it.

And then there were some not-so-great things that came out of it.

How was 2021 for you?

As we start a new year, it’s helpful to look back on the one we just experienced (or endured, depending on your perspective) to see what was beneficial and what we’d like to change. To help us get a handle on the previous year, Lightly Roasted Thoughts offered up these seven questions:

  1. If I had to sum up this last year in one sentence, what would that be?
  2. What results/experiences would I like to repeat next year? And what would I like to not repeat?
  3. What were my top three lessons learned?
  4. Who made me feel happy and confident and who did not?
  5. What worries me most about the future?
  6. What have I done to be kind to myself this year?
  7. In an ideal world, how would I like to describe my life at the end of this upcoming year in one sentence?

As a financial advisor, I can’t just let this go with personal questions about the year; we should also take a look at what we achieved and what we need to work on financially in the upcoming year as well.

Answering these questions, both personal and financial, will help you get some perspective on what’s changed and what needs to change. Keeping a record of these answers from year-to-year might also give you an idea of where you’ve been and how far you’ve come in your personal and financial life.

Now, come on 2022. Improve my golf game!

You may not be aware that some financial planners will charge you on an hourly basis for their advice. Why would you want to engage an advisor on an hourly basis? There are a variety of reasons this may be a good choice for you.

You Don’t Have the Minimum Assets Many Firms Require

A common structure of financial firms is that they will provide advice for you if you invest your money with them. Unfortunately, many firms have account balance minimums of $250,000, $500,000 or even higher. This pushes those investors with smaller asset bases out of the market for advice.

You’d like a second opinion on the work you are doing yourself

Perhaps you really enjoy and are very adept at managing your own investments and financial plan. Consulting with a financial planner who can double-check your assumptions and outcomes can save you from making big mistakes. It is better to find out you need to make a change now when you have a time left to reach your goals, rather than years after it is too late to correct your course of action.

You’d like to ask a professional a few questions specific to your situation

All of the information you are seeking is potentially available for free on the internet. But it could take years to search for the information you are seeking. And even if you find what you are looking for, is it relevant to you? Consulting with a financial planner allows you to ask questions and receive answers specific to your individual situation. Tailor-made advice, just for you.

You’d like to try someone out before committing to a long-term relationship

Choosing a financial planner is a big decision. This is potentially a years-long relationship, and you are trusting this person to help you make some of the most important decisions of your life. Why not test the waters and make sure you like them and the work they do?

Paying for hourly services may be something which you have never considered, but can be an excellent option. A great place to start would be to make some calls and ask some questions!

CLICK HERE for What Questions Should Women Ask When Interviewing a Financial Advisor?

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

In planning how to finance a large purchase before age 59 ½, it’s common to consider the idea of taking a withdrawal or a loan from a 401(k) or another retirement account. Taking money from your retirement funds is not a decision to be made lightly and can come with a few negative consequences. But the Coronavirus Aid, Relief and Economic Security (CARES) Act has allocated $2 trillion for economic stimulus and relief, including provisions to make it easier and more sensible for some to access their retirement funds. 

If you’re experiencing hardship because of the Coronavirus pandemic, you may be considering borrowing or withdrawing money from your 401(k) to help. Some things to consider:

What Has Changed Under the CARES Act?

Normally, you can withdraw or borrow up to 50% (or $50,000) from your 401(k) savings before age 59 ½. A premature withdrawal usually comes with a 10% penalty and at least 20% automatic withholding from taxes. 

Under the CARES Act, you can now borrow or withdraw up to $100,000 from employer-sponsored and personal retirement accounts, or a combination of the two. The 10% penalty is waived for distributions made in 2020 and there are no mandatory withholding requirements. However, if you don’t pay back the amount you withdrew, the distribution will be taxed as income. You can spread this evenly over the years 2020, 2021 and 2022. If you do pay back the amount within three years, you can claim a refund on those taxes. 

You can also take out up to 100% or $100,000 as a loan and defer payments for up to one year. 

Who is Eligible? 

Not everyone is eligible to take advantage of these 401(k) benefits. If you, your spouse or a dependent has been diagnosed with COVID-19, you are automatically eligible. Otherwise, if you have suffered from financial hardship due to the pandemic, you may be eligible. This could include a number of circumstances that you, your spouse or a member of your household has experienced, including: 

Even if you are still employed, you may be eligible for a distribution from your 401(k) if you have had one or more of these hardships. 

Consider Your Options Carefully 

Consider the impact that a withdrawal from your account may have on compound interest over time. If you’re withdrawing with no plan for paying it back, you may be hurting your finances more in the long run than borrowing from somewhere else. But, especially if you’re experiencing a hardship like loss of income, withdrawing money from your 401(k) may make more sense than accumulating high-interest debt. 

Be mindful of taxes in your specific situation. As mentioned above, you can claim your distribution as income all at once or spread it out over the next three years. In many cases, it would be better to spread the income out, as you’ll be less likely to bump yourself into a higher tax bracket. Although if you expect your income to be lower in 2020 than the two subsequent years, claiming the distribution all at once may result in a lower tax liability. 

Conversely, taking a loan does not immediately count as income if you plan to stay with your employer; you will pay back the loan over the next five years. But staying with the same employer for 5 years isn’t always in your control. If you separate from that employer, the full remaining amount of your loan is due by mid-October of the following year. If you do not pay the loan back by then, the entire amount is considered an early withdrawal, and is therefore taxable and will incur a penalty.

Retirement plans are designed for long-term savings to help you save for your post-working years. There are serious consequences to withdrawals and loans, and they should be considered very carefully.

If you’re struggling to figure out whether taking a withdrawal or loan from your 401(k) is right for your needs, consult a financial professional to figure out what your best plan of action may be.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice .We suggest that you discuss your specific tax issues with a qualified tax advisor.

Many investors, especially those currently seeing major losses due to COVID-19’s impact on the markets, have developed a low tolerance for volatility. As a result they have moved a significant portion of their investments into bonds or other fixed yield vehicles. What many investors may not realize is that wholesale switches from one asset class to another in order to avoid volatility, can actually increase it. Secondly, for investors with a long-term perspective on their investments, volatility is actually a good thing, as it is the primary driver behind the sustained market gains over the last century.


Unquestionably, the stock market has experienced some fairly severe volatility in the recent weeks due to the uncertainty surrounding the worldwide Coronavirus pandemic. But a more thorough review of the historical record provides a clearer perspective on market volatility over the decades that actually favor investors who manage to hang on even in the worst of market declines.


Winning with Market Volatility
Since World War II, the stock market has experienced, on average, an intra-year decline of 14 percent each and every year; and in that same period, the market ended lower, on average, by 18 percent every third year. Bear markets, with an average decline of nearly 30 percent, have occurred every fifth year. Yet, over that same span of nearly seven decades, stock market values have grown 100-fold, which means that, $1,000 invested in the stock market 70 years ago would have grown to $100,000 despite the periodic market declines.


The very profound and highly instructive take away from this is that market declines have, thus far, been nothing more than a momentary interruption in an enduring market advance. Hence, volatility is simply a necessary phenomenon of a market that works. On the other hand, market risk – the risk of incurring losses as stock prices fall – is human-induced. The only way investors actually lose money is when they sell their stocks.


Those who are suddenly spooked into bailing out of the market after it has already fallen 10 or 15 percent, will always lose money. Yet, history shows that the stock market rewards investors who can bear the volatility of stocks and avoid the harmful behavioral traps through various periods of performance. So, the real risk to investors isn’t being in the next 20 percent market decline, its being out of the next 100 percent market increase.


Building Your Portfolio around Market Volatility


Proper Diversification
Proper diversification is the key to withstanding increased volatility and reducing downside exposure. A well-diversified, strategically allocated portfolio will almost always decline in value less than the stock market indexes. If your portfolio only declines 7 percent while the stock market declines 12 percent, you’ll have less to recover when the market rebounds.


Focus on your Long-Term Objectives
During periods of increased market volatility, such as the current volatility caused by COVID-19, it does little good to worry about the market-shifting macro events of the day that will have little or no impact on the long-term performance of your portfolio. The stock market decline of 2008 will turn out to be nothing but a small blip for a portfolio invested for 20 years. It took years for the investors who fled the market in 2008 to recoup their losses, while those who kept their sights on their objectives and stayed the course have enjoyed record gains in their portfolio.


Patience and Discipline
Volatile markets can cause investors to make costly mistakes, such as trying to time the market (which is very difficult at best), or chasing performance, or trying to pick the winners. These mistakes can cost investors a significant portion of their portfolio value. It takes patience and discipline to adhere to a strategy and avoid the herds. Stocks should be deliberately bought and sold according to a strategy, not in response to emotions. If you don't work with a financial advisor, now is a good time to consider it. They can assist with a solid strategy, since they are able to look at the current markets without any emotional attachment.


Though we don’t know how Coronavirus and its affect on the market will progress, we do know that strong planning and diversification may help you navigate the current storm.


*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. All investing involves risk , Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. 

With Coronavirus worries creating rapid changes in the markets, your portfolio construction can be the difference between continued growth or difficult losses. The markets will ebb and flow, but the secret to investing is not the amount of money in your account, but rather the quality of your portfolio. Setting up a robust portfolio will be vital in handling market volatility. I’d like to touch on some of the ways in which you can build a portfolio that can handle market volatility.


1. Determine an objective
Your portfolio needs direction, or you can’t select appropriate investments. Whether you are looking to invest in your retirement, or save up enough for your children’s schooling, you need an objective. This objective should be long-term, and big enough that it is something to work towards, but not so vast that it is unattainable.

2. Limit Investment Turnover
Your portfolio is not something to play around with. Look at this way: you should not rent a stock. Instead, you should look to invest in a business. Yes, you can have some short-term investments, but the majority of your portfolio should consist of stocks that you are okay to invest and hold on to for up to five years.

3. Be realistic and understand the ups and downs of the market
Investing in a low-yield stock and expecting it to triple in the first year is not realistic. Instead, take the time to understand your investments and know what to expect in terms of return. This will allow you to ride the market during the highs and the lows and continue to keep an even keel over the long-term.

4. Diversify
Investing is a long-term game, and betting all of your money on a single company over a twenty-year period does not make sense. Instead, look to diversify your investment across multiple blue-chip or up-start companies in several industries. Thus, if one market is struggling, one of your other companies will take up the slack until the market corrects. Simply put, diversification will allow you to continue to see substantial returns year over year.

5. Talk to an expert
Helping investors navigate these complexities is my job, and I can help build your portfolio to ensure that it can ride out market volatility. A big part of a financial planner’s job is to help guide your portfolio and grow your money over time, and I am here to help.

No matter if COVID-19 has a continued effect, I can help you navigate the daily ebbs and flows of the market. Need help building a portfolio, or want a second opinion on your current set-up? Let’s chat!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

In part 3 of my series on negotiation and retirement savings, Elizabeth Suárez and I discuss setting up the necessary goals to help ensure you receive a raise in the upcoming year. If you missed part 1 and 2 of my conversation with the national speaker, coach, and the author of “The Art of Getting Everything” you can find them here: https://tinyurl.com/yxjr4tyl and here: https://tinyurl.com/y2c2sude.

Liz Windisch, CFP®: Previously you and I discussed asking for a higher salary when given a job offer. But what about increasing your salary in the job you have? Since we’re heading into the new year, how do you let your supervisor know that you want to do what it takes to achieve a raise or promotion next year?

Before you address the topic of a raise or promotion with your boss, it is imperative to take some time to evaluate how your work has impacted your team/division/company. Many professionals believe they deserve a raise because they are working long days. However, raises and promotions are directly linked to how your work transforms the desired team/division/organization outcomes. I recommend keeping a log of your work and accomplishments on a weekly basis. Before meeting with your boss, review your log and identify your top five accomplishments. Share them by illustrating the positive effect they have had toward the company. Follow up it up with the ask. An example of the ask is: “Based on the accomplishments I have shared, I wanted to discuss a plan on how to improve my compensation to match my performance in this company.”

LW: What is a good communication strategy to “check in” as the year progresses?

One of the biggest mistakes is waiting until performance evaluation time to check in with your boss on how you are doing measured against your objectives. I highly recommend that in every one-on-one meeting with your boss you set aside ten minutes to discuss your performance and identify ways that you can continue to improve. If you do this, there should be no surprises at evaluation time. Quite the opposite - you will feel confident and in charge of your future in the company.

LW: Thank you so much for your insight on this topic!

Next month: You’re making more money! How to put it to work for your retirement.

Liz Windisch, CFP® has guided women toward overcoming their money fears and mastering their finances for over 15 years. She believes women will not be socially equal until they are financially equal. For more information, please visit www.lizwindisch.com or contact her at ewindisch@aspenwealthinc.com.

Elizabeth Suárez is an author, speaker and coach dedicated to helping professionals unleash their potential by transforming them into skilled negotiators and decision makers. For more information, please visit https://www.negotiationunleashed.com/ or contact Elizabeth at elizabeth@negotiationunleashed.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through GPS Wealth Strategies Group, LLC, a registered investment advisor. GPS Wealth Strategies Group, LLC and Aspen Wealth Management are separate entities from LPL Financial.

Elizabeth Suarez is not affiliated with LPL Financial and Aspen Wealth Management.

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Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through GPS Wealth Strategies Group LLC, a registered investment advisor. GPS Wealth Strategies Group LLC and Aspen Wealth Management are separate entities from LPL Financial.

The LPL Financial registered representative associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.
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