If you have student loans or expect to, create a spreadsheet to track these loans. It’s likely that every semester you will be taking out loans and it can be very easy to forget how many you took out, especially when they are through different loan providers. Things to include in your spreadsheet would be: what type of loan was taken out, who the loan provider is along with their contact information, when the loan was taken out, the amount the loan is for, what the grace period is, and what the interest rate is.
Automate Your Student Loan Payments and Save!
When your student loans go into repayment get setup with automatic payments. Many loan providers will offer you a lower interest rate for doing this. It will also help ensure you don’t miss a payment, which will have a positive effect on your credit score.
Working in a Public Service Field with Student Loans?
Are you thinking about a career in a public service field? If you are, be sure to check out Public Service Loan Forgiveness. Depending on the types of loans you have and what type of organization you plan on working for you may be eligible for Public Service Loan Forgiveness (PSLF). If you are eligible, be sure to set up your loan repayments with an eligible repayment plan.
Monday Morning Quarter-Buck: Social Security Benefits While Working
Monday Morning Quarter-Buck: Teachers Appreciation Week
Happy Post Cinco de Mayo! We hope you were able to kick back and enjoy your favorite beverage and snacks in celebration. We enjoyed a tasty glass of a yet to be released bottle of Estate Red by Bully Hill.
Speaking of celebrating, we want to recognize a few special professions, since we have a number of clients in these professions:
May 6th – 10th is Teacher Appreciation Week and I hope this week’s blog does it justice
May 6th (today) is Nurses Day. Where would we be without our wonderful nurses?
May 6th – 12th is Be Kind to Animals Week. Have you checked out our Pawz and Purz posts? There are some amazing fur-babies up for adoption that would just love your kindness.
May 10th is Military Spouse Appreciation Day. Although they may not be enlisted, they certainly are active participants in serving our country.
Rounding out the week on May 12th is Mother’s Day.
Teacher Appreciation Week
By Amy Irvine, CFP®, EA, MPAS®
Corning, New York
Parrish, Florida
We are blessed to get to work with some amazing teachers and administrators at our practice and there have been a few that have influenced our lives in ways they will never know, even when we try to tell them.
For those of you that have read my book, “Uncork Your Finances,” you know that I give a lot of credit to a teacher that helped me discover my passion for finance. In honor of teacher appreciation week, I once again would like to mention that Lenny Caruso was an extraordinary teacher and I am very excited to be recording a podcast with him very soon for release in June.
Another extra special mention in our lives include “Chief” and “Tricia.” They will know who they are, and their long-term friendship (since 1976) and guidance is forever engrained in our lives.
These individuals spent their entire career focused on growing knowledge; encouraging us to draw our own conclusions and, most of all, inspiring curiosity.
It’s that curiosity that has driven me to change the face of financial planning, asking why. Why do we have to charge based on your assets? Why do you need to have a lot of money to have a financial planner? Why can’t we start financial education at a young age? Why do we assume that everyone understands financial basics? Why do school districts allow sales people to sell products, but not include financial education? Why, Why, Why?
When the www.403bwise.com website was launched, I was one of the first members to jump on the bandwagon wanting to protect our educators and provide them with unbiased information. Still, I feel it is a challenge to get the information front and center. For example, did you know that in New York, certain school districts offer an opportunity to participate in the New York State 457 Deferred Compensation plan? The underlying investments in this plan are very low cost for the most part and have special provisions not offered by 403b plans. But no one gets a commission if you elect that option, so it remains a “secret.”
Also, did you know that many teacher Unions have negotiated to offer group rates for things like disability, life and home and auto insurance? All of these may save you money and protect you and your family in the long run! But if you utilize these products, no one gets a commission.
There is a trend, but let’s end it.
For those of you that are not teachers, my guess is you know a few and given the influence they’ve had on your life (or you children/grand-children/etc.), you would want them to get the best advice. Just like they may have given to you years ago.
So, join me this week in saying thank you to a retired or active teacher that has influenced your life, from the feedback I’ve received, they would love to hear from you.
Want to hear more about people that have influenced my life? Attend the YWCA Annual Tribute to Women Fundraising Luncheon, join me in being an anomaly and asking why!
Monday Morning Quarter-Buck: Outsourcing for Small Businesses
Outsourcing, Should I?
By Kate Welker, CFP
Hornell, NY
When you’re a small business owner, especially starting out, you are everything. You are the boss, the accountant, the clerk, the handyman. As your business grows you will need to start thinking about the best use of your time and money. Delegation is hard, letting go of a piece of your business might feel like you are losing control but it might be the perfect opportunity to gain more control of your business. One of the easiest ways to begin to delegate is to start outsourcing.
When considering what to outsource start by looking at the areas that are causing you the most frustration or feel like the biggest time sucker. By hiring someone else to handle that task it frees you up to be producing for your business or to build in more free time for your life. If outsourcing a task for $50 an hour will let you make $150 an hour you are coming out ahead. If there is a task that can be outsourced that will give you five more hours a week with your family the cost may be well worth it. You will also want to look at the other benefits to be gained such as specialized knowledge.
There are many tasks you may consider outsourcing, I’m going to touch on a few of the more popular.
Accounting: Generally the first task a small business will choose to outsource. Accounting tasks can take up a large amount of time, especially if you are not a numbers person and struggle to keep up with the process. A professional bookkeeper will be able to accomplish this in a much faster time period. A professional may also be able to recommend strategies to save money and get the most beneficial tax deductions.
Human Resources: Payroll, staffing, recording keeping. There are many options available now to outsource HR needs. There are apps and software to help with recordkeeping. Consultants are available to work either virtually or in person to come in and take some of this burden off your plate.
Maintenance: Starting out funds may be tight and you are tackling everything including the construction, repairs, lawn care, and more. As your business grows and there is room in the budget consider sourcing these out. Particularly if you are not a handy person this will save you a lot of frustration and money in the long run.
IT: In an ever increasing digital age having an IT professional on hand will help your business in multiple ways. You may be adept in this area, I am not and find myself unable to keep up with the newest technology and requirements in security, speed, and advancement. I could spend hours on the research, but that is not a good use of my time. Having a trusted professional that can make sure your cyber security system is solid will protect you information and that of your clients. An opinion on whether you need to upgrade or are ok to continue the current protocol will also help save money over time.
Marketing: When you are ready to start expanding a marketing specialist will be able to focus the funds you are ready to spend go to the best use. Take advantage of the knowledge this person may have of social media channels, demographics, website traffic and SEO optimization.
There are so many other areas you could choose to outsource, it will ultimately come down to your business and what will make the most impact to you. At Rooted Planning Group we are also able to assist your business with financial planning to get your business and personal financial life together.
Monday Morning Quarter-Buck: Earth Day by Becky Partridge
Our theme this week is Earth Day!
For those of you that have been on Market Street in Corning, you may have noticed a unique display in the window the past few weeks. We are proud to promote local events that are happening in our community, especially when the organization is operating on a shoestring budget. The display is meant to bring awareness to an event happening on May 4th called “ReCouture,” previously known as Recycled Runway.
Here’s the really cool thing - in honor of this event and Earth Day (Today, Monday April 22nd), we are giving away a ticket to this cool event to the first person that speaks for it. Not just any ole ticket either, a VIP ticket! Full disclosure, I do serve on a sub-committee for The ARTS Council of the Southern Finger Lakes, so I’d like to see the event do well for multiple reasons.* If you are interested in learning more about the event (and we’d love to see you there), check out the Fashion Show Website Page. What a fun night out this will be, along with being a good cause! And if you are wondering, yes this picture is made 100% out of recycled items.
Also stay tuned for Friday’s Wine and Dime Podcast release where we talk about how each of us can make small inexpensive adjustments in our lives to leave a better footprint. I think you’ll love Becky’s tips below, our resident budget buster has some great savings tips for you!
Earth Day
By Financial Planner Becky Partridge
Corning, New York
Earth Day is a day where people take a step back, and think about how they can help the planet. What if I told you that you can help save the earth, and save money while doing so? There are many things in your everyday life that you could do by making tiny adjustments so that you can save money and make a huge environmental impact.
Let’s start with drinking tap water instead of using bottled water. If you are in an area with safe tap water, consider using a refillable water bottle instead of grabbing bottled water. If you take a refillable bottle, you can save upwards of $2 a bottle depending on where you shop. This adds up over the course of a year, not to mention the fact that you aren’t wasting plastic when you use a refillable bottle! It’s estimated that only 23% of water bottles are recycled. If you do use a one-time use water bottle, please do your part and recycle. If you live in a state like New York, or any of the other states which have a container deposit, you can get the nickel deposit back for every bottle you return. If you do some research you may even find a redemption center that gives back 6 or 7 cents, which will allow you to earn some money back.
Another way to save money and the earth is to buy fewer groceries. I know this one sounds odd, but did you know that nearly 25% - 40% of food bought ends up being thrown out? If you could reduce your grocery budget by 25% - 40% think of all the money you will be saving! You will also be reducing the amount of space you take up in a landfill. When you have to throw food out, you could consider having a compost pile to make fertile soil that you could use to grow a garden to save even more money. There is nothing better than fresh picked fruits and vegetables.
Who doesn’t love a nice cup of hot or iced coffee? Keurigs have become the coffee maker of choice for people all over largely due to their simplicity and efficiency. It’s sad though that almost all K-cups are enclosed in an individual plastic shell. Thankfully there are some companies who are coming out with eco-friendly pods, and there are also refillable K-cups. The refillable K-cups are great because they save on the amount of plastic being sent to landfills and they are much more economical than throwaway pods. In fact, a single K-cup averages out to be about 4 times the cost of using traditional ground coffee in a refillable pod. If you drink a lot of coffee that adds up to a substantial saving each year. Going along with saving money and the environment on coffee comes coffee on the go. Places like Starbucks and Dunkin Donuts have made getting coffee on the go very convenient, but think about the effect that has on your wallet and the environment. To-go cups are often times plastic or what appears to be paper, but the inner coating is actually plastic which makes these cups take a long time to decompose in the landfill. The average cup of coffee is around $3. I’m not saying don’t spend your money this way if that is what makes you happy, but it might be beneficial to reduce the amount of coffee you buy outside of your home; try making it from home and taking it with you on occasion. If you are going to be purchasing coffee when you are away from home, consider taking a reusable cup with you. Most coffee shops and gas stations welcome you bringing in your own cup. In fact, many places even give a discount if you bring your own cup.
*The ARTS Council of the Southern Tier is an independent organization, this is published with their permission.
There are many other ways that you could save money and the environment together. What is your action plan? We would love to hear from you!
Monday Morning Quarter-Buck: The Boston Marathon and Money by Kerrie Beene
Happy Tax Day! While we find this day to be one of the most stressful overall days of the year with last minute decisions and actions, the team made a commitment this year to make sure we managed our stress with healthy behaviors like exercise and eating right. What does this have to do with finances? Read below as Financial Planner Kerrie Beene shares her experience on this journey. We also want to wish all of the Boston Marathon runners the best of luck today!!
The Boston Marathon and Money
By Financial Planner Kerrie Beene
Rooted Planning Group
April 15th is Tax Day but even more exciting than that, it is Boston Marathon Day. A marathon is 26.2 Miles. There are around 570 marathons held each year in the United States. Around 24% of runners have run a marathon, which accounts for 0.5% of the U.S. population.
The Boston Marathon is one of the World Marathon Majors - these are the top six annual marathons run in major cities around the globe. The other five are held in New York City, Chicago, Berlin, London, and Tokyo.
The first Boston Marathon was ran in 1897. It is always held on the 3rd Monday in April, also Patriot’s Day. The day is a state holiday in Massachusetts and Maine and all local offices and schools are closed.
Every year since 1903, the Boston Red Sox, play a game the morning of the marathon. After the game, spectators head to Kenmore Square and cheer on the runners. There are other fun traditions held each year, such as, the scream tunnel and Greek inspired wreaths for winners. Unfortunately, in 2013, was the Boston Marathon bombing where explosives killed three people and injured hundreds.
The Boston Marathon attracts around 500,000 spectators each year to watch the 30,000 qualifying runners. The Boston Marathon has a serious registration process that begins in September the year before you would like to race.
To begin the registration process you have to be 18 years old and already ran a marathon with the International Association of Athletics Association within the last 18 months. Eighty percent of entries are reserved for the fastest qualifying times. Unfortunately, even if you qualify that does not mean you will get to run. For the 2019 race, more than 7,000 entries were not accepted.
Example of Qualifying Standard:
40 Year Old Male - Qualifying Time - 3 Hours and 10 Minutes (Under 8 minutes per mile)
40 Year Old Female - Qualifying Time - 3 Hours and 40 Minutes (Under 9 minutes per mile)
20 Year Old Male - Qualifying Time - 3 Hours (Under 7 minutes per mile)
20 Year Old Female - Qualifying Time - 3 Hours and 30 Minutes (Around 8 minutes per mile)
Male and Female Winners of the Boston Marathon receive:
$150,000 for 1st Place
$75,000 for 2nd Place
$40,000 for 3rd Place
Reading about the history of the marathon and the associated facts is fun. However, I do not foresee myself running a marathon anytime soon.
Most people, including myself, jump on and off the exercise bandwagon many times throughout our adult lives. I have been exercising for a while now and see myself continuing. I have created a habit and enjoy the endorphins. I do it for my health and so should everyone, but could it also make us wealthier?
The answer is yes! Some of the answer comes from personal experience and some of it comes from facts. My experience has taught me that when I do one positive activity, it encourages me to do another positive activity. For example, I notice when I exercise I am naturally attracted to healthier foods and vice versa. When I do not exercise, I warm up a honey bun after dinner and then binge watch Netflix. Well, I watch Netflix regardless, but I feel less guilty if I am not eating a honey bun. The other thing that I have noticed is that when I exercise, my house is cleaner and I don’t mind cooking at home. On the days I exercise, my endorphins keep me moving and I come home and am in the mood to get to cooking or even pickup my house and then cook. I also look forward to doing things outside, like yard work and cleaning outside. While, this is not formal research, it is real and I see the results.
More formal research shows that one cost saving advantage of exercising is our medical bills. We all know the multiple health reasons to exercise but The Lancet states that, just walking 150 minutes per week will result in $2,500 less per year on Healthcare.
The FI Introvert website shows other ways fitness can also save you money by simply eliminating one behavior for a healthier, more enjoyable behavior:
Walking and biking rather than driving saves on car maintenance and gas
Hiking and taking in nature’s scenery rather than scenes from a movie saves on sedentary entertainment expenses
Buying fruits, vegetables, and unprocessed meat rather than expensive and nutritionally weak processed meals saves on food costs
Drinking water is less expensive than sugary soda and other drinks
Going out and playing sports saves money on mindless cable TV consumption
Save on alcohol and cigarettes by not wanting to negate the gains from your investment in your health
So, at the end of the day, maybe the Boston Marathon is not on your bucket list, but exercising should become a daily habit…. It will make you healthier and wealthier.
Want to learn more about our services? Take control now and reach out to us.
Apple Wallet Review
Have you heard the news about the new Apple Card? Read below for Financial Planner Matt Fizell’s take on this new product.
In other news, did you know that April 7 - 13 is national volunteer week? I recently recorded a podcast to be released on April 19th with one of my long-term volunteer commitments, we hope you enjoy that upcoming podcast and learning more about Faith-in-Action Steuben County, and don’t miss last week’s episode with Courtney Berry - women extraordinaire!
Also, we love to celebrate anything financial planning related, so join us in celebrating Retirement Planning Week from April 9th - April 13th - if you haven’t updated your retirement plan recently, this is a perfect week to do so (or at least to schedule a time to do so)!
And consider celebrating those fur babies too! April 10 is ASPCA Day - a great day to combine both a celebration of animals and volunteer week (like how I pulled that all together)!
Finally, we received an alert from our VPN provider that yet another Facebook security failure occurred and millions of records were leaked. This time information included comments, likes, reactions, account names, and Facebook ID’s, along with some email addresses. The compromise was a result of a third-party app called “At The Pool,” which even stored passwords of 22,000 users in plaintext (not encrypted). If you have ever used this app, it’s time to change your Facebook password. Also, if you use that same password for any other websites, make sure you change those too. As always, beware of phishing attacks as a result of this breach.
Apple Card Review
by Financial Planner Matt Fizell
Rooted Planning Group
While I did not watch the Apple press release this week, I had a slew of texts come my way asking about my opinion on the Apple Card which will be released this summer and “completely rethinks everything about the credit card by representing all the things Apple stands for.”
Words such as simplicity, transparency, and privacy were heavily used throughout the presentation, so I figured I would dive in and see what the buzz is about! So you are probably asking yourself, what makes this card so different?
First things first, before we get to the fun stuff... please remember this is a credit card! Credit cards are a great tool when used properly, but if not properly managed, the Apple Card will just create new problems in your financial life. We strongly suggest understanding your financial health BEFORE you consider taking out any credit cards, understand your spending habits so a great tool doesn’t become a major setback.
The limited information available at press release time does show some promise around their core values:
Simplicity:
You can apply for the card right on your phone, and if approved, your card is ready for use via any Apple Pay kiosk at the stores you already visit.
The card actually keeps a running total of your purchases AND lays out a budget for you! As a Financial Planner, this is probably the coolest thing about the card in my eyes... we all know making a budget by going through statements is a HUGE PAIN! Brownie points to Apple for trying to make budgeting sexy.
You can update your account address or other important information by simply texting Apple Support, very slick indeed, no more waiting on hold with the card issuer or navigating the wonky websites we all know and love.
Transparency:
No fees, period. This includes fees such as late payment fees, international fees, cash advance fees, overdraft fees, and no annual fees also.
Make note... Missing a payment WILL still impact your credit score. So don’t lean on that one if possible!
Interest rates are what they are. Based on your credit at the time of application, you will receive an APR between 13.24% and 24.24%. These are pretty in-line with industry standards, BUT you will not be charged a penalty APR like you will on some other products.
If you do not pay off the entire balance each month, Apple Card will tell you approximately what interest will be charged to your account. This is another huge win in my book for consumers... Just like some financial planners simply draw fees from your account and aren’t transparent, most big credit card issuers will simply assess it on those statements you probably don’t read like most people.
Detailed information surrounding the Privacy Protocol with the card is still fuzzy... so look for an updated version of this article when we have information to share. We pride ourselves on only giving information we would use for our own financial decision making.
Want to find what financial independence looks like in your personal financial world? Contact us to schedule a free initial meeting to discuss your goals, current situation, and let us help you draw up a plan so that you can live your best financial life... it really is as simple as having a great conversation and letting us take care of the behind-the-scenes, technical aspects of a well-executed financial plan we deal with each and every day. Just like Apple Card, you won’t pay any fees you don’t know about and we will be sure to let you know what your cost is BEFORE you sign any papers.
Understanding Required Minimum Distributions
Happy April 1st! Did you know that April Fools’ Day is also called All Fools’ Day? Did you also know that it may have started in the 16th Century due to a calendar change? That calendar change was a switch from the year starting in April to the year starting in January. Another theory ties it to the “vernal equinox,” which is the first day of spring in the Northern Hemisphere, but the weather doesn’t always behave Spring like (I know my New York clients will believe this!).
For those of us in the personal finance world, it is a date that carries different meaning to us! It is the last day you can defer your Required Minimum Distribution the year after you turn 70½, no April fools there, we don’t want you to miss that date and pay the 50% penalty!
Understanding Required Minimum Distributions
By Financial Planner Scott DuMond, CFP®
“I turned 70 this year, isn’t there something I am supposed to do with my retirement accounts?”
The topic for today’s lesson is IRS Minimum Distribution requirements at age 70 ½. The IRS has a nasty penalty for not taking the required Minimum Distribution withdrawal, 50% of what you should have taken… and that’s no April fool.
I tell my students and clients that understanding Minimum Distribution requirements are like cutting an onion. There is always another layer, and the deeper you go, the more you cry. I am never sure if I am joking or not, so let’s take this one layer at a time. Out of respect for you and your tear ducts, we will stick to the first few layers. Please do understand that there is always another layer and it is worth talking to your financial advisor or tax professional as you approach age 70.
Layer One
If you have turned 70 or are turning 70 this year, be sure to talk with your tax advisor or financial planner. They will tell you what you need to do and when. The simple answer is either this year or next you will be required to take a withdrawal from your 401ks or IRAs of approximately 4% of your total.
That’s it. Feel free to stop reading here and talk to your financial professional. If you want to keep reading I will keep explaining. However, feel free to come back to Layer One at any time.
Layer Two
Exactly when do I have to take this withdrawal?
A person is required to take their first minimum distribution withdrawal the April 1st of the year following the year they turn 70 ½. *
Example 1:
Fred turns 70 in May of 2019. He then turns 70 ½ six months later in November of 2019. He will have to take out a distribution before April 1 of 2020.
Example 2:
Wilma turns 70 in July of 2019. She then turns 70 ½ six months later in January of 2020. She will have to take the distribution before April 1 of 2021. (The April 1st of the year after the year she turns 70 ½.)
Layer Three
When should a person take their first minimum distribution withdrawal?
They should take it the year they turn 70 ½ and not wait until the following April.
Example 1:
Fred turned 70 ½ in November of 2019. He therefore should take his withdrawal in 2019. The IRS gives you until the following April in case you didn’t know and needed to be told by your tax advisor.
So Fred could actually take his first withdrawal anytime between January 1st 2019 and April 1st 2020. He should keep in mind that this becomes an every year thing. He may want to be sure to take the first withdrawal in 2019 so he doesn’t have two withdrawals in the same year. The first one by April of 2020 and the second one by December of 2020. That could hurt come tax time.
Example 2:
Wilma turned 70 ½ in January 2020. She therefore should take her withdrawal in 2020. Wilma could take her withdrawal anytime between January 1st 2020 and April 1st 2021 and still be in compliance.
Layer Four
Exactly how much do I have to withdraw to stay in compliance and make the IRS happy?
This is a simple math problem. Find out the balance of all of your 401ks, IRAs, and other retirement accounts as of the December 31st of the year before the year your turn 70 ½. Divide that number by 27.4 if you will be 70 at the end of the year that you turn 70 ½ or divide that number by 26.5 if you will turn 71 at the end of the year that you turn 70 ½.
In the examples above, Fred would use 27.4 as his divisor and Wilma would use 26.5 as her divisor. The math would show you the amount of money you need to withdraw to make the IRS happy. Remember that it is your money. The IRS just wants you to withdraw it so they can tax you on it.
Like the directions on your shampoo bottle, this is a lather, rinse, repeat requirement. Meaning each year after you turn 70 ½ you will have to do this again with slightly different numbers. Thank you for joining me for this endeavor. Enjoy your spring!
*Remember if you have any concerns about this topic, please go back to Layer One.
*Remember also that there are many exceptions to this requirement that need to be reviewed. We just scratched the surface today in a topic that could be discussed in a full book.