May 2022: Grad Gifts that Teach Good Financial Habits

With so many possibilities, what should you gift your child or grandchild as they graduate from college? The job market is uncertain, and many of our new graduates are carrying heavy weights of student debt. Here’s an article from Kiplinger that gives insight into ways to help, even if you’re not flush with money yourself. As a teaser, here are a few words from Len as he weighs in among other professionals in this article:

The best financial gifts are those that improve financial behavior, says Len Hayduchok, president of Dedicated Financial Services in Hamilton, N.J. “Leverage those gifts to teach good financial habits.”

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GIfts-for-Grads_Kiplinger_May-2019

April 2022: Pitfalls to Retirement

This month, we’ll review some of the biggest, baddest pitfalls to having an amazing retirement. We all want a wonderful, worry-free retirement with enough money to achieve our life’s goals, hopes and dreams™ for this new season. Retirement should be a golden time. But failing to plan really does mean planning to fail when it comes to retirement.

Here are the top big mistake to avoid so you can plan for a retirement where your money goes to work for you!

Pitfall #1: Not Downsizing or Paying Down Your Mortgage

It’s crucial to minimize your expenses for retirement. This is particularly important when you aren’t earning any income. If you don’t keep your overhead down, you will have to cut back on your spending and draw on your resources more quickly than you would like. One way to do that is with your mortgage or rent. Budget, plan and work to pay that off so you don’t have ongoing cost for living expenses to deal with.

Pitfall #2: Ignore the risk of long-term care

There are a lot of factors that go into calculating how long your money will last, including your age, your life expectancy, current rate of returns and long-term care is the biggest financial risk we face in retirement. Not only can it be expensive, but care can also extend for a long period of time. Many of us ignore the possibility of long-term care because it’s something we don’t want to think about. We also underestimate the chance we might need it.

Sometimes we think, it’s no problem, someone will just care for me. My spouse will care for me or my children will help out. We don’t realize what a strain that could be on others to provide that care for us. It’s vital to come up with realistic solutions in the event long-term care is needed. Closely examine your financial resources. Look into purchasing a financial product for your needs. Be prepared to be covered by a government Medicaid program and the amount you have saved. We can help by giving you an approximate figure that you can safely withdraw each year without putting yourself at risk of running out of money.

Pitfall #3: Not understanding how your portfolio works

We’re mistaken if we believe being set for retirement is as simple as withdrawing a certain percentage of our 401(k) monthly. If we are not able to control our expenses or get the returns we want from our portfolio and limit our investment risks, that sum of money is going to reduce to the point that there will not be enough money in our 401(k) for us to maintain the standard of living for the rest of our lives.

What may have worked in your portfolio in your working years may not work when you’re retired. Your income will most likely not be the same, and you won’t have an extra financial cushion if you make errors or face bad results in the market.

Pitfall #4: Too much or too little risk

It’s normal practice to shift your money to lower-risk vehicles as you head nearer to retirement. You want to minimize risk if the market falls so you don’t lose a lot. The problem is that many view their portfolio as a whole, rather than parts. Years of experience have taught us that it’s wise to divide your portfolio into timeframes for withdrawals or your objectives for their use. One part can meet needs in the short-term with more liquidity and less risk. Another segment is for meeting long-term needs with higher risk, allowing you to access important growth opportunities.

Pitfall #5: Not having legal documents in order

Planning for retirement means preparing for events we might rather ignore. Who wants to think about dying and whom to leave what to when we go? Who wants to talk about a scenario where we can’t care for ourselves and who will take care of us? These difficult topics are precisely why wills, living revocable trusts, and other legal documents are crucial. If we don’t get these legal documents in place, that doesn’t mean those events happen. It only means if and when they do happen, there will not be a proper structure in place to handle those affairs as we would like them to be handled. It becomes a potential problem for those that we expect will handle things for us.

Pitfall #6: Not having beneficiaries on an investment account

We can pass on assets to others in a few ways when we die. First, they can be jointly owned with the surviving owner takes possession of the assets. Otherwise, it is done through naming a beneficiary. If we don’t have joint ownership or name a beneficiary, then assets pass down through the stipulations in our will which can get messy. Don’t forget to designate beneficiaries in your will, otherwise your wishes may not be carried out.

Pitfall #7: Transferring a Home/ Property to a Child Before Death

Most people assume their lifespans will be far shorter than statistics indicate, and they plan for their retirement accordingly. Unfortunately, the result of this trend is that many retirees outlive their savings. The best way to mitigate this risk is to assume a best-case scenario when planning for retirement. Save, invest and spend as if you will live to be 100 years old.

Tip #8: Doing It All Yourself

Many of us think we’re good financial planners because we’ve had some success with our investments. However, that’s a potentially costly assumption. Financial planning is complex and complicated. By seeking the advice of experts who have dealt with a wide variety of situations, we get a plethora of experience and expertise. Trying to go it alone, may translate into lost opportunities to earn and save more.

Pitfall #9: Focus on Sequence of Returns

Before becoming retired (when planning for the future), it seems wise to move to a low-tax state where the cost of living is low. BUT this may not be the best emotional or financial choice after all. Moving far from family means more money spent on travel. Greater distance can lead to feeling far, disconnected, even estranged from close family and friends whose relationships mean so much in our golden years.

January 2022 -New Year’s Savings / New Habits

This year, why not plan so when summer rolls around you’re ready for a much-deserved rest. Take a look as our very own Len Hayduchok weighs in with other experts:

“12 Doable Changes You Can Make This Year To Save For An Amazing Vacation”

“There are plenty of reasons to save money, but a big vacation is arguably the most exciting incentive. After all, “I’d love to travel more” is one of those New Year resolutions pretty much everyone makes.

We usually start out with a decent budgeting effort (hello, Dry January), but as the year rolls on, our spending inevitably becomes harder and harder to keep in check. To make sure that you’re able to make a healthy contribution to your travel fund every month, we’ve tapped two budgeting experts to devise a 12-month saving plan that’s super easy to follow. Each month, you’ll be challenged to give up or change an everyday habit, and we’ve provided rough estimates on how much extra savings can go towards your planned journey, whether it’s an epic Eurotrip or backpacking jaunt through Southeast Asia.”

“Find out how you can save up for the most amazing vacation, ever. Trust us: The delayed gratification of a nice hotel or a fancy meal while you’re away — because you’ve been frugal all year — is the sweetest feeling.”

<p><strong>Do A Home Plurge</strong></p><p>March is time for spring cleaning and getting your <a href=
Do A Home Purge

March is time for spring cleaning and getting your Marie Kondo on. Get rid of junk that no longer bring joy to your household — from used furniture to spare electronics — on Letgo and Wallapop, two online marketplaces for virtual garage sales. To quickly simplify your wardrobe, offload your clothing and accessories at your local thrift stores. Resale chains such as Buffalo Exchange and Beacon’s Closet will offer you cash up front.
<p><strong>Reassess Your Monthly Bills</strong></p><p>The start of a year is a great time to kick things into motion — and start paying attention to your monthly bills. "Try to identify areas of redundancy that you can just cut back," says Kimmie Greene, a consumer finance expert at <a href=
Reassess Your Monthly Bills
“Try to identify areas of redundancy that you can just cut back,” says Kimmie Greene, a consumer finance expert at Mint, a personal finance and budgeting app. “Grab a magnifying glass and really pore over your monthly bank statements. Not only is it a great way to figure out what spending areas you should be trimming, it’s also an opportunity to flag any subscription-based services that you no longer have a need for, such as premium membership on dating apps.” One no-brainer step you should already be doing? Pay all your bills online. It’s a lot more convenient, and you’ll be saving on postage. The math= 10 bills a month, x $.49 stamps over 12 months saves $58.80.
<p><strong>Go Low-Key On V-Day</strong></p><p>Valentine's Day is one of those special occasions that can be a massive drain on your savings. Flowers and chocolates tend to be more expensive around this time of the year due to increased demand, not to mention skyrocketing costs if you choose to dine out.</p><p>Skipping the bouquet-and-chocolate combo can save you around $75 right off the bat, according to Len Hayduchok, a CFP and president of <a href=
Go Low-Key On V-Day
Valentine’s Day is one of those special occasions that can be a massive drain on your savings. Flowers and chocolates tend to be more expensive around this time of the year due to increased demand, not to mention skyrocketing costs if you choose to dine out.Skipping the bouquet-and-chocolate combo can save you around $75 right off the bat, according to Len Hayduchok, a CFP and president of Dedicated Financial Services. Opt for a nice hand-written note — paired with an inexpensive but thoughtful gift — to avoid racking up high expenses. If you’re flying solo on V-Day, throwing a popcorn-and-movie gathering with your best buds will keep things cheap and cheerful.
<p><strong>Reduce Dining Out By Half</strong></p><p>You probably already know this, but eating in is a big money saver. By being smart about meal-planning, you can still eat out without breaking the bank. Greene suggests cutting the number of times you dine out in half to eliminate unnecessary costs. "The average person spends around $232 per month ordering takeout and dining at restaurants," she says. “By reducing this in half, you can save yourself $116 a month." Check out our <a href=
Reduce Dining Out By Half

You probably already know this, but eating in is a big money saver. By being smart about meal-planning, you can still eat out without breaking the bank. Greene suggests cutting the number of times you dine out in half to eliminate unnecessary costs.

“The average person spends around $232 per month ordering takeout and dining at restaurants,” she says. “By reducing this in half, you can save yourself $116 a month.”

Check out our big roundup of packed lunch recipes for culinary inspiration.
<p><strong>Cut The Cord</strong></p><p>Part ways with your cable provider to save a buck, since most of the things you'd want to watch is on Netflix and Amazon Prime anyways. Depending what cable company you're with, you can save an average of $110 a month, according to Greene.</p><p>If you're not reading to bid adieu to your TV channels, try bargaining your way to a better deal. Broadband and phone bundles often charge a lot for services you might not even need, such as a landline or a surplus of TV channels. Contacting a customer service rep at your current provider and <a href=
Cut The Cord

Part ways with your cable provider to save a buck, since most of the things you’d want to watch is on Netflix and Amazon Prime anyways. Depending what cable company you’re with, you can save an average of $110 a month, according to Greene.If you’re not reading to bid adieu to your TV channels, try bargaining your way to a better deal. Broadband and phone bundles often charge a lot for services you might not even need, such as a landline or a surplus of TV channels. Contacting a customer service rep at your current provider and negotiate for a discount. (Threatening to leave helps.)
<p><strong>Take Alternative Transportation</strong></p><p>If walking to work is an option, try challenging yourself to a whole month of commuting on foot — since the weather is generally pleasant this time of year. If you drive to work, try mapping out an alternative route on public transportation. "If you can commit to a more economical method of getting around for an entire month, you should be able to set aside $100 to $200 at the end of that month," says Greene. Obviously, this depends on the type of car you drive, parking costs, and the length of your daily commute, but you'd be killing multiple birds with one stone — it's better for the environment <em>and</em> you're getting some extra work out.</p><span class="copyright">illustrated by Anna Sudit.</span>
Take Alternative Transportation
If walking to work is an option, try challenging yourself to a whole month of commuting on foot — since the weather is generally pleasant this time of year. If you drive to work, try mapping out an alternative route on public transportation. “If you can commit to a more economical method of getting around for an entire month, you should be able to set aside $100 to $200 at the end of that month,” says Greene. Obviously, this depends on the type of car you drive, parking costs, and the length of your daily commute, but you’d be killing multiple birds with one stone — it’s better for the environment and you’re getting some extra work out. illustrated by Anna Sudit.
<p><strong>Watch Your Power Consumption</strong></p><p>"Take a look at your electric bill and ask yourself: Can you handle cutting back on the AC or heat?" says Hayduchok. Work towards a lower energy bill by installing a programmable thermostat, so the heating and cooling functions are turned off when you're at work or asleep.</p><p>Better yet, install a ceiling fan and back off on the AC: It can potentially save you an average of $128 each month, according to figures published on <a href=
Watch Your Power Consumption

“Take a look at your electric bill and ask yourself: Can you handle cutting back on the AC or heat?” says Hayduchok. Work towards a lower energy bill by installing a programmable thermostat, so the heating and cooling functions are turned off when you’re at work or asleep.Better yet, install a ceiling fan and back off on the AC: It can potentially save you an average of $128 each month, according to figures published on 20somethingfinance.com
<p><strong>Get Coupon-Savvy</strong></p><p>Sure, couponing doesn't sound like a sexy way to budget your spending, but it can make a huge difference, especially considering that the average household spends <a href=
Get Coupon-Savvy
Sure, couponing doesn’t sound like a sexy way to budget your spending, but it can make a huge difference, especially considering that the average household spends an upwards of $4,000 on groceries every year. “Take some time out of your day to research coupons, from Groupons to delivery deals — anything that make sense for your lifestyle,” says Greene. “These small discounts can help you save an average of $5 a day on groceries, which adds up to $150 a month.”
<p><strong>Collect Your Spare Change</strong></p><p>This savings trick doesn't take much effort, but not many people actually do it: Start collecting all the spare change you’re given after purchases. While you’re at it, do a quick scan under your couch, cushions, and car seats for loose coins: You’d be surprised at how much money you'll find. Another hack that helps you set aside money without even thinking about it? Greene recommends setting up a daily transfer of $1 from your checking account to your savings account. Even if you're just putting away $1 a day, it will amount to $365 at the end of the year.</p>
Collect Your Spare Change
This savings trick doesn’t take much effort, but not many people actually do it: Start collecting all the spare change you’re given after purchases. While you’re at it, do a quick scan under your couch, cushions, and car seats for loose coins: You’d be surprised at how much money you’ll find. Another hack that helps you set aside money without even thinking about it? Greene recommends setting up a daily transfer of $1 from your checking account to your savings account. Even if you’re just putting away $1 a day, it will amount to $365 at the end of the year.
<p><strong>Get Creative With Workouts</strong></p><p>A pilates class may help get those endorphins going, but that expensive gym membership isn't doing your bank account any favors. Membership fees in big cities like L.A. or NYC can rack up over $100 a month, according to Greene. "If you’re not really taking advantage of your gym, cancel your membership and find a more affordable way to work out instead," she says. "Running outdoors, doing routines at home, or pursuing trial day passes are the way to go."</p><p>Another thing you can possibly cut back on: buying bottled water after a class. Bring a reusable bottles at the gym helps reduce waste and unnecessary spending. By Greene's estimates, an average person spends roughly $100 a year on bottled water. You can save yourself at least $8.33 a month by skipping the plastic.</p><span class="copyright">illustrated by Anna Sudit.</span>
Get Creative With Workouts
A pilates class may help get those endorphins going, but that expensive gym membership isn’t doing your bank account any favors. “If you’re not really taking advantage of your gym, cancel your membership and find a more affordable way to work out instead,” she says. “Running outdoors, doing routines at home, or pursuing trial day passes are the way to go.” Another thing you can possibly cut back on: buying bottled water after a class. Bring a reusable bottles at the gym helps reduce waste and unnecessary spending. By Greene’s estimates, an average person spends roughly $100 a year on bottled water. You can save yourself at least $8.33 a month by skipping the plastic.
Go Easy On Thanksgiving Dinner

The more indulgent the feast, the higher the expenditure: Instead of going all out on your Thanksgiving dinner, look up ways to do more with less.

Skip the whole bird and invest in just breast or drumsticks for half the price. Repurpose the frozen rolls and sliced bread in your freezer into side dishes. Get boxed wine and serve it in a fancy decanter.

According to Hayduchok, you can save at least $20 per person by cutting back to normal portions.
Delay Your Gifts
We’re often tempted to spend more around the holidays. To counter that urge to drop more money than you should on gifts, Hayduchok suggests doing things a little differently this year. “Try to do your holiday shopping right after the holidays, when Day-After-Christmas deals are in place,” says Hayduchok.

“While you’re at it, stock up on essentials you may need next year, such as wrapping paper, bows and gift bags — while they are on clearance.” Waiting an extra couple of days to unveil your presents is going to be so worth it.

ARTICLE: https://finance.yahoo.com/news/12-doable-changes-save-amazing-162000048.html

Illustrated by Anna Sudit

Also check out our other resources:

Need help considering which policies might be the best to meet your individualized needs and budget? Contact us for help. AskUs@dedicatedfinancialservices.com | 1-866-US-Senior (866-877-3464)

December 2021 – Annuities 101

Annuities are a tool. Misunderstanding around annuities has been a common theme as we work with individuals and rub elbows with other advisors. As any tool, they can be misused, especially when such misunderstanding abounds. However, also like any tool, they can be very useful when used properly. To shed some more light, we share an article from FinancialAdvisor.com where Len weights in on the topic:

Annuity Use Is Expanding, But Knowledge Is Limited, Advisor Says

DECEMBER 17, 2019 • KAREN DEMASTERS

Annuities are becoming mainstream even though knowledge about them among investors is still limited, said Len Hayduchok, president of Dedicated Financial Services and Dedicated Senior Advisors in Trenton, N.J.

“Annuities used to be a limited product with only a small market penetration, but the addition of riders for income, death benefits and long-term-care benefits to provide clients more value than pure growth have made them more popular,” said Hayduchok, an advisor and portfolio manager.

The riders come at a cost but provide the holder with more options when purchasing the annuity and more benefits over the years, he said, compared to just the deferred income or immediate income annuities available in the past.

The problem is that knowledge about annuities—even among those who own them—is not great, Hayduchok added.

“I think people are highly uneducated about annuities,” Hayduchok said in a recent interview with Financial Advisor. “Many do not know the basic features that they should have been educated about before they bought the product. Even people who consider themselves informed investors often are not current about the details of their annuities.”

Hayduchok said when he is advising a client who already owns an annuity product that he will talk with the annuity company, with the client’s approval, and determine the details of the contract. He and the client can then make a determination about whether the annuity is helping or hurting the client’s financial situation.

“Then we can talk about what the client should do with the annuity,” he added.

Indexed annuities are now tied to a number of different indexes, which can add to their appeal. What might curb the appeal of annuities in the future are any new regulations that could be imposed on the product, Hayduchok said.

Need help considering whether Annuities (and which ones) might be a fit for your portfolio? Contact us for help. AskUs@dedicatedfinancialservices.com | 1-866-US-Senior (866-877-3646)

Also check out our other resources:

November 2021 – Tips to Neutralize Risk in Retirement

What if I end up in a nursing home later in life? Will I be able to afford my basic expenses, if my spouse passes away? Life Risk events are a daunting consideration that can give us sleepless nights. When one considers a Financial Plan, this is a BIG AREA to set aside time to address. To help on your journey, here are a few basic tips.

1) Concerned about the financial impact of passing or the passing of a loved one whose income one may be relying on?

TIP: Secure Life Insurance

2) Concerned about the risk of medical costs that may not be adequately covered by current insurance policies?

TIP: Secure health insurance or a Medicare Supplement policy

3) Concerned about the risk of long-term care costs if not able to care for oneself?

TIP: Secure Long-Term Care Insurance

Need help considering which policies might be the best to meet your individualized needs and budget? Contact us for help. AskUs@dedicatedfinancialservices.com | 1-866-US-Senior (866-877-3464)

Also check out our other resources:

October 2021 – Strategies in Retirement You Should Try

While taxes are a fact of life, the amount you pay is NOT. How do you know if you’re paying more than you should? Take time out to review the latest tips in our Series: “Retirement Savings Strategies You Should Try.”

Tip #1: MAKE WITHDRAWALS STRATEGICALLY

In retirement, you often have income coming from many different savings accounts. Some of those accounts will be tax-deferred accounts, and it may be in your best interest to delay withdrawals from those accounts as long as possible limiting your taxable income each year. So, if you have a non-taxable withdrawal account such as a ROTH IRA and a taxable withdrawal account such as a 401K, you’ll want to defer making withdrawals from the 401k for as long as possible to keep you from moving into a higher tax bracket and having a higher tax bill.

Tip #2: MAX OUT YOUR TAX BRACKET

If at the end of the year you find you haven’t maxed out your current tax bracket consider withdrawing income from tax-deferred accounts to reduce your future taxable income. For example, if you have a large IRA and still have some wiggle room before you max out your current tax bracket, consider withdrawing funds from that IRA in the current year. Yes, you will be taxed on the money you withdraw, but only at your current tax rate. Each year you can reduce the amount of your IRA, the less money you have to pay in taxes in the future.

Tip #3: REDUCE EXPENSES

Sometimes paying less in taxes in retirement simply means reducing your current expenses. The less money you have to put out each month is less money you have to withdraw from your retirement accounts. Talk with your accountant to see what type of tax hit you might take if you paid off major expenses such as your car note, a mortgage – if you still have one – and other bills that aren’t part of monthly living expenses. You may find taking one big tax hit to eliminate those bills, means a much lower tax liability in the future as you will need far less money to live on month-to-month.

Tip #4: DEDUCTION BUNCHING

Try pulling some deductions into the current tax year to help minimize your overall tax liability. An example would be bunching two years’ worth of charitable giving into a single year to get over the itemized deduction threshold. Granted, this technique might put an undue strain on cash flow and savings but is an option for those that can afford it. With those extra charitable deductions, you can maximize your deductions for the current tax year.

Tip #5: MINIMIZE TAXES ON SOCIAL SECURITY BENEFITS

Your Social Security benefits are taxed based on your combined income. If you file jointly and your income is below $32,000, you won’t have to pay taxes on your Social Security benefits. If you’re single and your income is below $25,000, you won’t have to pay taxes on your Social Security benefits, either. As your taxable income increases, however, the more taxes you will have to pay on your Social Security benefits.

Tip #6: CONSIDER MOVING TO A ROTH IRA

While this isn’t a strategy that will work for everyone, if you have a large IRA consider moving some of it to a Roth IRA to help reduce future tax liability. The move can also help minimize your future minimum IRA distributions. To see if this strategy will work for you, mock up a tax return in the fourth quarter and see how much money you can remove before pushing yourself into a higher tax bracket.

Need help TAX PLANNING to make sure you don’t pay more than is needed? Retirement preparation is our specialty! Reach out for a free consultation: AskUs@DedicatedFinancialServices.com For help with Tax Planning to make the most of retirement, get in touch: 1-866-US Senior (1-866-877 3646) or AskUs@DedicatedFinancialServices.com