3 Financial Developments to be Thankful for in 2020

Fact: According to the U.S. Government Accountability Office (GAO), over half of all Americans 55 years or older have no retirement savings.1 Among those who have managed to put some money aside for retirement, their average savings amount to only $109,000. That works out to just over $400 a month in income by the time they reach 65. But the real kicker is that Social Security payments, the safety net many older generations depended on during retirement are no longer enough for most people to survive. Hopefully, you have saved more than the average American. But if you have neglected to invest in your retirement and you are still working, there is always time to bulk up your retirement account. 1. Don't Put It off Any Longer Many people who reach their late 40s or 50s without adequate savings in the bank fear that it is too late to do anything to make a real difference, so they decide to do nothing at all. But avoiding action is the worst decision. Instead of letting fear paralyze you, let it become a powerful motivating force to get up and start doing something about the situation. You need a plan. The best way to start is estimating how much money you will need will need during your retirement. While there are many methods for determining this amount, one of the quickest is to multiple your expected salary for the last year you work by 10 to 12. This will give you a rough estimate — and for many people, the number is shockingly high. Now that you have a number to shoot for, you can determine how far off track you actually are from your goal. 2. Reduce Your Expenses Now One way to improve your lifestyle significantly during retirement is to cut back on your expenses while you are still working. Lowering your monthly spending now can give you the additional money necessary to invest in your 401(k) and take advantage of your company's matching opportunities. Remember starting this year, those under 50 years old can contribute up to $18,500 per year in pre-tax dollars and those older than 50 can make up to a $24,500 contribution. Besides giving you extra money to invest, learning to live on less helps you prepare financially and psychologically for retirement. Many retirees find it takes time to adjust to living on a lower income and they often make costly financial mistakes early on. Experiment with your budget now, so you still have the safety net of a steady income if your calculations are off. One of the biggest expenses most people is their home. If you are considering downsizing to a smaller home once you retire, don't wait. Selling your home and moving into a less expensive option as early as possible will allow you to invest the proceeds from the sale of your home in your retirement fund. 3. Sometimes Waiting as Long as Possible Is a Good Thing You may have had dreams of walking out of your office on your 65th birthday, but it rarely makes economic sense. If possible, try to put off retirement for as long as possible. Working as few as four years longer can substantially increase the quality of your lifestyle. Besides allowing you to save a significant portion of your earnings, the longer you can delay taking your Social Security benefits, the more you will receive each month. Saving for retirement is complex and can be confusing. That is why your best option to rescue your retirement is to speak with a financial professional who can help you to choose the right strategies for your personal situation.  1. https://www.gao.gov/products/GAO-15-419 This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

According to a recent study, there is a found universal gender gap in financial literacy between men and women. However, while women reported not knowing the answers to more financial questions than men, this wasn’t solely due to a lack of financial knowledge. Rather, it came from a lack of confidence in financial decision-making.1 Follow these five tips to boost your confidence and financially empower yourself or the women in your life. #1: Set Smart Goals Don’t limit yourself. Set some short-term goals that you can actively measure and achieve in a reasonable amount of time. These goals can be the stepping stones for your financial future and bigger long-term achievements. Progressing through your goals can be an important component of building your financial confidence over time. #2: Build a Budget Creating a budget is the best way to know exactly where your money is going and avoid surprises. If you find yourself stressed out about managing your money, setting and sticking to a budget could help. Over time, seeing your money spent intentionally can help build feelings of financial confidence and reassurance. #3: Invest Studies show that because they are less confident when it comes to money, women are less likely to invest in stocks.1 Unfortunately, being reluctant to invest in stocks can truly put women at a disadvantage. When planning ahead for retirement, investing in a diversified portfolio is often a key component of any comprehensive, long-term strategy. If you aren’t working with a financial professional already, search for a financial professional who can support and guide you in developing a portfolio and creating a solid financial plan. Doing so can help increase your level of comfort with investments and improve your ability to make investment decisions on your own. #4: Don’t Be Afraid to Ask and Answer Questions It’s easy to feel insecure about not knowing all the answers. Asking questions and learning from the answers is an important component of increasing your knowledge base and growing your financial confidence. When you’re more comfortable, pay it forward by answering questions for others too. This is in the hopes that, eventually, asking questions about money doesn’t feel wrong or taboo. If you have young children, especially daughters, take the time to teach them about financial decision-making and encourage them to ask questions as well. #5: Advocate on Behalf of All Women No matter what gender you identify as, you can use your voice to advocate for women’s financial equality, security and confidence. Speak up when you can, and encourage other women to speak up as well. Creating meaningful conversations can help identify similar pain points amongst your peers, get your concerns addressed and develop a space safe to grow your financial knowledge and confidence. It’s okay to strive for balance rather than perfection when it comes to your financial life. Make sure that you’re doing the best for yourself. Don’t let the fear of failure or lack of confidence hold you back from taking control of your financial life and achieving your biggest goals. https://www.econstor.eu/bitstream/10419/231301/1/1748719645.pdf This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Much of the confusion of retirement planning has to do with folks not understanding that it's more than simply saving. Good planning involves actionable steps to visualize getting from now to the desired tomorrow. Here are six ways to make that idea a specific, detailed plan towards a retirement date you can live with: Step #1: Set Reasonable Income Goals We would all love to be millionaires in our retirement, but that’s not reality. A practical, doable retirement plan starts with identifying what one really wants as a livable, enjoyable income in retirement. For some that might be $50,000 a year. For others, it might be $300,000 a year. Whatever the number, spend some time pegging the true cost and spelling out why it should be that number. How you get to the number then defines your retirement date. Step #2: Determine Where Your Income Will Come From Most of us assume our work will be enough and whatever is taken out of our paychecks will pay for our later years. For a few with a defined pension plan, that might still be the case. But for the rest of us, the exact income sources will matter. If more is needed when you retire than anticipated then that will be a mix of retirement savings, Social Security benefits, and potentially still working more. The worst surprise reaching retirement is realizing you don’t have enough and then having to go back to work. Step #3: Evaluate the Necessary Real Savings This is where time comes into play. Based on your target goal of income per year, saving early in your life adds more funds for later. So, 10 percent of net income (after taxes) is probably fine for someone in their 20s. But if you’re in your 40s, you have less time and need to save more for the same target. A few good strategies may include putting as much as you can into a pre-tax IRA or 401K. If there is an employer match, you have the option to do that as this is free money for you. You can also choose to post to a post-tax Roth IRA. Most are limited by contribution caps. Whatever that amount is, it may be a good idea to add it to the rest of your savings to get to your overall percentage target each year. The combined amount will be your retirement savings. Step #4: Take a Look at Your Health If your family history is one with a lot of 100-year-olds, there’s a good chance you’re going to genetically do the same. So your savings plan needs to anticipate you will need more retirement for a longer time window. If, on the other hand, you’re closer to the average mortality rates, take that into account too. No one knows for sure how long they have, but with modern medicine people overall are living much longer, well into their 80's. Your retirement has to account for this fact if you want to live comfortably. Step #5: Consider Health Insurance Coverage Many folks peg an age number to retirement and hope everything falls into place. But practical issues often get in the way. The most common is health insurance coverage. Folks who retire before they are eligible for Medicare coverage (a required health insurance for seniors from the government) find they are suddenly strapped for medical costs. Then they have to un-retire to afford medical help needed. If you can’t afford good health insurance in early retirement, don’t retire early, period. The easiest health insurance to have and retain is the employer-provided package while still employed. Then, at age 65 you can get Medicare. So don't retire too early or you’re on your own. Step #6: Starting Late Is Better Than Not Starting at All Believe it or not, starting late for retirement is still a good idea versus no planning at all. Social Security will very likely not be enough, so don’t ever assume it will be your safety net without any planning. It doesn’t work like a hospital emergency room. Starting in your 50s, you will have a higher climb and have to save more aggressively, but you gain advantages. After 50 you can put more in tax-deferred or tax shelter IRA accounts, protecting more for retirement. You will likely have more discretionary income as your major bills will stop, such as mortgage, the kids’ college tuition, loans, etc. Use those funds to save more as well. Also, try downsizing your life. Just avoiding buying gourmet coffee every morning can produce $868 annually ($4 x 217 working day stops at Starbucks). Packing a bag lunch can save $1,953 every year instead of eating out ($9 x 217 fast food lunches). These changes are simple, easy to make and hardly make a dent in our lives overall. This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

In a recently conducted survey, only 37 percent of participants were considered to have a passable level of financial literacy.1 The number sounds low, but it’s not hard to see why more than 60 percent of participants had trouble answering basic financial questions. The financial field is packed full of special terms, abbreviations and concepts many people don’t come across day to day. It can be tough to differentiate between concepts when you’re someone simply looking to make the best financial decisions for you and your family. But when it comes to your money, you always want to be in the know. That’s why we’re providing 15 must-know definitions below you can use to make more informed decisions moving forward. Banking Terms To Know Net Worth Your net worth is found by subtracting your liabilities (or debts) from your assets. To determine this value, you can add up everything you have of value. - Investopedia This includes investments, money in the bank and the current value of your car and home. Then, you’ll want to subtract any current money owed, including credit card debt, student loans, mortgage balances and any other debts. The remaining amount is your net worth. Compound interest Compound interest is the interest you earn on interest.- Investopedia It sounds confusing, but it can be an effective way to gradually increase your wealth over time. When referred to in regards to a banking account, this is interest that is incurred based on the original deposited amount plus its original interest. For example, if you deposit $1,000 into an account with a five percent compounding interest rate, in the first year you’ll have $1,050 (the original $1,000 plus five percent, or $50). As you enter into the next year, that five percent interest rate will apply to the $1,050 (the original amount plus its interest already accrued). By the end of that year, you’ll have $1,102.50. FICO Score FICO, which is an acronym for Fair Isaac Corporation, is a method used to determine how credible a borrower may be.-Investopedia This score is typically dependent on factors including total debt owed, length of credit history and previous payment performance. A FICO score can be between 300 and 800. The higher your score, the better a chance, in general, you have at obtaining loans or other forms of financing. APR APR stands for annual percentage rate. This refers to the amount of interest gained in an account. It does not include compound interest.- Investopedia Certificate of Deposit Often referred to as a CD, this is an account in which you agree to deposit a certain amount of money and leave it in the account for a predetermined length.-Investopedia In doing so, you will receive an interest rate that is typically higher than those found on checking or savings accounts. Investment Terms To Know Asset Allocation When developing your portfolio, asset allocation refers to the process of dividing your assets into different asset classes. The most popular asset classes include stocks, bonds and cash or cash equivalents.-Investopedia Typically, your asset allocation is determined based on several factors including risk tolerance and time horizon. Capital Gains This is the amount of value an asset has gained or increased since the original purchase.-Investopedia Capital gains are typically used to describe an increase in value of stocks or real estate. It’s important to note, however, that these gains are only shown on paper until the actual entity is sold. Rebalancing Rebalancing is the process used to help maintain the proper asset allocation for your specific needs. -Investopedia This is a necessary part of keeping your asset allocation in check as stocks, bonds and other assets are sold or purchased or gain and lose value over time. Mutual Funds When choosing to invest in a mutual fund, you are pooling your money together with other investors into one account that is then typically managed by a professional.-Fidelity These types of investments can include any of the most common asset classes including stocks, bonds, cash and cash equivalents (such as a certificate of deposit). Custodial Account In the broadest sense, a custodial account is any account that is managed by another party. -Investopedia Typically, that party will have a fiduciary duty to manage the account in the holder’s best interest. In terms of investment accounts, the manager could be the brokerage firm you’ve put in charge of handling your investments. The term custodial accounts is also used to describe accounts that have been set up by a parent or legal guardian for a minor. Insurance Terms To Know Beneficiary In the event you were to pass away while owning a life insurance policy, the beneficiary is the person who would receive the insurance payout after your death. Umbrella Insurance Umbrella insurance is a type of liability insurance designed to provide blanket coverage protecting most aspects of your financial life. -Investopedia Specifically created to cover you in the case of a lawsuit, this coverage steps in when you’ve reached the liability limits on your auto insurance or other types of insurance. Term Life Insurance Term life insurance is designed to offer coverage only during a designated period of time.-Investopedia When you select the term, you often have the choice to choose the length, such as 10, 20, 30+ years. Should you die unexpectedly or prematurely during this predetermined time span, your beneficiary will receive an insurance payout. Premium This is the actual amount your insurance plan costs you to have. You’ll typically pay your premium on a month to month or annual basis.-Investopedia Risk Classification When determining the premium on an insurance policy, the provider will evaluate your risk classification among other factors including the length of the policy, your age, etc. In terms of life insurance, providers will determine your risk classification based on a number of variables including your smoking status, BMI and medical history. -Investopedia  Whether you’re looking to dive deeper into the world of investments or take a second look at your current insurance policies, it’s important to have a basic understanding of the concepts and terms the professionals you speak with will be using. This can help you make more informed decisions as you move forward in navigating the financial services industry. 1.https://www.investopedia.com/ 2.https://www.fidelity.com/ 3. http://www.usfinancialcapability.org/results.php?region=US This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Whether you’re making a career change or just got laid off, your 401(k) may be at the bottom of your to-do list. However, moving your 401(k) is an incredibly important step that must be well-thought-out. When leaving an employer, there are typically three workable opportunities to continue the growth of your retirement funds. Understanding which route offers more advantages for continued growth that will align with your next chapter in life is the first step. Assessment The first step is to read through your plan's agreement. Doing so will help you understand if your employer plan accepts rollovers as some may not. Ultimately, plan sponsors maintain the membership guidelines. In some cases, your former employer’s plan may allow the sponsor to cash-out the account when you end employment. Withdrawals could trigger income taxes and a 10 percent penalty.1 Before you start, gather any appropriate account statements and contacts. When you signed up for the plan, you may have selected both a traditional 401(k) and a Roth 401(k) but keep in mind, these are two separate accounts. Traditional 401(k) contributions are not taxed but are subject to penalties in the case of early withdrawal. Roth contributions, on the other hand, are taxed but withdrawals have no adverse effect as long as the distribution is considered qualified by the IRS.2 It’s a good idea to meet with a financial professional before starting the process. You‘ll want to choose the right type of retirement account and avoid paying taxes or penalties for potentially choosing a plan that isn’t right for you. For example, if you decide to roll your 401(k) into a Roth, you should prepare to pay taxes on the full amount. Execute Planning A financial professional can help you make informed decisions as you continue saving. They can offer assistance by reviewing your previous employer’s plan and weighing the benefits of your new employer’s retirement plans. More importantly, their involvement will make sure the necessary steps are taken to move your funds with limited repercussions.  If you leave money in your previous employer’s plan, it’s a good idea to have an financial professional review the plan’s progress over time. If you decide to transfer funds, the previous plan’s administrator can often send the check to a designated contact. Working with your financial professional will be beneficial as they can coordinate such transactions. Financial Precautions Depending on the length of your previous employment, it’s a good idea to also check the associated vesting schedules. Vesting schedules are tied to the employer’s contributions and determine the amount and date when the employer’s contributions are legally yours. Your own contributions are fully vested from day one. Age is another contributing factor when deciding how to approach a former employer’s 401(k). For instance, if you quit a job, are laid off or fired the year you turn 55, you may withdraw funds penalty-free from the 401(k) established through that employer only.3 If you choose to roll the funds over into another 401(k) or IRA, you will need to wait to withdraw those funds until age 59½ in order to avoid the 10 percent withdrawal penalty. In addition, this penalty-free withdrawal does not count for 401(k) accounts established through previous employers. It only is eligible in regards to the account established with the employer you've left at age 55 or older. If you're unsure about what options may be right for you, talk with a financial professional to help ease your concerns and help you avoid costly mistakes. It’s important to also keep in mind that your new employer may have a waiting period before you’re able to rollover funds. In this case, your financial professional may suggest that you open an investment account to continue contributions during the waiting period. Opening another account allows you to take advantage of the tax deduction until you make your final decision. Keeping investment growth active could be more beneficial for you in the long run. From old job to new, you’re on the right track by having already started saving for retirement. By working with a financial professional, you’ll gain further insight and understand the regulations of moving your funds in the most beneficial way. They will also help with navigating any future changes you may encounter. https://www.irs.gov/newsroom/what-if-i-withdraw-money-from-my-ira https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

In true 2020 fashion, the presidential election has been a rollercoaster ride. On Saturday, November 7, four days after election day, most media outlets projected Joe Biden as the next President of the United States.1 However, the call for Joe Biden didn’t come without suspense, as the country waited for days for ballots to be counted in Pennsylvania, Arizona, Georgia, and Nevada.1 As of Monday, November 9, President Trump and many members of the GOP claimed that the election h [...]

The recovery in the financial markets hit some turbulence in October, as investors wrestled with anxiety about increasing COVID cases. However, a surge in gross domestic product (GDP) in the third quarter may signal that the economy is on the rebound.1 Through October 28, all major indexes had mostly recouped most of their losses from the COVID crash in March. However, all were down for the month of October. Below is each index’s return from October 1 through October 28: S [...]

​It’s the scariest time of the year. Halloween is here. It’s time for trick-or-treaters, haunted houses, spooky home decorations, and more. This may be the scariest time of the year, but it only lasts a month. The truth is there could be gaps in your investment strategy that could come back to haunt you for years or even decades. Below are a few common retirement planning mistakes that can have frightening long-term consequences. If any of these sound familiar, it m [...]

Technology has revolutionized every aspect of our lives, so it shouldn’t come as a surprise that tech-based investment platforms, known as robo-advisors, are becoming more popular. Robo-advisors were created in the aftermath of the 2008 financial crisis, as an alternative to traditional financial advisors and investment managers. This year, robo-advisor platforms crossed the $1 trillion threshold in assets under management.1 These web- or app-based platforms usually use a surve [...]