I know, nobody really like resolutions, but these can really help you have a successful financial life. I don’t think any of them are too hard to accomplish.

Increase your 401k deposit amount and reallocate funds if necessary. The more you put into your account, the less you will pay in current income taxes.

Check your credit report. this is something that can be done annually for free through the annualcreditreport.com site.

Review your taxes. See if there are areas you are not using that can save you some income tax.

Devote some time to these points, then you will have a Happy New year!

Disclosures:Disclosures | The Hecht Effect

The best part of this time of year is the memories we make. Happy holidays!

We get so excited about the upcoming holidays that we often overlook some important end of year financial issues. Here are a few items I think are important for you to review:

Have you maxed out your retirement savings?
Review your contributions to your company or individual retirement plan to make sure you have contributed as much as you can. Pre-tax contributions will save you on current income tax while Roth contributions will save you future taxation.
Review your itemized deductions.
One thing to look at is bunching your deductions. If you plan to donate the same amount of money each year, consider “bunching” the donations into a single year. This could increase your potential itemized deduction for that year. Consider using a donor-advised fund to spread out the giving while taking advantage of “bunching.”
Another are to look at is your property tax, it may be advantageous to pay this years and next year’s property tax at one time to increased your itemized deductions.
Check your Credit status.
Go to any one of the credit sites to make sure there are no surprises. Make sure the items listed are actually yours, check your credit scores, and look at the interest rates you may be paying to see if they =can be lowered.

A little bit of work can usher you into a financial healthy New Year.

Disclosures:http://www.hechteffect.net/?page_id=31

Acronyms often make it easy for us to remember how to do things, here is an acronym for your financial goal setting:

S: Be specific with what you want to achieve. Here is an example: “I want to save $5000 for a trip to Italy”.

M: make your goals measurable. An example of this would be stating specifically how much money you want to be saving every month.

A: Make your goal achievable. Based on your own financial situation, make sure you set a goal you can achieve.

R: Your goals should be relevant. For example, if your car needs to be replaced soon, do the homework necessary to be able to save for that specific goal.

T: Timely. Set a deadline for your goals. Each goal will have a specific deadline, this will help you stay on track for success.

*ChatCPT is source of SMART

Disclosures:http://www.hechteffect.net/?page_id=31

I read this article and feel that these points are important to share. These are points that I agree with and try to get my client to follow. Mr. Buffett shares 3 specifics to avoid so you have a good retirement.
1. Speculating instead of investing
Some investors fail to recognize the difference between a speculative asset and an investment-worthy asset. According to Buffett, the difference is in how the asset generates a return.
“All investment is, is laying out some money now to get more money back in the future,” Buffett once explained. “Now, there’s two ways of looking at getting the money back. One is from what the asset itself will produce. That’s investment. [The other] is from what somebody else will pay you for it later on, irrespective of what the asset produces. And I call that speculation.”
2. Trying to time the market
Market timing is deceptively tempting. Investors often convince themselves they can wait for the right time to buy or sell a stock. However, experienced investors understand that market cycles are unpredictable, so staying invested for longer is typically the best approach.
3. Overpaying
During market bubbles and speculative manias, investors run the risk of overpaying for assets. This can be detrimental for returns.

“No matter how wonderful a business it is, there always is a risk that you will pay a price [and] that it will take a few years for the business to catch up with the stock,”

Moneywise interview 9/10/24

Disclosures:http://www.hechteffect.net/?page_id=31

I have saved six months’ worth of expenses in an emergency fund, but inflation is eroding its value. Should I invest part of my emergency fund in something higher-yielding, like bonds or a high-yield savings account?

Emergency money needs to stay liquid; these are funds you almost have to ignore because they are for an emergency. I understand that it is hard in today’s environment to see what inflation has done to our savings. There are a number of money market accounts that will pay more than savings accounts, which might be an option. My rule is, any money you might potentially need in 18 months or less, needs to stay liquid, regardless of the yield.

Discolsures:http://www.hechteffect.net/?page_id=31

In 2024, you can cash out as much as $1,000 from a traditional 401(k) or IRA to cover an urgent need. And here’s a big change: You get to define what counts as an emergency.
But there are rules, here they are:
You can make one withdrawal per year.
◾ You can’t take out more than $1,000.
◾ You can’t make an emergency withdrawal that brings your account balance below $1,000.
Remember, if you withdraw from a your 401(k) prior to age 59.5, you will pay a 10% penalty.
Please think twice before taking advantage of this new rule, you only have so much time to save for your retirement.
Need to borrow from your 401(k)? Now you can decide what is an emergency.

In 2024, you can cash out as much as $1,000 from a traditional 401(k) or IRA to cover an urgent need. And here’s a big change: You get to define what counts as an emergency.
But there are rules, here they are:
You can make one withdrawal per year.
◾ You can’t take out more than $1,000.
◾ You can’t make an emergency withdrawal that brings your account balance below $1,000.
Remember, if you withdraw from a your 401(k) prior to age 59.5, you will pay a 10% penalty.
Please think twice before taking advantage of this new rule, you only have so much time to save for your retirement.

*USA Today is the source for this information 8/14/24

Disclosures:http://www.hechteffect.net/?page_id=31

Many times, when I am meeting with new people in my office, they pull out their phone to open their financial accounts. They may be logging into the company 401(k), their brokerage account, or their bank accounts. I always ask them if they have a VPN on their phone, their common reply is “what is that”?
A VPN, which stands for virtual private network, protects its users by encrypting their data and masking their IP addresses. This hides their browsing activity, identity, and location, allowing for greater privacy and autonomy.
I cannot stress enough how important it is to have this on all of your devices. Most people are keeping their financial data on their phone or iPad without protection. Thieves are getting very sophisticated at skimming information. This is an effortless way to protect your financial data – do it!

Disclosures

Should I own gold? We have all seen and heard the commercials about buying gold, how it is the standard and gives protection and peace of mind, at least that is what they say in the commercials. What they are selling is actual gold pieces. If you are going to own gold in this manner, here are a few things to look out for.

How pure is the gold? The higher the purity, the higher the price.
What is the markup to the vendor? Often it is quite high.
How are you going to be able to use the gold? If Armageddon happens, are you going to trade a gold coin that cost you $2400 for a bag of groceries?

I believe in diversification and gold can be a hedge against traditional stocks and bonds. If you want to add gold to your portfolio, please look for a quality mutual fund or ETF that invests in gold.
The views and opinions expressed are for informational and educational purposes only as of the date of writing and may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person. All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time. The information and data contained herein was obtained from sources we believe to be reliable but it has not been independently verified. Past performance is no guarantee of future results.
Disclosures:http://www.hechteffect.net/?page_id=31

I am generally in favor of the bird in your hand, with 401(k) accounts, this means Traditional, pre-tax contributions. If you save as much as you comfortably can pre-tax, less will go to the IRS, and there is little change in your spendable income. You are putting the funds in your retirement pocket vs. that of the IRS. Roth 401(k) contributions are made with after-tax dollars and currently accumulate tax=free as long as the funds are on deposit for 5 years or more.
Over the past 3 years there has been a lot of talk about changing the Roth accounts because our Government feels too many people are accumulating too much money that will never be taxed. There have not been any negative statements made in regard to the Traditional pre-tax deposits, until now. Our Government is stating that only “well-healed” individuals have access to these types of accounts, and they are adding too much to these non-taxed deposits. If the amount that can be contributed is lowered, more money can go toward Social Security, thus helping that system.*
I do not know, I thought retirement savings were meant to help us all prepare for our own retirement.
*USAToday 3/21/24

Disclosures:http://www.hechteffect.net/?page_id=31