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Investing means putting funds into a product with expectations to earn a profit over time. Making good investments and smart choices are so critical to improving a person and family’s financial standing. If you compare two households with equal income and one earns 0% return on their savings while the other earns 6% return, over time you will see a huge difference in their financial worth.
Here is an example: If you invest 1,000 per month, earn 6% compounded return, and do that for 20 years, you will have 441,427 dollars. If you invest 1,000 per month, earn 0% return, and do that for 20 years, you will have 240,000. That is over a 201,000-dollar difference by just making smart choices and investing! No additional work, and the differences only become larger with more money involved!
*This is a hypothetical example and is not representative of any specific investment. Your results may vary.
At Mayer Private Wealth Management, we get to understand your goals, your concerns, and build a custom investment plan & strategy designed with you and your family in mind. We take special care to try to identify opportunities in the investing world and strive to have your money working as hard for you as possible. We do this through state-of-the-art tools, research, and other comprehensive strategies. We’ve listed out a few common questions about investing:
While it is difficult to time the market, there are times we believe are better for investing than others. We believe this may be one of those times. Also, remember that even if stocks go down in the short term, generally over long periods of time stocks tend to go higher. Stocks are not an appropriate investment if you need the funds within the next 1-3 years.
There will be different investments that appear more attractive than others at different times. So, this answer may vary week to week or month to month. One of the things we do at MPWM is to always keep our clients aligned with what we believe to be the best investments at any given period.
This may also change over time. A stock that looks like it may have a lot of potential upside this month may not be as attractive next month. If you would like additional information about our views on the markets and potential opportunities, please subscribe to our newsletter.
*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Stock investing includes risks, including fluctuating prices and loss of principal.
When you think of retirement, what comes to mind? Many people envision retirement as a time to stop working and start doing crossword puzzles. However, when I hear the word retirement, I think financial independence. In my opinion, it’s a point in which you have enough resources and income, that work becomes optional, and when you can choose where to work instead of being forced to work. In fact, more retirees than ever before, are leading active and longer retirements.
Retirement, or as we prefer to call it financial freedom, is important for several reasons. Retirement seeks to improve your quality of life, allowing more time to focus on relationships, activities you enjoy, and doing things you’ve always wanted to do. Another reason financial freedom is critical, one day you may be forced to retire. You may begin to lack the ability to perform your job, or your employer may simply pressure you to retire. Retirement and financial freedom have never been more pressing, especially as pensions become rarer and savings become more crucial to generating retirement income.
Retirement means different things to different people. We all have different visions of it. For us, we believe retirement means financial freedom. A point in which you are financially independent. You have the option to choose to work instead of being forced to work.
This question is difficult as some retirement lifestyles may cost 3,000 per month, others may cost 10,000 per month. If you save 1 Million Dollars you can take out an estimated 4% or 40,000 per year. Those funds should last through the duration of your retirement. Don’t forget to account for taxes though!
*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Remember when you stressed over the terrible 2’s, then the teenage years? Ah, if only you could turn back the hand of time. Now you find yourself sifting through family photos, realizing your babies have overnight become young adults. Many parents around this time are locking heads trying to come up with a plan to help pay for college. I know you likely have a lot of questions, like how much is tuition, books, room and board. It’s enough to make anyone cringe.
But what if we told you, there was an easier way? If you start planning and saving early, you may be able to alleviate a lot of that stress. You can start by opening a college savings plan. Aside from paying for college costs, the 529 plan can also be used to save and invest for K-12 tuition. Even better, earnings are accumulated on a tax-deferred basis and as long as the money is used for qualified higher education distributions are tax-free.
You can participate in almost any state. For instance, if you live in Georgia and invest in that state’s plan, it can still be used to pay for college in say New York. Not only can you use the 529 plan at more than 6,000 US colleges, but you can also use it at more than 400 foreign colleges.
Well as you know, all colleges are different and vary in price. However, according to US News data:
- The average cost of tuition and fees for the 2020–2021 school year was $41,411 at private colleges.
- $11,171 for state residents at public colleges.
- And $26,809 for out-of-state students at state schools.
The best way to pay for college is to start planning and saving early. Consider investing in a college savings plan. 529 plans can be used to pay for K-12 tuition in addition to college costs. Distributions are tax-free and depending on where you live some states offer a tax deduction or tax credit.
There are 2 types of 529 plans: prepaid tuition plans, and education savings plans.
Prepaid Tuition Plans lock in tuition at today’s rates and are only offered by a few states. They do not cover tuition for K-12.
The 529 Savings Plan is the most common. An accountholder invests money in a selection of mutual funds. These plans do cover K-12 education and college expenses. It can pay for tuition, fees, room and board, and other related costs.
*Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
When you think of estate planning you probably think you have to be a millionaire. It just sounds intimidating. Estate planning is actually the process of deciding who will inherit your assets and handle your responsibilities should you die or become disabled.
When we talk about assets, we are referring to your belongings. That could be real estate, cars, furniture and a whole lot more. It also includes intangible property. That’s things like bank and investment accounts, stocks and bonds, life insurance, or loans you may have made to others.
There are several elements to estate planning. You may need a power of attorney, someone who can act on your behalf. It can also include wills and trusts. The main purpose of estate planning is to ensure your assets are given to whom you choose, and in a way that minimizes estate tax, gift tax, income tax and other taxes.
The answer is Yes! Estate planning can be a massive undertaking. Having a trusted financial advisor by your side can help make the process go much easier. While advisors can’t necessarily give legal advice, they can help ensure that your wishes are being followed. It’s often a good idea to involve your advisor when meeting with an estate planning attorney. They can provide critical information about your finances and assets. They can also make sure your beneficiaries are always updated.
A Will is a written document that lays out a person’s wishes upon death. That includes everything from naming guardians to minor children to declaring who gets what when it comes to your assets. A will becomes active only after the person’s death. Wills also must go through probate which can be long and stressful especially if family members contest it.
A Trust is active the day it’s created. It can list the person or persons you wish to leave your assets to. If you have a trust you are not required to go through probate, and they cannot be contested. I believe a trust is the better option. Also, nothing says you can’t have both.
Estate planning in short is a plan that determines who should receive your assets and belongings should you die or become incapacitated. It makes it easier for surviving family members when they know and have your wishes in writing. It can also prevent loved ones from fighting over who gets what and protect them from high estate taxes.
*This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
The most asked questions when it comes to life insurance are likely, why do I need it, and what’s it for. A person gets life insurance to make sure loved ones are taken care of financially should you die. Life insurance provides immediate cash after death. That in turn can help take care of the costs of the deceased person’s funeral, debts, and taxes. Without life insurance, your family could be left with a lot of debt that they are unable to pay which could lead to financial struggles, or worse bankruptcy.
If you’re undecisive on whether or not to get life insurance, ask yourself a few simple questions. Do you have family members who rely on you financially? And could they survive on what they have should you die? If you answered yes, then you are likely a prime candidate.
So where do you go from here? Once you find an insurance company you like, you will pay them a portion of the cost monthly, quarterly, semi-annually, or annually. The payments are in exchange for the insurer’s word to pay out the benefit when you die. The money can be given to your spouse or children.
There is term life insurance. That’s life insurance that is temporary. It can last anywhere from 5 years to any other set number. Term life insurance is the most common. Then there’s permanent life insurance which lasts until the person dies. Permanent life insurance is a lot more expensive. It’s also more complex in that it offers a death benefit along with a savings account. The savings account generally earns a money market rate of interest.
If you outlive your term life insurance policy, it’s simple, all the money you’ve paid is returned.
That depends on your dependents. If you have young children who rely on you financially, a20- or 30-year term may be best. However, if your children are older and more independent you could probably get by with a 10-year term policy.
*This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
Long term investments are best in that it allows you to build your wealth over time. Of course, there may be setbacks, but for the most part the stock market always goes back up.
The simple answer, yes it could. There are a lot of factors at play here. You have to keep in mind market volatility and economic uncertainty. To prevent the likelihood of running out of money, you may have to redefine your goals and adjust your income periodically. Your best bet may be to invest in an annuity. It’s the only financial product that can generate income that will last as long as you do.
According to a US News & World Report article, “The Most Affordable Places to Retire”, here’s the 10 best places to retire on a budget:
Source: “The Most Affordable Places to Retire” - US News & World Report November 2,2020
One way to plan ahead for your kid’s college is to start investing in a college savings plan, like the 529 Plan. It can also be used to save for K-12 tuition in addition to college.
That depends on the school. The average cost of tuition and fees for the 2020-21 school year was $41,000 at private colleges. For state residents at public colleges, tuition and fees added up to just over $11 thousand, and out-of-state students paid more than $26,000.
Source: “What to Know About College Tuition Costs” – US News Sept. 17, 2020
Anyone with assets. It’s a way to guarantee your estate and belongings will be given to those you choose.
Term life insurance provides life insurance coverage for a specific amount of time.
Whole life insurance is when you are able to buy and maintain coverage for life, which typically is more expensive than term life.
Most insurance companies say a reasonable amount would be 6 to 10 times your annual salary. For information about specific insurance needs or situations, contact your insurance agent.
Each month, quarter, or year… you pay a premium to the insurance company. In return, they commit to paying your beneficiaries after your death. They can use the money for whatever they choose. This material contains only general descriptions and is not a solicitation. It may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional.
Estate planning is the process of deciding who will receive your assets and handle your responsibilities should you die or become disabled.
An estate is all of your property like your home, cars, furniture, antiques, art, and intangible property.
Intangible property includes bank and investment accounts, stocks and bonds, Social Security benefits, life insurance policies, and loans.
That’s when the surviving owner automatically receives the assets.
That’s when your share of assets is divided up between your heirs.
It’s a good idea to create a will to make the probate process easier. It could also prevent potential family disputes over who gets what.
A revocable trust is also often referred to as a living trust. A revocable trust allows the trustee(s)/owner to retain control and help with the transfer of ownership upon the owner’s death.
Trustees are the people who set up the trust and their beneficiaries.
You can reduce or eliminate estate taxes, avoid probate, all of your assets are under one plan, it can be changed or updated. It also allows for quick distribution of assets.
The main difference is the taxes. With a Roth IRA you can contribute funds on which you have already paid income taxes, otherwise known as post-tax income.
With a traditional IRA you contribute money that has not yet been taxed, so you pay taxes when you take money out.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.