Self-care for young professionals

If she could have convinced herself of one thing during her younger days, financial advisor Tanya Winch would have told herself to save much more for her retirement and to begin saving earlier. “I regret wasting potential gains on magazines and gum” she said. “Back then, I didn’t understand the magnitude of what compound interest can do. It’s a great theory and it’s completely understandable but behaviorally, it’s not real until you get to a certain point in your life and you say, ‘There’s only so much left in my working life. I’d better get on it. I’d better stop fooling around.’” These days, she’s on a mission to help other young working professionals not only understand how compound interest can boost the money they’ve worked so hard to earn, but also how easy it is to do so. Simply directing a small portion of their paycheck into an account now will lessen their future anxiety about retirement and give them a leg up on feeling great about their money skills. Toward that end, she is teaching a class called “Take Control of Your 401(k)” that will be offered both virtually and in person through the University of Wisconsin Oshkosh – Fox Cities. The two-session series will run on Nov. 2 and 9 from 6 to 7 p.m.  You can register here. She wants young professionals to take control of their 401(k) and other retirement accounts and to understand that it’s not that difficult to do so. “I think everyone thinks it has to be a giant amount of money that you put into your 401K) to make a difference, but even if you just put a small amount of your paycheck in you’re going to see a big reward,” she said. “That’s the highest form of self-care and it’s really necessary for both your current and your future self.” While the class will cover 401(k) specifics like what a market cap is and… | Read More »

Don’t make maximizing your 401(k) a DIY project

There is something exhilarating about a challenge; something satisfying about being presented with a daunting task and working hard to complete it!  A hard job done well is simply fulfilling.  Over the Labor Day weekend you would have found me in a 104 degree garage re-painting 10 closet doors.  It was sweaty work and I did my share of grumbling, but that made it even more sublime in its completion. However, there are some jobs that I just do not tackle.  With age, comes wisdom (so they say) and I am aware that I don’t have enough time in my week, month, or year to get even marginally good enough at some skilled tasks.  It is not worthwhile.  For instance, I don’t do my own taxes.  There are multiple rule changes and schedules and tax benefits and pitfalls that affect me.  It’s better for me to admit I need help than to get halfway through and belatedly realize I need decades to become anywhere close to proficient (or passionate) enough to really excel at tax prep. For that, I take advantage of Winch Financial’s excellent tax preparation services. I feel the same way with my 401(k) investment choices. Your 401(k) is the most important piece of wealth you have, second only to owning a home. An alarming majority of 401(k) investors do not pay much attention to this hefty portion of their wealth.  Many set up their account and close their eyes.  That is simply short sighted.  If you are not thinking about it, it is now time to begin!  Six of the biggest questions to consider are: How much are you funding your account? What is your employer’s match? Are you able to fund your 401(k) to the maximum – currently $18,000 in 2015 with an additional $6,000 catch-up contribution if you are 50 or older What investment options are open to you / what investments are you actually… | Read More »

A Millennial Conundrum and the Case of the Disappearing Inheritance

The rising tides of exponentially increasing health care costs and a longer life span have led to a relatively new wrinkle in retirement planning, the disappearing inheritance. In the past few years, the primary goal of most retirees, which had centered on legacy planning, has become survival and making sure their money lasts their whole lives. Happily, their lives are growing longer; the average lifespan of an American female is now 81.2 years, and for males it’s 76.4 years, a record high according to a new report on mortality by the Centers for Disease Control and Prevention. Unhappily, the cost of care to maintain that life span is growing at an equally swift pace. Healthcare costs run higher in the United States than in any other developed country in the world, according to Consumer Reports. Add to that statistic the threat of an increasing cost of living, and elderly investors have their hands full just keeping their heads above water. For millennials, who already face a potential loss of Social Security and work related benefits (Does anyone get a pension anymore?), this is another indication that the health of their own ideal retirement rests squarely on their shoulders. Years ago, as Americans reached retirement age, many middle class Americans could count on some form of inheritance from their parents as a bonus to their own pension and life savings. Two of these three vehicles are becoming obsolete.. Fortunately, Millennials are saving earlier and more aggressively than any age group before them, according to a survey from the nonprofit Transamerica Center for Retirement Studies. Among Millennials whose companies offer an employer sponsored retirement plan like a 401(k), 71% are participating in the plan, and they’re investing a healthy median 8% of their annual salary, the survey of more than 4,000 workers found. What many 401(k) investors don’t realize is that they not only control the amount they invest in their company… | Read More »