Retirement Planning: Roth 401k vs Traditional 401k

Contributed by: Kali Hassinger, CFP®

With our country’s ever-changing tax policies, we are left to hypothesize what taxation will look like in the coming years. Striking the right balance between taxation now and taxation during retirement is complicated, but a recent study has shown that it may not significantly affect our overall savings behaviors. Since 2006, employers have had the option to offer Roth 401ks to employees, and approximately 49% of employers now include this option as part of their incentive package. 

Roth 401ks effectively remove a large portion of the taxation mystery because all employee contributions are made on an after-tax basis. That means that you pay the tax today at the current and stated rate, but, assuming you wait until 59 ½ and have held the account for five years, all withdrawals are tax-free. All employer matches and contributions, however, are still made on a before-tax basis, so there will still be a tax liability for those future withdrawals.

The Harvard Business School study compared the current and previous savings rates of employees who were given the option to contribute to a Roth 401k and a traditional before-tax 401k. Somewhat surprisingly, there were no significant changes or differences between the before-tax 401k and Roth 401k savings rates. It would be easy to assume that Roth 401ks would have a lower contribution rate because current taxes would eat away at the employee’s ability to save. However, it instead appears that employees continued to use the same savings rates as before-tax 401ks, effectively reducing their current cash flow. Although the participant will pay more tax today, they will have greater purchasing power during retirement. 

The study also touched on the significant participation rate differences between 401k plans that automatically enrolled employees and those that didn’t. With an automatic enrollment plan, unless they choose otherwise, the employee will contribute at least the plan’s default deferral percentage. The lowest participation rate in the studied auto-enroll plans was 90%, while the highest participation rate for a non-enrollment plan (meaning the employees had to manually choose to participate) was 64%.

The study itself didn’t address the question of which type of 401k contribution is more beneficial from a tax or long-term standpoint, but a Roth 401k would inarguably have more purchasing power than a traditional 401k with the same balance. Regardless of what your current retirement plan offers, you can feel confident knowing that both before-tax and Roth 401ks can provide a secure retirement when paired with solid and strategic planning.

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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This information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Kali Hassinger and are not necessarily those of Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Every investor's situation is unique, you should consider your investment goals, risk tolerance and time horizon before making any investment decision. Prior to making an investment decision, please consult with a financial professional about your individual situation.

Sources: http://www.hbs.edu/faculty/Publication%20Files/front-loading_taxation_b10a2f45-48ff-45ff-9547-99039cf8e9da.pdf

https://www.wsj.com/articles/roth-vs-traditional-401-k-study-finds-a-clear-winner-1497233040?mod=e2fb&mg=prod/accounts-wsj

The Flexibility of a Roth IRA

Contributed by: Kali Hassinger, CFP®

Whether it’s a 401(k) or 403(b), many employers provide employees with the option to defer their income and help save toward retirement. Although these are essential savings tools, it’s important to be aware of and understand other retirement savings options as well.  With a Roth IRA, your money is given the same opportunity to be invested and grow over time without taxation, with the additional benefit of being tax free at withdrawal! With a Roth IRA, however, the funds invested are already taxed, so there is no immediate tax benefit. Roth IRAs do provide additional advantages and flexibility, which can make them very attractive additions to your retirement savings.

Use of Contributions

Because you’ve already paid tax on the funds invested, Roth IRAs can allow you to take out 100% of your contributions at any point, with no taxes or penalties. Generally, contributions are assumed to be withdrawn first. Earnings, on the other hand, are subject to penalty if withdrawn prior to age 59 1/2.

First Time Homebuyers

Roth IRAs can be beneficial to young investors thanks to an exception which allows the account holder to withdraw funds prior to age 59 ½ without paying the 10% penalty tax.  After the Roth IRA has been established for 5 years, the account holder is able to withdrawal up to $10,000 if the funds are used toward his or her first home purchase. This means that a couple, if they both have established Roth IRAs, could use up to $20,000 toward their first home purchase.

Required Minimum Distributions

Roth IRAs do not have required minimum distributions (RMDs) during the lifetime of the owner, unlike other tax-deferred savings (like traditional IRAs, 401(k)s, 403(b)s) which require the owner to begin taking distributions at age 70 ½.  An inherited Roth IRA will, however, require the beneficiary to take annual distributions, but these withdrawals are still tax fee.

Conversions

Since Roth IRAs can be beneficial for long term tax planning, the IRA has placed income limits on who can make contributions. If your income is above this threshold, however, you may be able to work around those limitations by completing a back-door Roth conversion. This process is essentially opening and funding a traditional IRA with a non-deductible contribution, but then immediately converting the funds from that account into a Roth IRA. 

Whether you’re just starting out or getting close to retirement, a Roth IRA could be a beneficial addition to your retirement savings. By simply understanding all of your options, you can be more equipped to help achieve your long term financial goals. Please contact us if you have questions about this type of retirement account and how it could benefit your financial plan, we’re here to help!

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Kali Hassinger and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investments mentioned may not be suitable for all investors. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Planning for a Wild 2017

Contributed by: Kali Hassinger, CFP®

Happy 2017 everyone! A new year is a great opportunity to evaluate your financial wellbeing and set goals for the future.  Some of you may have existing financial plans in place, and others may be thinking that 2017 is the year to take control of your finances.  In either situation, it’s important to understand that financial planning is an ongoing and ever-evolving process. Separate from your personal circumstances, there are many outside forces that affect your financial plan, and there are a few items that may be especially important to evaluate this year.

Given the events of 2016 and possible changes in 2017, the following circumstances could be prime examples of why it’s important to review and update your plan.

• Taxes – With the impending presidency of Donald Trump and the GOP in control of both the House and the Senate, we are anticipating a possible overhaul of the current tax system. For almost all taxpayers, your current tax rate could be reduced.  If the brackets are consolidated as expected, 2017 may be a good year to accelerate taxable income or max out your Roth IRA contributions. You can read more about the proposed tax plans here (http://www.centerfinplan.com/money-centered/2016/12/22/is-tax-reform-coming ).  

• Estate Planning – Just as with taxes, the political landscape of 2017 is set to possibly repeal the current Estate Tax. Because this tax is such a central point for Estate Planning with high net worth individuals, some current estate plans may need to be revised. There is also the possibility that the current gift tax laws may be on the docket for elimination. Although nothing is certain at this point, we will remain up to-date on any changes as they come.

• Allocation – 2016 was certainly a year of surprises for the market. After a decline in January, the shock of Brexit, and Donald Trump’s unanticipated election, the market overcame intermittent volatility and reached all-time highs in November.  Just as no one could predict that the market dip after Brexit would recover so quickly, no one expected the markets to actually go up in the wake of Trump’s election. There is no way to predict the future, but there is a disciplined investing approach that can help you through market uncertainties. With a balanced investment portfolio it is possible to reap the benefits of part of these gains while also insulating yourself from potential volatility. Your balanced portfolio returns may not reach the same highs as the S&P 500, but it can help you reach your goals with proper management over time. 

Regardless of your situation, a new year is always a great opportunity to reorganize and review your goals.  Life can be unpredictable, but not unplannable. We are always here to help, and we encourage you to reach out with questions.

Happy New Year! 

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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This information does not purport to be a complete description of the securities, markets, or developments referred to in this material, it is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Kali Hassinger, CFP®, and are not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change. There is no assurance that the statements, opinions or forecasts mentioned will prove to be correct. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax or legal issues, these matters should be discussed with the appropriate professional. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Please note that direct investment in an index is not possible.

Restricted Stock Units vs Employee Stock Options

Contributed by: Kali Hassinger, CFP®

Some of you may be familiar with the blanket term "stock options." In the past, this term was most likely referring to Employee Stock Options (or ESOs). ESOs were frequently offered as an employee benefit and form of compensation, but, over time, employers have adapted stock options to better benefit both the employee and themselves.

ESOs provided the employee the right to buy a certain number of company shares at a predetermined price for a specific period of time. These options, however, would lose their value if the stock price dropped below the predetermined price, thus becoming essentially worthless to the employee. As an alternative to this format, a large number of employers are now utilizing another type of stock option known as Restricted Stock Units (or RSUs). This option is referred to as a "full value stock grant" because, unlike ESOs, RSUs are worth the "full value" of the stock shares when the grant vests. This means that the RSU will always have value to the employee upon vesting (assuming the stock price doesn't reach $0). In this sense, the RSU is more advantageous to the employee than the ESO.

As opposed to some other types of stock options, the employer is not transferring stock ownership or allocating any outstanding stock to the employee until the predetermined RSU vesting date. The shares granted with RSUs are essentially a promise between the employer and employee, but no shares are received by the employee until vesting. Since there is no "constructive receipt" (IRS term!) of the shares, there is also no taxation until vesting.

For example, if an employer grants 5,000 shares of company stock to an employee as an RSU, the employee won't be sure of how much the grant is worth until vesting. If this stock is valued at $25 upon vesting, the employee would have $125,000 of compensation income (reported on the W-2) that year.

As you can imagine, vesting can cause a large jump in taxable income for the year, so the employee may have to select how to withhold for taxes. Some usual options include paying cash, selling or holding back shares within the grant to cover taxes, or selling all shares and withholding cash from the proceeds. In some RSU plan structures, the employee is allowed to defer receipt of the shares after vesting in order to avoid income taxes during high earning years. In most cases, however, the employee will still have to pay Social Security and Medicare taxes the year the grant vests.

Although there are a few differences between the old school stock option and the newer Restricted Stock Unit hybrid, these options can provide the same incentive for employees. If you have any questions about your own stock options, please reach out to us!

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Kali Hassinger, CFP® and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. This is a hypothetical example for illustration purpose only and does not represent an actual investment.

Deepening Financial Planning Knowledge: FPA Residency

Contributed by: Kali Hassinger, CFP®

Financial Planning is more than just analyzing data and crunching numbers – it’s also about trust, communication, and (most importantly) relationships. While studying for the CERTIFIED FINANCIAL PLANNER™ certification, all candidates are, perhaps obviously, required to focus on the technical (and necessary) knowledge to be a worthy financial planner. Upon finishing the coursework and passing the test, however, the relationship facet of a financial planning practice is left somewhat overlooked.  In hopes of filling this gap, the Financial Planning Association (FPA) offers a “Residency” program for new financial planners who are looking to hone in on their interpersonal skills. I was lucky enough to be one of the attendees at this workshop in Denver, Colorado last month. 

The FPA Residency program provides a space to refocus on the subtle skill of building relationships based on trust, authenticity, and mutual respect. Although I would have argued that you either innately possess these abilities or you don’t, this course ultimately changed my mind.  Every skill in life can be practiced and improved upon, and communication is no different. The Residency focused on specific strategies such as how to ask the most effective questions and minimize miscommunication. It also focused on the more delicate skill of how to better notice and acknowledge emotions in others. 

Financial Planning is a deeply personal matter for all of our clients. We are discussing your life’s work, your dreams, and your family. In many cases, the financial aspects of these matters aren’t discussed with anyone else, so it’s normal for clients to have a certain level of anxiety when engaging a financial planner or preparing for a meeting. Although numbers and strategies will always be a main focus, above all, we strive to provide clients with a relationship that provides them with confidence. By recognizing, understanding, and dealing with the emotions that are often incited by finances, we can better serve our clients in all aspects of financial planning. Without question, I personally benefited from the FPA Residency program. I hope to use this benefit, however, to foster effective and valued financial planning relationships in the future.  

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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Raymond James is not affiliated with the Financial Planning Association. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Social Security Changes You Need to Know

Contributed by: Kali Hassinger, CFP®

The Social Security Administration announced on October 18th that the Cost of Living Adjustment for 2017 will be 0.3 percent. This announcement comes after 2016, when Social Security provided no COLA benefit. For many Social Security recipients, however, this minimal increase will be negated by the expected rise in Medicare Part B premiums, which are usually deducted directly from Social Security payments. For those subject to the “hold harmless” provision, the Medicare Part B premiums cannot increase by more than the COLA. Those not covered by that provision, however, could be subject to a larger premium increase. The specific Medicare changes will be announced later this year.

The Social Security Administration will also increase the wage ceiling subject to payroll taxes to $127,200 in 2017 (previously capped at $118,500). This means that the first $127,200 earned by any taxpayer will be taxed at 12.4% (6.2% is paid by the Employee and 6.2% is paid by the Employer). Any earnings above $127,200 won’t be subject to the OASDI (Old Age, Survivor and Disability Insurance) tax. The Retirement Earnings Test (concerning any wages earned while collecting Social Security prior to Full Retirement Age), also received a slight boost. Those receiving benefits prior to Full Retirement Age can now earn up to $16,920/year before Social Security will start to withhold benefits. If you have any questions about how these changes affect you and your family, please feel free to give us a call!

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

Non-Qualified Deferred Compensation (NQDC) Plans

Contributed by: Kali Hassinger

A Non-Qualified Deferred Compensation plan (NQDC) is a benefit plan offered by some employers to their higher earning and/or ranking employees. Some of you may have heard of these plans referred to as “Golden Handcuffs” because they often require that an employee stay with their current employer, or at least not move to a competing firm, in order to receive the compensation. This nickname provides both a negative and positive connotation, but, when appropriate, NQDC plans can offer employees greater control over their income, taxes, and financial future.

NQDC plans, unlike your typical 401(k), are not subject to limitations or non-discrimination rules. That means that the employer can offer this benefit to specific employees and there is no restriction on the dollar amount deferred. This is advantageous to an employee who is expecting to be in a high tax bracket, is already fully funding their retirement savings plan(s), has a surplus in cash flow, and may foresee a time when their taxable income will be reduced. With this strategy, the employee and employer agree upon a date in the future to pay the employee his/her earned income. Both parties agree to when the funds will be received in the future, and it isn’t taxable income until it is actually received by the employee.

In most cases, these plans are considered “unfunded” by the employer, which means that the money isn’t explicitly set aside for the employee. This scenario creates a certain level of risk for the employee because the funds would be subject to any future bankruptcy or creditor claims. There are some strategies that the employer can utilize to mitigate the risk (involving trusts and insurance), but they need to uphold the NQDC status. Otherwise, the deferred compensation amount will become fully taxable to the employee along with a 20% penalty. Funded NQDC plans exist as well, and these plans set the deferred compensation assets aside exclusively for the benefit for the employee. Funded plans, however, open themselves back up to ERISA requirements, making them far less popular.  

When an employer and employee enter in a NQDC agreement, it can be a win for both parties.  Employers are securing that valued employees will remain loyal, while employees are able to reduce their taxable income now. 

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Kali Hassinger and are not necessarily those of RJFS or Raymond James. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax issues, these matters should be discussed with the appropriate professional.

Everyone’s Favorite Topics: Social Security and Taxes

Contributed by: Kali Hassinger

Throughout our entire working lives, our hard-earned cash is taken out of each paycheck and paid into a seemingly abstract Social Security Trust fund. As we see these funds disappear week after week, the pain of being taxed is hopefully somewhat alleviated by the possibility that, one day, we can finally collect benefits from the money that has been alluding us for so long. (Maybe you’re also comforted by the fact that you’re paying toward economic security for the elderly and disabled – or maybe not, but I’m an idealist). 

When the time to file for benefits finally arises, however, it may not be clear how this new source of income will affect your tax situation. Although no one pays tax on 100% of their Social Security benefits, the amount that is taxable is determined by the IRS based on your “provisional” or “combined” income. Provisional and combined income are terms that can be use interchangeably, so we will just use provisional from this point forward. Many of you may not be familiar with either term, but I’ll bet it’s no surprise that the beloved IRS uses a system that can be slightly confusing! No need to worry, though, because I’m going to provide you with the basics of Social Security taxation.

Determining your provisional (aka combined) income requires the following formula: 

Adjusted Gross income (AGI) includes almost all forms of income (salaries, pensions, IRA distributions, ordinary dividends, etc.), and it can be found on the 1st page of your Form 1040. AGI does not, however, include tax exempt interest – such as dividends paid from a municipal bond or excluded foreign interest. These can be powerful tax tools in individual situations, but they won’t help when it comes to Social Security taxation. The IRS requires that you add any tax-exempt interest received into your Adjusted Gross Income for this calculation. On top of that, you have to add ½ of your annual social security benefits. The sum of these 3 items will reveal your provisional income for Social Security taxation purposes.

After determining the provisional income amount, the IRS taxes your Social Security benefits using 3 thresholds: 0%, 50%, or 85%. This means that the maximum portion of your Social Security Benefits that can be considered taxable income is 85%, while some people may not be taxed at all. The provisional income dollar amount in relation to the taxation percentage is illustrated in the chart below: 

As you can see, it isn’t difficult to reach the 50% and 85% thresholds, which can ultimately affect your marginal tax bracket.  These thresholds were established in 1984 and 1993, and they have never been adjusted for inflation. The taxable portion of your benefit is the taxed at your normal marginal tax rate. 

Social Security, in general, can be a very confusing and intimidating topic, but it is also a valuable income resource for all who collect benefits. Everyone’s circumstance is different, and it’s important to understand how the benefits are affecting your tax situation. I encourage you to speak to your CPA or Financial Planner with any questions.

Kali Hassinger, CFP® is a Registered Client Service Associate at Center for Financial Planning, Inc.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Kali Hassinger and not necessarily those of Raymond James.

A Day for Competition and a Day for Vision!

Contributed by: Kali Hassinger, CFP®

In previous years, The Center has held an annual Retreat at some point in December. This was always an opportunity to review the year, look to the future, and have a little bit of fun, too!  This year, however, we started a new tradition! Instead of one day to cover fun and business, we took two separate days to accomplish two very different goals – Competition and Vision! 

On December 11th, The Center hosted a holiday staff appreciation day at the Detroit Curling Club.  Yes, that kind of Curling.  The Curling that you’ve watched during the Olympics and thought, “Oh my gosh! I could totally do that!” Turns out, it isn’t that easy. Although it may look totally doable, Curling actually requires a lot of accuracy and finesse!  I have a whole new respect for Curling athletes (in addition to the respect for their incredible sense of style – I highly recommend a quick google image search for “Curling Olympic Uniforms”).

The office broke up into four teams and everyone dressed up to show their Curling spirit.  As usual (and as you may have guessed), it got pretty competitive!  There was plenty of friendly fire on the ice, but Amanda Toia was named the Curling MVP with an incredible game winning shot!  The day was set aside for fun and bonding, and it was great way to close the year.

In January, however, we used our energy for the New Year to focus on the days ahead.  “Vision” was the buzzword of the day as we brainstormed ways to improve personally and professionally. We don’t believe in complacency at The Center and we are always working toward new goals. It was a time to assess our current strategies and decide on how to improve upon them. 

A large part of the day focused on reviewing the firm’s Vision 2020 that was developed by the office in 2012. This Vision 2020 functions as an ideal guide on how the office would develop and improve by the year 2020.  As we reviewed the document, however, it became clear that The Center has already accomplished many of the goals set forth in the Vision 2020. Of course there are still matters that we are working on and ways to further improve, but it was great to see the vast amount of progress that has been made in just a few years. 

Although it was a luxury to take two days away from the office, both days proved themselves to be unique, worthwhile, and effective.  We absolutely want to thank our clients for their patience and understanding while the office was closed. Please know that we used this time to refocus and rejuvenate, but mostly to become a better firm for our clients!  

Kali Hassinger is a Registered Client Service Associate at Center for Financial Planning, Inc.

The Truth Behind Getting Your Resolutions to Stick

Contributed by: Kali Hassinger

It’s New Year’s Eve, which means it’s time for New Year’s Resolutions!  Typically, this is a point when we think about the big changes in store for next year.  It’s a fresh start.  Come January, gyms will be packed, diet commercials will be constant, and people will be committed to making the New Year better!  As the days roll on, however, it’s easy to lose focus and old habits tend to creep back into our lives.  Eventually, it’s difficult to remember the resolutions that you felt so passionately about a few months ago.  In some cases, it’s because we set unrealistic expectations.  Other times it’s because life gets too busy and it’s hard to remain motivated.

I know you may be expecting me to provide you with a list of suggested financial resolutions for 2016, but honestly I’m not sure that would really help you. Change isn’t as simple as writing a list or reading a blog.  Making a real change requires so much more effort, which is part of the reason why resolutions can be so easily forgotten after a few months.  There are so many pieces that go into our habits and behaviors in life, and in order to really enact change, we have to connect our goals to our actions, logic, resources, and emotions.

According to a quick Google search, here are the most common financial resolutions each year: 

• Save More

• Pay off Debt

• Spend Less

These are very modest and sensible goals; however, these are the top 3 resolutions every year.  Keep in mind, if you are planning to include one of these three resolutions, they are great goals!  But try to be specific when establishing your plan for the New Year.  Instead of “Save more,” try saving an additional $100 each month and set it up to occur automatically.  Instead of “Pay off Debt,” try determining which credit card has the highest interest rate and target that first. I am absolutely not trying to suggest that resolutions aren’t worthwhile (I make them every year, too!).  I’m only suggesting that you ask yourself, “Why do I wait until January 1st to make my life better?”

Consider your motivation behind saving more and spending less.  It’s not because we just want to see a bigger number in our accounts.  Feeling financially secure enables us to enrich our lives with new experiences.  Instead of “Save More,” connect your savings’ goal to what it truly means – building toward a future, a trip, retirement, or whatever it is that is genuinely important to you. 

Instead of making a resolution, make a change that is:

1. Attainable

2. Sustainable

3. Meaningful

If you find that you missed a monthly deposit into your savings account (or you skipped the gym for a week), don’t give up.  Life is unpredictable and our resolutions for change have to be adaptable and resilient.  Reconnect your resolution with what it means to you on a long-term and emotional level.  We don’t need January 1st to make a change, we just need resolve and determination (both are synonyms for resolution – see what I did there?!).  Have a happy and healthy 2016, everyone!

Kali Hassinger is a Registered Client Service Associate at Center for Financial Planning, Inc.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kali Hassinger and not necessarily those of Raymond James.