Providing the Best for Your Pets

Contributed by: Kelsey Arvai, MBA

**Register for our upcoming volunteer event at The Ferndale Cat Café HERE!

Did you know that May is National Pet Month? This month celebrates the joy that pets bring into our lives. In honor of our pets, The Center will spend the month of May promoting the benefits of pet ownership and supporting local non-profits who offer shelter and pet adoption services.

There are many health benefits of owning a pet. According to the Center for Disease Control (CDC), pets can help manage loneliness and depression through companionship and decrease blood pressure, cholesterol levels, and triglyceride levels through regular walking and playing. If you have a pet already, you probably have already experienced some of these benefits. However, if you are in the market to adopt a new pet, it is crucial to do your research prior and consider the following question: Do I have the capacity in my life to give this pet the proper home it deserves? To name a few factors to consider before increasing your family in size, think about how much exercise the pet will need, the type of food it eats, the habitat it will need to thrive, the pet’s size, cost, and life expectancy. 

There are also some financial planning aspects to consider, such as pet insurance and estate planning for your pets. Pet insurance can help cover the cost of medical care for your animals. Typical policies can cost around $50 per month for dogs and $28 per month for cats. Premiums will vary depending on your pet’s age, breed, cost of services where you live, and the policy you choose. Pet insurance is not suitable for everyone, but it is important to obtain it before your pet has an expensive diagnosis and you are potentially looking at $5,000 or more in medical bills.

Planning for your animals can be a challenge that is often overlooked. It is estimated that more than 500,000 loved pets are euthanized annually because their pet parent passed away or became disabled. It is possible to craft a plan to protect your pets using your will or by establishing a trust. When planning for your pet, it is important to first determine if your pet has a unique circumstance (i.e., health issue) and who you would like your pet caregiver to be if you can no longer take care of it.

Once you have confirmed that your choice is willing, you will want to determine a few things. This can include where you want your pet to live, what financial resources you will provide to ensure your pet is adequately cared for, and who you want to be responsible for administering your assets left behind to care for your pet. Using these elements to create a plan will ensure your pets are properly cared for when you cannot do so yourself.

Each week, The Center will be hosting trivia on our Facebook to spotlight local non-profits dedicated to finding loving, forever homes for animals. Be sure to follow us for a chance to win a $50 gift card for your pet!

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

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 Kelsey Arvai, MBA and not necessarily those of Raymond James.

The Power of Compounding Interest

Contributed by: Kelsey Arvai, MBA

Saving for retirement can feel like flossing your teeth; we know we should, but sometimes it is easier to keep putting it off. If you are young and have yet to prioritize your retirement savings, you are not alone. According to Investment Executive, only 58% of Millennials are actively saving for retirement. While this might sound as scary as flossing your teeth, time is your greatest advantage.

When comparing a 25 and 35-year-old who have each saved $10,000 in their 401(k)’s, the 25-year-old could build a $200,000 retirement fund by the time they are 65 without adding any more money (assuming an 8% rate of return). In contrast, the 35-year-old could reach $100,000 of savings by age 65 without saving another dime (assuming an 8% rate of return). Both are able to grow their savings massively, thanks to compounding interest. The 25-year-old has had more time (10 years) for their interest to compound, hence the $100,000 advantage over the 35-year-old. The lesson here is that the sooner you start saving for retirement, the more time you will have to take advantage of compounding interest.

Compounding happens when your savings are reinvested to generate their own earnings, those earnings create more, and so on. This is the key to helping grow your savings, and getting started early pays off. With time on your side, saving becomes much more pleasant and accessible. If you have access to an employer-based retirement plan, it is a good idea to make the most of it. Most employers will also match some of your contribution, and it is in your best interest to contribute at least that match, so you are not leaving any money on the table. For example, if your employer matches up to 3%, it would be most beneficial to you to defer at least 3% of your paycheck (pretax) so that you retain the full 6% (3% of your deferral + 3% employer match) of your income going into your retirement savings.

Since the deductions are pretax, meaning the savings happen before the check hits your bank account, you will likely hardly notice your money being put away once you have created the habit. The longer you wait to plan for your retirement, the more you will need to invest later on. In your twenties and thirties, a longer time horizon before you retire affords you the ability to invest largely in stocks, where you will be able to handle market losses and benefit from market growth.

An early start is only the beginning for retirement savings. It is important to stay consistent with your commitment to your retirement savings. The sooner you start saving, the better - reach out to us if you have any questions on how to get started! 

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

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 Kelsey Arvai, MBA and not necessarily those of Raymond James.

Tips to Help You Achieve Your Financial Goals

Contributed by: Kelsey Arvai, MBA

We hope your 2022 is off to a great start! As we all know, the New Year is an opportune time to reset and reevaluate your goals. With this in mind, we have come up with some simple yet effective strategies to position yourself for a prosperous year ahead.

Automate Savings and Debt Reduction

Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to being efficient and effective while working toward your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Additionally, utilizing automatic payments for your credit card could help your credit score if the time the payment happens is before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.

Max Out Your 401(k) and Health Savings Account (HSA)

The beginning of the year is a great time to review your 401(k) and HSA contributions. In doing so, you can ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2022. 401(k), 403(b), and most 457 plan contribution limits have been bumped up to $20,500 for elective employee deferral.

HSA contribution limits have also been increased to a maximum of $3,650 for individuals and $7,300 for family coverage. It is estimated that couples retiring today will face $200,000-$300,000 of out-of-pocket medical expenses over the course of their retirement years. HSA balances can build and grow over time, and these accounts can be used to offset healthcare costs in retirement.

Plan for Charitable Giving

The beginning of the year is also a great time to determine your charitable goals and budget for the year ahead. We have written extensively on how to best pick a charity, so if you are unsure of which causes or organizations you would like to support, these blogs may be helpful!

How to Pick a Charity…During a Pandemic Part 1: Important Documents

How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission

How to Pick a Charity…During a Pandemic Part 3: Resources

Invest in Your Emotional and Physical Well-Being

As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth, and each should be reviewed by a professional, at least annually.

Reach Out to Your Financial Advisor 

Working with your advisor on an ongoing basis can provide you support to keep you on track while you are determining and working towards financial goals. If you ever have any questions, please reach out to us. We are always happy to help!

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

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 Kelsey Arvai, MBA and not necessarily those of Raymond James.