Most women don’t shy away from the day-to-day financial decisions, but some may be leaving their future to chance.

Nearly 60% of women take the lead in managing their household finances, yet only 19% of women feel very confident in their ability to fully retire with a comfortable lifestyle.1,2

These figures suggest that most women don’t shy away from the day-to-day financial decisions needed to run a household, but when it comes to projecting and strategizing for retirement, some women may be leaving their future to chance.

Women and College

The reason behind this disparity doesn’t seem to be a lack of education or independence. Today, women are more likely to go to college than men. So what keeps them from taking charge of their long-term financial picture?3

One reason may be a lack of confidence. One study found that only 48% of women feel confident about their finances. Women may shy away from discussing money because they don’t want to appear uneducated or naive and hesitate to ask questions as a result.4

Insider Language

Since Wall Street traditionally has been a male-dominated field, women whose expertise lies in other areas may feel uneasy amidst complex calculations and long-term financial projections. Just the jargon of personal finance can be intimidating: 401(k), 403(b), fixed, variable. To someone inexperienced in the field of personal finance, it may seem like an entirely different language.5

But women need to keep one eye looking toward retirement since they may live longer and could potentially face higher healthcare expenses than men.

If you have left your long-term financial strategy to chance, now is the time to pick up the reins and retake control. Consider talking with a financial professional about your goals and ambitions for retirement. Don’t be afraid to ask for clarification if the conversation turns to something unfamiliar. No one was born knowing the ins and outs of compound interest, but it’s important to understand in order to make informed decisions.

Compound Interest: What’s the Hype?

Compound interest may be one of the greatest secrets of smart investing. And time is the key to making the most of it. If you invested $250,000 in an account earning 6%, at the end of 20 years, your account would be worth $801,784. However, if you waited 10 years, and then started your investment program, you would end up with only $447,712.

This is a hypothetical example used for illustrative purposes only. It does not represent any specific investment or combination of investments.

1. Yahoo.com, March 21, 2023
2. TransAmericaCenter.org, November 7, 2023
3. Statista, 2024
4. Bankrate.com, April 10, 2023
5. Distributions from 401(k), 403(b), and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.

A few strategies that may help you prepare for the cost of higher education.

One study estimates the average cost of raising a child to the age of 17 for a middle-income family is about $310,605. As a point of comparison, the median home price in the U.S. was $417,700 at the end of 2023.1,2

If you want to add the cost of education to that number, you can expect to be paying an additional $24,030 a year for the cost of a public four-year in-state university.3

But before you throw your hands up in the air and send junior out looking for a job, you might consider a few strategies to help you prepare for the cost of higher education.

First, take advantage of time. The time value of money is the concept that the money in your pocket today is worth more than the same amount will be worth tomorrow because it has more earning potential. If you put $100 a month toward your child’s college education, after 17 years’ time, you would have saved $20,400. But that same $100 a month would be worth over $32,000 if it had generated a hypothetical 5-percent annual rate of return. The bottom line is: the earlier you start, the more time you give your money the potential to grow.4

Second, don’t panic. Every parent knows the feeling – one minute, you’re holding a little miracle in your arms, the next, you’re trying to figure out how to pay for braces, piano lessons, and summer camp. You may feel like saving for college is a pipe dream. But remember, many people get some sort of help in the form of financial aid and scholarships. Although it’s difficult to forecast how much help your student may get in aid and scholarships, these tools can provide a valuable supplement to what you have already saved.

Finally, weigh your choices. There are a number of federally and state-sponsored, tax-advantaged college savings programs available. Some offer prepaid tuition plans, and others offer tax-deferred savings. Many such plans are state-sponsored, so the details will vary from one state to the next. A number of private colleges and universities now also offer prepaid tuition plans for their institutions. It pays to do your homework to find the vehicle that may work best for you.5

As a parent, you teach your children to dream big and believe in their ability to overcome any obstacle. By investing wisely, you can help tackle the financial obstacles of funding their higher education – and smooth the way for them to pursue their dreams.

1. Investopedia.com, December 14, 2023
2. StLouisFed.org, 2024
3. CollegeBoard.com, 2023
4. The rate of return on investments will vary over time, particularly for longer-term investments. Investments that offer the potential for higher returns also carry a higher degree of risk. Actual results will fluctuate. Past performance does not guarantee future results.
5. The tax implications of education savings programs can vary significantly from state to state, and some plans may provide advantages and benefits exclusively for their residents. Please consult legal or tax professionals for specific information regarding your individual situation. Withdrawals from tax-advantaged education savings programs that are not used for education are subject to ordinary income taxes and may be subject to penalties.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Check out this brief article which explores the role Money Market Funds may play in your portfolio.

A money market fund, not to be confused with a money market account, is a type of mutual fund that invests in instruments like cash equivalents and short-term debt-based securities, which can also include U.S. Treasury Bonds.1

Safety First

These funds are designed to be easily accessible and are often considered cash equivalents. Their primary role in a portfolio is to preserve capital while maintaining liquidity. Financial professionals use them as a place to hold cash for an investor or as a place to “park cash” temporarily while they evaluate new investments. In fact, the core value of money market funds lies in their stability and liquidity, making them one place where investors can build an emergency fund.2

Asset Value

Money held in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Money market funds seek to preserve the value of your investment at $1.00 a share. However, it is possible to lose money by investing in a money market fund.

Money market mutual funds are sold by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

Preserving Capital

Money market funds can play a role in an investor’s portfolio by providing a high-liquidity, low-risk investment choice that is designed to preserve capital. They can play a central role in managing an investment portfolio.2

1. Medicare.gov, 2023
2. Medicare.gov, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

One or the other? Perhaps both traditional and Roth IRAs can play a part in your retirement plans.

Traditional Individual Retirement Accounts (IRAs), which were created in 1974, are owned by roughly 41 million U.S. households. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 32 million households.1

Both are IRAs. And yet, each is quite different.

Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions to their account(s). Distributions from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.2,3

For individuals covered by a retirement plan at work, the deduction for a traditional IRA in 2024 is phased out for incomes between $123,000 and $143,000 for married couples filing jointly and between $77,000 and $87,000 for single filers.4

Also, within certain limits, individuals can make contributions to a Roth IRA with after-tax dollars. To qualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½.

Like a traditional IRA, contributions to a Roth IRA are limited based on income. For 2024, contributions to a Roth IRA are phased out between $230,000 and $240,000 for married couples filing jointly and between $146,000 and $161,000 for single filers.4

In addition to contribution and distribution rules, there are limits on how much can be contributed each year to either IRA. In fact, these limits apply to any combination of IRAs; that is, workers cannot put more than $7,000 per year into their Roth and traditional IRAs combined. So, if a worker contributed $4,000 in a given year into a traditional IRA, contributions to a Roth IRA would be limited to $3,000 in that same year.4

Individuals who reach age 50 or older by the end of the tax year can qualify for “catch-up” contributions. The combined limit for these is $8,000.4

Both traditional and Roth IRAs can play a part in your retirement plans. And once you’ve figured out which will work better for you, only one task remains: open an account.5

Features of Traditional and Roth IRAs

Traditional v Roth IRA

* Up to certain limits
** Distributions from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.
*** To qualify, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½.

1. ICI.org, February 2023
2. IRS.gov, 2024. In most circumstances, once you reach age 73, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). You may continue to contribute to a Traditional IRA past age 70½ as long as you meet the earned-income requirement.
3. Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into their account(s). Distributions from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.
4. IRS.gov, 2024
5. The Tax Cuts and Jobs Act of 2017 eliminated the ability to “undo” a Roth conversion.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Market Updates.

  • We’ve been encouraged by recent economic forecasts and numbers that indicate a softer overall inflationary impact.
  • The unemployment rate fell to 3.7%, and U.S. nonfarm payrolls rose to 199,000 in November, a slight increase from the payroll gain of 150,000 in October.
  • The November Consumer Price Index (CPI) increased by 0.1% over last month and is up 3.1% from a year ago. Wholesale prices remained unchanged in November, which is also an encouraging inflation indicator.
  • As we approach 2024, there is some optimism in the housing market — even though housing prices are still high and supply is difficult, the average 30-year fixed mortgage rate declined to 7.07%, the lowest rate since July. Over the past week, mortgage applications increased by 7.4% and refinance applications increased by 19%.
  • In the December meeting, the Federal Reserve opted not to raise interest rates, remaining within the 5.25%–5.5% target range. Projections released by the Fed indicate an expectation of four rate cuts in 2024, aiming for the goal of a 4.6% rate by the end of 2024.
  • The Fed also shared an encouraging core personal consumption expenditures price index (core PCE) forecast indicating a decline of 2.4% in 2024 and 2.2% by 2025 to reach their 2% target in 2026. Previous forecasts indicated a decrease of 2.6% in 2024 and 2.3% in 2025.
  • We are wishing you a very Happy Holiday season and a prosperous New Year!

Sources

 

Join us for the next Ask Triangle!

Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Market Updates.

  • While we have observed some unexpected fluctuations in the economy recently, they don’t appear to be extreme, and the economy remains resilient and strong.
  • The Bureau of Labor Statistics October report showed a cool down as U.S. nonfarm payrolls only increased by 150,000, less than expected, while the unemployment rate rose to 3.9%.
  • The October Consumer Price Index, which measures consumer price changes over time (excluding food and energy) was lower than anticipated with a two-year low of 4%.
  • This month, the U.S. 10-year Treasury yield fell by almost 9 basis points, and the 2-year Treasury yield has fallen nearly 10 basis points.
  • We saw an 0.8% decrease in import prices, along with a 0.5% decline for the Producer Price Index in October, the biggest drop since April 2020.
  • Although the Federal Reserve opted not to raise interest rates in October, and it is encouraging to see the pace of inflation begin to slow, the Fed is still committed to enforcing a restrictive monetary policy through rate increases to achieve a decreased 2% inflation rate.
  • Despite decreases in the jobs market, the potential slowing of inflation and interest rate hikes encourages us. No matter what, we won’t leave your financials up to chance or wait to see what the market does tomorrow. The Triangle Financial team always takes a long-game perspective, so you can rest assured we keep your future security in focus.

Sources

 

Join us for the next Ask Triangle!

Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

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