If you’re a small-business owner, you think a lot about today. Is your cash flow sufficient … today? Are your products and services competitive … today? Are you confident in your marketing and advertising efforts … today? And because you are so focused on today, you may be neglecting a key aspect of tomorrow – your retirement. Specifically, do you have a good retirement plan for yourself?
Next week, we observe the 4th of July with sparklers, picnics and parades. And living in a country that offers so much freedom, we have a lot to celebrate. But on a more personal level, you may still be working toward another type of independence – financial independence. What can you do to speed your progress toward this goal?
It’s almost Father’s Day. If you’re a dad with young children, you can expect some nice homemade cards and maybe even a baseball cap. But, of course, your greatest reward is spending time with your kids and watching them grow. In return, you can give them a gift – the gift of knowledge. Specifically, in the months and years ahead, teach them the financial skills that can help make their lives easier and more rewarding.
You might work diligently at building a financial roadmap for your retirement years and a comprehensive estate plan. But you can’t just create these strategies – you also have to communicate them. Specifically, you need to inform your spouse and your grown children what you have in mind for the future – because the more they know, the fewer the surprises that await them down the road.
Let’s start with your spouse. Ideally, of course, you and your spouse should have already communicated about your respective ideas for retirement and have come to an agreement on the big issues, such as when you both plan to retire, where you’ll live during retirement, and what you want to do as retirees (volunteer, travel, work part time and so on).
But what you both might have let slip through the cracks are the important specifics related to financing your retirement. You’ll need to answer several questions, including these:
When will you each start taking Social Security?
Identity theft is a big problem. How big? Consider this: In 2015, about 13 million Americans were victimized, with a total fraud amount of $15 billion, according to Javelin Strategy & Research. That’s a lot of victims, and a lot of money. How can you protect yourself from becoming a statistic?
Here are a few suggestions:
If you have children who are finishing college or embarking on their first full-time job, you obviously want them to get off to a good start in their adult and working lives. And by virtue of your years of experience, you probably have some good advice to offer – especially when it comes to making smart financial moves.
Of course, you can find a broad array of financial topics to discuss. But if you want to concentrate on just a few, you might consider these for starters:
We’re at the end of another school year. If you have younger kids, you might be thinking about summer camps and other activities. But in the not-too-distant future, your children will be facing a bigger transition as they head off to college. Will you be financially prepared for that day?
A college education is a good investment – college graduates earn, on average, $1 million more over their lifetimes than high school graduates, according to a study by Georgetown University – but a bachelor’s degree doesn’t come cheap. For the 2015–2016 school year, the average expense – tuition, fees, room and board – was $19,548 at a public four-year school and $43,921 at a four-year private school, according to the College Board. And by the time your children are ready for college, these costs may be considerably higher, because inflation is alive and well in the higher education arena.
If you have a medical appointment this week, you might want to wish your nurse a happy National Nurses Week. This annual event is designed to celebrate the important role nurses play in health care. Of course, while nurses and doctors can help you in many ways, you can do a lot of good for yourself by adopting healthy living habits, such as eating right, exercising frequently, and so on. But you can also do much to help your financial health.
Here are a few suggestions:
Mother’s Day is almost here, so start shopping for the flowers or candy for Mom. But this year, why not also go beyond the traditional? Specifically, if your mother is still working but getting close to retirement, consider providing her with a gift that can help make her days as a retiree more pleasant.
Here are a few suggestions:
Tax Freedom Day, which typically occurs in late April, according to the Tax Foundation, is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. So you may want to use this opportunity to determine if you can liberate yourself from some investment-related taxes in the future.
Actually, Tax Freedom Day is something of a fiction, in practical terms, because most people pay their taxes throughout the year via payroll deductions. Also, you may not mind paying your share of taxes, because your tax dollars are used in many ways – such as law enforcement, food safety, road maintenance, public education, and so on – that, taken together, have a big impact on the quality of life in this country. Still, you may want to look for ways to reduce those taxes associated with your investments, leaving you more money available to meet your important goals, such as a comfortable retirement.
So, what moves can you make to become more of a “tax-smart” investor? Consider the following: