GO Week, or Get Organized week started on Sunday, Oct 3. GO Week was first established in 1991 and is an entire week devoted to organizing, decluttering, and getting life in order. Everything from organizing yourself, your family, your kitchen pantry, closets, garage AND your personal finances. 

While I’d love to help you organize your garage, I’m really not all that good at garages! So, since money is my business, I thought we might get some ideas flowing on what it means to organize our financial “garage” instead! 
Most of the ideas below are ones that we have covered in various ways before, but not all at once. I also expect none of these ideas will be all that new, and therefore will mostly serve as reminders for things we know we should be doing already. Let’s separate these into 3 categories: Information handling, Money Management, Caring for loved ones. 

Information Handling 

Backing up your computer files. All important digital pictures, financial records, and other files should be backed up to a USB backup drive or the “Cloud” via a service. If you back up on a USB drive, be sure to store the portable drive off-site. Don’t store it in the same room or home that the computer is in. That defeats the purpose if you have a flood or fire.

Organizing your physical records. For any important physical records (e.g. Home Deed) you want to keep off-site in a safe deposit box or similar. Also be sure to destroy (shred) any old tax records, receipts, canceled checks, etc. No need to keep anything tax-related for more than 7 years. 

Preparing for tax season. October is a great time to start organizing files for your tax preparer. Vehicle tax records, charitable records, etc. can all be organized this time of year just 3 months before you need to get serious about it. 

Off-site information management. Per above, important digital or physical records need to be stored outside your home or office in case there is a disaster or near disaster. 

Money Management 

Creating a household budget. Retired or working, you will never truly understand your spending or saving habits (that will help you make decisions) unless you have and actively use a household budget. 

Tracking your expenses. The household budget helps you allocate income. Tracking expenses lets you know you are tracking your budget (or not). 

Organizing your bill payment system. Either put all your incoming bills in one physical place in your home (or pay them right away) OR just put them all on auto-pay. No one wants to get that letter in the mail informing us that we are late on paying a bill because we have misplaced it. 

Separating bank accounts. A crude way to separate discretionary monies from bill-paying monies is by separating your income into more than one bank account. Coupled with a budget, separating these can keep our hands off of the mortgage payment! 

Caring for loved ones 

Keep important information together. If you suddenly pass, do your loved ones know who your CPA is? Financial Advisor (hopefully that’s me)? What banks or financial institutions have your investments? Are the beneficiaries up to date on your accounts? Passwords to important websites such that they can access funds quickly? Thinking this through and documenting is definitely an act of love for those who you care about. 

Be sure to keep your last wishes up to date. Do you have a Living Will and/or Trust set up? Is it up to date for the state you live in? Having this in order not only ensures your wishes are completed but also can make it much easier and faster for your loved ones. 

Sharing information with your heirs. Once you have the Living Will and Trust set up, AND all that helpful information on where all your investments are, be sure to share it with your adult heirs. That way there are no surprises and much less hassle for them when the inevitable happens. 

While there are more items that I could list, this is a great start to getting financially organized. I hope you have a great GO Week!! 

Are You a Purposeful Saver?

by Suzanne Powell

You don’t hear that question every day! I can hear some of you saying, “Of course I purposely save!” …. Or …. “Sure. I save what I can.” …. Or …. “Kinda. I am in my employer’s 401K. Doesn’t that count?”

While not terribly common, there is some good food for thought in considering your saving habits, and what you are really saving for.

So, what are you saving for? It could be for education for you or a family member, your retirement, an emergency fund, a very special vacation, a generous Christmas, a new car (or any major purchase). The question is what exactly am I saving for? Just saying “retirement” is not good enough. What is it you want in “retirement”? Be specific. Break it down. Clearly understanding your detailed priorities for saving is worth careful consideration; because some goals will take many many years to save for and many years to figure out in many cases.

Why are you saving? To avoid taking out loans on big purchases? To ensure you can sustain your standard of living in retirement? To ensure grandkids get a good education? To avoid worrying if you can afford a vacation home someday? Pulling out the “why’s” and then reflecting on them can help ensure that your savings reflects your values. It is also good to do this exercise every few years, as life has a way of changing our priorities over time.

Everyone’s answers to these questions will be different. That’s good!
Everyone’s answer, if thought through well, will be as unique as we all are unique from each other.

Having a friend or partner to share your goals with may help you refine and clarify what you really want to do with your savings at some point. You may want to buy a place in Florida someday. However, your partner is more of a mountain person! Clarifying your goals with your partner may help you get very specific as to how you solve this dilemma. Maybe the solution is not buying that place in Florida but having varied vacation destinations where both of you would enjoy and therefore support each other’s savings goals.

Then there is identifying exactly how much you are saving. Are you counting your work’s 401K? Are you counting your annual contributions to IRA’s or ROTH IRA’s? Are you counting the education 529 contributions? Sometimes we forget that those automatic payroll deductions into the company 401K is a significant part of the “saving” equation. It is not just what we manage to put into a savings account with every paycheck.

Can you save more? Do you need to save so much? While there is no magical percentage of your income that is just right, or too much or too little, having a detailed understanding of all your monthly expenses is a key part to understanding if you are saving too little or too much. Maintaining a “budget” can help you clearly see how you are spending your money and can help you prioritize spending versus saving priorities.

Be sure to give me a shout if you would like to discuss any of these topics. I am confident I can help you understand if your savings are invested well and to help you understand if you are on a path to meeting your goals and priorities.

You might think financial advisors discourage “fun” purchases – but that’s not entirely true. At least, I don’t. Many of you know that, as part of our client reviews, I always ask you about the big-ticket items and the bucket list things that you intend to do in the next year. But why does it matter?

Well, first –remember you have been saving and investing for a while now. So, when you want to buy that new car, second home, boat, or go on your dream vacation, it’s important the spending is included in your planning goals. There are lots of “fun” reasons to spend your money, and that is totally expected, as all of them will create memories for you and your family. In order to make these fun things happen though, it may mean cashing in some of your investments. We need to account for these purchases in your financial plan. A few of you may think to yourself, “wait, do I have a plan?” If you are my client, you do. I create financial plans using software called MoneyGuide Pro. When we meet in the next few weeks, part of our review process is always reviewing the plan, your budget, your goals, and making sure everything is on track.

Why do I use financial planning software? Well, I have been using MoneyGuide Pro since 2005 and I have found it to be an amazing and intuitive software. MoneyGuide Pro helps us account for every dollar you intend to spend, and how those dollars affect your long-term goals. Part of the plan is to help us determine when it’s the right time to make the “fun” purchase, and part of the plan is to tell us where the money will come from to do it. Most of my clients hate to pull money from their investments, but, the timing of when we do this is just as important as the amount.

In your plan, I do try to keep cash, of which the amount will vary depending on where you are in life and the general state of the world. With that said, sometimes it actually makes more sense from a planning perspective to finance the “fun” purchase. With the Fed’s recent low-interest rates to incentivize consumers to spend, financing could be a valid option. Will interest rates always be low? Not likely. But while they are low, there could be pros to borrowing to make your “fun” purchase happen, rather than selling your investments. By selling your investments, you’ll lose your return potential AND have to claim the gain or withdrawal on your taxes. (Remember, it’s ALWAYS best to speak to a financial professional about choices like these to make sure they are suitable for your specific situation).

Most retirees watch T.V. with their extra time – is that your dream as well?

I have written before about the importance of a retirement plan, which I do for every client to have a course of action for when their paychecks stop. What you may not know is that the most important part of the retirement plan is determining what clients will (and will not) do in retirement with their time. With that being said, I thought now would be a great time to talk about time (ha!) and what to do with yours in retirement. Since the end of summer typically means less travel and more hot cocoa – it felt like a good topic to cover today. So here we go!

An interesting statistic I found on retirees is that they spend 9.5 hours of their “extra” time a week on recreation with the majority of it spent watching T.V. To some, this could be the retirement of their dreams. And I can see that, as most retirees worked a structured schedule during their career, so watching T.V. is easier than scheduling their day, which could feel too much like work.

But what is there to do besides watching T.V.? I have found that my most active retirees focus more on recreational activities, travel, and volunteering. In fact, some mix all of those together to fill their days with the things they love, and love to do, the most.

There are also those who know they want to retire from their career, but feel that they still want to work in some capacity. This may mean part-time employment, or turning a hobby into extra income, or just driving an Uber on Saturday nights for fun and to meet new people. Maybe it does not pay as well, but it keeps them engaged, with other people, and provides some with a greater sense of value.

Clearly there is a big self-awareness aspect to this. What did you really like to do when you were working full time, besides go on vacation? What is it that you truly enjoy doing that fulfills you?

Said another way, your real retirement is what happens during the extra hours you are given each day. How creative you are with that time will determine how fulfilling your retirement will be. For the most part, you and I have likely had conversations around this aspect of your retirement plan, as it is an important piece of your goal spending, but if we have not, and you have questions, please don’t hesitate to reach out.

Are We in a Housing Bubble?

by Suzanne Powell

Have you looked at the housing market lately? Have you tried to buy a home or know someone who’s trying to buy? It’s crazy out there right now!

Depending on the location, single-family homes are selling in just days. Columbus OH’s average is 8 days. Denver: 9 days. Cinci: 11 days. Nationally the average is less than 1 month (25 days). It is also not uncommon to hear about homeowners getting more than their asking price / appraised value due to bidding wars and the like. Buyers are taking more risks by waiving the customary home inspections. It is clearly a seller’s market out there!

Demand is currently high. Clearly, this is driving prices higher and higher! Is this all going to come crashing down? Will this “bubble” in pricing “burst”? What’s going on?

Like most things, there are multiple answers to these questions. Here are the big trends and why we are likely NOT in a housing bubble:

The generation buying the most homes are millennials (25-39) at 39%. Millennials got off to a slow start since many graduated from post-secondary schools during the “great recession” in the late 2000s. Many got out of college or trade school and found it very hard to get a good-paying job. That has changed post-Covid19. Many are now working and saving and are ready for homeownership.

The #2 generation of home buyers are baby boomers (55-74) at 28%. With the stock market climbing since early 2009, the savers and investors among this group finds themselves with money enough to buy that vacation home or to upgrade/downsize. So, believe it or not, this generation is driving a significant part of the demand for homes today.

The Federal Reserve continues to keep the money supply high. Interest rates are low. Between the great recession and the pandemic, interest rates have been at historic lows. For the foreseeable future, Fed leadership will work to keep interest rates low, even if hints of inflation pop up.

Builders have not been keeping up. Some of this was Covid19 related, having to do with getting workers. Some were due to sawmill employment being down. This is partly due to builders not ordering as much supply because they didn’t predict that Covid19 would INCREASE their demand; but also, some was due to weather and fire issues in the northwest US where much of our timber comes from. All this tends to drive prices of the house’s raw materials up, worrying some home builders about buying too much high-priced wood.

Covid19 made “WFH” an acronym! Pretty much all workers who COULD work from home did. When people are working from home, they noticed that they didn’t have such a great work environment because they didn’t have that extra “bedroom” that they could convert to an office. People are upgrading!

Will this bubble burst? Maybe, but not likely anytime soon. Most experts expect housing prices to stay high and increase through 2024 and likely beyond. The rate of price increases are starting to slow, but there will likely be a supply/demand challenge for years, barring any real surprises.

The largest wealth transfer in the history of the world is currently in process. It’s estimated that around $68 trillion will switch hands over the next 25 years. Baby Boomers are currently retiring, and many of them will pass of the scene within the next few years. Much of this wealth will be tied up in family homes. This brings up the question of what to do if you inherit your parents’ house.


Some heirs will benefit from moving into their family’s homestead. Many retirees may have no mortgage. Therefore, those who inherit a home will likely have only the property taxes and insurance to pay to stay in the house. This can become an excellent benefit for those who might have a mortgage or a rent payment to make each month. If you own a house and have equity built up, moving into your parents’ house could provide a great opportunity to sell your own home and access the equity. The money you’ll access could allow you to make some improvements to your inheritance and bring it up to a more modern standard. Moving in can make more sense if you don’t have to share the estate with any siblings. If your parents owned a nicer or bigger home than you currently do, moving into your parents’ house could allow you to move up in your standard of living. Additionally, you would not have to deal with real estate agents, increased debt, and contract negotiations.

Rent It Out

Another way to benefit from inheriting your parents’ house can come when you decide to rent it out. Renting out could be a better option than moving in if you have siblings that will inherit a share of the home. If there isn’t an outstanding mortgage, every dollar you bring in over any property taxes, insurance, and repairs, is a dollar of passive income you could use for something else. You could save or invest the rental income. You could also use it to pay for everyday living expenses. If you have siblings, you might have to split up the income, but it’s still passive income rolling in every month.

Sell It

The third option for dealing with an inherited house is selling it. Once you inherit the house, you’ll want to maintain insurance on the property until you sign over the deed to another party. This will protect the value of the home in case a catastrophic event occurs. You’ll have to agree with any siblings if they also inherited a share of the house. Even if a house has increased in value, you’ll likely inherit the home on a stepped-up basis. This will allow you to avoid having to pay capital gains taxes. If you decide to sell, you might want to make a few updates that could improve the selling price. Shag carpet from the 1970s and floral wallpaper do not tend to sell well in today’s market.

Your parents likely worked hard to provide for you as a child. Over time, one of the assets many Baby Boomers have been able to accumulate is a home. As an heir, you should mourn the loss of your parents, but you should also consider which option works best for you when it comes to dealing with their home.

Whether we think about it or not, most of us are likely investing in real estate just by owning a home. Even though we use our home for shelter, it is part of our investment portfolio, net worth, and likely our estate planning. That said, our investment in our home is just one way to invest in real estate.

Why invest in real estate?

Real estate investments are a great way to further diversify your stocks, bonds, and other types of investments. Real estate values can change on different cycles to stocks and bonds, making it a great diversification to your total portfolio.

How can I invest in real estate?

There are lots of ways to invest in real estate directly. Here are some quick ideas:

If you have the ability/desire, you can buy a vacation / rental home. Depending on the location, you can generate reliable income that can not only pay for expenses but also reap a profit for you as well.

It is not uncommon for first time home buyers to buy a duplex as their first home: living in one unit and renting out the 2nd unit. That 2nd unit rent can pay for the mortgage on the entire duplex!

Partner with a general contractor or handyman and invest in multiple units that can be rented out to both cover costs (including loan payments, repairs, etc.) and potentially some profit. All of these require you (and/or a partner) to be able to either take on significant debt OR have liquid funds at the ready to make these large purchases.

What if you don’t want to own physical property, but still want to invest in real estate?

There are investment vehicles where you do NOT have to own any physical real estate, and still diversify with real estate investments:

Real Estate Investment Trusts (REIT’s) come in many different flavors. REIT’s are investment vehicles that invest directly in real estate through properties or mortgages. REIT’s pay out dividends based on their taxable profits, as required by law. We buy shares of these just like shares of any company.

Real Estate Mutual Funds are mutual funds that invest in REIT’s, real-estate stocks and/or indices. These mutual funds are bought and sold just like any mutual fund.

Home Builder / Construction Funds are mutual or exchange traded funds that invest in companies that build homes and/or commercial properties. They also have holdings for wood, steel and various hardware components that are needed to build new properties. While technically not real estate, they closely track real estate trends from an investment perspective. “NAIL” is an ETF example of this.

The advantage with these options is that you can buy and sell like any other stock or mutual fund. No large cash infusion or taking on debt is needed for these options.

If you’d like to discuss any of these options or discuss what portion of your portfolio you might consider for real estate investments, please let me know!

What IS the question? When should I …? or Will I have enough to …? or something else?

So many of us ask ourselves this question: “Will I have enough to retire?” This question is more than a question, it is really a significant worry for many. We are really worried that we will NOT have enough to retire.

Then there are those of us who ask the question: “When can I retire?” This question can also morph into a worry, but most of the time we are questioning how long we must work full time to save enough to retire comfortably.

There are variations on these themes of course. Some of us combine the questions into something like: “When will I have enough to retire?”.

Let me reword the question to get to the heart of the matter: “When will I be able to retire based on my savings, investments, and spending needs?”

I could go on. The point is that all these questions are valid, important, and need to be honestly answered. In order to get a good understanding of your readiness to stop full-time work, many facets of this “retirement questioning” need to be asked.

Personally, I think the questions that need to be asked and answered, all have to do with what you plan to do WHEN you decide to retire. What will you do with your free time? Are you going to play golf every day? Are you going to spend your free time with those grandbabies? Are you going to travel 6 months of the year? Are you going to volunteer your free time to your church or local charity? Are you going to build that dream vacation home? Maybe you will start a business based on your passions or interests? Maybe a combination of all the above?

The answers to these questions help to define the vision you have for your retirement. This is important to do years BEFORE you retire. Why? Because it is in answering these questions that you can start building a financial needs assessment of the income you will need to fund those plans and dreams. You need to have a feel for your spending projections during retirement in order to know if you are saving enough and investing properly. You need to have the end in mind in order to know “when will I have enough to retire”.

Of course, you can change your mind along the way. But seriously trying to define that vision of retirement will help you know if you are on a path that is potentially successful or if you need to adjust. Either adjust your savings and investing or adjust your retirement expectations. Either way, it is peace of mind.

Let me know if I can help you build such a plan! I look forward to brainstorming and thinking this through with you!

We all wish investing in the markets was easier than it is. Our lives are complicated enough. Deciding which investments to makeover our lifetimes, with our priorities changing, and the markets changing makes for a real challenge. So what about “Target-date” investments?

So, what is a “target-date” investment? Essentially, they are mutual funds or exchange-traded funds (ETF’s) that are actively managed to grow your money in a way that is optimized based on when you will need the money. Generally, the “target date” lines up with your retirement date, but it might also coincide with a college tuition need or any other future major expense.

As an example, let’s say you envision retiring around the year 2040, 19 years from now. You would find a 2040 or 2045 Target Date fund (many investment companies offer this directly or you can get through most 401K’s). Between now and 2040, the fund’s investment team will manage the portfolio of stocks, bonds/fixed income, and cash. They attempt to trade-off risk with growth. In other words, the longer time frame they have, the more risk (stocks) will be built into the portfolio of investment items. Said differently, the closer to the target date, the less risk will be built into the investments. More fixed income and cash will be held closer to the target date. Essentially, target-date investments charge a fee to attempt to manage risk for you depending on the number of years you have to invest. You, supposedly, don’t have to worry about it until you need the money. Sounds easy.

Target-date funds are easy for the investor. Over the years, you don’t have to worry about manually changing the investment mix such that you are decreasing risk the closer to your need date approaches.

That said, there are trade-offs.

1. Target-date funds are expensive. That management does cost you money in the form of returns versus non-target-date funds.

2. If you forget about the target-date fund and let it ride past your target date, your returns will not track the overall market.

3. The target-date funds don’t adapt with your life changes. If your income and priorities change, you will want to change your investments.

4. Generally, these funds are a very conservative investment. They offer a smoother ride in volatile times, but they may disappoint you when the market has its good years.

I am here for you to discuss target-date investments if you are interested. That said, I manage many client’s investments that consider returns, long-term goals, and short-term life changes. That’s what I do! Please let me know how I can help!

The 401k legislation passed in 1978 and refers to the section of the Internal Revenue Code. These 3 numbers ending with the letter “K” have become synonymous with a company-sponsored retirement plan today. So much so, that most companies today do not offer another version of a retirement plan. So, understanding your options with your employer’s retirement plan is super important.

At first, 401K plans had just one flavor: Tax-Deferred. What does this mean? Essentially it means that with every paycheck, you can allocate a percentage to contribute to the 401k without paying income taxes on it. So that means that all the money you contribute to the 401k is not taxed while you are saving. No taxes are due on the growth of that money either. Taxes are paid when the money (and its growth) are withdrawn as ordinary income. For more information on Tax-deferred vs. tax-advantaged money, check out this post on my blog: Should I Convert to a Roth IRA?

In 2006, Congress allowed employers to offer a Roth version of the 401k as well as the original tax-deferred version. This Roth version was different by the way it is taxed. Every paycheck you still designate a percentage of your paycheck to the Roth 401k, but it is taxed as ordinary income upfront. After taxes are taken out and the money is in the Roth 401k account, it will never be taxed again, including the investment growth (with few exceptions).

While it is widely accepted that you should participate in your company’s 401k retirement plan (especially if your company offers to add to your contribution), deciding which 401k flavor to contribute to is not as straightforward.

There are several topics to consider when deciding between these two paths. Here are a few:

Pick a tax-deferred 401k if:
– Want to minimize taxes today versus in the future
– Likely to donate to charities after you turn 72 (which you can do without paying taxes)

Pick a Roth 401k if:
– If you believe tax rates in the future will be higher vs today
– If you will be in a higher tax bracket in the future
– Want to avoid Required Minimum Distributions (RMD’s) and the associated taxes
– Want your heirs to inherit money tax-free

Remember that you can always switch (or contribute to both) mid-way or towards the end of your career. For example, if your tax-deferred 401K balance has grown to the point you are concerned about taxes due to RMD’s, you can always switch your future savings to a ROTH 401K. Once you commit to a path, you can change your strategy based on your current savings and other life situations.

Website designed & developed by Agent Refined.