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How to Get Started with Your Savings Goals

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 Whether you are young and starting your own life as an adult or in mid-life and realizing that you are behind in getting started towards your financial planning savings goals, it may be hard to know how to begin.  No matter where you are now, it’s time to take steps towards setting and achieving your financial goals. 

Ready.

Determine your top financial goals.  Maybe you need to start saving, period.  Then there is college for the kids and retirement someday (?)

Set.

Prioritize your main goals.  Top priority is building emergency reserves – at least 3 – 6 months of monthly expense needs is recommended.  Next, balance retirement and education savings, keeping in mind that loans are available for education costs, but there are no loans for retirement.

Go.

  • Begin your saving by paying yourself first.  Budget an amount to set aside in savings, as if your savings account is someone you owe, until your savings reserve is built up to your goal.
  • Next, begin contributing at least a minimal amount to your employer retirement plan.  Start by contributing enough to receive any employer match that might be available, and then slowly increase your contribution percentage over time.  
  • Education saving can begin by investing monetary gifts received for birthdays and other holidays into 529 college education accounts for your children.  As cash flow allows, budget in a set amount monthly to add to the 529 accounts.

No matter what your current place in life, it’s the right time to start saving to meet your financial planning goals.  Contact a Certified Financial Planner™ to help you come up with a plan to get you to the starting line and off to the races!

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

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Serving our community and profession

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 At the Center we are dedicated to sharing and spreading financial literacy. Melissa Joy, CFP® and Julie Hall, CFP® recently took their professional expertise to the community by volunteering for the Financial Planning Association of Michigan. Each presented workshops for the Detroit Parent Network. 

Julie led a risk management workshop speaking to parents of school aged children that live in Detroit, Hamtramck and Highland Park. Her message included ways to incorporate life insurance, disability insurance and property and casualty insurance into an overall risk management plan.  Julie said, “It was great to be able share my financial planning knowledge with a group of parents in Detroit who have not had the opportunity to meet with someone to discuss financial planning concerns before."

Also reaching out to parents, Melissa visited the parent support center at Marcus Garvey in Detroit Public Schools where she shared what she calls a personal Financial Fire Drill. “I visited on field day so the whole school was full of excitement and energy and the parents had been volunteering their time with their kids throughout the day," Melissa said. "It was great to meet so many moms and dads and the program instructors at Marcus Garvey. The financial literacy discussion was wide-ranging and real-world, just as financial planning should be. I’ll look forward to volunteering with this program again in the future.”

Social Security Planning for Divorcees

 Today’s longer life expectancies, especially for women have increased the importance and complexity of retirement income planning.  What used to be a 20-year retirement period has progressed to 30+ years for many baby boomers.  One common concern I hear expressed from women thinking about leaving the workforce and transitioning into retirement is "can I enjoy my desired lifestyle and have enough money to last through my retirement years."  Discussing retirement income and what part Social Security will play often leads to this question, “If I continue working, can I draw on my ex-husband's earning record at my full retirement age and defer my own Social Security benefit until age 70?"

The answer is “yes” and “it depends!”  In a special rule that applies only to divorced spouses, you can claim benefits on your ex even if he has not yet filed for retirement benefits.  The key is he must be at least 62 years old with sufficient Social Security credits.

Here is how this strategy works:

  • At your Full Retirement Age (FRA) file a restricted claim for spousal benefits only
  • You begin to collect 50% of your ex-husbands FRA benefit from age 66 to 70
  • The Social Security benefit based on your earnings record increases by 8% per year with the delayed benefit credit from age 66 to age 70

Additional requirements:

  • You are single and were married for more than 10 years
  • You have been divorced more than 2 years (If divorced less than 2 and your ex-spouse is not collecting you must wait for the 2 year mark to receive benefit) 

Crunching the numbers:

  • If you are less than FRA, drawing an ex-spouse benefit to delay yours may not be allowed because the decision is impacted by the amount of your own benefit.  If your benefit is greater (prior to reaching FRA) than ex-spouse you must take your own benefit.
  • This strategy makes sense if your retirement benefit at full retirement age, plus a 32% increase due to delayed retirement credits would be worth more than the spousal benefit.

Settling on a Social Security strategy is one piece of the retirement income puzzle.  This strategy is not meant to be a one size fits all solution; rather an example of how Social Security planning can be customized to meet your individual income needs.

Laurie Renchik, CFP®, MBA is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

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 Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

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Center Helps to Support Professional "Issues in Aging" Education

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One of the Center’s core values is Continuous Learning and Personal Growth – a value that applies not only to our Center team, but also to other professionals that may serve our clients. That is why we were proud to support the Wayne State University Institute of Gerontology (IOG) as it educated over 250 healthcare professionals at its 24th annual “Issues in Aging” conference. 

“Issues in Aging,” one of the longest running and well-recognized events of its kind, aims to provide information on best practices and current research related to geriatrics and gerontology.  One day of each annual two-day conference is dedicated to Alzheimer’s and related dementias.  Our nation’s ongoing generational shift will demand healthcare professionals that are armed with knowledge and skills to help our older adults.  The IOG is certainly doing its part!

The Center has  partnered with the IOG for many years to provide both financial and volunteer support, with  Sandy Adams serving on the IOG’s Board of Visitor’s for the last two years.  For more information about the WSU Institute of Gerontology’s ongoing research, education and outreach efforts, go to www.iog.wayne.edu.

Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

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Leaving a Legacy

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 There are many ways to make your mark in the world today.  Some give of their time and talents through volunteering and others give financially to the causes near and dear to their hearts  Consider a hypothetical couple that wants to preserve their legacy and give to four organizations that they would like to help succeed, we’ll call them Dick and Jane. Dick and Jane have been good savers throughout their working years. Fortunately, they accumulated enough assets to care for their own retirement needs with a high expectation of having a surplus, regardless of what financial markets deliver for their remaining years. In a recent annual review meeting, Dick and Jane determined that it was time to make financial contributions to some of area institutions that they feel are benefitting the larger society. Essentially, they wanted to help ensure these organizations are around to enrich other lives like they have their own. 

Suppose Dick and Jane could comfortably gift $50,000 each to four organizations; Detroit Institute of Arts, Michigan Opera Theatre, Michigan Nature Conservancy, and the Detroit Symphony.  Each of these organizations contributed to their well-being and they may consider it is time to “give back”.  Working together, we may be able to identify securities in their portfolio that could help maximize their contributions as discussed in this prior blog .  If Dick and Jane would like their gifting to remain anonymous, they could consider establishing a Donor Advised Fund (as I discussed in a recent blog) to facilitate the donations. In the end, Dick and Jane can make tax leveraged gifts benefitting four organizations with the hopes that these groups will continue to enrich the lives of Michigan residents.  As a fellow Michigander and financial planner, it would be rewarding to see them leave their mark. 

If you are planning to leave a legacy, here are 4 Steps to get you started:

  1. Determine your financial ability to give financially – never give away a dollar that you might need for your needs
  2. Research possible organizations
  3. Determine the most tax efficient manner to give – preferably appreciated securities
  4. Enjoy knowing that you have made a significant contribution to society

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

The illustration above is hypothetical.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

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Julie Hall Helps Spread Financial Literacy

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Teaching middle school aged children about budgeting and the value of learning how to make financially aware decisions, even as teenagers, was top of mind for Julie Hall. That's why she got involved in the Junior Achievement Finance Park in Detroit as a volunteer through her membership in the Financial Planning Association (FPA) of Michigan.

During the workshop teens were given a different life scenario with different education levels, income levels, and unique circumstances emulating real life family dynamics.  With guidance from financial professionals, the participants got to make their own financial choices and build a budget.  After paying bills and reviewing results the next step was to explore and decide if they can and want to save money for upcoming financial goals or donate to charitable causes important to them.

Julie says “Teaching financial awareness can and should begin at an early age so that our children are better prepared to handle their finances effectively in the future.” The Junior Achievement Finance Park is a resource that Julie has been involved with in the past, and each time a member of the Center team volunteers, we walk away knowing we've given even more young people in our community tools they can use for a lifetime.

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Kacy Supporters Helped Take a Step Toward a Cure

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 On Sunday May 5th the sun was out and we had the largest crowd yet as more than 400 runners, walkers, bikers and dogs turned out to support Kacy Wyman and the Cystinosis Research Network.  Contributions are still coming in and we are grateful and proud to share that our community of supporters has raised near $30,000 for the Cystinosis Research Network. These funds will help with continued research projects to improve the quality of life for those dealing with Cystinosis and other rare diseases, and ultimately a cure!

The last 12 months have been exciting for the Cystinosis community and Kacy. Recently the eye drops that Kacy takes each hour have been FDA approved, meaning the drops are now covered by insurance. This makes them more affordable and accessible for many families. Also, a slow release (12 hour) drug called Procysbi is expected to be available this year allowing kids (and their parents) with Cystinosis to hopefully get a full night sleep for the first time in many years. There is still much work to be done to find a cure and our fundraising is having an impact for Cystinosis and other rare diseases. Kacy's mom Jen Wyman continues to be active with the Cystinosis Research Network where the feeling is that these two advancements should have a positive impact on kids dealing with the disease.

The fun run/walk, like anything worthwhile, could not have been such a success without the help of so many people. Michelle & John Kelly, Kristin Prebay, and Jeff & Kathy Abrash have helped every year with food. Carrie Olds and Suzanne Neff have been stalwarts rounding up many route volunteers. Lori & Hadley Horton, Mike Neff, and Nona Cleary pitched in where needed every year as well.  This year we are thankful to Kristin Cullen for arranging the donation of T-shirts. The list goes on….our generous sponsors… colleagues at The Center…Kacy’s swim club Atlantis……..all of these “little things” are not little….they add up to make a great event and we thank you all!

The CRN Fun Run/Walk has become a staple in our community. It is an important day for Kacy and for finding a cure. But as I (Kacy's dad) like to say, more than anything, the day is about HOPE. When you choose HOPE anything is possible. The support you all provide year after year gives us hope….hope for better treatments….hope for a cure…. Thank you!

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