Sherman Wealth & Launch Workplace’s Sock & Coat Drive To Support So What Else

Happy Giving Tuesday! Do you have a few old coats and socks laying around the house? If so, let’s do some good with them! Join Sherman Wealth and Launch Workplaces in our Sock and Coat Drive to support So What Else and their wonderful mission.

Drop offs can be made at 9841 Washingtonian Blvd #200, Gaithersburg, MD 20878 from today, November 30th, 2021 til December 17th, 2021, so let’s get donating! If you have any questions on other ways to get involved in giveback opportunities or volunteering at So What Else, email us at info@shermanwealth.com and we are happy to discuss and direct you to the right place.

Ep. 63 Launch Financial-Cyber Monday & Giving Tuesday at Sherman Wealth

Overview: Join us on this week’s post-Thanksgiving episode of Launch Financial with Ashley and Brad as we discuss our Giving Tuesday plans and local charities, along with Black Friday/Cyber Monday data and the new Omicron threat. 

What You’ll Learn:

  • Cyber Monday/Black Friday consumer data 
  • Market data and digestion 
  • The Fed’s response to Omicron variant 

Show Notes:

https://www.cnbc.com/2021/11/30/powell-says-fed-will-discuss-speeding-up-bond-buying-taper-at-december-meeting.html 

https://www.instagram.com/p/CWYziFXJL2_/ 

Check out this episode!

The Financial Industry Is Changing, And What You Want Is Too

As generational wealth continues to transfer, we are seeing a shift in the way today’s consumers are wanting to conduct relationships with those who are managing their money. According to a recent WSJ article, rich customers are changing what they want; they are shifting away from these bigger public companies and are seeking niched start-ups and individualized advice and relationships. We are also seeing that those who only offer asset management services are becoming less desirable and holistic financial planners are the future. 

At Sherman Wealth, we have noticed similar attitudes amongst prospects and clients, those who are feeling ignored or unheard from their “Wall Street-esq” or parents’ financial advisor that they assumed a relationship with. With this ever evolving bifurcation of financial advice, clients are no longer interested in working with their parents financial advisor they may have an estranged relationship with, but rather are looking for evolved and all encompassing individualized wealth management and financial planning advice delivered at the ease of their fingertips. We’ve been seeing tons of clients and individuals getting organized under COVID-19, stressing to us the importance of finding the right person to walk them through their whole financial life. This is where we come in. 

We have long recognized this shift in financial service needs and are constantly battling financial stigmas and adapting the way in which we deliver unique and customized advice to our clients. We recognize that holistic financial planning is the future. This new way of navigating your financial life encourages those seeking an advisor to look for someone in line with this approach. With a financial concierge such as Sherman Wealth, your advice will stay current and constantly communicated, not getting lost or forgotten.

At Sherman Wealth we can help you with the following 

  • Goal Setting 
  • Cash flow analysis and budget planning 
  • Net worth analysis 
  • Debt strategy 
  • Student loan planning 
  • Retirement planning/projections
  • Work benefits 
  • Rent vs. buy mortgage strategy 
  • Education planning 
  • Investment management 
  • Tax planning 
  • Insurance need analysis 

We are a fiduciary to our clients, but we are also, in some respects, a concierge and a coach. What we mean is that we work with you in an all-encompassing way- ensuring your specific needs are being heard, understood, and proactively addressed. For further details on our philosophy and core values, click here to learn a little more about who we are and what we strive to deliver. If you feel that your financial needs align with our core values and philosophy or your current situation feels stale, email us to inquire about our services at info@shermanwealth.com or schedule a 30-minute complimentary intro call here.

Are You HSA Eligible? If So, Check This Out

Are You HSA eligible? If so, here’s how to take advantage of it during this time of year. As open enrollment is underway, you might have some questions about what benefits you are eligible for, and what those benefits truly mean. Retirement savings and medical coverage are typically a large part of your workplace benefits, which is why it’s so important to take advantage of what’s available to you, such as an HSA.

So, what are HSA’s? An HSA is a tax-advantaged health savings account that allows you to save money to use to pay medical and health care expenses. If you get your insurance coverage through high-deductible health plans, you can qualify for an HSA. Your contributions within the account will grow on a tax-free basis, and any untouched dollars can be rolled over year to year. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs.

For 2022, employees and employers can contribute a total of up to $3,650 for individual coverage and up to $7,300 for family coverage. Be sure to contribute by the end-of-the-year December 31st deadline, so that you can make the most of your yearly contribution. Keep in mind that HSAs are just one of the many benefits that you can take advantage of. Check out our open-enrollment blog to see what else you may be eligible for! For other end of the year tips, check out our financial checklist blog here. If you have any questions about funding your various accounts, email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

 

Ep. 61 Launch Financial- All Time Highs In Crypto World & The Stock Market

Overview: Tune into this week’s episode of Launch Financial with Ashley and Brad as we discuss all time highs in the market and in the crypto world, along with truck driver and supply chain shortages continuing into holiday season, pandemic milestones, Biden’s infrastructure bill, and more! 

What You’ll Learn: 

  • How third quarter earnings season unfolded 
  • About All-Time Highs in the market and bitcoin

Show Notes: 

https://twitter.com/RyanDetrick/status/1457814095126741005?s=20 

End Of The Year Financial Checklist 

Check out this episode!

Mortgage Strategies for Self-Employed Home Buyers

Morgages for self-employed applicants

Being your own boss is a great feeling with many benefits, but those benefits do not include a fast track to a great mortgage. Gone are the days of the easy mortgages, the no-income-verification loans, and The Big Short. In fact, qualifying for a mortgage may rank as one of the biggest challenges you face as someone who is self-employed.

However, given that the 30-year rates have plunged below 3%, marking the lowest they’ve been in over a month, you should move quickly because now is a great time for refinancing and home buying to lock in those historically low rates. According to data company Black Knight, “In the U.S., homeowners withdrew $63 billion in equity from their properties through more than 1.1 million cash-out refinances in the second quarter of the year — the largest quarterly volume since mid-2007”. As you can see from the data, with these all-time lows, now is the time to act.

As a self-employed business owner who just bought a new home for our growing family, I can testify that the mortgage process is not for the faint-hearted. Every time I completed a lender’s checklist they come back to me for more information. This was not my first mortgage but the time and energy it took this time around was beyond what I expected – and I’m a credit-worthy borrower and financial pro with a background in the mortgage world.

So what’s the best way to prepare? To understand the issues, think like a bank. In deciding to lend you hundreds of thousands of dollars, the bank wants to know, first and foremost, that you will be able to pay them back – steadily, regularly, over time.

Here are 3 of the biggest hurdles you may have to overcome:

SHOW YOU MEET THE INCOME REQUIREMENTS

The first thing a potential lender asks to see is your W-2 form, the document that shows salaried workers’ annual wages and withheld taxes. Business owners and independent contractors are unlikely to have W2s, and instead need to present their full tax returns, including profit & loss and deductions & depreciation, as well as their own income.

Not only are lenders not likely to be expert at understanding your business and your cash flow, but the salary you show on paper may be deceptively low. That’s because most business owners invest a sizable chunk “back into the business” when they’re getting started as well as taking deductions for travel, leased vehicles, and purchases of computers, office supplies, and even their phone.

Getting ready: If you’re thinking about buying a house, consult a financial planner, your accountant, or a trusted mortgage professional (we’ve suggested a few below) about how much to accurately deduct – or not – this year to show sufficient income and an acceptable debt-to-income ratio.

HAVE ALL THE PAPERWORK

Having paperwork that tells the full story can make all the difference, so now is the perfect time to prepare a file with the documents you’ve already collected for the IRS. Remember, though, that this year’s tax returns and records may not be enough to show your business has been steadily growing. Be prepared with records from previous years, and bonus points for data about how your sector has been doing as well.

Getting ready: Keeping good records is key so if you haven’t already started, get started now, and see what you can put together for previous years.

MAKE SENSE OF COMPLEXITY

Every company and every consultant is unique and it may be hard to reconcile your business’ specific challenges and trajectory with the solid predictability a mortgage lender is looking for. You may want to bring a trusted accountant or financial or business advisor to the meeting with the lender – someone who knows your business well and can explain its structure, operations, and cash flow in context. If your advisor can’t be there, ask them to write a brief document explaining your data. Consider also requesting profit-and-loss statements prepared without personal expenses to show the difference between reported income and actual income.

Getting ready: be prepared to explain what your numbers mean in context and turn to a trusted advisor, if possible, who can translate your numbers for the lender and help them understand you’re a good candidate.

AVOID CREDIT SCORE SURPRISES

You wouldn’t be the first, or last, person to find discrepancies in your credit score. Correct any discrepancies and make sure it’s correctly updated before applying for a mortgage. And – obviously – pay off any outstanding debt.

Getting ready: get credit reports from the major agencies and make sure that they are accurate.

If you’re in the market for a new home, let us help you and guide you through the process. With interest rates at all-time lows, whether applying for a mortgage or refinancing, we are happy to schedule a call with you for a free analysis of how that may affect your purchasing power.

We are well versed in the latest options from different lenders that may be most appropriate for your situation and have online tools to help you look at your overall financial situation to determine how much of a mortgage it makes sense for you to take on. We also have resources and experts we can refer you to, or, if you already have a mortgage professional, we will work with them to determine how much your can afford.

And we have experience: I’m pleased to report that, after what seemed like a never ending process, I succeeded in getting a mortgage with very favorable terms and – most importantly – we love our new home.

Don’t be daunted by the challenges involved with getting a mortgage when you’re working for yourself. With the right preparation and the right help, you too can make your dream home a reality!

Here are three resources trusted referral partners in the Washington area:

(As a fee-only financial planner, we have no financial vested interest in referrals. We just want to make sure you have the best advice possible!)

Jody H. Eichenblatt, Senior Mortgage Consultant at Prosperity Home Mortgage

Josh Friedson, Senior Vice President of Mortgage Lending at Guaranteed Rate

James Schneider, Loan Officer at Eagle Creek Mortgage

***

The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions.  They are for information purposes only. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Sherman Wealth unless a client service agreement is in place.

If you have any questions regarding this Blog Post, please Contact Us.

Retirement Inflation-Adjustments for 2022

Happy November everyone! New retirement inflation-adjustments for 2022 have been released, and we want to provide you with a quick breakdown. Business owners and employees, this one applies to you, so don’t miss it.

See Below For Retirement Inflation-Adjustments for 2022

  • IRA/Roth IRA contribution: $6,000 (no change)
  • 401k/403(b)/457 deferral: $20,500 ($1,000 increase)
  • 401k/403b/457 catch-up: $6,500 (no change)
  • SEP IRA/PSP: $61,000 ($3,000 increase)
  • SIMPLE deferral: $14,000 ($500 increase)
  • SIMPLE catch-up: $3,000 (no change)
  • Also boosted for 2022: The income ranges for determining eligibility to make deductible contributions to traditional IRAs, Roth IRAs.
  • IRS also issued technical guidance regarding all of the cost of living adjustments

If you have any questions on how these adjustments apply to your financial situation, email us at info@shermanwealth.com.

Maximizing Your Benefits During Open Enrollment Season

We recently posted a video, blog and financial tips regarding the importance of creating and implementing an end of year financial checklist. As part of your annual checklist, a main focus during the month of November should be your employer’s open enrollment period.

For many employers, open enrollment runs through early December. This year, as a result of the pandemic, there are some new offerings aimed at mental, physical and financial health. Here are some things to revisit during your open enrollment period this month:

  1. Health Insurance

When reviewing your health insurance options during your open enrollment period, you should consider what your health coverage costs you now that premiums and deductibles are changing. Annual family premiums for employer-sponsored health insurance will likely be about 3% lower in 2022, after factoring in subsidies enacted under the American Rescue Plan Act. However, more workers have a deductible — the amount you pay before insurance kicks in — and that deductible is rising. In 2020, the average single deductible was $1,945, roughly twice what it was a decade ago. If you are shopping for a plan, make sure to not only focus on the premium, but also the total out of pocket

  1. Health Savings Accounts

As discussed in a prior blog, using tax-advantaged accounts for medical expenses, specifically, health savings accounts or flexible spending accounts, is one way to help with health care costs.

To be able to use an HSA, you need to be enrolled in what’s called a high-deductible health plan, or HDHP. Contributions grow on a tax-free basis, and any unused money can be rolled over year to year. For 2022, employees and employers can contribute a total of up to $3,650 for individual coverage and up to $7,300 for family coverage.

Health Flexible Savings Accounts (FSAs) have lower contribution limits ($2,750 for 2021) and you don’t need to have a high-deductible plan in order to be eligible. You don’t need health coverage at all to sign up for an FSA. There are also dependent care FSAs, which allow employees to pay for eligible childcare expenses using funds on a pre-tax basis.

Generally, you must use the FSA money by year-end or you lose it. However, recent legislation could also allow you to roll over any unused funds from 2021 to 2022 for use at any time next year if your company has opted in.

  1. Life Insurance

According to a recent survey, nearly 45% of U.S. workers don’t have or don’t know if they have life insurance. Due to the pandemic, people are now interested in life insurance policies more than ever. Since most employer-issued life insurance policies typically amount to a year’s worth of salary or less, it’s important to consider what’s the right amount for you and your family. You can then decide if you want to buy additional coverage, or supplemental insurance, through your workplace group plan or shop for your own individual term life insurance policy, which many advisors recommend.

  1. Disability Insurance

Disability insurance is often the most overlooked employee benefit. These plans can help replace a portion of your paycheck if you get sick or injured and are unable to work. Short-term disability generally replaces 60% to 70% of your base salary and premiums are often paid by your employer. Long-term disability, which ordinarily kicks in after three months to six months, typically replaces 40% to 60% of your income. If your employer offers some kind of disability insurance, you should consider enrolling. 

  1. Wellness Initiatives

The pandemic has many Americans turning to their companies for help dealing with work-life stressors and personal issues. Due to increased demand, many companies are now offering a variety of financial wellness benefits. Some of the wellness resources available this year include financial coaching, stress management classes, web-based resources for healthy living and even discounts on gym equipment. There could also be tuition assistance, student loan repayment programs, backup child care, tutoring services for older children and stipends for enrichment programs and camps. Companies that understand the importance of their employees’ well being often have a more productive and successful workforce.

If you have any questions about your company’s open enrollment options, you should contact your human resources department. If you are interested in having us help you create your end of year financial checklist, please contact us for a free 30 minute consultation.

Potential Implications of the Tax Change Proposal

As we head into November, with only two months left in the year, the Democrats have just edited the Tax Proposal we have been discussing since March. Back door Roths were one of the few things that survived the new tax change proposal, even though they were in talks to be eliminated. Check out the vlog below for more details on what survived and what was eliminated in the tax change proposal. While there is no bill in place officially, listed in the video below are just a few of the major changes on the financial planning side we want you to be aware of.  While we are on the topic of end of the year financial planning, be sure to check out our end-of-year checklist that will provide you with some useful financial tips before the new year.  If you have any questions about the proposed tax changes or financial planning, please email us at info@shermanwealth.com or schedule a 30-minute complimentary intro call here.

https://www.youtube.com/watch?v=HKgAuTA9Qmghttps://youtu.be/HKgAuTA9Qmg