Ep. 115 Launch Financial- Giving Tuesday At Sherman Wealth

Overiew: Join us today on Giving Tuesday as we discuss Thanksgiving at Sherman Wealth and how we participated in giving this holiday season. As we wrap up what looks like a positvie month in the markets, we want you all to check off your end of the year planning lists and make sure you are prepared for the year to come. 

Show Notes:

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End Of The Year Financial Contributions & Checklist

It’s hard to believe, but the final quarter of the year is now upon us. As 2022 comes to a close, here are some key money moves you can make to finish the year off strong and set yourself up for success in 2023.


As we head into the final months of the year, it may be a good time to gather your important financial documents, preferably into once place such as an automated financial planning software. Once your financial data is organized, analyze it, take a look at your spending, budgets, and cash flow, to make sure you are on track to reach your financial goals for the year. Then, implement any necessary changes. Additionally within this process, take some time to set new financial goals for you and your family for the upcoming year.


Given the extreme market volatility and economic uncertainty we’ve seen this year, this task is more important than in previous years. If you are working with a financial professional, ask them to tax loss harvest your accounts to capture losses, and rebalance your portfolio. As mentioned above, given the extreme market volatility the markets have been facing, make sure your asset allocation is right for you, that you are comfortable with your portfolio during the highs and the lows. Even if you’ve found the perfect asset allocation for your investment portfolios, its important to revisit your allocations periodically and do a portfolio review. Overtime, your investments may perform differently than you expected, which will change your intended allocation.


If you’re planning to max out your 401(k) for 2022, mark your calendar for December 31st, as this is the last chance to do so. The IRS just announced retirement contribution limits for 2023, so check those out as your project your budget for next year. If you receive an end-of-the-year bonus, you may want to consider putting as much of it toward your 401(k) plan as you are able to. Additionally, if your company offers a match, make sure you are contributing at least the match to take advantage of those essentially free dollars.

If you are HSA eligible, make sure you are contributing to your HSA before the end of the year. Lastly, if you have young children, hopefully you are already contributing to a 529 plan to help pay for college when the time arrives. If not, now is the time to set one up. If you already have an account set up, make sure you remember to make your annual contribution. 529 plans have varying deadlines set by the state, but many have a December 31 cut-off. If you miss the end-of-year deposit deadline for your plan, you could be missing out on significant state tax breaks. 


A Roth IRA conversion involves transferring retirement funds from a traditional IRA or 401(k) into a Roth account. Since the former is tax-deferred while a Roth is tax-exempt, the deferred income taxes due must be paid on the converted funds at that time. There is no early withdrawal penalty. Inquire about whether a Roth conversion is right for you. 


Donor-advised funds are tax-deductible financial accounts provided by 501(c)(3) nonprofits who are approved, donor-advised fund sponsors. The funds are opened in the donor’s name, and they enable a donor to donate funds and get a tax-deduction immediately while deciding later which organization those funds will support.

After you set up a DAF, you can add money or appreciated assets into one of these funds and receive a tax deduction for the money or assets on the day you put them in the fund. And then, any time in the future — whether one day or ten years later — you can give the money out to any charity of your choosing. Check out our podcast with Elizabeth Goldstein regarding Donor Advised Funds and how to get involved.


Now is a good time to revisit the annual subscriptions you are paying for. Do you really need Netflix, Hulu, Apple TV and other streaming services at the same time? You might be able to cut down on some of your monthly expenses by taking a good look at what you are actually using vs. what you are paying for. You’d be surprised at how these services add up so it’s a good time to assess what you might be able to save money on in the upcoming year.

Finally, now is a great time to schedule a meeting with your financial advisor to review your year-end financial planning. It’s important to have that meeting before year-end to set the stage for a financially successful year in 2023. Besides the list mentioned above, there are tons of other tasks you may need to check off your list before the end of the year so let us know if you need any help!  If you don’t currently have a financial advisor and would like some help with your year-end planning, please contact us for a free 30-minute consultation today! 

When Should You Give Inheritance Money to Your Kids?

When it comes to gifting and giving money, especially to family members, people are oftentimes confused on when is the right time to pass over their inheritance. Should an inheritance be strictly given after one’s death? Should it be used while one is still alive?  Let’s take a look at some of these questions.

Of course, every family is different, in terms of how they want to be remembered, but there are some things that every family should think about when passing on wealth. Many articles recently have been stating that individuals believe they will need an inheritance to maintain their level of wealth and living when they grow older. A Merrill Edge survey revealed that “a third of “mass affluent” Americans from Gen Z to baby boomers with investible assets of at most $250,000 are waiting on inheritances to achieve financial stability.” It’s interesting to see that so many individuals are relying on such wealth as part of their financial future. It will be interesting to see how the current market conditions impact the ability for individuals to continue to pass down wealth. Next, let’s take a look at when family members should think about passing down their inheritance to their heirs. 

Give Now or Later?

Giving now rather than later is the preferred approach for many financially comfortable people these days. According to a 2019 Merrill study, Leaving a Legacy: A Lasting Gift to Loved Ones, 65% of Americans 55 and older say it’s better to pass on at least part of their estate while they are still alive.

While every family person has a different financial situation and circumstance, if deciding whether to gift your money earlier or later, here are some questions to ask yourself. 

Are You Over-Giving?

Before you give to your children or family members, make sure you are not sacrificing your own personal financial situation. Oftentimes, family members give too much to their children and don’t save enough for their own lifetime. 

Some of your children may prefer to wait for their inheritance, while others could benefit greatly from having the assets today. Before making that decision, make sure to communicate with your family members to make sure everyone is comfortable with the situation at hand. We recently recorded a podcast episode with David Pearl discussing money and financial traditions, explaining how to pass down money values and concepts. 

Where the U.S Tax Code Comes In

For those who are interested in contributing to the education of heir children or grandchildren, 529 plans may be a great place to start. 529 plans allows you to slowly contribute and save for your children’s education that they can use later in life. Remember you can give up to $15,000 tax-free without it going against your gift exemption.

While this situation varies from person to person, it’s important to plan out your inheritance and set a will in place so that your hard-earned money is shared amongst your loved ones. Planning early and asking yourself these questions is a great strategy to help you make the right decisions when it comes to your inheritance. If you have any questions about your personal financial situation and what makes the most sense for you and your family, please email us at info@shermanwealth.com. 

The Value Of Ongoing Financial Advice

As financial advisors, we work with individuals everyday to deliver value and financial advice. At Sherman Wealth, we specialize and focus on customized financial advice and plans. We often discuss the difference between DIY “do-it-yourselfers” and financial advisors. One very important differentiator between the two is the value of the advice.

We believe that financial advice is most successful when it’s built on a relationship. The reason we strongly believe in customized plans is because no investors are alike. Therefore, it’s prudent to work with someone you not only trust, but who will create a plan that is specific to and will reflect your goals and needs and adjust them as they change over time.

When looking for the right advisor to provide you advice, make sure they can help in these three overarching areas: investments, planning, and ongoing advice. I’d say one aspect many individuals don’t focus on is the ongoing advice component. We always tell our clients and prospects that a one-time financial plan is just a roadmap and snapshot in time. While that snapshot and roadmap will lay the foundation of your financial future, life is complicated and changes overtime. It’s important to have a trusted individual stay the course with you, jump the hurdles, and adjust your advice as your life becomes more complex.

A timely example of needing ongoing advice is this year. As we’ve been writing about, this year has been off to a very rocky start, and the markets have been digesting lots of uncertainty creating extreme volatility. With inflation at all time highs, the Federal Reserve raising interest rates, and individuals adjusting to this economic environment, ongoing advice is prudent. We’ve been working with individuals to adjust their budget to this higher cost of living, as well as revisiting cash ideas and asset allocations based on risk tolerance. If you’ve felt financially uncertain during the course of this year, this is your sign to consider an advisor who will provide you with ongoing advice. If you have any questions and are seeking either a one-time financial plan or an ongoing relationship, email us at info@shermanwealth.com or schedule a complimentary intro call here.

Here’s Why To Consider A Donor Advised Fund

With the holidays and Thanksgiving around the corner, it’s a great time to discuss giving back to those in need. At Sherman Wealth, we are very charitably inclined, so we want to discuss how setting up a donor advised fund could be a good option for you and your family. For those who don’t know, a donor advised fund is a charitable investment account that you can open for the purpose of supporting organizations and charities of your choice and that you care about.

Donor advised funds allow you to be very creative in making your tax-deductible donation. You can donate cash, stocks, RSU’s, or non-publicly traded assets. Once your money is in your account, you do not have to donate it right away, you can let that money grow within the account, tax free, until you are ready to donate it.

Interestingly enough, we read an article stating that Fidelity Charitable and Schwab Charitable donors gave record amounts of money to support non-profits in 2020, inspired by a desire to help those suffering during the pandemic.

Fidelity Charitable said its donors made 2 million grants totaling $9.1 billion to 170,000 charities in 2020, a 24% increase in the amount of money donated and a 31% increase in the number of grants compared to 2019. According to the company VPs, the pace and the amount of giving stood out compared to previous years. The pandemic changed giving targets, as donors supported organizations that provided food and other necessities for people who experienced economic setbacks due to the outbreak.

For those who have unique tax situations and are also interested in charitable giving, you can contribute funds into a donor advised fund, which will allow a donor to make charitable contributions, receive a tax deduction and then distribute the money over time. It is a great way to benefit your tax situation while also supporting your favorite charities. It was so incredible to see such an outpouring of love and support to those in need during such a difficult time. If you are in a position to do so, we always encourage others to consider giving back to those in need or setting up a donor advised fund. If you have any questions about setting up a donor advised fund or charitable giving, please reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute meeting.

Things To Do In A Market Correction

As we’ve been making our way through this market correction and this interesting economic environment with the Federal Reserve raising interest rates to combat inflation, we’ve been getting many questions about which financial moves you should be making and which ones to avoid. While market volatility can be stressful and scary for us all, the way in which you approach and react to the fluctuations in the markets themselves can say a lot about your portfolio and investments. So, let’s jump in. 

First and foremost, it is important not to panic and make sure you stick to your long-term plan when the market is going through a correction period. We know it’s easy to get caught up with the media and headlines, tempting you to derail your financial plan and allocation during volatility and market downturns. As we have seen time and time again, your long-term strategy will most likely stay the course through the ebbs and flows of the market. As long as you choose an allocation that works for you in market highs and lows, then sticking to it for the long-haul is the right move. Don’t obsess over the markets – they will always do their own thing.

If you do happen to have some extra cash sitting around right now, we’ve been talking with many clients and prospects about the attractiveness of CDs, treasury bills, and high yields savings accounts for more liquid cash and then of course putting any other money thats available to work in the markets! Dips in the markets are good opportunities to enter or invest more if you are comfortable with your overall risk.

However, if you find yourself having trouble sleeping at night through all this volatility, it might be a sign that you have too much risk in your portfolio. Maybe think about re-allocating your portfolio or working with a professional to feel more comfortable about your situation. It’s extremely important to understand your risk tolerance before investing to ensure that you can handle the investments you are taking on. If you would like access to our complimentary risk tolerance questionnaire software, email us at info@shermanwealth.com to learn more or click here

If the COVID-19 pandemic taught us anything, it’s the importance of having a plan in place for when life throws uncertainties and hardships our way. If you do not have a financial plan, NOW is the time to implement one. We’ve been working with many clients on end-of-the-year financial and tax planning, revisiting budgets, setting goals, and projecting for 2023.

Not only is it smart to have a financial plan set in case of emergencies, but you should also have an estate plan set up. For more resources on how to get started on estate planning, check out our blog here. Remember, long-term plans are put in place for a reason, so try not to panic and do not derail your plan in the presence of volatility. Also keep in mind that everyone’s personal and financial situation differs, so make sure not to confuse your time horizon with your friend or next door neighbor. If you find yourself nervous or anxious during this time or even feel comfortable but have questions, we are here to help. You can send us an email at info@shermanwealth.com or schedule a complimentary meeting here.