Together Let’s Help So What Else

So What Else needs your help! 2020 was an unbelievably difficult and challenging year for most of us. Beginning on March, 9 2020, So What Else (SWE) began a tremendous undertaking and started one of the most successful emergency hunger relief and support programs in the Greater Washington Area. Food was donated to us from partner organizations and local businesses without restriction and given to anyone in need, to the tune of 9 million meals from March 2020-March 2021.

Food is continuously being donated from every source imaginable. But, the warm summer months are fast approaching, and the SWE Team is in serious need of purchasing a refrigerated box truck to store perishable food arriving from multiple sources. The need for supplying food has only increased since the pandemic began. SWE is requesting a one time donation in order to purchase a refrigerated truck to store perishables such as produce, eggs, dairy, poultry and other products that need to be refrigerated during transportation in the upcoming summer months. 

Almost every week since the inception of this highly accessible program, the need for free food has increased. The So What Else team feels it is critical to have a refrigerated truck in order to continue to support children and families that are in dire need of food. We are hoping you will agree that this need is critical as is our desire to continue the food donation line to help serve those in need. Will you help SWE by supporting this special request?

Your generous donation means the world to Sherman Wealth and So What Else and will continue to support their mission to help serve our community. We thank you in advance for your donation and support to meet our community’s needs. So What Else has received rave reviews for their service to our community and hope you will see the total benefit to obtaining a refrigerated truck in order to continue to support everyone in need of food donations throughout our community.

Currently SWE serves 68 sites per week with a total of 110,000 meals a week directly to children and families. Again your help means the world, especially to the children who rely on SWE for most of their meals every week. For questions about the donation, email us at info@shermanwealth.com. 

The refrigerated box truck costs approximately $60,000. SWE currently has $12,500 committed from a generous donor. Will you help us raise the remaining $47,500?

Click here to donate to a great cause to help our community and a wonderful organization. https://www.gofundme.com/f/refrigerated-truck-fund?member=10610365&utm_medium=email&utm_source=customer&utm_campaign=p_email%2Binvitesupporters

Tax Break Adds Perk To 529 College Plans

529 plans are not only a great estate-planning tool way to save for your children or grandchildren’s’  college tuition, but they have another added bonus too. Under this new tax law, individuals can make a lump-sum 2021 gift of up to $75,000 to fund a 529 college savings account for a child or grandchild and claim a federal gift tax exclusion for the full amount. 

“This accounts for five years’ worth of the standard $15,000 annual exclusion that normally applies to 2021 gifts,” according to the IRS. We have found that many people are not aware of this tax break and how they can benefit from this, which is why it’s important to share the knowledge. 

Another interesting point to note is that the Tax Cuts and Jobs Act of 2017 now applies to tuition for grade K-12, which is useful for those who decide to send their children to private school. 

It’s important to note that grandparents can really benefit from contributing to a 529 plan, as it removes assets from taxable estates in large sums and the money is invested to grow and earn income tax-free. If you are currently contributing to a 529 plan or are considering opening one, we are happy to discuss your situation and more of the benefits involved. If you have any questions or would like to discuss these plans, please feel free to contact us at info@shermanwealth.com or schedule a 30-minute complimentary meeting here. 

How To Determine Your Debt Tolerance

Debt can be tricky. While on one hand it can help you achieve your goals and build your wealth, it can also be a downfall if you do not know how to use it properly. Sometimes, it seems like taking on debt is a good idea for raising net worth and building credit. However, building up debt can be a slippery slope and quickly turn negative, if you are over-spending and taking on too much. 

We know that finding the right balance can be tricky, so determining your debt tolerance might be an easy way to start tracking it. Today we want to point out a few key factors to consider if you are trying to figure out if you can afford more debt.

Calculate your debt-to-income ratio

Whats a DTI? Lenders use a standardized calculation called debt-to-income ratio (DTI) to decide whether you can take on a loan. DTI is calculated by dividing your monthly expenses by your gross monthly income before taxes. 

Watch out for your credit utilization 

If you are making a big purchase, take a second and think about your credit utilization rate. Buying a big expensive item may seem like a good idea, but it may temporarily drop your credit score and raise your CUR.  However, once you pay the balance off, your score will improve. A typical rule of thumb is to not spend too much over 30% of your CUR. 

Add up at the total cost of the debt

The more money you borrow, the more you’ll have to pay back in interest and other fees. Always do your research on the types of loans you will be applying to before taking it on. Think about using tools such as interest calculators to see how much you are really paying when you take on a loan.  

Putting aside the financials, you also want think about your personal financial situation. Make sure you are comfortable with your debt tolerance and know what you are doing before taking out more and more debt. If you have any questions about your personal situation or about debt, please email us at info@shermanwealth.com or schedule a 30-minute consultation here. 

10 Financial Milestones & Goals To Pursue In Yours 20s and 30s 

Establishing goals in your early years is a great way to reach financial milestones and better your financial future. As part of financial literacy month, we have been discussing different techniques to establish smart and achievable goals along with ways to achieve those goals. We know that managing your finances, especially for the first time, can be overwhelming, but the sooner you start making financial goals and plans for yourself, the brighter your future will. Building these habits, especially in your twenties and thirties, is so important for long-term and future success. Here are ten financial milestones to consider pursuing in your twenties and thirties. 

  1. Automate Everything 
  2. Create a Monthly/Quarterly/Yearly Budget Plan
  3. Pay off All of your debt 
  4. Pay your bills on time and establish a good credit score
  5. Start and regularly fund an emergency account 
  6. Contribute to your company 401(K) and take advantage of your match 
  7. Open a Roth or Traditional IRA 
  8. Save for a big purchase such as a car or first home 
  9. Invest outside of a retirement plan 
  10. Protect your life with insurance and a will 

While it is not mandatory to achieve these goals to succeed, hitting these goals in your early years is a great way to set yourself up for success. Savings, budgeting, investing, and protecting your life are essential steps in building a solid foundation and growing your money. Also, starting to education yourself about personal finance will take you much farther than you think. The sooner you start and realize these goals are important and achievable, the better position you will be in in your forties and fifties. If you have any questions about achieving your financial goals or establishing SMART goals personalized to your financial situation, send us an email at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

What You Need To Know About NFTs

With NFTs and baseball mania taking over the news, some of you may be wondering: What actually are NFTs? 

Blockchain technology has opened up new markets for investment and consumption. NFTs are one-of-a-kind, authenticated digital files, such as artwork or collectibles. The reason gain and retain such high value is because they are not easily replicated.

The hype around NFTs has been growing rapidly, in the news and especially online. Let’s dive a bit deeper into NFTs to see if this is something you are interested in. At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs. It is worth noting that other blockchains can implement their own versions of NFTs. 

So what types of companies are selling NFTs? The NBA has NBA Top Shot – a way of selling digital collectibles in the form of trading cards.  There is also Topps, who now wants to do for Major League Baseball (MLB) what Dapper Labs did with NBA Top Shot. And now, even tweets hold value, with Twitter co-founder Jack Dorsey selling off the first-ever tweet for a massive $2,915,835.47. Musicians are also selling the rights and originals of their work, as well as short videos to clips of their music, and you can even buy digital real estate and 3D assets like furniture. 

NFT’s are definitely the craze right now, and may only just be getting started. If you have any questions on what NFTs are or how it may impact your financial planning or tax situation, please email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

Don’t Forget This Year’s Tax Deadline Extension

As we kick off April and financial literacy month, we want to remind you about the tax deadline extension the IRS instated this year. Due to the coronavirus pandemic, the federal government extended this year’s federal income tax filing deadline from April 15, 2021, to May 17, 2021. This extension automatically applies to filing and payments. So, if you owe taxes for 2020, you have until May 17, 2021, to pay them without interest or penalties. This extension applies to all filers, including businesses, individuals, trusts, estates, and more. This gives you plenty more time to fund your HSA’s along with your Traditional or Roth IRA’s (depending on what you are eligible for). 

Taxes likely won’t be the only aspect of your finances to be affected by the COVID-19 pandemic. Speak with your financial professional or tax professional about your particular situation. Before making any decisions, make sure to check your state deadlines to ensure there are no different cut-offs you must comply with. Check out the video below as Brad discusses the unemployment benefits and how those will affect your tax situation this year. As always, if you have any questions, please reach out to us at info@shermanwealth.com or schedule a 30-minute introductory call here. 

Here are the Benefits of Sherman Wealth Financial Tools

If you budget your money, analyze your investments, and save for retirement, you’d likely benefit from being able to track your finances in one place. With financial literacy month around the corner, it’s a great time to discuss tools that you can utilize to simplify your financial life. Additionally, given the technological shifts due to the coronavirus pandemic and as we are all learning how to operate our lives from the confines of our smartphones and laptops, it’s crucial to continue to automate our lives, especially our finances. 

This is where we can help. Our state-of-the-art technology at Sherman Wealth allows you to track and stay on top of your finances, on your own time, and without charge. Life is complicated, your finances shouldn’t be. We know financial planning may seem like an overwhelming process, but by utilizing these tools, you can do everything in one place, at the tip of your fingers. 

With our comprehensive financial software, all of your financial accounts will be aggregated into one place, and you can use the tools to budget your money for short-term goals and prepare for the long run.  Additionally, through this holistic software, you can utilize the following tools: investment check up, fee analyzer, savings planner, net worth tracker, long-term goal planner, retirement planner, cash-flow planner, running balance sheet planner, and more.

If you have not utilized a financial software yet, we encourage you to consider a trial run of our software. Within minutes, you will be able to see your assets and liabilities in one tab. If you have any questions or would like to trial the software, please reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute meeting here.

The Benefits of “Time” In The Market

As we hit mid-March of 2021, we think about the rollercoaster we’ve been on this past year. A year ago today, the stock market bottomed out. Given this wild ride and great volatility, it’s important to discuss the value of “time” in the market. We saw a very interesting tweet by Peter Mallouk, CEO of Creative Planning, which is a great depiction of what you should save incrementally at each stage of life to become a millionaire by 65 years-old with a 7% return.

As Peter Mallouk states above, “time” in the market truly does matter. It’s crucial to understand consistency, dollar-cost averaging, avoiding the noise, and understanding that there will be drawdowns in the market. Despite these drawdowns; however, stick with your long-term plan because the market will recover, as we have seen a year since the catastrophic lows. Starting early is an essential key to building your long-term wealth, as you can see in the figure below by JP Morgan.

For Brad’s deep dive on a year in the market and the true benefits of “time” in the market, check out the video below. If you have any questions about how to capitalize your financial situation or plan, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

https://youtu.be/_0-eEe76bgg 

How COVID-19 Has Impacted Women

As the coronavirus continues to sweep our country, we are seeing more and more data on how this past year has impacted certain demographics. One demographic in particular, women, have found this pandemic to be quite strenuous for various reasons. 

Women are really seeing a big impact from the coronavirus pandemic, especially when it comes to their jobs.

Not only have they lost the most jobs from the beginning of the pandemic, but they are exhausted from the demands of child care and housework — and many are now seeing no path ahead but to quit working. A large portion of job losses during the pandemic has come in businesses such as restaurants and hotels, both sectors with high female employment. 

In a recent survey by Daily Capital and Empower Retirement, women revealed that this pandemic has altered their confidence in their financial future. Below are some findings they discovered:

  • A majority (62%) of single working moms do not feel confident in their ability to plan for retirement. Conversely, less than half of the general population (40%) lacks confidence in their retirement plans.
  • More than two-thirds (64%) of single moms no longer feel confident in their ability to retire when they want. That’s in contrast to 43% of the general population.
  • More than half (52%) of single moms do not feel confident in their ability to build emergency savings. Again, this stands in contrast to 39% of the general population and 36% of single dads.

While this data is quite astounding, this brings light to discuss the importance of financial literacy and continuing to educate women on their finances. While the coronavirus pandemic has surely set back some women in their careers, they need to remain driven and determined to reach their financial goals, even if that might mean switching up their financial plan. It’s important to discuss these topics with a financial advisor who can help you alter your plan when life throws you curveballs or setbacks. If you have any questions, please feel free to reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute appointment here

How To Take Advantage of the Tax Deadline Extension

For those scrambling to get their tax returns together before next month’s deadline, you’re in luck. The federal income tax filing deadline has been extended one month, the Internal Revenue Service (IRS) and the U.S. Treasury Department announced this week. It’s official. The federal income tax filing due date for individuals for the 2020 tax year is now May 17, 2021 instead of April 15, 2021.

The 2021 tax filing season began on February 12th, 2021. The IRS is still urging Americans to file as soon as possible even though the deadline has been extended. The filing deadline extension applies to individual taxpayers, including those who pay self-employment tax, the IRS said. After May 17, Americans who have not filed will be subject to penalties, interest and additions to tax. 

Because the tax deadline has been extended, that means you have more time to fund your retirement accounts as well. Take advantage of this extension to make sure you are well prepared for the May deadline. If you have any questions regarding this year’s tax return, as always, reach out to your tax professionals or CPA for guidance on your particular circumstance. Additionally, for more detailed information, check out the IRS website detailing the fine print of this extension. As always, you can reach us with any questions at info@shermanwealth.com or schedule a complimentary 30-minute consultation here.