What Are Your Financial Resolutions for 2022?

Happy New Year everyone! We hope you all had a wonderful holiday season and new year celebration. When a new year rolls around, we often think about the year just behind us and set financial resolutions and goals for the year to come. So, let’s discuss a few great 2022 financial resolutions we’ve seen and recommend to ensure you are starting your new year off on the right foot. 

Prior to setting your financial resolutions, it’s a good idea to think about goal setting and how to set challenging, yet realistic and attainable objectives for the coming year. Take a look at our previous blog that lays out the framework of goal-setting, distinguishing between short and long-term financial goals, and sticking to your strategy in order to reach those goals. So, now that we discussed how to set those goals, what are some good resolutions to put in place?

Pay Off Debt 

Paying off debt seems to be a common financial resolution as we head into 2022. If you have loans or credit card debt, think about making a plan to pay it off and sticking to it. If you need assistance in setting up a strategy to tackle your debt, we are here to help! 

Set a Realistic Budget 

When it comes to finances, we see that individuals oftentimes are stressed or concerned about their budgeting and spending. Think about your cash flows, wants vs. your needs, along with long and short-term goals to reach a reasonable and realistic budget that works for you and your family.

Automate & Track Your Finances

If you aren’t already doing so, automating your finances is a crucial way to get organized. Aggregating all your accounts into one place that is accessible at the click of a few buttons on your smartphone can drastically change how you view your situation as a whole. If you are interested in utilizing our data aggregation software, let us know and we are happy to help you get started! 

Saving For Big Purchase/Goal

Whether it’s a new home, college, or a kitchen renovation, we know saving for a big purchase can be stressful. In our podcast episode with David Pearl, we discussed intentional and smart spending, and how there can sometimes be a psychological disconnect when saving for and actually spending money on a large goal. This disconnect and sense of stress is very common when saving for a big purchase, which is why it’s crucial to set up a savings plan and budget that works for you. 

Save for Retirement 

The contribution limits for 2022 have recently increased. If you are unaware of the retirement inflation-adjustments, check out our blog for a breakdown of those changes. This increase in contribution limits is a great opportunity to ramp up your retirement savings in 2022. Also, as we are only a few days into the New Year, make sure to review your company 401(k) match to ensure you are taking full advantage of your situation. 

While these are only a few financial resolutions that may help you improve your financial stability and situation in 2022, there are endless moves that can be made to better your overall financial outlook. If you have any questions about setting attainable goals and resolutions for 2022, email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here

End Of The Year Financial Checklist

It’s hard to believe, but the final quarter of the year is now upon us. As 2021 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 2021.

GATHER AND ANALYZE YOUR DATA

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.

REBALANCE YOUR PORTFOLIO

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. So in this instance, make sure to go back and double check you are happy with your current asset allocation and that you have no intended alterations.

MAX OUT YOUR 401(k)

If you’re planning to max out your 401(k) for 2021, mark your calendar for Dec. 31, as this is the last chance to do so. 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 that you haven’t maxed out, now is the time to do so.

CONTRIBUTE TO YOUR 529 PLAN

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 savings. These tax deductions reduce your taxable income, giving you a percentage reduction in taxes owed reflective of your tax bracket. Lots of states offer a state income tax deduction or tax credit so make sure to do some research to see if you qualify for one! 

MAKE ANY CHANGES TO YOUR HSA

If you have an HSA, now is the time to make appropriate changes or contributions to your plan. Every year , the IRS creates a contribution limits for health savings accounts and this year the limits have increased by $50 dollars for individuals and $100 for families. Check this out for other HSA contribution limits. 

CONVERT TO A ROTH IRA IF ELIGIBLE

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. 

CONTRIBUTE TO A DONOR ADVISED FUND OR OTHER CHARITABLE ORGANIZATION

Donor-advised funds are tax-deductible financial accounts provided by 501c3 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 get the full 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. 

If a DAF isn’t for you, many people look for ways to combine their desire to help the causes they believe in—including COVID-19 pandemic relief efforts—with their desire to save on taxes. Generally, if you itemize your deductions, making charitable contributions can decrease your tax bill, and since high‐income earners generally pay tax at higher rates, they may enjoy a particularly large tax benefit from charitable contributions. Check out our podcast with Elizabeth Goldstein regarding Donor Advised Funds and how to get involved.

CHECK ON YOUR ANNUAL SUBSCRIPTIONS

Now is a good time to make sure you are actually using all of those 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 2022. 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! 

What Happens If You Try To Spend More Than Your Credit Limit?

credit cards

When you sign up for a credit card, you are often assigned a credit limit when that account is opened.  These limits typically start at $200 and go up to tens of thousands of dollars.  With so many people out of jobs and finding it hard to make ends meet these days, credit cards have become a necessary resource to pay for things that we might not have the money for right now. However, the more you charge on your cards, the closer you may come to hitting that max limit.  If you do hit that amount, you are likely to get hit with over-the-limit fees. Before you decide to use your credit card to pay for necessities, there are alternatives to going over your max before risking having your credit limit cut or incurring unnecessary fees.  

Can You Go Over Your Credit Limit?

Yes, you can go over your credit limit, but there’s no surefire way to know how much you can spend in excess of your limit. Card issuers may consider a variety of factors, such as your past payment history, when deciding the risk of approving an over-the-limit transaction. Any approved transactions above your credit limit are subject to over-the-limit (or over-limit) fees. This credit card fee is typically up to $35, but it can’t be greater than the amount you spend over your limit. So if you spend $20 over your limit, the fee can’t exceed $20.

Due to the CARD Act of 2009, over-limit fees can’t be charged without your consent. As a result of these regulations, most card issuers have done away with over-limit fees and the default for any transactions over your credit limit may be that the transaction is simply denied.

If you do consent to a one-time over-limit fee, you can change your mind and opt-out at any time. However, in doing so, your card issuer will likely decline any purchases you attempt to make over your limit. Even if you opt-in to over-limit fees, transactions exceeding your credit limit may still be denied.

Should You Go Over Your Credit Limit?

While spending over your credit limit might relieve some short-term problems, it can also cause long-term financial issues, including fees, debt and damage to your credit score. The best practice is to try to maintain a low credit utilization rate – avoid maxing out your card and spending anywhere near your credit limit.  If you do go over your limit, you should sit down and consider why it happened in the first place and review your budget. You should figure out what purchases caused you to spend more and whether you can make any changes to your spending habits.

Alternatives If Your Credit Limit Is Low

For those that may have a low credit limit or if your credit limit recently got cut, there are some options to ensure you don’t max out your spending. If you’ve had a low credit limit for a while and currently have a stable job, you may want to request a credit limit increase. This can be a good idea if you have good credit (scores 670 to 739) or excellent credit (scores 740 and greater) or if you haven’t updated your income in a while and make more money than what’s listed. Your card issuer may pull your credit report for this request, which may cause a small, temporary ding to your credit score.

However, if your credit limit was reduced, you may want to consider other options. Cardholders with good payment history and a stable job should call their card issuer and ask for reconsideration.  You should ask why your credit limit was cut, explain that your account is in good standing and that you have a stable source of income to pay off your bill. This may shed light on why your limit was lowered and potentially result in your credit limit increasing — though there is no guarantee. Rather than asking for a credit limit increase on the card that had a reduction, you may want to consider any other cards you have instead. If you have three credit cards and one got the limit cut, see if you can get an increase on one or both of the other two,

If you have a history of missed payments or maxing out your cards, you are likely not a good candidate for reconsideration and don’t want to draw attention to yourself. Therefore, if you fall into one of these categories, it’s best to not try to request a higher limit.

When To Apply For A New Credit Card

Cardholders with only one credit card and a low credit limit may want to consider opening a new credit card, but should be aware of any potential risks. For starters, if you were recently laid off or faced a reduction in income, you may not be in the best position to be approved for a new card, and there’s no sense in adding a new credit inquiry to your credit report if your chances are low. Also, if you have a history of maxing out your card, you should be aware that more credit can lead to more debt. An additional credit limit can be helpful for affording your expenses, but it can also be harmful if you overspend.

Before opening a new card, give yourself clear guidelines on how you’ll use the card and stick to keeping a low credit utilization rate. When it comes time to pay your bill, make on-time payments of at least the minimum every month for all of your cards.  If you are able to do so, pay in full so that your credit score will  improve and your debt will be minimized. When applying for a new card, check your credit score first to narrow down your options. Then consider cards based on your credit score. 

In these tough times, we need to be responsible when it comes to spending and not see going over your credit limit as a choice. If you do need to use your credit cards to pay for utilities, groceries and other necessities right now, make sure you are aware of your max and other options you might be able to work out with the credit card companies before going over your limit. When you do receive those credit card statements, make sure to pay at least the minimum amount each month to maintain a positive credit score. And, make sure you are paying the bills on time to ensure you won’t incur any late fees either.  If you have any questions about credit, credit cards or other issues concerning your finances, please contact us.  We are all in this together and we’re here to help! 

Are Inflationary Prices Here To Stay?

Have you been feeling the impacts of inflation over the last 6-9 months? As many of us are starting to spend more money again on things we had been accustomed to pre-Covid, you are likely noticing that costs related to dining, travel, gas, and more have been on the rise. Over the last few months, we’ve been talking a great deal about inflation and the impact it is having on us all. 

As you may have been seeing in the headlines of CNBC and The Wall Street Journal, higher prices seem like they are here to stay when it comes to Uber and Lyft, FedEx and UPS, and even the dollar store. Last week we even saw US Crude Oil hitting a record high since 2014, reaching over $80 a barrel. We’re not the only ones talking about it- A CNBC article noted that Treasury Secretary Janet Yellen cautioned that inflationary pressures hitting the US economy could last a while. 

As we focus on this data and the likelihood of a longer term inflationary impact, how are you feeling about it? Some of you may be not panicking over the increased dollar here or there, but others are certainly feeling the impacts. What’s important to remember during a time like this is to not get overwhelmed, but to adjust your financial plan and budget. Revisit your wants versus your needs and decide what is a priority for you and your family. Since it now costs more to fill your tank with gas, maybe you can scale back on some of your take-out meals. In the event your spending habits change as a result of inflation, it’s key to align your budget with your cash flows and monthly expenses. If you have questions about how to realign your budget and spending habits with your financial goals and current economic situation, email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here.

10 Important Things To Discuss Before Marriage

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10 Things to Discuss Before the Big Day

You are excited, in love, and planning the wedding of your dreams. Probably the only money questions on your mind are the down payments for the caterers and the florists!

Yet – whether your wedding reflects a minimalist sensibility or is a no-holds-barred extravaganza – it’s better to have a good understanding of each other’s finances before the “I Do’s”. This is a time when procrastination could cost you a bundle, even if neither one of you currently have a lot of assets.

Getting married is more than just substituting the word “ours” for “yours” and “mine”.  It’s combining your finances, histories, dreams, aspirations, possessions – even your music – and making all of that “ours too. Since a significant part of those dreams and aspirations involve money, having multiple financial conversations before marriage (or right after, if you’re newlyweds!) can help you start married life on a firmer footing, with regard to financial goals.

Here are a few conversations that will get your marriage off to a smoother financial start:

1) Views on money. How we feel about money is often very emotional and very personal. Our family’s views on money can have a big impact on the way we see finances. In some families money may not be talked about. In others, one partner may hide money or spending from the other. While we might not consciously have these same behaviors, our upbringing will have an impact on how we feel about money and how we save, spend, and budget.

The best way to address unconscious – and sometimes conflicting – money behaviors is to start by recognizing how you each feel about money. Then you can take a practical approach and implement the best strategies from the past and incorporate them into your new relationship. This will also give you a chance to address any not-so-beneficial attitudes and behaviors and work to consciously change them.

2) Spending/Saving Habits. Chances are the two of you don’t spend and save money the same way. The interesting thing about spending and saving habits is that they give insight into priorities, both financial and otherwise because we tend to spend money on things we feel are most important and scoff at spending on things we see as unimportant.  Some people value saving more than anything and could be considered “tightwads”. Other people have a “live for today” attitude and spend whatever they have available, saving nothing or little for later. Most of us find ourselves somewhere in the middle.

Not agreeing on spending priorities can lead to serious conflicts down the line. While there is no right and wrong answer regarding priorities and habits, it’s valuable to know and understand each other’s habits earlier rather than later.

3) Divvying Up the Bills. This is an important conversation about how you will manage your money together. Will you have separate or joint accounts? Who will be responsible for paying the bills and investing for long term goals? A realistic understanding both of your current incomes and current debts is important so you can create a realistic budget based on your combined income and expenses.

4) Credit History. No one likes to talk about credit ratings because they highlight past mistakes and spending habits. Yet it’s essential to know and discuss your credit histories. This can help you talk about past money mistakes, current debt loads, and how to address any issues that are lurking. Having this conversation now will also help if you’re planning to borrow money for a large purchase, such as a home or car; credit history will effect how much you’ll pay in interest for loans, as well as how much it will cost for things like insurance. Many companies even pull credit for potential job applicants. When it comes to credit, it’s best not to have surprises down the road, so have the conversation now.

5) Risk Tolerance and Financial Goals. Couples often have very strong – and differing – feelings about risk and money that are deeply rooted in past experiences.  Your family may have gone through periods of unemployment, for instance, or  you may have grown up taking financial security for granted. One of your parents may have owned a business and you saw it go bankrupt,  so you might be very conservative with your money and not want to take unnecessary chances. Or perhaps they invested in a business that was a huge success.

Everyone brings a different level of comfort when it comes to risk tolerance and it’s important to understand your partner’s because it has an impact on spending and savings habits – everything from where you invest to how much money you want to set aside. Money provides a level of security that can be very powerful and risk tolerance is directly linked to that feeling of security.

6) Ongoing Financial Obligations. If this is a second marriage, are there child support or alimony payments that need to be considered in the budget process? If so, how much and how long will the obligations need to be fulfilled. Caring for elderly parents might also be a long term expense you will be facing as a couple.

7) Net Worth. When it’s a first marriage, often neither partner has much in the way of assets, but if one partner has more than the other, are you going to want a pre-nuptial agreement? When discussing net worth it is valuable to discuss not only current net worth, but also aspiring net worth. What household income level are you both hoping to achieve. Will reaching those aspirations include additional education? Will it mean switching jobs several times early in your career? Will it mean working 80 hours a week for decades? As a couple, understanding financial expectations and future net worth aspirations will help you plan a life together that will meet both of your needs, financially and emotionally.

8) Family Plans. The family size you hope to have will also have a big impact on your financial needs. Children, as wonderful as they are, are very expensive to raise. Do you both want to have children and, if so, one child or several children? Discussions about how the children will be raised and educated are also valuable from a financial perspective. Will one of you stay home to raise the children? Will you pay for day care? How far apart should the children be? Each of these answers will have a significant financial impact to the family budget.

9) Combining Physical and Financial Assets. Particularly with couples getting married later, both partners will have accumulated possessions that now need to be combined. This can be as simple as which sofa and bedroom set to keep, or more complicated when multiple homes, retirement accounts, and other investments are brought into the mix. Discussing whether property, accounts, and debt should be left in individual names or held jointly is also an important conversation to have.

10) Wills, Trusts, and Life Insurance. When you’re getting married, you don’t really want to think about death. Yet wills, trusts, and life insurance need to be updated soon after you say, “I Do.” This is true especially if you have assets or children. The process of obtaining a will or trust is fairly straightforward; it’s the discussions that lead up to it that provide the most value. Both of you should have a good understanding of what you have and what you want to happen, should the unthinkable occur.

Financial advisors can be a real asset, when it comes to pre-marital financial discussions. They can help you determine when it is best to hold assets jointly or separately. Assistance with budgeting and planning for long term goals will help you create a strong financial plan. Advisors can also guide you in building a strategy for reaching financial milestones.

So, if you’re getting married (or just got married), congratulations! And while these discussions may not be the most romantic ones you’re having, they do have the ability to bring you closer together. Planning together and sharing your dreams will give you better insight into the mind and heart of the person you’ve fallen in love with and allow you to become stronger partners when it comes to reaching your goals as a couple, emotional as well as financial.

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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. 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.

Financial Checklist for Newlyweds

Just tied the knot? Or getting ready for the big day? Well, no matter the situation, you are about to take the next step with your partner and should probably start thinking about next steps for your financial future. 

Below we will list some newlywed topics to think about when taking those next steps with your significant other.

  1. Changing Your Name 

Changing your name is a big step. But whatever you decide, you’ll need to make your new name legal as one of the first tasks of married life. If you do decide to change your name, it’s important hen changing your name, 

    2. Combining Your Money

Once you’ve taken care of any necessary name changes, it’s time to make some decisions about how your new household will merge and manage finances. It is important to communicate to understand who will be assuming responsibility for certain things and who will be contributing to the finances. 

    3. Think About Combining Insurance Plans

When discussing merging finances, remember insurance. Now that you are married, consider adding your spouse to your insurance plan to make it cheaper for the both of you. 

   4. Deicide Who Your Beneficiaries Are

Now that you are married, you probably will want to update the beneficiaries on all of your accounts, such as 401(K)’s, IRA’s , and bank accounts.

  5. Smooth Out Property Titles 

Now that you are married, are you moving in together? Did you purchase a house? Make sure to put each-other on the title of the house to represent that you both have ownership.

  6. Budgeting 

Communication is key. We have long talked about the importance of communicating with a spouse, especially when it comes to budgeting and spending. If you and your significant other are not on the same page when it comes to budgeting and spending, you may not be headed towards a solid financial future. 

While these are only a few of the topics you should incorporate into your financial conversations, the best place to start is establishing strong line communication. Communication is key in understanding each other’s views and building a strong foundation together. We recently recorded a podcast with psychotherapist and consultant, David Pearl, discussing how to have uncomfortable and oftentimes difficult money conversations with your spouse. For any questions or direction on your newlywed financial situation, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute meeting here.

Has COVID-19 Impacted Your Relationships?

COVID-19 has impacted our lives in so many ways. Work, relationships and finances have been taken for a whirlwind by widespread job loss and stay-at-home orders. 

Due to the global pandemic, relationships have shifted: Couples and singles alike are focusing increasingly on financial stability and transparency.

In a recent Personal Capital survey conducted by The Harris Poll*, nearly 2 in 3 Americans (61%) told us that the COVID-19 pandemic has made financial stability in a partner more important to them.

Financial stress affects couples in different ways. According to our survey, however, men feel the impact of financial stress in a relationship slightly more than women. They have also noticed that they are talking more about money with their partner, and — either in conversation or in private — they’re more likely to have contemplated a prenup. However, they don’t value financial stability as much as women do.

As a third party and fiduciary advisor, we can help drive a a big-picture money discussion, helping find a balance and strategy that both parties are comfortable with. 

We recently published a podcast with psychotherapist David Pearl about tips and ways to have those uncomfortable conversations with your significant other. In all, personal finance is just that — personal. When discussing it with a partner, it can feel vulnerable, and you can feel anxious or uneasy. However, don’t let those feelings distract you from having a productive and transparent conversation. Consider discussing with a financial advisor to help spark those conversations and find a happy medium when it comes to your finances. If you and your partner would like to discuss with us, please book a complimentary 30-minute consultation here. 

It’s Time to Re-Visit Your Life Insurance Options

As the new year is quickly approaching, end of the year planning is ramping up. While many are getting their finances in order for 2021, I want to bring light to a topic that you may have given little attention to: life insurance.  If you haven’t already, now is the time to reach out to a trusted professional to find out what your options are when it comes to life insurance. 

Each year, you should get an annual health checkup with your doctor to make sure you’re in good shape physically. The same thinking applies to your life insurance policies. You may find that you have adequate coverage, but it’s always important to revisit it each year. Your financial advisor or insurance provider can help you decide what type of strategy you should pursue when it comes to your life insurance policy. 

I recently revisited my life insurance policy and realized some things had changed since I had purchased it. Life insurance rates had gone down, there were better options, and my health had remained the same, if not better. By revisiting my policy, I was able to save money, as well as add on more life insurance. 

Keep in mind the importance of life insurance and remember to check in with your agent or other trusted professional at least once a year to see if you can benefit from a reassessment. In some instances, you may be able to pay less for a similar policy or obtain a policy with a higher value for the same cost or less based on the current rates. If you have any questions, please reach out to us at info@shermanwealth.com or sign up for a complimentary 30-minute consultation here.

Do you Need Financial Therapy to Deal with Money Stress and Budget Fights with a Spouse?

Do you fight about money with your spouse or significant other? Do you have trouble following a budget – assuming you even have one? If so, you might want to consider seeking financial therapy, coaching, or a financial advisor.  

What is financial therapy?

Think of it like psychotherapy. But instead of improving your state of mind it seeks to improve the state of your money. In essence, it’s supposed to help you behave differently, and for the better, when it comes to how you handle your money.

Do you need coaching, not therapy?

Given the year we’ve had with the coronavirus pandemic, which has led to massive layoffs and economic turmoil, it’s not a surprise that money issues may have caused fights between you and your significant other. In some of these scenarios, financial coaching is the way to go. In times that are economically tough, it’s important to tighten up your budget and learn ways to strategically stabilize your financial life. 

Consider meeting with a financial advisor. Here at Sherman Wealth, we challenge our clients to think differently about their money and coach them towards positive financial outcomes. We help our clients avoid making decisions persuaded by behavioral and investment biases, such as selling and buying mutual funds and stocks at the wrong times. Financial coaching will help you learn bucket strategies for savings, the importance of budgeting and ways to strategically build your wealth. If your finances are having a negative impact on your health and relationships, it is key to seek help from a professional in the field. Talking with a financial advisor can help you work through some of those miscommunications and misconceptions towards a positive outcome. 

Where to find help

If you believe a financial coach is best for your situation, please reach out to us at info@shermanwealth.com or sign up for a free 30-minute consultation on our site. Our team is happy to help you get your finances on track and get you to a place where you are feeling positive about your financial life. 

How Much Retirement Savings Is Enough? Why Couples May Disagree

As couples combine their finances and think about their financial future, its common for the conversation to be uncomfortable or tricky. While one individual in the relationship might think about money one way, the other party could think about it completely different. Just know, it’s normal and okay to have different background and approaches to money, but that communication is key in coming to a solid compromise and understanding. 

The first step is communication. When discussing your finances, it’s important to communicate and feel open about discussing an often uncomfortable topic such as money. 

The Wall Street Journal highlighted an issue that can get overlooked in retirement planning: the financial burdens that women, in particular, face late in life.

A survey last year by the National Council on Aging and Ipsos, a polling and data firm, found that fully half (51%) of women age 60 and older are worried about outliving their savings. In the same survey, almost six in 10 women (59%) said they are worried about losing their independence.

According to the survey, women, of course, typically live longer than men—about five years, on average—and are more likely to live their final years alone. In 2019, almost half (44%) of women age 75 and older in the U.S. lived alone, according to the Administration on Aging. 

As you can see from the survey data reference above, both men and women often have different expectations on how much money they need for their future, which is normal. Again, make sure to communicate and research with your partner to insure both individuals are comfortable with their finances and savings. Of course, a good financial adviser also can make a difference. But the most important step is to talk about retirement and how your finances might play out before you get there. If you have any questions, or want to discuss retirement with us, please schedule a complimentary 30-minute consultation.