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Blog Archive May 2019



Accounts to Consider When Planning for the Future

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When planning for retirement, there are several options to consider and the most effective way to save your money is paramount. Various types of accounts are available that earn interest and provide tax savings but many also stipulate limitations and disadvantages you should be aware of.  Here is a breakdown of the most popular accounts and some unnoted accounts that might be worth considering. 

401(k), 403(b), 457 – These plans are offered by employers and usually the easiest way for most to begin investing for retirement. Your contributions are automatically deducted from your paycheck, pre-tax, and if you are fortunate your employer will match a part, or all of it. The contribution limit for 2019 is $19,000, unless you are over age 50 in which case your limit is $25,000. Unfortunately, the average employee does not utilize about $1,336 per year of employer match contributions. Over the span of your career, this can result in a nearly $1 million loss of retirement savings.

SEP IRA – SEP stands for Simplified Employee Pension and is designed for those who are self-employed or small business owners. Up to 25% of your income or $56,000 can be contributed to the account per year, whichever amounts to less.

Simple IRA – Business owners with less than 100 employees can offer this tool for their companies. Many business owners feel that their budget is usually too tight and they are already overwhelmed with the responsibilities of their new business to consider retirement plans. However, the tax savings benefits are enormous and the long-term advantages are priceless.

This plan is not as difficult or expensive to implement as a standard 401 (k) plan. As an employer, a contribution match is required but it does not have to be equal to the employee contribution. Employees can contribute up to $13,000 in 2019 and there is a $3,000 catch-up contribution for those age 50 and older.

IRA – An Individual Retirement Account is for anyone that can contribute up to $6,000 ($7,000 for age 50 and over) per year and have their money increase, tax free while it remains in the account. Taxes are paid when money is withdrawn from the account.

Roth IRA – This IRA functions differently than the others. Contributions will be made post-tax, therefore you will not receive a tax advantage when you put money into the account. However, your money will still grow in the account tax-free and the advantage of this account is that your money will be withdrawn tax-free after you reach age 59.5. This type of account does not have a minimum required distribution so you will not be required to withdraw funds at age 70.5. To contribute to this account, a single person must earn less than $135,000 and if married and filing jointly you must earn less than $186,000.

HSA – A Health Savings Account is generally used for health and medical expenses, however, those with high deductible health insurance plans can use this account to save money, tax free. Contribution limits are $3,500 for an individual and $7,000 for a family. Those 55 and older can contribute an additional $1,000. The money can be used at any time for allowable expenses. Money not used rolls over for subsequent years. It can accumulate to be used later in life when medical costs are assumed to be higher and will remain tax-free. If the funds are withdrawn before age 65 for non-medical expenses, a 20% penalty will be incurred. 

Cash Balance Pension Plan – This account was designed for those earning a high income and wanting a personal pension. Small business owners can implement this plan to reduce their tax liability if they combine it with a Profit Sharing 401 (k) Plan. As a business owner, you would have to contribute towards your employees’ plans as well. Of course, this account is only useful if you to save sizeable amounts of money which would be pre-tax. Before utilizing this account, it is beneficial to maximize the previous accounts described.

Non-Qualified Annuity – These types of plans are beneficial for those seeking guaranteed income that is not promised from a mutual fund or ETF.  While they may seem enticing because of the guarantee, you must also consider that it comes at a high guaranteed cost in fees. Annuities are often advised by stock brokers who will benefit from their high commissions. However, there is hope. There are newly regulated Fiduciary Rule compliant annuities that will be fee-only. Ask to have your old policy reviewed to reduce your ownership cost, or if starting a new one, be sure to request a fee-only annuity. Again, this type of plan should be used once all of the other basic types have been utilized for maximum long-term advantage


Should You Consider Starting A Business After Retirement?

Elderly man looking at cell phone.

The traditional idea of retirement has drastically changed from previous generations. Most who retired in the years between 1960 and 1970 were about age 65 and ceased working altogether, lived off of their pensions and looked forward to years of life without a boss. Today people retire at various ages, young and old, with plans to travel and increase relaxation, but many maintain ties in the industries they left, for good reason. Some have found that their career experience serves them well as advisors and consultants, allowing them flexible, highly paid hours on their terms. Others are getting a second wind by starting new businesses. This trend has actually grown in recent years. In fact, one-third of all small businesses in the United States are owned by 50 to 59 year olds, 17% by 60 to 69 year olds, and as much as 4% by 70 year olds and older.

There are several advantages to becoming a business owner after retirement.

Added Income 

The most obvious is additional income. Supplemental cash to cushion your retirement savings can help reduce the ways you might need to adjust your budget. There are so many productive uses for extra income that can benefit your retirement years such as paying down debt, avoiding the sale of investments to pay for expenses or paying for health insurance if under the age of 65.

Brain Power

Keeping your mind engaged after years of constant stimulation may seem like the last thing you want to do, but studies show an idle brain slows quicker than one that is active. A business would be ideal to keep your mind sharp. Keep in mind your new business can be completely different from the industry you retired from, perhaps even in a different location, so that you feel as if you’ve cut ties from the job you needed a break from. In fact, a new profession may be the key to keeping your brain young. Learning new skills, computer programs and meeting new people will boost your sense of self and stimulate your brain into high gear. 

Family Bonding

Starting a business at retirement age can be a good time to involve family. Since your time can be fully dedicated to the business, this can be a great opportunity to create both an income and purposeful interaction with your children.  The ideal scenario of eventually having the business prosper and provide a financial opportunity to the next generation is a priceless asset to leave to your heirs.  

Retaining your sense of value

Many fear retirement for fear of feeling useless. Years of accumulated knowledge and experience should never be left untapped. Using that wealth of information in some capacity is beneficial to your sense of self as well as those who are fortunate enough to receive it. Continuing a business of any type in which your expertise can be used for a profit after retirement will keep fear of inadequacy at bay.

Things to consider when deciding to start a business

How will you fund the start-up expenses of the business? Investors are a great option so as not to use your precious retirement savings. Overestimate start up costs so as not to risk debt or depletion of your savings.

Are you prepared to commit the amount of time necessary to this business to ensure it is a success? Launching any business is time consuming and stressful. Choose a business type that you are passionate about and the effort will be much more enjoyable. 

What is your long-term plan for the business? Decide if your goals for the business are to reach a certain profit amount, or for a designated amount of time. This plan may evolve over time but having an initial business plan to refer to as challenges arise will help the decision making process as you move forward.

Solutions to Economic Trials Many Women Face Throughout Their Career
Close up of business women putting together two puzzle pieces

Consider the following statistic:

Women aged 35 and older in the United States earn, on average, only 74% to 80% of the earnings of their male counterparts.

This fact, along with many other factors that affect a woman’s career pursuit, take a negative toll on life long earning potential and retirement saving that can be attained.

Let’s review some of the most common situations women encounter that lead to career regression and possible solutions to resolve them.

Career Stereotyping

The corporate world has made efforts to improve regarding gender inequality but there is still much work to be done in that arena as well as many other aspects of the work force. Many professions and trades today are still predominantly female or male. For example, jobs in childcare and education are typically filled by women.  These types of jobs often pay less than other male-dominated trades such as electricians or plumbers. Most females do not consider many higher paying trades or professions due to the fact that they are predominantly male.

To avoid such stereotyping, it is crucial from childhood to implement a sense of confidence in young girls to aspire to any profession. Parents must remove the stigma limiting careers based upon a stereotypical bias. This concept should also be reinforced through their school and counselors. 

Self Worth

Women are more likely to be underpaid for their professional contributions than men. Unfortunately, women are also most likely to undervalue themselves and therefore not ask for the raise or promotion they deserve. To avoid being taken advantage of, do your research. Ask a recruiter for a salary average. Keep notes of all the ways you add value to your team or company, financially or otherwise. Include ways you plan to do so in the future. Once you feel confident in all the ways you have proven you are worth the raise or promotion you are seeking, arrange a time with your manager. Present your value and reasons for your request ending with an invitation for his/her feedback. If you are denied, ask what areas you could improve upon or learn more about to earn your request. Also ask when you can revisit this topic again. Always keep in mind if the situation is truly not fair, you may need to consider changing jobs.


Women often stop working or reduce their working hours from full time to part time when they have a child.  Financially, this is a time period with increased expenses but a decrease in income. As a result, unless you have a very detailed, accurate budget to which you adhere very strictly, debt can very easily accumulate. Planning ahead is one way to avoid this scenario. Looking over all of your bills and expenses to determine what may be avoided or reduced, as well and projecting the additional expenses that will be added once the newest member of the family arrives, will help avoid the unexpected onslaught of new costs.Lowering cable bills, finding better rates for insurance and avoiding entertainment costs are just a few ways that can reduce expenses. Some women have transitioned to working from home rather than cutting hours completely to avoid a decrease in income.

Also consider that women who leave the work force for an extended period of time to raise children not only lose the income that would have been earned during that time frame, but also the salary increases, retirement savings and professional worth of the years absent. This total can amount to a great deal in the long term. If one were to decide to focus on motherhood, it should always be a consideration to remain knowledgeable and relevant by taking classes, maintaining certifications and/or maintaining relationships with professional colleagues. When the desire or need does arise for a woman to return to the work force, these steps will ensure that the transition will be easier and the financial aspect should not be below market value because of absence.


Tactics used by Efficient Executives to Manage Their Overwhelming Email Inboxes

Close up of man checking email on laptop computer.

The constant ding of an incoming email is commonplace for most business people. The time it takes to read and reply to every e-mail received is not only impossible but unproductive for a busy entrepreneur. Here are some solutions discovered by some highly successful CEOs and business owners who have figured out how to stop the email madness.
Tamara Mellon - co-founder and Chief Creative Officer of luxury footwear brand Tamara Mellon, as well as co-founder of Jimmy Choo, recommends having a trusted second set of eyes to avoid missing anything important. She gives her assistant access to her inbox so she doesn’t have to worry about skimming e-mails in a hurry. She has also implemented an internal communication system within her company called Slack to avoid additional e-mails. Slack is a cloud base collaboration tool that allows users to separate messages, discussions and notifications by type, purpose, department or topic.
Joshua Harris – founder of Agency Growth Secrets, stresses the importance of eliminating junk mail. Unroll.Me is a great tool that lists everything to which you are subscribed and allows you to choose which you would like to unsubscribe from with one click. Follow that with a regular batch approach of archiving, deleting and responding. Lastly, he answers e-mail only once per day, requesting notification only for important e-mail for the rest of the day. This reduces anxiety and compulsive e-mail behavior.
Jason Capital – best selling author, high-income coach, online marketing expert and founder of High Status, suggests to not feel compelled to respond. His theory is, if it truly is urgent or important, the person will call or text. His e-mail box is so overwhelming it would be impossible to respond to everyone. The result? More time, more freedom, less guilt.
Patch Baker – founder and CEO of Mobius Media Solutions, refuses to read or reply to an e-mail longer than 3 lines. If it requires longer than 3 lines, he’d rather use the phone. He has a zero e-mail policy within his company. Instead they use Skype and Basecamp.
Andres Pira – real estate developer, author and CEO of Blue Horizon Developments and owner of 19 companies, Andres must trust and delegate. He includes his various management teams on his emails so they can reply on his behalf. He also used flags, categories, labels and shared folders to stay organized. He primarily uses instant messaging apps on his phone to stay organized. This avoids long threads and formal replies. It also eliminates the need to spend time on punctuation, salutations and signatures.
Keri Shull - founder of the Keri Shull Team which has sold over $2 Billion in real estate and co-founder of real estate coaching business HyperFast Agent. Keri’s advice is to learn to let go and trust that it will be okay. For several years, she refused to give anyone access to her e-mail, fearing lack of confidentiality and worry that she would no longer be on a personal, authentic level with her recipients.  She finally realized she needed help when she couldn’t even enjoy a day of vacation without checking e-mail because it was so overwhelming. Since letting go she has experienced an incredible sense of freedom. To keep her personal touch, she has written scripts in her own words for her staff to use when replying on her behalf.
Unfortunately, not everyone can avoid e-mails altogether or have someone else respond for them. If that’s the case keep these guidelines in mind:
Does the email really require an e-mail response? Would a call be a better approach to eliminate further emails?
Avoid lengthy e-mails. Get straight to the point. Unnecessary e-mail writing and reading are a huge source of non-productivity.
Carefully consider the recipients of the e-mails you send. Many times “Reply All” is selected or executives and co-workers are CC-ed or FYI-ed. This doesn’t make it clear if an action is required by them or if they are only being made aware of the topic, which leads to many more e-mails. Most times, many of the people included do not need to be.
Bullet point is preferable over sentences. It makes it easier for most to grasp the info while reading through quickly.
Check spelling and punctuation! Keep in mind an e-mail can be forwarded easily and end up in anyone’s inbox. You don’t want to make a bad impression. The way you write does create an impression of you.
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