YEARLY ARCHIVES: 2018

This is Not Your Father’s Retirement

 

If retirement planning seems like it is more complex now than it used to be – it’s because it is!  Your goals are different and you have more options than ever, which can be overwhelming when trying to make the right choices for your future.  Should you be saving more in your employer retirement plan?  Should you be taking advantage of ROTH IRA contributions?  How much of your portfolio should be invested in stocks and how much in bonds?

It used to be that people worked for one company their entire career and then retired at age 65 with a pension and social security.  Nowadays, we’re likely to change careers frequently and having a pension is the exception rather than the rule.  Combine that with the fact that we are living longer and you can easily become overwhelmed trying to figure out if you are saving enough and making sound financial decisions for your future.

Working with a financial planning professional can help alleviate the stress and provide you with peace of mind that you are on track to meet your financial goals.  Building a financial plan will help organize your financial life and keep it that way for the rest of your life.  Here at AHC Advisors, we’ll work with you to learn about your financial goals – including your vision for your retirement.  We’ll not only advise you on your investment portfolio but work with you on tax planning, education planning, insurance planning and much more.  We become the financial partner you can count on!  Check out this short video that shows how we can collaborate to help alleviate some of your concerns.

The information being provided is for informational and educational purposes only. It is not intended to provide specific advice or recommendations. All efforts have been made to report true and accurate information.  The information being delivered today is subject to change without notice. For additional information about AHC Advisors (CRD #127364) please visit the SEC Website at www.adviserinfo.sec.gov.  For a copy of the firms ADV Part 2 Brochure, please contact us at 630-762-8185 or e-Mail at info@ahcadvisors.com. Please also see our website at www.ahc.advisors.com

7 Financial Tips for Young People

“I wish I would have built a financial plan when I was in my 20s”.  This is one of the most common phrases I hear from financial planning clients once we have finished their plan.  Don’t we all wish that we could share our current wisdom with our younger selves?  Not only would we all have had financial plans in place before age 25, but we would have avoided a whole bunch of other missteps that we invariably took along the way.  Some unfortunate fashion choices in the 90’s come to mind!

While it might be too late for some of us to change our past decisions, those of you in your teens and 20s still have plenty of time on your side!  Below are 7 tips that all young people should consider following.

1. Really consider how much college debt you take on. A college education is important, and often necessary, depending on the career you plan to pursue.  However, saddling yourself with a large amount of college loans right out of school will put you behind on saving for retirement and other large purchases, like a home.  One way to manage the cost of a college education is to do two years at a community college before transferring to a 4-year university to finish your degree.  Also, make sure to do your financial aid research.  Talk to the financial aid department at all schools you are considering to find out what they are willing to offer.  Search out grant and scholarship opportunities that exist.  There are many websites and apps that can assist you in this search.  Finally, consider getting a part time job while in school to help pay some of your living expenses.

2. Learn to handle credit responsibly. Get a credit card and start using it for small, recurring expenses.  Good expenses to start with are things like gasoline and groceries.  Make sure to pay your credit card bill in full each month.  Good credit will be important to you when it is time to begin making large purchases like a car and a home.  You will qualify for lower interest rates if you have a good credit score.  It takes time to build your credit record since it is based upon things like length of credit, types of credit (revolving vs. loans) and on-time payment percentage.  Starting to build your credit record at a young age will be beneficial to you if you handle it responsibly.

3. Create a budget. Learning to live within your means is an important skill at any age, but starting to budget when you are young will make it that much easier to carry the habit into the future.  Choose an online website (such as Mint.com) that will make your job of budgeting easier.  These online tools allow you to link your bank accounts and credit cards and will begin tracking and categorizing all of your transactions for you.  You’ll want to review your total income vs. spending periodically to make sure you aren’t spending more than you make.  You’ll be able to set up budgets for individual categories and even get text notifications if you go over your pre-set budgets.

4. Start Saving for retirement as soon as you get your first job. The biggest secret to creating wealth is simple – time.  The sooner you start saving the longer your money will have to grow and compound.  Take advantage of the power of compound earnings over time by starting to contribute to your employer retirement plan the day you get your first job.  Sign up to contribute 10% of your salary directly to your company’s retirement savings plan and you’ll be putting yourself on a strong financial path.  If you delay starting retirement contributions until your 30s or 40s, you will have to contribute a significantly larger percentage of your salary each year to catch up.

5. Always maintain an emergency fund. You should always have 6 months’ worth of expenses set aside in a savings account.  This is the money that will get you through any hard times that you experience.  This could be something like an expensive car repair or an unexpected medical bill.  It could also be something much larger like losing your job.  Having an emergency fund in place will keep you from going into debt when life throws you a curve ball.

6. Manage your risk with insurance. Insurance exists so that you can share the risk of something bad happening with other people.  If you own a car you need to have auto insurance.  If you own a home you need to have homeowners insurance.  However, there are other types of insurance that are not good to have, even if they are not required.  You should consider having renters insurance if you rent a home.  Renters insurance will cover the cost to replace damaged or stolen personal items.  When you get your first job you should make sure that you have disability insurance.  This is insurance that will continue to pay you a portion of your wages even if you are unable to work because of a disability.  Oftentimes you can purchase disability insurance through your employer but you can also purchase it in the private marketplace.  When you reach a point in your life where other people are dependent upon you (for example, a spouse and/or children) you’ll want to make sure that you purchase life insurance to protect them in the event you die young.

7. Avoid lifestyle creep. Decide now that you are not going to live your life trying to “keep up with the Jones’”.  One of the most harmful financial choices people make is to keep expanding their lifestyle every time they get a raise.  This not only means that they save less over their working life, but they also become accustomed to a lifestyle that they won’t be able to maintain in retirement.  Make a promise to yourself now that every time you get a raise you’ll use at least half of it to increase the amount you save each year.

Follow these tips and you’ll have a good (and early!) start towards financial independence.  These early steps are things you can do easily by yourself.  However, you should consider working with a Certified Financial Planner™ to build a financial plan once life starts getting more complicated.  A good time to build a financial plan is at big life milestones, such as getting married, having your first child or getting a big promotion.  A financial planner is skilled at helping you look at the big picture and make good money decisions that will help guide you towards your future goals.

 

The information being provided is for informational and educational purposes only. It is not intended to provide specific advice or recommendations. All efforts have been made to report true and accurate information.  The information being delivered today is subject to change without notice. For additional information about AHC Advisors (CRD #127364) please visit the SEC Website at www.adviserinfo.sec.gov.  For a copy of the firms ADV Part 2 Brochure, please contact us at 630-762-8185 or e-Mail at info@ahcadvisors.com. Please also see our website at www.ahc.advisors.com

New Tax Bill – Changes Likely to Impact You

Tax day 2017 was a few weeks ago and if you’re like me you probably breathed a big sigh of relief! However, now that you’ve had some time to recover you have the opportunity to do yourself a big favor and start planning for 2018. Early planning each year can help save you money! You may recall that Congress passed a new tax bill in December. While the tax bill did not impact your 2017 taxes it will have an impact on your 2018 taxes. Below are some key items from the new bill that you should be aware of.

The tax bill retained seven tax brackets. However, most of the tax brackets have been reduced by a couple of percentage points. Visit the Tax Foundation Website to see the new tax brackets.

Fewer people will decide to itemize their deductions in 2018 because the standard deduction has increased substantially, and new limits were placed on popular deductions. The new law retains the option to take either the standard deduction or to take itemized deductions – whichever is higher. However, a limit on some popular deductions such as mortgage interest, state taxes, and property taxes will likely mean that many people will be better off claiming the standard deduction. The standard deduction for an individual filing single has increased to $12,000 from $6,300. The standard deduction for a couple filing jointly has increased to $24,000 from $12,700. You can add on another $1,300 to your standard deduction if you file jointly with your spouse and are over the age of 65 ($1,600 if you are single).

The old law allowed you to deduct interest on a mortgage loan balance of up to $1 million. Under the new law, the interest deduction will be capped at home acquisition debt of $750,000. Mortgages taken out prior to December 15, 2017 are grandfathered under the old rules.

State income taxes and property taxes were popular itemized deductions under the old law. Under the new law you will be limited to a combined deduction of $10,000 for state and property taxes, so it is likely that many people will be better off taking the standard deduction instead of itemizing their state and local taxes.

Personal exemptions have been eliminated under the new law. In 2017 you were allowed a personal exemption on your tax return of $4,050 for yourself and each dependent (though the exemption was phased out for high income earners). In 2018, no one will be able to claim a personal exemption.

The child tax credit has been expanded for those with children under the age of 17. The credit has been raised to $2,000 from $1,000 per child. This credit will still phase out for high income earners, but the income thresholds have increased significantly. The threshold for single filers has increased to $200,000 from $75,000, and for married tax payers filing jointly the threshold has increased to $400,000 from $110,000.

This is not a complete list of all changes under the new tax law, but they are some of the changes that will impact a large number of taxpayers. If you’d like to learn more about the tax bill you can visit the IRS Website for some additional information.

Consider whether any of these changes are likely to impact you and whether there are any tax planning decisions you can make during 2018 to reduce the tax bite come next April. If you’re not sure what tax planning moves may be beneficial to you, think about reaching out to AHC for advice.

The information being provided is for informational and educational purposes only. It is not intended to provide specific advice or recommendations. All efforts have been made to report true and accurate information.  The information being delivered today is subject to change without notice. For additional information about AHC Advisors (CRD #127364) please visit the SEC Website at www.adviserinfo.sec.gov.  For a copy of the firms ADV Part 2 Brochure, please contact us at 630-762-8185 or e-Mail at info@ahcadvisors.com. Please also see our website at www.ahc.advisors.com

AHC Advisors Awards Ownership Interest to Jorie Pitt

February 7, 2018

AHC Advisors, Inc., a fee-only financial planning and investment advisory firm, today announced that Jorie Pitt, CFP®, has been named principal and shareholder.

Pitt has been with AHC Advisors since 2011, and currently holds the position of Lead Financial Planner. In announcing her new ownership interest, AHC Advisors founder Craig Larsen, CFP®, cited her demonstrated excellence as a financial planner, and her commitment to continually enhancing the service that AHC delivers to its clients.

“I was thrilled to offer this ownership opportunity to a well-deserving employee who has excelled as a financial planner,” Larsen said. “Since day one, Jorie has exhibited a commitment to delivering superior service to our clients, especially those going through a time of transition.”

Larsen, who will continue to lead AHC Advisors as its President, said Pitt’s commitment to clients’ financial well-being, as well as her efforts to continually enhance the service that AHC delivers to its clients, played a key role in his decision to offer her ownership in the firm.

“I am very proud that she has grown into a leader both in the company and in the financial planning industry,” he said. “She is dedicated to helping families and individuals make sound financial decisions, and is expert in helping our clients through times of transition.”

In addition to her role as Lead Financial Planner, Pitt has also held the post of President of the Financial Planning Association of Illinois. She is invited regularly by community organizations and employee groups to share her expertise on a variety of topics.

Pitt is a graduate of the University of Illinois, Champaign, which she attended as a Chick Evans scholarship recipient, and has attained the CERTIFIED FINANCIAL PLANNER™ designation and Series 65 securities license. She is enrolled in training to obtain the Certified Financial Transitionist® (CeFT®) designation.

Pitt said she felt humbled to be awarded an ownership interest.

“I’m fortunate to be a part of a firm that places clients’ goals at the forefront of all the work that we do,” she said. “At AHC, I strive to help people feel good about their money decisions, which in turn directly impacts their ability to live a fulfilling and enjoyable lifestyle. I particularly enjoy working with individuals and couples who are going through a time of transition. I get a lot of satisfaction from helping a client emerge on the other side of their transition with confidence and a fulfilling path forward.”

In addition to holding the post of President of the Financial Planning Association (FPA) of Illinois, Jorie served as director of public awareness and director of finance for the organization. Pitt is also a member of the National Association of Personal Financial Advisors (NAPFA). She is among the CFP® and FPA professionals who offer pro bono advice to Chicagoland residents through activities such as Financial Planning Day, Age Well DuPage, and MoneySmart Week.

About AHC Advisors, Inc.

AHC Advisors, Inc., serves as a partner in clients’ financial freedom through comprehensive wealth management services, and offers expertise in helping its clients through times of transition. As a fiduciary investment advisor registered with the Securities and Exchange Commission, AHC Advisors offers fee-only financial planning and investment advice through its offices in St. Charles, Illinois, and Des Moines, Iowa. For more information, visit the firm’s website at www.ahcadvisors.com.

Contact Information

Jorie Pitt, CFP®

380 S. 1st St.
St. Charles, IL 60174
(630) 762-8185

joriepitt@ahcadvisors.com

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
This material is intended for informational purposes only. It is not intended to provide specific advice or recommendations for any individual.  The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report true and accurate information.  The information being delivered today is subject to change without notice. For additional information about AHC Advisors please visit the SEC Website at www.adviserinfo.sec.gov.  For a copy of the firms ADV Part 2 Brochure, please contact us at 630-762-8185 or e-mail at info@ahcadvisors.com.