Author: SynergiaFinancialGroup

As the U.S. population continues to age, the “sandwich generation” is caught in the middle, supporting both their parents and their children, whether financially, physically, or emotionally. This generation is the middle-aged generation supporting the baby boomer generation—now the largest generation ever.

By 2035, one in three heads of households will be someone age 65 and older. The American population will have one in five people age 65 or older, increasing 30 million people over the next thirty years. As our population ages, the cost of affordable care and accessible services will continue to grow, and many will find taking care of their parents the only reasonable option. However, the cost of care impacts those taking care of their aging parents as their incomes are at stake with reducing work hours or eventually discontinuing work altogether.

“The “sandwich generation” — a group of Americans who are caring for children under 18 and older relatives at the same time. Twelve percent of parents are part of the sandwich generation, according to data from the Pew Research Center. Sandwich generation parents who are between 18 and 44 are spending about three hours per day on caretaking, compared with similar parents over 45, who do closer to two hours per day. This difference is likely because the younger parents also have young children.”  –‘It’s Pretty Brutal’: The Sandwich Generation Pays a Price, The New York Times, Feb.18, 2020.

While seniors plan to stay in their own homes, only half think they’ll be able to stay until the end of their lives and will need to rely on their adult children. Common concerns of aging seniors include:

• Personal care
• Household chores
• Money management
• Meals
• Healthcare
• Getting around/transportation
• Staying active and maintaining friendships

Taking care of Boomer Parents takes planning.

While you never know what your parent’s needs may be as they age, the first step is thinking about what help they may need in the future. Do they have health issues now? Will there be a progression of their illness over time requiring special care or modification of their home? Health problems can make it hard for someone to care for themselves as they age.

Your parents can get almost any type of care at home-but at a cost. Check into home health care in their areaand include health care costs (including long-term care) in your financial planning. Health care is one of the highest expenses your family will have, especially as your parent’s health issues arise. Your aging parent may need to downsize to a smaller home, live in an assisted living facility, or a long-term care facility. You and your parents may choose to live near or with family members until you can no longer care for them.

If you plan to help your parents as they age and require care, it’s important to discuss your intention with your family and financial professional and start planning to make it possible.

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Summer is here, and many Americans are ready to get outside and enjoy it! As every state warms by June, outdoor activities help us rise from our winter dazes. Outdoor activities offered by your local parks and rec centers are a great way to remain COVID safe as our country slowly lifts restrictions. Remember to check out parks and rec programs for often free or inexpensive activities to enjoy this summer. Here are some activities your local parks and rec center may offer in your community:

• Running, throwing, or kicking a ball are age-appropriate movements for children and essential for physical development. Introduce your child to sports through your community’s parks and recreation programs to familiarize them with the game and associated movements.
• Exploring a local nature reserve and an introduction to plants and wildlife in your area.
• Swimming lessons
• Making art from natural materials through scavenging for leaves, pieces of bark, and other natural elements to create a mural or other work of art.

Here are some additional summer activity ideas for kids, pre-teens, teens, and the whole family:

Outdoor activities for kids age five and under- Studies have shown that kids who spend time outdoors are generally happier and more relaxed. Time outdoors helps to improve short-term memory, concentration, and cognitive skills as well!

• Schedule a COVID-safe outdoor playdate for your children with their friends.
• Plan a picnic with your child’s favorite snacks in tow and head to the park to play.

Summer fun for pre-teens- Getting your 9–12-year-old outside is vital to strengthen their mental health. Outdoor activity helps your child become more engaged in learning, exhibit more positive behavior, and receive physical benefits as well.

• Organize a scavenger hunt for your pre-teen to get them engaged and moving, including enticing prizes to get them motivated to participate.
• Set up camp in your backyard and encourage your pre-teen to make space of their own. This activity creates a sense of ownership over the activity encouraging them to stay outside longer.

Excellent activities for teens- Your 13–17-year-old needs to get outside too! This age is perfect for instilling the habit of exercising and an appreciation for nature. Teens should be getting outside (and enjoying their last few years as a kid) as much as possible.

Plan a longer-than-usual bike ride for you and your teen by researching biking paths in your community. Biking is a great way to help them explore their surroundings and take risks (under your supervision).

Check for drive-in movie theaters in your area or plan an outdoor movie event in your yard.

• An evening under the stars with your teen’s favorite movie is a great way to encourage an appreciation for the outdoors.
• Watch the sunrise and sunset from a new vantage point.

This summer, remember to check out your community’s parks and recreation programs for adult programs as well. Enjoy your summer!

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June 28th is National Insurance Awareness Day which prompts the question of whether you are adequately covered. Right now is a great time to assess your insurance coverage and evaluate your risk of being underinsured.

The importance of having life insurance coverage

The idea of having life insurance coverage can feel daunting. Still, the meaning of it is simple: life insurance protects your family from financial hardship if you were to pass away unexpectedly. Life insurance will help your family provide for lost income, help cover bills, and debts left behind, cover funeral expenses, and help pay for other financial obligations. If you have a spouse or dependents, life insurance is one way to protect the people you love.

Ways to evaluate your coverage needs

If you have someone that depends on you to support them financially

Whether you have dependents

If you have debt

You lack financial resources to cover expenses related to death—your funeral, estate expenses, attorney fees, etc.

If you answered yes to any of the above scenarios, life insurance might be an option for you to consider. Purchasing a life insurance policy for the correct death benefit amount to cover all of your financial obligations is essential. Here are two options for you to consider:

Universal Life Insurance

Universal life insurance provides a guaranteed death benefit while accumulating cash value. It can and provide flexibility in premium payments, but most people choose monthly or quarterly payments. Often, Universal life insurance is called whole life or permanent insurance. This type of insurance has two parts; the savings or investment portion and the insurance portion. Universal life is used for death coverage and provides for retirement assets if used as part of retirement planning. 

Indexed Universal Life (IUL)

Another type of life insurance for you to consider is an IUL insurance policy. IUL insurance provides a death benefit with a separate cash value account that increases in value over time. The performance of the IUL policy mimics an equity index, such as the S&P 500. The IUL insurance policy increases when the market performs and does not lose value when underperforming. For this reason, an IUL policy has the possibility of a higher cash value accumulation than a universal life (UL) insurance policy.

Contact your financial professional to get started.

Your financial professional can help you understand which type of life insurance is appropriate to your situation and get you started reviewing your current coverage or applying for new coverage. Once you determine whether life insurance is necessary and which type of life insurance coverage is appropriate, it’s essential to make sure you have enough coverage. Reach out to your financial professional today to get started.

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Financial wellness is the ability to have a healthy financial life and feel good about your financial situation. Financial wellness doesn’t have just one meaning because it can mean something different to each person. Financial wellness is a broad term that encompasses these key areas:

• Taking control of your money before it controls you.
• Determining how safe your money is.
• Planning what to do with your money.

Financial wellness has become one of the top concerns for many people, especially those unprepared for short-term cash needs. Financial wellness means having financial security and financial freedom to make choices. When it comes to financial health, two people with the same income can have differing financial wellness. There are three things to remember about financial wellness:

1. Financial wellness allows you to live the life you’ve earned- literally. When you manage your money well, you can have shelter, food, clothing and participate in the broader economy you have helped create.
2. Financial wellness prepares you for future short-term and long-term expenses and emergencies that may arise. Part of being prepared is where you keep your money- is it accessible and safe?
3. Budgeting is part of financial wellness. When your money comes in, it pays for specific expenses, and the extra is saved for the future.
4. Financial wellness requires planning how you want your money to fund your future goals. A new car, home, and being able to retire on your terms are all possible.
5. Financial wellness includes your use of credit and your credit score. When someone is in poor ‘financial health,’ it can reflect in a low credit score.
6. Insurance coverage is part of financial wellness, and being prepared for death, an accident, disability, or loss of an asset is critical to maintaining financial security.

Evaluating one’s financial wellness can be difficult for some people. Still, the CFPB financial well-being survey is an excellent place to start to see how you compare to other Americans. The survey website additionally provides resources to help you improve your financial health.

When it comes to financial wellness, self-evaluation and education can help you to become financially well. Additionally, working with a financial professional can provide you with accountability and a plan to achieve your goals.

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One of the biggest news stories last month was the heightened trading activity and price volatility of GameStop and several other companies. These company’s stocks were targeted by participants using the social media platform Reddit. Reddit supported the social media conversations among its members, and Robinhood was the trading app of choice for buying and selling stocks of GameStop, KOSS, AMC Entertainment Holdings, and others. While the event has gained regulators’ attention, it is still too early to tell if new regulations or policies will be enacted.

Why should investors care if this event didn’t directly impact them? Here are a few reasons that explain how this event and the new era of investing is changing:

Social Media’s impact on the stock market- This event (and others) has shown that some people are reactive to FOMO (Fear of missing out) trading as they watch social media comments posting from others on the social platform. This isn’t reserved to just social media, but also discussions people have among themselves, leading investors open to risk when they follow others. In this latest event, we are aware of the impact social media has on our society.

Isolated Events can create market manipulation, which is illegal, hard to prove, and causes a security price to inflate or deflate for some time. Over the past years, there have been market manipulation events, but the latest was the most considerable rise and fall of stock prices in a single week.

New investors entered the stock market using complex trading actions- Individual investors involved in the GME/Reddit event were purchasing options instead of stocks or ETFs:

“Reddit users also cheered the trade as a way to drive massive losses at short-selling hedge funds. Language on Wall Street Bets took on a populist tone that pitted the everyday trader against the Wall Street establishment.”  – Markets Insider, February 11, 2021.

Inexperienced investors did complicated investing in this event as additional money available to them has made its way to Wall Street. Options investing is typically performed by fund managers to make money for portfolios and only after extensive research. Fund managers or professional traders do not use this complex type of investing in targeting and hurting Wall Street or other investors who rely on our stock market system to produce positive returns for their portfolios.

This unusual event shouldn’t change your overall investing strategy because events like this are short-term. Continue to work with your financial professional and ask questions about specific investments you are considering basing on public information. And remember that time in the market beats timing the market when it comes to saving for retirement.

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Women can experience more challenges saving for retirement than men, and unfortunately, COVID-19 has added even more challenges. According to Transamerica Center for Retirement Studies report Women and Retirement: Risks and Realities Amid COVID-19, women continue to be at risk of saving enough for retirement:

• 52% experienced impacts to their employment situation as a result of COVID-19.
• 24% of women have reduced work hours.
• 13% have experienced a salary reduction.
• 16% have been laid-off.
• 13% have furloughed.

On-going challenges that women face aside from COVID-19 include leaving the workforce to care for children or other family members, lower pay, and finding full-time employment. According to the same study, only 24% of women are very confident they can retire comfortably, compared with 20% of men.  Here are several reasons why retirement is different for women than men. 

Women usually earn less than their male counterparts.

Even though more women work more today in professional jobs than in the past, a gender pay gap still exists. The U.S. Census Bureau discovered that women earn about 75% less than their male counterparts. This discrepancy makes it more difficult for them to save for retirement. 

Women spend less time in the workforce.

On average, women spend nine more years out of the workforce than men. Less time working reduces their overall lifetime earnings and retirement savings. Women often take time off from work so they can care for their children or other family members.

Women miss out on employer-sponsored retirement plans.

Since women are more likely to work part-time or contract positions to enjoy flexible schedules, they don’t always qualify to participate in employer-sponsored retirement plans or miss out on the company match.

Women have a longer life expectancy.

The life expectancy for women is generally greater than for men. Therefore, women require enough retirement savings to cover a longer time in retirement. Unless women plan and save appropriately, they risk premature depletion of their retirement assets and possibily living their retirement years in poverty. 

Despite these challenges, women can thrive in retirement by implementing these tips: 

1. Have a Backup Plan: Circumstances like divorce, death, or injury can prevent retiring as planned. For this reason, having an emergency savings account, life insurance, disability insurance, a set budget, and a plan to reduce your expenses can help.

2. Participate in Your Employer-sponsored Retirement Plan: If you work for an employer who offers a retirement plan, take advantage of it. Save enough to ensure you receive the employer’s matching contributions. 

3. Save as Much as Possible in other types of retirement savings vehicles: The more you save at an earlier age, the better prepared you’ll be for retirement. If you take some time off from full-time employment, continue part-time or perform contract work and continue to save for retirement.

4. Consult Your Financial Professional

If you’re a woman planning for your retirement, your financial professional can review your financial situation and develop a retirement strategy appropriate for you.

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Having a hobby or participating in a regular activity done purely for enjoyment can provide many benefits. Among the most notable is that hobbies can lead to better health and a more full-filled life. Here are some of the benefits that come from having hobbies:

Hobbies improve physical health. Hobbies do not have to be physically demanding to be beneficial. A study by the National Institute of Health (NIH) found that people who engage in leisure activities have lower blood pressure, total cortisol, waist circumference, and body mass index.

Hobbies reduce stress and improve mental health. Research by psychologists Matthew Zawadzki, Joshua Smyth, and Heather Costigan reveals that participating in hobbies reduces negative moods, anxiety, and lowers heart rate when engaging in leisure than when not. The study also found that leisure-based invention, or starting a hobby, can improve health and well-being compared to before having a hobby.

Hobbies help one perform better at work. A study conducted on employees associates creativity with mastery, control, relaxation, and job performance‐related outcomes. Creative activity was found to, directly and indirectly, affect performance‐related outcomes, but the effects varied by the type of performance‐related outcome. The results indicate that companies may benefit from encouraging their employees to consider creative activities or having a hobby to recover from their work.

Balancing hobbies and work are critical to you and your relationships. During our working years, focusing on family and yourself first and work secondly can help reduce stress.  Exercise, work, family time, personal leisure time, and volunteering should be part of your monthly schedule. 

Hopefully, you will have the choice to continue to work because you enjoy it and not because you have to. Your retirement work can become a leisure time activity if planned successfully.

Having hobbies can help you be ready for retirement. The choice to retireshould be based on your decision and not due to poor physical or mental health.  Feeling you have achieved all you want to in your career, looking forward to the next chapter of your life, and having a healthy body is just as important as saving money for retirement.

The benefits of having a hobby can have lasting effects days after participating in a hobby. While some people enjoy doing a hobby on their own, others like to join with others. Regardless of your preference, having a hobby is essential to your health. Together we can plan for your financial future, but it is up to you to maintain a healthy lifestyle to enjoy retirement.

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The COVID-19 pandemic has shifted cybersecurity and identity theft into the spotlight for both businesses and individuals. With many people working from home, the need for internet security is at an all-time high. Businesses are experiencing more cybersecurity attacks and their remote workers are targets of phishing. As we enter December, “Identity Theft and Prevention Month,” we want you to realize that internet scammers see increasing opportunity the longer we are ‘locked-down’ at home with increasing internet usage.

2020 is ‘an identity theft pandemic.’ According to the Federal Trade Commission, at the end of August 2020, more than 175,000 COVID-19-related reports about fraud, identity theft, and Do Not Call:

Online orders are the #1 fraud complaint.

Americans have reported $16 million in losses.

Common scams include offers for masks, hand sanitizer, and other high-demand items that never arrive.

Scam text messages related to bogus offers to earn income, phony economic relief programs, fake charities, and government imposters.

What can you do to minimize the chance of being a victim of cyber fraud?

Start with accessing your credit report and check for errors, especially if you have ordered online during COVID-19.

Avoid ordering products online from retailers that do not ‘check out’: physical address and phone number or email address listed.

Do not open emails that look like phishing or are from companies or people you do not know.

Do not answer phone calls or respond to text message offers-block phone numbers associated with both.

We need to protect ourselves from COVID-19 and ‘identity theft pandemic now more than ever. It is up to you to take some of the steps outlined above to protect yourself and deter how fraudsters are using our personal information.

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2021 is a great time to focus on your retirement savings! Thanks to the power of compound interest, the more you save this upcoming year, the better off you will be later. If you are ready to make more headway on your retirement savings in 2021, keep reading to find out how much you can contribute.

If you’re saving for retirement through a 401(k), 403(b), 457, or the Thrift Savings Plan, you can expect the same contribution limit from 2020. You will be able to contribute up to $19,500 to any of these plans during the new year. In the event you are 50 years of age or older, you can enjoy the additional “catch-up” contribution limit, which will be $6,500. You may max out your plan at $26,000, just like you could in 2020.

When it comes to a traditional or Roth IRA, the annual contribution limit also remains the same from 2020 and maxes out at $6,000. If you are at least 50, you can benefit from the annual cost-of-living adjustment of $1,000 for a total contribution limit of $7,000.

If you are a small business with 100 or fewer employees and save for retirement via a SIMPLE IRA, your contribution limit will not change from 2020. In 2021, you can max out your plan at $13,500.

Income Ranges Will Increase

While contribution limits will stay the same for most retirement plans, the maximum income levels for traditional IRA deductions, Roth IRA contributions, and the Saver’s Credit will go up in 2021. This income limit change is excellent news as it may mean that you will be eligible for a tax break that you did not qualify for in 2020. Here are some details on the 2021 increases:

Traditional IRA– Lock in the Traditional IRA deduction benefit if you meet these criteria:

You are single and earn anywhere from $66,000 to $76,000.

You are married and filing jointly, and the spouse with the IRA contribution makes between $105,000 to $125,000.

You’re a married couple with an income that falls between $198,000 and $208,000, and an employee retirement plan does not cover one spouse while the other is.

You are married and filing individually with a separate return and covered by an employee retirement plan with an income that ranges between $0 and $10,000.

Roth IRA- Your income will determine whether you can use a Roth IRA as a retirement savings tool. You will be able to contribute the maximum in 2021 if:

You are single, and your income is less than $125,000.

You are married, and you make less than $198,000.

You will not be able to save for retirement with a Roth IRA in 2021 if:

You are single, and your income reaches $140,000.

You are married, and your income hits $208,000.

Saver’s Credit

The saver’s credit is a tax credit you may cash in on if you make salary-deferral contributions to your employer-sponsored 401(k), 403(b), SIMPLE IRA, SEP IRA, or government 457 plan. You can enjoy this benefit if:

You are single, or a married individual filing separately. and make up to $33,000.

You are married, filing jointly, and earn up to $66,000.

You are a ‘head-of-household’ filer with an income of up to $49,500.

Automate Your Retirement Savings

By automating your retirement savings in 2021, you will find it easier to meet your goals and save for retirement with virtually no thought or effort. Your net worth will continue to grow since deductions are made automatically from your paycheck.

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COVID-19 has changed everything from our jobs to school learning and shopping and how we plan for retirement. The pandemic has created implications for financial planning on critical items, moving them front and center for those saving for retirement and those already retired:

Healthcare costs.

With the Affordable Care Act’s future undecided in the U.S. Supreme Court, American’s who lost their jobs may be without health insurance. The implication of not having health insurance, primarily due to unemployment during COVID-19, creates the risk that retirement accounts will deplete to pay for healthcare. Both health insurance cost increases or unanticipated medical bills will likely impact if the twenty states and President Trump win the lawsuit.

A study by Avalere Health in early 2020 found that 12 million workers are likely to lose employer-based insurance during the pandemic, with a percentage loss of coverage among people of color is double than for white people.

Early retirement.

For the first time in fifty years, joblessness is higher for those ages 55 and higher due to COVID-19 health risks, layoffs, and terminations relating to business closings. Those facing months of joblessness and who are unable to find work are accessing retirement savings earlier. Additionally, the decision to take social security retirement benefits earlier results in a lower monthly benefit amount.

Retirement portfolios withdraw rates and a low yield environment.

Yields on fixed-income investments such as CDs, bonds, and savings accounts have been low for much of the past decade and may not offset inflation. This rate decline will require investors to save more into fixed-investment vehicles than in past decades to meet their future financial demands.

“It really calls into question what will be a sustainable retirement portfolio withdrawal rate. We’ve never seen this specific confluence of events where we have high valuations on the stock market, coinciding with very low yields on safe securities, so new retirees are coming into a constrained environment from the standpoint of what their portfolios might earn.” – Christine Benz, Morningstar’s Director of Personal Finance.

Meet with a financial professional.

Financial planning is changing and must reflect the present and our future after COVID-19. With so many unknowns, financial planning that prepares you for the future is critical to your financial stability.

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