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Author: Robert Blakely

Tis the Season: End-of-Year Tax-Saving Strategies

Posted on by Robert Blakely

As the year draws to a close, so does the window for strategic tax planning and benefits. The decisions you make regarding your finances before December 31st can significantly impact your tax liability and overall financial well-being for the year ahead. Here we’ll explore end-of-year tax-saving strategies you can take advantage of before the year-end deadline to improve your financial picture in the upcoming year. 

Capitalize on Retirement Contributions

We’re nearing the end of the year, but there’s still time to boost and capitalize on your retirement savings. Be sure you are contributing to retirement accounts, like a 401(k) or an IRA, as they offer immediate tax advantages while helping ensure a secure, financially healthy future. Assess your current contributions and consider optimizing them before the yearly deadline to enjoy both short-term and long-term tax benefits. For IRAs, contributions can often be made until the tax filing deadline of the next year (usually April 15th). Remember: it is important to take a look at your entire financial picture before making significant changes to your financial plan. Talk to your financial advisor to find the best course of action to continue on a path to financial security. 

Leverage Health Savings Accounts and Flexible Spending Accounts

Health-related expenses can take a toll on your finances, but utilizing Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can offer significant tax relief. Both HSAs and FSAs allow you to save for qualified healthcare costs. Any contributions made to these accounts may be tax-deductible, helping to reduce your taxable income. Whether or not you can open an HSA is dependent on your health insurance. These typically offer higher contribution limits and allow you to carry over funds. Opening an FSA is dependent on your employer. This type of account typically has lower contribution limits and does not allow you to carry over funds, so be sure to use them before the end of the year to avoid forfeiting them. Some FSAs allow a grace period or a limited carryover, but it depends on each individual plan. It is vital to weigh your options carefully and discuss any plans with your financial advisor to ensure the best financial outcome for you. 

Optimize Investment Portfolios

End-of-year is a great time to fine-tune your investment strategy. Consider tax-efficient investment practices such as:

  • Diversifying your account types
  • Holding investments for more than one year to qualify for lower capital gains tax rates

Take this opportunity to speak with a financial professional. They can help you diversify and rebalance your portfolio for tax efficiency and long-term growth. 

Charitable Giving for a Purpose

The final months of the year are the season of giving, and your generosity can translate into tax benefits. Charitable contributions to qualified organizations offer the opportunity for tax advantages including deductions, exemptions, and estate planning benefits. Consider various giving options to optimize your end-of-year tax-saving strategies. For example, explore bundling multiple years’ worth of donations into one tax year to exceed the standard deduction. Consult your financial advisor about your philanthropic giving to optimize your financial situation while bettering the world around you. Regardless of the details, remember to gather receipts and any other necessary documents surrounding your charitable contributions to claim the deductions. 

Explore Deductions and Credits

Among the end-of-year tax-saving strategies, there is an abundance of tax credits and tax deductions that should not be overlooked. Tax credits offer a direct reduction of your tax liability. Investigate credits such as:

Thoroughly research any deductions and credits to ensure you meet the eligibility criteria. Take the necessary steps to maximize them to put more money back in your pocket. If you need help discovering which ones are available to you, speak with a financial professional. 

After addressing your current end-of-year tax-saving strategies it is important to review your financial health as a whole. Revisit your financial goals and begin adjusting for the upcoming year. Being financially proactive and making informed decisions will help to optimize your tax situation and begin the new year on solid financial ground. If you are looking to improve your overall financial outlook and secure your financial future in the new year, contact the Blakely Financial team today. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
National Fraud Awareness Week: Can You Spot the Fraud Warning Signs?

National Fraud Awareness Week: Can You Spot the Fraud Warning Signs?

Posted on by Robert Blakely

According to data from the FTC, consumers lost nearly $8.8 billion to fraud in 2022. The highest reported loss amount came from investment scams and imposter scams. National Fraud Awareness Week, taking place from November 12th through 18th, is an annual event meant to promote anti-fraud awareness and education in hopes of minimizing the impact of fraud. This week serves as a reminder that fraud can strike anyone, anywhere, at any time. Awareness is the first line of defense against fraud, and we are here to help you sharpen your fraud detection skills. Look out for the following fraud warning signs to protect yourself and your finances.

Unexpected Requests & Suspicious Contacts

One of the most prominent fraud warning signs is receiving unsolicited requests for your personal information. These requests can come through emails, phone calls, text messages, and more. The fraudsters will ask for sensitive personal data such as your Social Security number, credit card details, or passwords while posing as trusted individuals or organizations. They frequently use fake names, profiles, or email addresses to deceive fraud victims. Be wary of these requests and be sure to verify the legitimacy of any suspicious or unverified contacts before sharing your information with them or completing any financial transactions. 

Payment in Unusual Forms

Is someone asking you for an unusual form of payment? These odd methods are more difficult to trace, and therefore a fraudster favorite:

  • Gift cards
  • Cryptocurrency
  • Wire transfers

Always verify the legitimacy of requests for financial transactions, especially from unknown and unverified sources. 

Too Good to Be True Offers 

Messages promising extraordinary financial gains, immense discounts, or exclusive limited-time opportunities should be handled with caution. If you think an offer is too good to be true, it probably is. Fraudsters will try to lure you with these rewards, so carefully evaluate the offer before taking their bait. Remember, legitimate opportunities typically take time and effort before experiencing benefits and rarely promise instant and effortless wealth. 

Urgent or High-Pressure Tactics

Urgent and high-pressure tactics are a common way fraudsters manipulate their victims. Limited time offers, immediate financial decisions, and threatening messages are all fraud warning signs. It is important to be cautious when someone tries to push you to make quick and financially significant choices without allowing time for proper consideration. If the source is legitimate, they will likely provide time to evaluate your options and make a decision best for you. 

Unusual Account Activity

A crucial part of detecting fraud is closely monitoring your financial accounts. Keep an eye out for any unusual or unauthorized transactions on your bank and credit card statements. If you spot unfamiliar account activity, promptly report the incident to your financial institution as it could be a clear indication of fraudulent activity. 

Another piece of unusual activity to look out for is any notifications of unexpected changes to your account information such as your passwords, email addresses, or contact details. Fraudsters may attempt to take control of your accounts by altering this information, so it is important to investigate promptly. Confirm any changes with the respective organization through a verified contact method when investigating.

Poorly Designed or Unprofessional Communications

Generally speaking, fraudsters are not investing in the aesthetics of their communications. If you receive a poorly designed or unprofessional email, document, or website, proceed with caution as it can be a fraud warning sign. Look out for mistakes in spelling and grammar, too. Legitimate organizations will typically maintain a professional, polished, and proofread online presence, so evaluate the quality of the materials you receive to help determine their legitimacy.

Remember, awareness is the key to fraud prevention, and it is a collective effort to educate. If you still have questions about spotting fraud warning signs, contact Blakely Financial today. We are happy to help you protect your finances. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

Monstrous Money Mistakes

Posted on by Robert Blakely

It may be the season of spooky haunts and horrors, but don’t let these monstrous money mistakes lead you to the financial graveyard!

Investment Zombies

Don’t neglect your investment strategies. Just like zombies mindlessly wander, not actively managing investments can lead to missed opportunities or poor performance, even for high earners. Revisit and reevaluate your investment portfolio periodically to be sure you are diversifying your investments and maximizing your returns. Talking to your financial advisor can help you avoid an investment zombie apocalypse.

Estate Planning Ghouls

Failing to create a comprehensive estate plan can haunt families after a high-earning individual passes away. This mistake can lead to unnecessary taxes, legal battles, and confusion over asset distribution. Meet with your financial professional to discuss the best estate planning options for you and your loved ones. Review your plan annually and make adjustments to reflect any life changes that may occur.

Lifestyle Vampire

This monstrous money mistake involves succumbing to lifestyle inflation. High earners might start spending excessively as their income rises, without properly considering the long-term impact on savings and investments. Don’t bite off more than you can chew with your spending.  It is crucial to find a balance between your desired lifestyle and your long-term financial goals and well-being to really enjoy life to the fullest. 

Debt Demons

Credit card ghouls, student loan specters, and mortgage monstrosities. Oh my! These debt demons come in many forms and can feel like never-ending financial nightmares if not managed properly. Be sure to explore interest rates and different repayment options to pay down your debt, and even consider refinancing your loans or mortgage to make payments more manageable. Utilizing a budget can help you do this more easily. Exorcize these debt demons and keep control of your financial future!

Budget Banshee

You’ll hear the eerie wails of the budget banshees if you neglect proper budgeting. The shrieks serve as haunting reminders of overspending, impulse purchases, debt, disorganized finances, and unexpected expenses. Create a budget unique to your financial situation by tracking your income and expenses and establishing your financial goals. Explore where you may be able to save and remain disciplined when it comes to your spending. Don’t forget to factor an emergency fund into your budgeting to cushion the impact of any unexpected financial shock! Evaluate your financial health routinely and adjust your budget accordingly to banish the budget banshees. 

If you need help battling these monstrous money mistakes, contact Blakely Financial today. 

 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Optimizing Your 401(k) Contributions

Optimizing Your 401(k) Contributions

Posted on by Robert Blakely

What is a 401(k) plan?

A 401(k) plan is a company-sponsored retirement plan that allows eligible employees to contribute a portion of their salary to a variety of investment options. 401(k) contributions are typically “before tax” money, meaning the amount you choose to contribute is deducted from your paycheck before taxes are taken out and you are paying taxes on a smaller portion of your salary. 

Many plans also offer options for employees to make post-tax ROTH 401(k) contributions from their paychecks. Post-tax ROTH contributions do not lower an employee’s taxable income, but they do grow tax-free and aren’t taxed upon withdrawal.

An additional benefit of a 401(k) plan is that when you finally pay the taxes on your 401(k) contributions, you may be at a lower rate. Typically, you begin withdrawing money from your 401(k) when you retire and you may very well be in a lower tax bracket at that time; thus you could end up paying less tax on your savings when you do eventually withdraw funds.

If your company offers a 401(k) plan and you are not participating, you may want to revisit your decision as they are a great opportunity and an easy way to save for the future. If you have just entered the workforce, retirement may be the last thing on your mind. Or if you are an older employee nearing retirement, you might be thinking it is too late. At any stage of life, 401(k)s can offer specific advantages that make them a great option for investing and saving.

Making the Most of Your 401(k) Contributions

Many employers offer matching contributions to 401(k)s. For example, your employer may offer a 4 percent match, where they will contribute the same amount you do, up to 4 percent. While this is their limit, you can personally contribute more. If you are not contributing to your company’s 401(k) plan and they have a match, you are leaving money on the table! Don’t be concerned if you cannot contribute the maximum amount to your retirement plan. Simply participating in an employer-sponsored plan puts you in a great position for a successful retirement, especially if you start early. If you are unsure about the specifics of your company’s plan, take the time to read over it thoroughly, perhaps with your financial advisor, so you can make the most of your money.

Combined Savings Strategy

A large number of people find success in a combined savings strategy using both a 401(k) and an IRA to truly maximize their retirement funds. A study conducted by the Employee Benefit Research Institute (2020) found that, on average, individuals who owned both a 401(k) and an IRA at some point during the six years of the survey had combined balances about 2.5 times higher than those who owned only a 401(k) or an IRA. People who owned both types of accounts consistently over the period had even higher balances. Talk to a financial advisor to explore your options and decide which is best for you based on your own income and circumstances.

A Few Key Points to Remember about 401(k)s

  • It is a retirement savings plan, so once you put money in it is best to leave it in. 
  • There are penalties if you take the money out before retirement age.
  • If you change employers you can roll your vested balance into your new employer’s 401(k) plan or into another qualifying retirement account such as an IRA.

No matter what, take advantage of any type of savings plan your current employer offers as the earlier and more aggressive you are, the closer you will come to achieving your financial goals. If you have questions, it is always a great idea to call a financial advisor for guidance. Contact the Blakely Financial team today to get started saving for your future. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Building a Philanthropic Legacy: Making a Meaningful Impact

Building a Philanthropic Legacy: Making a Meaningful Impact

Posted on by Robert Blakely

High earners have a unique opportunity to make a positive, meaningful, and lasting impact on society through philanthropy. By leveraging your financial resources, you can begin building a philanthropic legacy that resonates with your values and can continues for generations to come. 

Understanding the Power of Philanthropy for High Earners

With ample financial resources at your disposal, it is important to recognize your potential to make a positive impact on society through strategic giving. Your financial success grants you the power to create a better world through your philanthropic efforts – embrace the responsibility that comes with your financial success. Use your position of influence to address pressing social issues, support important causes related to your personal values and passions, and encourage positive change on a broader scale. Even a small effort can inspire others to do the same. 

Philanthropic Vehicles

There are several philanthropic vehicles available to high earners looking to make an impact. Each resource has its own benefits and considerations – choose one that coincides with your own goals, level of involvement desired, and tax implications. Some options are:

  • Private foundations are private organizations set up for charitable purposes, typically with limited funding sources. The benefits of a private foundation are flexibility and complete control over charitable giving.
  • Donor-advised funds are established as public charities and managed by a third party, leaving donors with the benefits of simplicity and professional guidance.
  • Charitable trusts are irrevocable trusts created for charitable purposes. These are set up to benefit you, your beneficiaries, and a charity simultaneously. Other benefits include tax advantages and the ability to plan long-term.

Talk to a financial advisor, like Blakely Financial, to learn more about each philanthropic vehicle and discover how to best leverage your financial resources when building a philanthropic legacy. 

Effective Giving Strategies

To begin developing effective giving strategies, it is essential to establish a clear philanthropic mission. Once your charitable goals are set, identify causes and organizations aligned with your values. Research the past success of potential recipients to ensure your donations are being utilized effectively. Consider prioritizing your giving in areas where your contributions can make a significant and lasting difference. 

Incorporating Charitable Giving into Long-Term Financial Planning

When creating your long-term financial plan, consider integrating philanthropy to ensure sustainable giving. Determine the percentage of your income or assets you would like to allocate to charitable endeavors and explore different techniques like planned giving, endowments, multi-year grants, and more to maximize the impact of your donations. 

Philanthropy also offers the opportunity for various tax advantages including deductions, exemptions, and estate planning benefits. It is important to understand these benefits and stay informed about the latest laws and regulations. Work with a financial advisor to seek out the best strategy for aligning your philanthropic goals and financial objectives and maximizing the tax benefits of your charitable contributions.

Engaging in Impactful Philanthropy Beyond Financial Contributions

Philanthropy goes beyond simply writing a check – high earners can also contribute their time, expertise, and networks to make an even more meaningful impact. Consider volunteering your time, serving on boards, or offering pro bono services in your professional field. Additionally, explore social entrepreneurship or impact investment to leverage your business knowledge for social good. Encourage your family to get involved as well, allowing values to be passed down and creating a legacy of giving.

Building a Legacy

Your charitable efforts can continue beyond your lifetime and leave a lasting legacy. Encourage family involvement to pass down the values of giving and develop a succession plan to ensure these endeavors continue after you’re gone. By building a philanthropic legacy as a high earner, you are making a meaningful impact with your high income that extends far beyond your financial success. 

If you are looking to make an impact and begin building your philanthropic legacy, the Blakely Financial team is here to help. Contact us to get started today. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Wealth Management for Enjoying Life: Balancing Lifestyle and Financial Goals

Wealth Management for Enjoying Life: Balancing Lifestyle and Financial Goals

Posted on by Robert Blakely

Wealth management goes beyond simply accumulating money; it’s also about achieving a fulfilling and enjoyable life. As a high earner, it is crucial to find a balance between your desired lifestyle and your long-term financial goals. In this article, we explore strategies for effectively managing your wealth and ensuring its longevity while also maximizing the enjoyment and experiences your wealth can provide. 

Define Your Lifestyle Goals

Envision the life you desire. Think about your passions, dreams, and generally what brings you joy. Do you love to travel? Are you an art lover looking to begin a collection? Identifying these unique lifestyle goals will allow you to begin long-term financial planning. These lifestyle preferences can guide your financial goals and decisions, ensuring your financial plan aligns with the goals that truly matter to you. 

Create a Comprehensive Financial Plan

To successfully manage wealth and achieve your goals, it is important to develop a comprehensive financial plan. It can be helpful to work with a financial advisor to evaluate your current financial situation. From there, you can together set clear objectives and customize a plan featuring saving strategies,  investment strategies, risk management, tax optimization, and estate planning to work towards these objectives. 

Prioritize Your Spending

In order to maintain a healthy balance between wealth and lifestyle, it is crucial to be thoughtful with your spending. Constant overspending could jeopardize the preservation of your wealth for the future. Establish priorities in your spending and differentiate between short-term indulgences and long-term financial health and security. To avoid frivolous spending, create a budget and stick to it. Don’t forget to factor enjoyment into this budget – it’s all about balance!

Diversify Your Investments

Diversification of your investment portfolio is essential to managing risk and maximizing returns. Consider traditional assets, such as stocks and bonds, as well as alternative investments like real estate or private equity.  This diversity will open up opportunities to experience new ventures aligned with your interests while also enhancing your long-term financial security.

Continuously Review and Adjust

Managing your wealth is not a one-time ordeal. It is extremely important to regularly review, evaluate, and adjust your plan as your circumstances change and your goals evolve. Make sure you are taking market conditions and emerging opportunities into consideration as well. Conducting periodic reviews with your financial advisor will help ensure that your financial strategy and objectives remain aligned. 

Give Back and Make a Difference

While enjoying the benefits of your wealth, consider philanthropy as a way to create a positive impact on your community. Philanthropic efforts could include engaging in charitable activities and supporting causes you care about, whether they are local, national, or global. These efforts can provide a sense of purpose and fulfillment. Talk to your financial advisor about developing a philanthropic strategy that aligns with your values and leverages your resources to spark meaningful change. 

Overall, wealth management is about building and maintaining your finances while also enjoying the benefits that come with your wealth. Defining your goals and creating a plan will allow you to embrace the opportunities that wealth brings while maintaining your financial well-being. While the balance between lifestyle and financial goals can be tough, the Blakely Financial team is here to help. Contact us today to speak with an advisor about securing your financial future. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
Managing Your Wealth: Tips for High Earners to Build and Maintain Wealth Over Time

Managing Your Wealth: Tips for High Earners to Build and Maintain Wealth Over Time

Posted on by Robert Blakely

High earners experience a unique set of financial challenges and responsibilities. Therefore, as a high earner, it is important to have effective wealth management strategies in place to both build and maintain wealth over time. High earners can build, maintain, and manage their wealth in the following ways:

Establish a Strong Financial Foundation

In order to maintain wealth, it is important to begin with a strong financial foundation. To build this foundation, start by tracking your income, expenses, and creating a budget. Doing so will allow you to understand where your money comes from, where it goes, and areas where you can cut spending to contribute to savings. Setting up an emergency fund will contribute to your strong financial foundation by helping you avoid accumulating debt in unexpected situations. Paying off any high-interest debt should also be a priority to avoid any unnecessary interest payments.

Implement Effective Tax Planning Strategies (Maximize Tax Advantages)

It is essential to optimize tax planning strategies as a high earner. Maximize your tax advantages through employer-sponsored retirement plans and tax-efficient investments. Working with a tax professional can also help you identify deductions and other strategies to optimize your tax planning and reduce your tax liabilities.

Diversification of Investments

By diversifying your portfolio of investments, you are able to mitigate risk and improve your chances of long-term growth. Explore various investment options like stocks, bonds, and real estate. Alternative investment options, such as private equity and venture capital, are also profitable options to consider. Seeking professional guidance will ensure you are making informed decisions to develop an investment portfolio aligned with your personal financial goals and risk tolerance.

Risk Management

As a high earner, it is essential to protect your wealth and minimize losses from any unexpected circumstances. One way to do this is through adequate insurance coverage including life, disability, and liability insurance. As mentioned earlier, risk management strategies should also be implemented with your investment portfolio to mitigate potential losses in the case of market downturns. Emergency funds also act as a buffer during any unforeseen circumstances. Working with a financial advisor can be helpful in developing a full risk management plan to protect your assets and income. 

Estate Planning

If high earners want to ensure a smooth transfer of wealth, it is crucial to create an estate plan. By creating a will, trust, power of attorney, and health care power of attorney, you can minimize estate taxes and distribute assets per your wishes. An estate plan can be updated regularly to reflect any changes in assets, personal circumstances, or estate planning laws. A comprehensive plan will help you establish a legacy for future generations and reduce future stress.

Building, maintaining, and managing wealth as a high earner requires careful planning. When building your wealth it is vital to prioritize saving and investing to ensure stability. It is also important to balance enjoying the present with preparing for the future. Remember to regularly review and adjust your financial strategies, keeping in mind personal changes as well as outside forces such as inflation. As a high earner, it is beneficial to seek professional guidance when creating wealth management strategies. Contact Blakely Financial today to begin your planning. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
Benefits of a 529 Savings Plan for Education

Benefits of a 529 Savings Plan for Education

Posted on by Robert Blakely

As the cost of education in the United States continues to rise, it’s becoming more and more important for parents to plan ahead. Fortunately, a 529 savings plan offers a solution to help alleviate the financial burden of education. The 529 savings plan is designed to help families save for education expenses by providing tax benefits and flexible investment options. 

What is a 529 plan?

A 529 plan, named after section 529 of the federal tax code, is a way to save for college in a tax-advantaged way. Plans are offered by states, and you can choose to participate in any state’s plan. It’s important to compare benefits to pick which plan best suits your needs.

There are two types of 529 plans—savings plans and prepaid tuition plans. 

  • With a 529 college savings plan, your investments grow in an individual investment account (tax-free).
  • With a 529 prepaid plan, you lock in a tuition payment at the current rates. The amount then goes into a general fund (rather than an individual investment account).

Between these two plan types, 592 savings plans are more common, as they have notable benefits. 

Tax-free Growth and Withdrawals

A 529 savings plan works similarly to a Roth 401(k) or Roth IRA. You select the investment option you want, deposit money, and your funds build over time in the account. Your investment grows on a tax-free basis. Money can also be withdrawn tax-free if used to pay for qualified higher education expenses.

Anyone Can Contribute

According to Education Data Initiative, Americans on average aim to save $55,342 for their child’s college expenses. With a 529 savings plan, a parent isn’t the only one who can contribute. Any friend or family member can make gift contributions to a beneficiary’s account. For birthdays and holidays, loved ones can make a lasting impact on the beneficiary’s future, cutting down on future student loans. The funds can be used to cover the beneficiary’s education costs, which are more than just tuition; these also cover textbooks, room and board, and other academic expenses. 

529 Savings Plans Can Be Used for More Than College Costs

Besides college expenses, the funds can also cover expenses for K-12 education. You can apply $10,000 per year toward private elementary or secondary school tuition expenses.

Flexibility to Change the Beneficiary

If your child chooses not to attend college or receives a scholarship, all is not lost. You can change the beneficiary to any other qualifying family member. This option helps families avoid paying taxes and fees on unused funds.  

A Little Goes a Long Way 

Small amounts truly add up over time and make a significant difference. Outstanding U.S. student loan debt reached $1.7 trillion at the end of 2020, according to the Federal Reserve. A 529 savings plan allows you to make a considerable dent in college costs, even if you start while the child is in high school. It is never too late—every penny counts.

The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that an education-funding goal will be met. In order to be federally tax-free, earnings must be used to pay for qualified education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10 percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
Books to Help You Improve Your Financial Literacy

Books to Help You Improve Your Financial Literacy

Posted on by Robert Blakely

Financial literacy is an essential skill that can always be improved, regardless of your previous knowledge. Understanding how money works, how to manage it, and how to make it work for you are key to being financially literate. Luckily, there are plenty of resources to help improve your proficiency with personal finance.  Below are a few of the Blakely Financial Team’s favorite books to improve your financial literacy.

Mind Gym: An Athlete’s Guide to Inner Excellence by Gary Mack and David Casstevens

Although Mind Gym is not specifically about finance, it offers valuable insights into the mindset and attitudes required for success in any field. This book explores the psychology of winning, and how an athlete’s mindset can impact their performance. The lessons in this book can be applied to all aspects of life, including financial success. Mind Gym emphasizes the importance of focus, confidence, and visualization in achieving success, all of which can help you achieve fiscal success.

Think and Grow Rich by Napoleon Hill

Think and Grow Rich is a classic book on personal finance and self-improvement. Published in 1937, it has sold millions of copies worldwide and is a source of inspiration for many successful individuals. This book discusses the importance of mindset, persistence, and goal setting in achieving financial success. The book emphasizes the importance of having a clear financial goal and a plan for achieving that goal. It also discusses the power of positive thinking, visualization, and affirmations in achieving financial success. By applying the principles outlined in this book, readers can improve their understanding of finances and make more confident choices with their portfolio. 

Freakonomics by Steven Levitt and Stephen Dubner

Freakonomics explores the intersection of economics and everyday life. It presents a unique and unconventional perspective on a range of topics, including incentives, risk, and decision-making. This book challenges readers to think critically about the economics that influence their lives, and encourages readers to question common assumptions about personal finance.

Improving your financial literacy and your attitude towards money is essential for achieving financial success. Reading is a great way to familiarize yourself with personal finance, and to feel more confident about the choices you make with your own investments. These three books, Mind Gym: An Athlete’s Guide to Inner Excellence, Think and Grow Rich, and Freakonomics, can provide valuable insights into the mindset required for financial success. By reading and applying the principles outlined in these books, you can develop the skills and knowledge necessary to achieve your financial goals. 

The views and opinions expressed in these books are for general informational purposes only and are not intended to provide or be a substitute for specific professional financial, tax or legal advice or recommendations for any individuals. They should not be construed directly or indirectly, as an offer to buy or sell any securities that may be mentioned in these publications.
Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
Financial Wellness Month – Time to Review, Learn & Plan

Financial Wellness Month – Time to Review, Learn & Plan

Posted on by Robert Blakely

Financial wellness month is the perfect time to take a look at your savings plans and learn new ways to be financially independent. Even if you are satisfied with your current level of financial knowledge, there is always more to learn! Take some time this month to look into a certain aspect of financial wellness you are curious about or think you could improve upon. Here are some of our top tips to help you on your path to financial freedom! 

Improve Your Knowledge

If you have been curious about certain aspects of financial wellness, there are hundreds of great books out there that can answer all your questions. Freakonomics takes a sociological approach to financial thinking and examines the ways in which you can apply economic rationale to your everyday life. Though this book does not provide specific tips for saving and spending, it may change the way you think about wealth and the economy overall. Think and Grow Rich is perhaps the single most popular piece of motivational literature there is. This book examines the most successful people of all time in an attempt to answer the question “what makes a winner?”. Though the title “Think and Grow Rich” may imply that it is all about money, the book instead focuses on the self-confidence required to be successful, and how it can be learned and taught. 

In addition to reading books, there are also a myriad of online resources that can assist you in your research. The Blakely Financial blogs and newsletters contain tips on personal finance and investments to help you increase your financial savvy. Simply reading an article or two a day can increase your financial knowledge throughout the course of the month! 

Small Changes Add Up

Small changes can make a big impact on your finances! If attaining your goals feels like an impossible task, start small. Over time, your smart habits will become routine, and your ambitions will no longer feel out of reach. This can be done by limiting your takeout meals, canceling unused subscriptions, or even just buying generic brand items at the grocery store. These types of changes may feel overly frugal, but they can quickly add up to significant savings you can use on more important purchases and adventures later. 

Emergency Fund

One of the most important, but easily forgotten, aspects of a sound financial plan is an emergency fund. This money should be easily accessible, and significant enough to protect you from unexpected crises. Medical emergencies, car problems, and home repairs can severely affect your budget. Having cash set aside for such events will not only prepare you for the worst but decrease your stress level as you will be confident in your ability to handle anything life throws your way. 

Work with a Financial Advisor

Perhaps the best thing you can do for yourself this financial wellness month is to seek the advice of a professional. A trained financial advisor can build you a custom plan to guide you to your long-term financial goals. Please feel free to contact our team at Blakely Financial today to help get you started.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.