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529 Plans Rethinking the Possibilities

529 Plans: Rethinking the Possibilities

529 plans are no longer solely reserved for college tuition. Today, these versatile accounts offer a broader spectrum of possibilities beyond saving for college, covering expenses like vocational schools and K-12 education. With their tax advantages and adaptability to diverse educational paths, 529 plans emerge as a strategic solution for families seeking flexibility and foresight in securing their children’s educational future. In this blog, we are rethinking the possibilities of 529 plans to explore their full potential and delving into how you can leverage these accounts to invest in your child’s future at every stage of their education journey.

529 Plans for College Tuition

Traditionally, 529 plans have been used to save for college tuition and related expenses. These accounts offer tax-deferred growth and tax-free withdrawals when funds are used for qualified higher education expenses. By contributing to a 529 plan, parents can build a dedicated fund to cover the cost of tuition, room and board, books, and other college-related expenses. Anyone can contribute to 529 plans, allowing family and friends to contribute to your child’s future education.

K-12 Tuition

In recent years, the scope of 529 plans has expanded to include K-12 education expenses. Families can now use a 529 plan to pay for up to $10,000 in tuition at elementary, middle, and high schools, including private and religious institutions. This flexibility allows parents to start saving for their child’s education from an early age and provides additional options for educational choices beyond the traditional public school system. 

Vocational Schools

Another exciting development in the possibilities of 529 plans is the ability to use funds for vocational schools and career training programs. If your child is interested in pursuing a trade or obtaining specialized certifications, a 529 plan can help cover the cost of tuition, fees, and supplies. This opens up new opportunities for students who may not have considered traditional four-year college programs, allowing them to pursue career paths aligned with their interests and goals. Eligible vocational schools, including many technical colleges, cosmetology schools, culinary schools, and more can be found using the Federal School Code Lookup Tool.

Apprenticeship Programs

529 plans can also be used to support apprenticeship programs that are certified and registered with the U.S. Department of Labor’s National Apprenticeships Act, providing financial assistance for on-the-job training and educational coursework. Apprenticeships offer a valuable alternative to traditional education pathways, allowing individuals to earn, while they learn and gain practical skills in a specific trade or industry. By using funds from a 529 plan, apprentices can offset the cost of program fees, books, supplies, equipment, and other related expenses, making these opportunities more accessible to aspiring professionals. The Department of Labor provides a search tool to determine whether your apprenticeship is eligible for 529 plan funds. 

As 529 Day approaches, it’s time to rethink the possibilities of 529 plans and explore the various ways you can use them to invest in your child’s education journey. Contact the Blakely Financial office today to learn how we can help you maximize the benefits of 529 plans and support your child’s goals every step of the way. 

 

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.
Quiz: How Financially Literate Are You?

Quiz: How Financially Literate Are You?

As we recognize Financial Literacy Month, we must assess our knowledge and understanding of key financial concepts that impact our daily lives such as budgeting, investing, borrowing, and more. Whether you’re a seasoned investor or just beginning your financial journey, this quiz offers an opportunity to reflect on your financial knowledge and take steps toward improving your financial literacy. Are you ready to see where you stand? Dive into our Financial Literacy Month quiz and put your knowledge to the test!

What is the effect of compound interest on an investment over time?

  1. Decreases the total amount of interest earned
  2. Increases the total amount of interest earned by adding interest to the principal and accumulated interest
  3. Has no effect on the total amount of interest earned
  4. Only applies to savings accounts

Correct Answer: 2

Compound interest allows you to earn interest not only on the initial principal amount invested but also on the accumulated interest from previous periods. Over time, this compounding effect results in the exponential growth of your investment, significantly increasing the total amount of interest earned.

Why is diversification important in an investment portfolio?

  1. It guarantees a fixed return on investment
  2. It reduces risk by spreading investments across various asset classes
  3. It focuses investment in one sector to maximize returns
  4. It ensures all investments will profit

Correct Answer: 2

The process of diversification involves spreading your investments across different asset classes to minimize risk. These may include stocks, bonds, and real estate. By diversifying your investment portfolio, you can mitigate the impact of adverse events affecting any single asset or sector. This will help stabilize returns and potentially improve long-term performance. If you’re struggling to diversify your investments, meet with your financial advisor to discuss your options.

Which of the following accounts offers tax-deferred growth?

  1. Checking account
  2. Certificate of Deposit (CD)
  3. 401(k) or Traditional IRA
  4. Brokerage Account

Correct Answer: 3

Tax-deferred growth refers to the ability of investments to grow without being taxed until withdrawal. Both 401(k) plans and Traditional IRAs offer tax-deferred growth, allowing your investments to compound over time without being subject to immediate taxation on earnings. Everyone’s financial situation is unique, so be sure to talk to your financial advisor to be sure you are taking advantage of the best plans and accounts for you.

What is a “bull market”?

  1. A market characterized by declining stock prices
  2. A market in which stock prices are remaining stable
  3. A market characterized by rising stock prices
  4. A market that exclusively trades in agricultural stocks

Correct Answer: 3

A bull market is a period characterized by rising stock prices and investor optimism. During a bull market, investor confidence is high, leading to increased buying activity and upward momentum in stock prices across the market.

What does a fixed-rate mortgage offer that a variable-rate mortgage does not?

  1. A mortgage rate that changes with the market
  2. Lower interest rates over the life of the loan
  3. The same interest rate and monthly payment throughout the life of the loan
  4. Higher borrowing limits

Correct Answer: 3

A fixed-rate mortgage offers borrowers the security of a consistent, or fixed, interest rate and monthly payment throughout the life of the loan. In contrast, a variable-rate mortgage will have interest rates that fluctuate with market conditions, resulting in varying monthly payments and potentially higher levels of financial uncertainty for borrowers. Talk to your financial advisor to sort out which option is best for you and your financial health. 

Whether you aced every question and passed with flying colors or found new areas to explore, taking the time to assess your financial literacy is a valuable step toward financial empowerment. Remember, financial literacy is an ongoing journey, and there’s always room to learn and grow. 

If you found any questions throughout the quiz challenging or would like to delve deeper into any topics, contact the Blakely Financial team today. We are ready to help you navigate your financial journey with confidence! For additional resources and insights designed to boost your financial understanding, check out the Blakely Financial website

 

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.
Financial Literacy Month Our Favorite Podcasts

Financial Literacy Month: Our Favorite Podcasts

April is Financial Literacy Month, a time dedicated to empowering everyone with the knowledge necessary to make informed and effective financial decisions. There are many ways to improve your financial literacy, and we are thrilled to share some of our favorite resources to boost your financial wisdom. As a listener of the following podcasts, you’ll gain valuable insights from experts, hear real-life stories, and listen in on thought-provoking discussions on a wide range of financial topics. 

Planet Money

Financial Literacy Month Podcast: Planet Money

Our first highlight is Planet Money, a podcast by NPR that makes economics fun, understandable, and relevant. The podcast can take any topic and relate it back to the economy, helping you understand both the economy and the world as a whole. 

Episodes are typically around 30 minutes or less. Here are some recent examples of episodes we’ve enjoyed:

Planet Money can be found anywhere you listen to your podcasts!

BiggerPockets

Dive into the world of finance, entrepreneurship, and real estate with our next podcast pick: BiggerPockets. Whether you’re a seasoned investor or just getting started, BiggerPockets offers invaluable insights to help you build your wealth and navigate the complexities of real estate investment.

Most episodes are less than 1 hour long. Here are some recent episodes we enjoyed:

BiggerPockets is available anywhere you listen to your podcasts!

Bloomberg’s Masters in Business

Our next feature is Bloomberg’s Masters in Business. This podcast brings the insights of the world’s leading business minds right to your ears. Delve into deep conversations with industry pioneers in finance, economics, and beyond. Discover the strategies and stories behind successful business ventures, elevating your understanding and inspiring you with every episode. 

Episodes vary in length, ranging from just 5 minutes to over an hour long. Here are some episodes we’ve enjoyed recently:

Masters in Business is available wherever you listen to podcasts!

Exploring podcasts during Financial Literacy Month offers an engaging and accessible way to expand your financial knowledge and empower yourself to make informed decisions about your finances. Whether you’re looking to improve your budgeting skills, learn about investing, or gain a deeper understanding of economic concepts, these podcasts provide valuable resources to help you navigate your financial journey with confidence. Grab your headphones and start listening – your healthy financial future awaits!

For more personalized advice and insights, contact the Blakley Financial team today. Our advisors are available and ready to assist you in your journey toward strong financial literacy and well-being.

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.
Advanced Tax Planning Tips for 2024

Advanced Tax Planning Tips for 2024

As the tax season draws near, it presents a perfect opportunity for both business owners and employees to refine their financial strategies and ensure a brighter, more efficient fiscal future. Whether it’s exploring advanced tax planning, making the most of employee benefits, or simply understanding the wealth of options at your disposal, being informed is the first step toward financial empowerment. In this article, we dive into some key tax planning insights, aiming to navigate this tax season with ease and set the stage for a year filled with prosperity and informed financial decisions.

For Business Owners:

Surround yourself with a team of professionals, including a tax professional and financial advisor, to explore tax deductions, credits, and strategies to fit your business into your overall financial picture.

Consider retirement savings options like SEP IRAs for self-employed individuals or SIMPLE or 401(k) plans if you have employees. Consult with your professional team to choose the best option for your situation.

Restricted Stock Units (RSUs) for Employees:

Restricted Stock Units (RSUs) are a form of stock compensation given by employers, which vest over time. Understanding your RSUs’ vesting schedule is critical, as it dictates when you can sell or hold your shares. Deciding whether to keep vested shares or sell them involves assessing the company’s potential growth against immediate financial gains and considering the tax implications of each choice.

Due to the complexities of RSUs, including their potential impact on your taxes and investment portfolio, consulting with a financial professional is highly recommended. An advisor can guide you through the intricacies of your RSUs, helping you to integrate them into your overall financial strategy effectively. This way, you can make informed decisions that balance immediate benefits with your long-term financial objectives, optimizing the value of your RSUs in alignment with your personal goals.

Employee Stock Purchase Plan (ESPP):

An Employee Stock Purchase Plan (ESPP) allows you to buy company stock, typically at a discounted rate, which can be a great financial opportunity. Key considerations include the discount rate, its fit within your financial plan, and its effect on your investment diversity. Before participating, assess how the plan impacts your financial goals and risk tolerance. Consulting a financial professional is beneficial for navigating ESPPs’ tax implications and integrating this investment into your overall strategy efficiently. Deciding on ESPP participation should align with your broader financial health, and professional advice can ensure it complements your portfolio effectively.

Rollovers: Combining Retirement Accounts:

Consider consolidating multiple 401(k) or 403(b) accounts from past jobs into one account for easier management and to simplify future required minimum distributions. Though not mandatory, consolidation can streamline your financial management.

If you are considering rolling over money from an employer-sponsored plan, you often have the following options: leave the money in the current employer-sponsored plan, move it into a new employer-sponsored plan, roll it over to an IRA, or cash out the account value. Leaving money in a plan may provide special benefits including access to lower-cost investment options; educational services; potential for penalty-free withdrawals; protection from creditors and legal judgments; and the ability to postpone required minimum distributions. If your plan account holds appreciated employer stock, there may be negative tax implications of transferring the stock to an IRA. Whether to roll over your plan account should be discussed with your financial advisor and your tax professional.

Pension Plans:

If you’re entitled to a pension plan, explore all payout options carefully to choose the best option for your financial situation. Discuss with your financial advisor to fully understand how your choice integrates with your broader financial goals.

Engaging with knowledgeable professionals and staying informed about your financial options allows for informed, strategic decisions that support your long-term financial success. Proactive planning is key. For personalized advice and to integrate these tax planning tips into your financial strategy, consider reaching out to financial professionals like the Blakely Financial team.

If you are considering rolling over money from an employer-sponsored plan, you often have the following options: leave the money in the current employer-sponsored plan, move it into a new employer-sponsored plan, roll it over to an IRA, or cash out the account value. Leaving money in a plan may provide special benefits including access to lower-cost investment options; educational services; potential for penalty-free withdrawals; protection from creditors and legal judgments; and the ability to postpone required minimum distributions. If your plan account holds appreciated employer stock, there may be negative tax implications of transferring the stock to an IRA. Whether to roll over your plan account should be discussed with your financial advisor and your tax professional.

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.

4 Ways to Prepare for a Prosperous Financial Future

The first few months of the year are the perfect opportunity for introspection, strategic planning, and establishing goals. This period is especially crucial for managing your personal finances. By evaluating your present financial situation, setting goals, and laying the foundation for the future, you can significantly influence your financial objectives. In this blog, we will delve into four practical measures you can implement to ensure a secure financial future.

1. Develop Goals and Priorities

Each person and each financial situation is unique. As a result, there is no one-size-fits-all approach to creating your financial plan. Each individual has their own goals and unique objectives for the future. As you identify your needs, wants, and wishes, it’s also important to think about your long and short-term financial goals. For example, are you interested in retiring in the next 10-15 years? Is buying a second home in the next 2 years feasible? Taking the time to review your goals from the past, as well as outlining goals for the future, will help you lay the foundation for success. 

Talk to your financial advisor to develop a financial game plan for your particular objectives. Be sure to consistently re-visit and re-evaluate your plan and priorities to ensure you’re on track to reach your goals. 

2. Identify All Assets and Liabilities

Next, conduct a thorough review of your assets and liabilities. Start by compiling a comprehensive list of your liquid assets and tangible properties. This detailed inventory provides a clear view of your financial standing and is an opportune time to re-evaluate your beneficiary designations. Next, identify any liabilities you may have, such as mortgages, auto loans, student loans, and so forth. With a clear picture of your assets and liabilities, it’s time to consider your income. Are there any bonuses or salary increases expected this year? If so, how will they impact your financial planning? Utilize all this information to refine and update your yearly financial plan accordingly.

3. Identify Any Barriers to Achieving Your Goals

With your liabilities and assets clearly outlined, it’s now important to recognize any obstacles that might prevent you from reaching your financial goals. These barriers may include existing debts, like student loans, that limit your capacity to save. Acknowledging your personal financial constraints is an essential piece to planning. When you acknowledge potential barriers, you and your financial advisor are able to create a more realistic set of financial goals based on your individual situation.  

4. Think About What Keeps You Up at Night

As you’re planning for the year, think about what’s keeping you up at night. For many, one question often looms large: how will I plan for long-term care without burdening my children? Long-term care insurance emerges as a practical solution, offering a versatile approach to funding care needs, whether for a nursing home or at-home care. This type of insurance not only provides peace of mind but also features options like receiving a cash benefit or allocating funds to your estate. If benefits are directed to your estate upon passing, they are typically exempt from income tax and can bypass the probate process. Consult with a financial advisor about long-term care insurance, as it can be a vital part of your estate planning strategy to ensure you’re prepared for any future care requirements.

Remember, preparing for a prosperous financial future is not only about financial planning but about setting the stage for a secure and fulfilling life ahead. The steps you take today can shape your financial tomorrow. Are you ready to plan the remainder of your 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.

2024 Financial Planning Tips & Updates

At the start of a new year, it is critical to reevaluate your financial status and strategies as well as consider the changes in rules and regulations that may impact your financial well-being. In this blog, we’re sharing information and updates to help you navigate your 2024 financial planning. 

Changes in Contribution Limits

The new year is the perfect time to review your employer benefits to make sure you are taking full advantage of everything offered to save for retirement. It is also crucial to review and understand any changes to contribution limits for the year. The following are changes for 2024 and should be factored into your 2024 financial planning:

  • The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan, increased to $23,000, up from $22,500.
  • The limit on annual contributions to an IRA increased to $7,000, up from $6,500. 
  • The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan, remains $7,500 for 2024.
  • There were also increases for SIMPLE and SEP contributions.

Social Security

In 2024, Social Security recipients will see their monthly payments rise by 3.2 percent. The maximum amount of earnings subject to the Social Security tax will increase to $168,600. The earnings limit for workers younger than full retirement age will increase to $22,320 and the earnings limit for people reaching their full retirement age will increase to $59,520. 

Financial Planning as a Family Affair

Our concerns often extend beyond our immediate financial well-being to that of our family. Instilling financial responsibility and planning in our children to ensure they have a solid financial foundation is invaluable. Are your adult children entering the workforce and beginning to build their careers? If so, are they planning for their financial future? Encouraging your children to focus on financial planning is critical in promoting their financial security. A conversation with a financial advisor can help equip them with the knowledge necessary to make informed financial decisions to align with their objectives. 

Additionally, it is essential to review your estate documents with your most current financial situation and goals in mind. Many things can change over the course of a year. Sit down with your financial advisor and review documents including wills, trusts, and beneficiaries. Do they still align with your current needs, wants, and wishes? If not, update your documents to prevent future complications and ensure a secure financial future and financial legacy for you and your family. 

The Blakely Financial team is here to guide you through the financial planning process. Contact us today to get started. Together we can begin paving your path to a financially prosperous year. 

 

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.
Your Guide to Year-End Financial Planning

Your Guide to Year-End Financial Planning

As 2023 comes to a close, now is a great time to review your financial plan. With 2024 coming quickly, it’s crucial to reevaluate your financial objectives, consider any life changes impacting your finances, and stay informed about the latest tax and finance developments. Before your yearly financial advisement meeting, here are four areas to consider for your year-end financial planning.

Tax Planning Strategies

The first step in your guide to financial planning, as the year ends, is to nail down your tax planning strategies. First, be sure to understand and utilize any tax deductions and credits available to you. Investigate credits such as child tax credits, education credits, and energy efficiency credits. A financial professional can also help you discover and optimize various deductions and credits.

Additionally, reexamine your finances to see if you can reduce your taxable income in other ways. One way to do so is to defer your income. Deferred income refers to income you have received but not yet earned. This is common if you offer products or services and have received advance payments. Another way to reduce taxable income is by accelerating your donations. Giving multiple years worth of charitable contributions in one year can bring you closer to the threshold. 

Accounts such as FSAs and HSAs can also offer tax relief. Talk to your financial advisor to see if you qualify. They can help you choose the best option for your unique financial situation, understand your balances, your rollover options, and how to maximize your contributions.

It is important to note that tax laws change frequently. Thoroughly research any tax law changes that will affect you over the upcoming year.

Investment Portfolio Review

When conducting your year-end financial review, give your investment portfolio a check-up. Assess risk tolerance and make adjustments accordingly. Strategize your stock options. Is selling in January 2024 more tax-efficient than doing so this year? You can also look for opportunities for tax loss harvesting. This would involve selling underperforming investments to offset gains, potentially reducing your taxable income. The rules surrounding tax-loss harvesting are complex, so it is best to seek professional advice before taking action. Your financial advisor can help you assess the timing for selling your stock as well as your best options for investment overall. 

Retirement Planning

Year-end is a great time to fine-tune your retirement plans! Are you maxing out your retirement contributions? If you are not currently, it is worth considering, especially to leverage employer-match benefits in workplace plans or increase traditional IRA contributions. Contribution limits change annually, so make sure you are up to date with the latest rules.

Additionally, if you inherited an IRA, specific rules apply to you in regards to how much you have to take up annually, or if it’s your IRA and you’ve reached the required minimum distribution age, you also have to take out distributions.

Another consideration is Roth conversions. If your current tax bracket has room, converting traditional IRA savings into a Roth IRA might be beneficial. This strategy involves paying taxes upfront for tax-free growth later. Consult your advisor to see if this suits your long-term tax strategy.

Make sure that you’re balancing what you’re setting aside for retirement as well as taxable savings. You don’t want all your money in one bucket or the other!

Charitable Giving

The end of the year is often referred to as the season of giving – it’s a great time to look at your charitable giving. This can be a great thing to do from a tax perspective as well as to fulfill personal needs.

The first thing to do is look at donor-advised funds, which are a flexible aspect of charitable giving. You can put lump sums of cash and appreciated securities into a donor-advised fund. From there, you’re able to get a full tax deduction from the amount of money that you put into it. You’re able to give these funds out for however long you want to the charities of your choice.

If you’re at the required minimum distribution age, you can start a qualified charitable distribution (QCD). This allows you to take your RMD (required minimum distribution) and give it directly to the charity of your choice.

Generally, a donor-advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution the organization has legal control over it. However, the donor, or the donor’s representative, retains advisory privileges with respect to the distribution of funds and the investment assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.

Are you ready to talk to a financial professional about your year-end financial planning? Contact Blakely Financial today to get 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.

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

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.

Giving Tuesday: The Power of Charitable Giving

One of the greatest parts of the holiday season is giving. Giving Tuesday, a global generosity movement, takes place on the Tuesday after Thanksgiving each year.

What is Giving Tuesday?

Giving Tuesday began in 2012 as a simple idea: a day dedicated to encouraging people to do good. Since then it has grown into a movement meant to unleash the power of people and organizations to transform their communities and the world at large. It demonstrates the power of philanthropy and collective action, inspiring hundreds of millions of people a year to give, collaborate, and overall celebrate generosity. 

How to Get Involved

Everyone can participate in Giving Tuesday and there are various ways to contribute. The first step to getting involved is choosing a cause that resonates with you and your values. Research the organization of your choice to ensure your contributions go somewhere reputable. After choosing your cause, there are many ways to give. Monetary donations are a common method, but you may also consider donating your time, skills, or other goods when appropriate. You can also participate in local fundraisers, community drives, or events.

Charitable giving is not limited to individuals – it can be embraced by businesses and organizations as well. Ask your employer about a matching program for employee donations, a team volunteer day, donating a portion of sales, or even donating products. Engaging in those activities will boost your organization’s corporate social responsibility while creating a significant positive impact on your community. 

The Impact of Charitable Giving

Charitable giving is vital in addressing various societal issues such as poverty, hunger, education, health, and environmental conservation. There are a number of nonprofits and charitable organizations that do essential work for these causes, making tangible differences in the lives of those who need it most. Many of these organizations rely on the support of donors and volunteers to serve their respective communities. Donated dollars, goods, and time, contribute to providing meals to those who need them, educational opportunities to underserved communities, preserving natural habitats, and much more making the impact of philanthropy undeniable. 

The Joy of Giving and Its Rewards

One of the most amazing aspects of giving is that it does not only benefit the recipients – it benefits the givers, too! Giving to others can be personally rewarding, leading to increased happiness and reduced stress. While you’re making the world a better place you’re also enhancing your overall wellbeing. In order to qualify for tax deductions, donations must be made to qualified organizations from the IRS guidelines.

In addition to emotional benefits, philanthropic giving also offers tax benefits including deductions, exemptions, and estate planning benefits. By working with your financial advisor, you can maximize these benefits while aligning your philanthropic goals and financial objectives.

Giving Beyond Giving Tuesday

Giving can be a year-round endeavor! While Giving Tuesday is a great way to get started, it is not the only opportunity to give. Talk to your financial advisor about building charitable giving into your long-term financial plan. Determine a fixed amount or a percentage of your income or assets you would like to allocate to philanthropy. Explore various philanthropic vehicles to maximize the impact of your donations. As a high earner, you have the unique opportunity to make a meaningful and lasting impact on the world through philanthropy. Start building your philanthropic legacy today!

Ready to begin building your charitable giving into your financial plans? Contact Blakely Financial today to get 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.