Monthly Economic Summary (July)

Inflation has now well surpassed the Federal Reserve’s (FOMC) target, as the core PCE accelerated to +3.5% year-over-year.  The FOMC recognizes the need to reduce accommodation in the quarters ahead and we believe it will start tapering the pace of its purchases in December. As always, if you have any questions or want to discuss the economy or markets more in-depth do not hesitate to give us a call!

Sources:

  1. Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov)
  2. Indices:
    • The Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
    • The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
    • The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
    • The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

Summer Webinar Series Replays Available

Our BFSG Summer Webinar Series is now available to watch on our YouTube channel “BFSG University”.

This Summer Webinar Series focused on #retirementplanning around the following topics:

  • Retirement Q&A: Ask the Experts – Hear the Certified Financial Planner™ professionals at BFSG answer #retirement related questions.
  • Retirement Accounts: Traditional vs. Roth – Learn the typical ways to save in retirement accounts and why #taxdiversification matters in retirement.
  • Healthcare in Retirement – BFSG and our special guest speaker, Brian McArthur, the founder of The Medicare Execution Process™, discuss navigating the #healthcare landscape once you reach retirement.
  • The Future of Retirement in America – BFSG was joined by Ted McCann, Vice President of the American Ideal Foundation and a former Senior Advisor to former House Speaker Paul Ryan, to discuss the retirement landscape and how it could change in the future.

Have a friend, family member or colleague who might be interested in watching our webinars? Feel free to forward them the link: https://www.youtube.com/playlist?list=PLTcnlJ5qj_fcLxv5BK_IGry_RiI-ywSep

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

Mid-Year is a Good Time for a Financial Checkup

As life emerges from the pandemic to a “new normal,” a mid-year financial checkup may be more important than ever this year.  Here are some ways to make sure that your financial situation is continuing on the right path.

Reassess your financial goals

At the beginning of the year, you may have set financial goals geared toward improving your financial situation. Perhaps you wanted to save more, spend less, or reduce your debt. How much progress have you made? If your income, expenses, and life circumstances have changed, you may need to rethink your priorities. Review your financial statements and account balances to determine whether you need to make any changes to keep your financial plan on track.

If you are a BFSG client, please remember to contact your financial advisor if there are any changes in your personal or financial situation for the purpose of reviewing our previous recommendations.

Take a look at your taxes

Completing a mid-year estimate of your tax liability may reveal new tax planning opportunities. You can use last year’s tax return as a basis, then factor in any anticipated adjustments to your income and deductions for this year. Check your withholding, especially if you owed taxes or received a large refund. Doing that now, rather than waiting until the end of the year, may help you avoid owing a big tax bill next year or overpaying taxes and giving Uncle Sam an interest-free loan. You can check your withholding by using the IRS Tax Withholding Estimator or by talking with your tax advisor. If necessary, adjust the amount of federal or state income tax withheld from your paycheck by filing a new Form W-4 with your employer.

Tax planning typically is backwards looking at just the past year. We recommend you take a proactive forward-looking approach by coordinating with your tax professionals to find ways to reduce your taxes now and in future years.

Check your retirement savings

If you’re still working, look for ways to increase retirement plan contributions. For example, if you receive a pay increase this year, you could contribute a higher percentage of your salary to your employer-sponsored retirement plan, such as a 401(k), 403(b), or 457(b) plan. For 2021, the contribution limit is $19,500, or $26,000 if you’re age 50 or older. If you are close to retirement or already retired, take another look at your retirement income needs and whether your current investment and distribution strategy will provide the income you will need. Check out BFSG’s recent webinar on Retirement Accounts (Traditional vs. Roth) and learn ways to maximize your retirement savings.

Evaluate your insurance coverage

What are the deductibles and coverage limits of your homeowners/renters insurance policies? How much disability or life insurance coverage do you have? Your insurance needs can change over time.  As a result, you’ll want to make sure your coverage has kept pace with your income and family/personal circumstances. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased.

Ask questions

Finally, you should also ask yourself the following questions as part of your mid-year financial checkup:

  • Do you have enough money in your emergency fund to cover unexpected expenses?
  • Do you have money left in your flexible spending account?
  • Are your beneficiary designations up-to-date?
  • Have you checked your credit score recently?
  • Do you need to create or update your will?

As always, our team of CERTIFIED FINANCIAL PLANNERS™ stands ready to assist: financialplanning@bfsg.com.

Prepared by Broadridge Advisor Solutions. Copyright 2021. Edited by BFSG, LLC.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

The Future of Retirement in America

Most retirement savers assume they will be able to access Social Security and Medicare in retirement, but what if those options become unavailable?

Join our webinar on July 29th at 10 am PST for an important discussion on the future of retirement in America and how you can prepare for potential changes to the retirement landscape. BFSG Wealth Manager Andrew Donahue, CFP®, MHA will be hosting the event, and Andrew will be joined by Ted McCann, Vice President of the American Idea Foundation and a former Senior Advisor to former House Speaker Paul Ryan.

How Are Workers Preparing for Retirement?

By:  Tina Schackman, CFA®, Senior Retirement Plan Consultant

According to a 2021 Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI), U.S. workers preparing for retirement vary by age but there are signs that savings habits are starting to take place earlier than previously reported. In fact, 48% of respondents between the ages of 25 and 34 reported having savings of $100,000 or more.

Starting to save early is one of the easiest ways to accumulate savings for retirement.

Of the 31% of respondents that stated they made changes to their retirement plan since January 1, 2020, more than half increased the amount they contribute.  A workplace retirement plan, such as a 401(k) or 403(b) plan, can help build retirement savings through tax-deferred savings and the potential for your company to match your contributions to the plan.  Check out our recent Summer Webinar Series “Retirement Accounts: Traditional vs. Roth” for typical ways to save for retirement.

What’s getting in the way of reaching savings goals?  Debt is the #1 reason, and it weighs heavier on workers who experienced loss of income or a job.  In fact, 70% feel debt is negatively impacting their ability to save for emergencies. Establishing and sticking to a budget can be a great way to get your finances under control and find more ways to save.  We recommend you watch the replay of “Connecting the Dots to Your Financial Future (Part 1)” to learn some budgeting tips and debt payment strategies.

Confidence is key! The majority of U.S. workers remain confident in their ability to live comfortably in retirement. 

Source: EBRI 2021 Retirement Confidence Survey (*1993 first year asked)

We wanted to provide a few tips to start creating healthy savings habits:

  1. Pay yourself first and start early.
  2. Don’t take on more debt than you can afford.
  3. Pay down credit cards as soon as you can.
  4. Understand your employer’s retirement plan.
  5. Create a budget and track expenses.
  6. Set financial goals and have a plan (start with a small goal that can be easily attained)

Contact BFSG if you’d like to learn more about developing your personal financial plan at financialplanning@bfsg.com.

Prepared by Broadridge Advisor Solutions. Copyright 2021. Edited by BFSG, LLC.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.