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Retirement planning is a journey that can start with your first-ever paycheck and continues until you retire. Making the right decisions during this journey is crucial, as it determines the comfort and financial security you can expect in your golden years.
Despite the wealth of information available, numerous retirement planning mistakes plague investors, potentially jeopardizing their financial futures. That can make navigating the complex world of retirement planning can feel understandably overwhelming.
However, by being aware of common mistakes and seeking guidance from a knowledgeable financial advisor, you can avoid pitfalls and optimize your retirement savings. Remember, the sooner you start saving and planning for retirement, the more comfortable and secure your retirement years can be!
The Top 3 Retirement Planning Mistakes
Here are three of the biggest mistakes I’ve seen people make while planning their retirement:
The “Red Zone” Mistake
One of the biggest retirement planning mistakes someone can make is being too risky with their retirement investment allocation within five years of retirement. We call this period the “red zone” of retirement planning—the five years before and after retirement. During this time, investment losses or poor returns can have devastating impacts. This can increase the fear of outliving one’s savings among retirees.
A real-world example of this occurred in 1999, during the height of the dot-com craze. I met a man we’ll call Tom. Tom was then three years from retirement. He had amassed $1.8 million in his 401(k). It was a comfortable nest egg that gave him a 95% chance his retirement savings would last until age 105. Unfortunately, he did not reduce the risk within his investment allocation when his 401(k) was at this level. The dot-com bubble burst, and the stock market plummeted. Tom’s 401K dropped from $1.8 million to $800,000. Suddenly, the likelihood of his savings lasting to age 90 fell to just 45%. A small allocation change from riskier stock assets to a stable value fund could have spared Tom this agony.
To sidestep a similar fate, performing regular financial checkups and reviewing your retirement investment allocation quarterly is imperative. Adjusting your allocation based on larger market cycles and leaning towards a more conservative approach when markets are at high levels or when you’re nearing retirement is advisable. There’s an old Wall Street saying: “Bears make money, Bulls make money, Pigs get slaughtered.” Tom’s story underlines the importance of avoiding excessive risk at inopportune times.
Ignoring Employer Matching
Another common retirement planning mistake is not taking full advantage of one of the most lucrative benefits of an employer-sponsored 401(k) plan: employer matching.
Employer matching is essentially “free money” that can significantly boost your retirement savings. With such a plan, your employer contributes their own money to your 401(k) plan. It’s called an “employer match” because your employer’s contribution typically matches your contributions up to a pre-determined limit.
If your employer matches your 401(k) contributions, ensure you contribute enough to maximize this benefit!
The Tax Trap
Retirement accounts, such as traditional 401(k) accounts and IRAs, offer tax-deferred growth, which means you don’t pay taxes on your contributions until you withdraw the funds at retirement.
But there’s always a trade-off. If you make pre-tax contributions, such as with a 401(k), then your retirement distributions are considered taxable income. However, you can receive tax-free distributions if you make post-tax contributions, such as with a Roth IRA.
So the question is: when can you most benefit from tax deductions? Now, or later? If you make pre-tax contributions, you can reduce your tax burden immediately. However, you might have higher taxes in retirement. Alternatively, the opposite happens if you make post-tax contributions: you’ll have higher taxes now and potentially lower taxes in retirement.
If you plan to be in a higher tax bracket when you retire, any tax reduction could be beneficial for maximizing your retirement income. Moreover, paying those taxes now (while you’re in a lower tax bracket) could increase your lifetime tax savings!
It’s a personal choice and depends entirely on your plans for your career and retirement.
Other Common Retirement Planning Mistakes
Here are some other common mistakes retirement planners make that can reduce their retirement income:
Overlooking Catch-Up Contributions
If you’re over 50, you can make “catch-up contributions” to your retirement accounts, allowing you to save more as you approach retirement. Ignoring these can mean missing out on thousands of dollars in additional savings.
Neglecting the Impact of Social Security
Social Security benefits play a critical role in most people’s retirement income. Understanding how the full retirement age impacts your benefits and when to start taking these benefits can significantly affect your overall retirement income.
Deferring the Start of Your Saving
One common mistake people make is delaying retirement savings, often believing they have plenty of time. However, the power of compound interest means that the earlier you start saving (even if it’s only small amounts), the more you can accumulate by the time you retire. Don’t put off until tomorrow what can be started today. Your future self will thank you!
Misunderstanding the Impact of Inflation
Many people forget to factor in inflation when planning for retirement. Inflation can erode the purchasing power of your money over time. If your retirement savings aren’t growing at a rate that keeps pace with inflation, your money may not stretch as far as you hoped when you retire. To mitigate this, consider investments with real returns that outpace inflation.
Forgetting about Healthcare Costs
Healthcare is a significant expense for most retirees. Yet, many people overlook these costs when planning for retirement. Creating a budget that factors in the latest estimates for healthcare costs can help you prepare for a more accurate retirement income.
Relying Solely on Social Security
Many people assume Social Security will provide enough income for their retirement years. However, after retiring, Social Security benefits only replace about 40% of an average wage earner’s income. Remember that Social Security is often at the center of governmental budget disagreements, and its future is constantly in flux. Therefore, it’s important not to rely solely on Social Security but to have other sources of retirement income as well.

Navigating the world of financial advice can be a bit like stepping into a labyrinth. Different titles, duties, and standards can cloud the waters and make it difficult to understand who to trust with your financial future. Two terms that often confuse people are “financial advisor” and “fiduciary advisor.”
While a financial advisor and a fiduciary advisor must both follow a code of ethics, they’re held to different legal standards of conduct that can impact the type of advice they can provide.
By understanding the key differences between fiduciary financial advisors and other types of financial professionals, you can make more informed decisions. Remember, your financial well-being is at the heart of these standards of conduct.
It might come as no surprise that this topic is near and dear to me! So let’s demystify these terms, explain the key differences, and outline how to find a fiduciary financial advisor.
What is a Fiduciary Financial Advisor?
As the name implies, a fiduciary financial advisor (or simply, a “fiduciary”) operates under the fiduciary standard. This means they are legally obligated to act in the best interests of their clients. They are required to prioritize your needs over their own.
A fiduciary must also actively avoid potential conflicts of interest and always provide clients with transparent, clear, and concise information about their investments. This includes the duty to disclose any fees they charge and present all options available.
Fiduciary advisors typically offer a wider selection of investment options because their primary goal is to keep their client’s best interest in mind, not to sell a particular product. For instance, even if they use model portfolios, they might still prefer to completely customize each portfolio to match their client’s best interest. This distinction can make all the difference in crafting a well-rounded, flexible financial plan.
How Does a Fiduciary Differ from a Financial Advisor?
At first glance, “fiduciary” and “financial advisor” might appear interchangeable. After all, isn’t a financial advisor also supposed to act in your best interest? The key difference lies in the standards they are required to adhere to.
“Financial advisor” is a blanket term encompassing various types of advisors. They can all offer advice on how to invest your money and provide regular financial checkups. Some of these advisors are fiduciaries, while others are not. Knowing this distinction is crucial as a consumer, as the type of advisor you hire will significantly impact the advice you receive.
For instance, some financial advisors operate under a Broker Dealer, earning commissions instead of fees. They are held to a regulatory standard known as “suitability.” Under the suitability standard, the financial advisor is not a fiduciary and only needs to consider whether the investment product they are selling suits the client, reflecting the client’s risk tolerance and time horizon. Critics argue that this standard leaves room for conflicts of interest.
Working with a fiduciary advisor offers the confidence that your financial advisor will always act in your best interest with their advice. However, financial advisors employed by insurance companies or broker-dealers may have a limited product scope they can offer clients, which could be a disadvantage for you as a client.
Verifying Your Advisor’s Fiduciary Status
So how can you ascertain if your financial advisor is indeed a fiduciary? It’s not as complicated as it might sound. The most direct way is to ask them outright. However, it’s also advisable to verify the information they provide. 
You can do this by visiting FINRA’s Broker Check website, which maintains a database of licensed financial advisors. You can also check which regulatory agency your advisor is registered with—advisors registered with the SEC or a State will typically be held to a fiduciary standard.
Another way to ensure that your advisor acts as a fiduciary is to hire a Registered Investment Advisor (RIA). RIAs are regulated by the SEC or state securities regulators and are held to the fiduciary standard. Additionally, Certified Financial Planners (CFP) are required to follow the fiduciary standard.
Lastly, you can ask your advisor for their “Fiduciary Disclosure,” which they must provide to clients.
Weighing the Costs: Fiduciary vs. Financial Advisor
When it comes to costs, there is no straightforward answer. Every advisor can charge their fees differently. Some may charge a management fee that is a percentage of the assets they manage, while others may charge a retainer or hourly fee. There isn’t typically a price difference between fiduciary and non-fiduciary advisors, but how the advisor is compensated could affect the price you end up paying.
Regardless of the specific structure, understanding how your financial professional charges for their services is essential to the decision-making process. Always ask for a clear explanation of any fees to avoid unpleasant surprises.
Breach of Fiduciary Duty
A fundamental cornerstone of fiduciary relationships is the advisor’s responsibility to always act in their client’s best interests. When a fiduciary advisor fails to meet this high standard, they may be guilty of a breach of fiduciary duty. Such an infraction can have severe consequences, both for the client and the advisor. It can mean significant financial loss or missed investment opportunities for the client. For the advisor, a breach can lead to legal repercussions, registration loss, and reputation damage.
In contrast, a financial advisor operating under the suitability standard does not face such legal obligations. They must ensure that their investment advice suits the client’s risk tolerance and financial goals.
Finding a Fiduciary Financial Advisor
Now that you understand what a fiduciary financial advisor is and the benefits they offer, you might wonder how to seek one out. Of course, a quick internet search can help you find fiduciaries near you. But to find the fiduciary best suited to you, you might consider taking a few extra steps:
1. Identify Your Financial Goals
Before you start your search, it’s essential to understand your financial goals. Are you planning for retirement, seeking to grow your wealth, or protecting your assets for future generations? Identifying your financial objectives will help you choose an advisor who specializes in areas relevant to your goals.
2. Use Online Directories
Once you have a clear idea of what you want, use online directories to find fiduciary financial advisors. In addition to the resources mentioned above, the National Association of Personal Financial Advisors (NAPFA) and the Certified Financial Planner Board of Standards (CFP Board) can help.
3. Look at Their Credentials
A fiduciary financial advisor often holds specific credentials, such as CFP or Chartered Financial Analyst (CFA). These credentials indicate they have undergone rigorous testing and adhere to high ethical standards, including acting as a fiduciary.
4. Ask the Right Questions
When you meet with potential advisors, asking the right questions is essential. Consider asking them questions about their:
Registration Status
Code of Ethics and legal standards
Compensation structures
Fees
5. Verify with Regulatory Agencies
As mentioned above, review online resources to double-check their status. While I don’t expect your chosen financial advisor to lie, it’s easy enough to check upfront before you relinquish control of your financial future.

The goal of The Next Investment Wave is to help you identify potential investing trends early.  If we were to use a baseball analogy, the meat of most investment moves is found near the bottom of the second inning or the top of the third inning. Our research over the past 6 months has caused us to believe that the next investment wave that investors may be able to lean into to create their next round of wealth may be found in the realm of commodities and basic materials.
With any long-term thesis, there needs to be both fundamental and technical factors present in order to fuel potential growth.  In this issue of The Next Investment Wave, we will explore why investors looking for a secular growth trend may want to keep fossil fuels and other commodities on their radar.
Short Term vs. Long Term
Oil prices have plunged by approximately 40% from their 2022 highs, causing doubt among many investors in the oil market bull thesis.  
The recent crude price decline reflects a tug-of-war underway between bullish structural factors and bearish temporary factors, causing us to ask, is this a buying opportunity within a longer-term structural bull market or the beginning of significantly lower oil prices led by reduction of demand as a result of a looming recession?
In the short term (1 week to 2 months), the tea leaves that many oil traders watch, like oil inventories, refining margins, and whether oil prices are in contango or backwardation do appear to give the impression that oil prices in Q1 of 2023 will be flat or possibly down slightly.  
Strong sentiment, increasing demand, geopolitics, and most importantly, supply-side issues that will take many years to fix.
Sentiment – Wall Street is Bullish
Many Oil market analysts believe oil prices are going higher.  For example, Jeff Currie, the global head of commodities for Goldman Sachs, has a $110 forecast for Brent Crude in 2023, while rival investment bank Morgan Stanley agrees, expecting Brent to top the $110 level by the middle of 2023.  
These analysts note several catalysts as dynamics in demand, supply, and geopolitical circumstances arise.
Demand Dynamics
Morgan Stanley probably summed up the demand dynamics best by stating, “We remain constructive on Oil prices driven by recovering demand from China reopening and aviation recovering amidst constrained supply due to low levels of investment, a risk to Russian supply, the end of SPR releases and slow down of U.S. Shale.”  
Being one that has traveled quite a bit the past few months, I can personally attest to the recovery in aviation as each and every airport I have been through has been very busy.  
While the airports and roads seem just as busy as they were prior to the Pandemic, it also seems China could be the biggest catalyst in 2023, as highlighted by the Wall Street Journal “The pent-up demand from China is going to be enormous,” according to comments by Energy Aspects director of research Amrita Sen.  Continuing with “China could swing demand by at least a million barrels a day, and that could easily make the difference between an Oil forecast of $95 to $105 versus $120 to $130.”
“Prior to the pandemic, China was the world’s third-largest consumer of liquified natural gas, second-largest oil consumer, and largest electricity consumer. Resumed manufacturing activity and overall energy use in China could help offset fears of recession-driven demand destruction” 
While demand seems poised to increase through 2023 (assuming there are no or low recession effects), it is the supply dynamics that seem to be part of the thesis that may cause a longer secular bull market in fossil fuel prices.
Supply Dynamics 
Due to poor energy policies of the past, there have been supply-side issues building for many years, and those issues don’t look to be changing anytime soon.   We see a future in which oil supply is constrained for years, necessitating higher prices and lower demand than would be possible during the oil market of the past decade, when supply was abundant. The bull case for oil rests on the constrained supply outlook, which will be evident in a supply deficit that surfaces whenever prices are low and the quantity of oil demanded by consumers ticks above the level of available supply.
Most oil companies plan to keep a relatively firm lid on output and investment spending for new production.  For example, Chevron plans to boost its capital budget by 25% next year to $17 billion; most of that increase is due to inflation and a ramp in lower-carbon investment spending.  Likewise, ExxonMobil plans to boost capital spending to $23 billion from $22 billion. However, it expects its production will remain flat on a per-day basis.  
Without a major demand disruption due to a large recession, demand seems poised to rise amid continued tight supplies. 
Geopolitics
The geopolitics of Oil has always been a hotbed of debate and speculation, and now it seems that many past issues are approaching an inflection point over the next 5-7 years.  
In our opinion, one of the cornerstones of Oil influence is the Saudis, so let’s start the geopolitical discussion there.  For decades Saudi Kings maintained political balance by doling out vital power positions to separate, carefully chosen successors. Positions such as Defense Minister, the Interior Ministry, and the head of the National Guard. Today, Mohammed Bin Salman controls all three positions. Foreign policy, defense matters, oil and economic decisions, and social changes are now all in the hands of one man.   The 2017 coup and rise of prince Mohammed Bin Salman (MBS) was significant in that MBS was backed by the Public Investment Fund (PIF), a fund comprised of trillions of dollars supplied by globalists Carlyle Group (Bush Family), Goldman Sachs, Blackstone, and Blackrock.  MBS gained the favor of the globalists for one big reason. He openly supported their “Vision for 2030”, a plan for the dismantling of “fossil fuel” based energy and the implementation of carbon controls.  In exchange for their cooperation, the Saudis are given access to ESG-like funding as well as access to AI advancements.
Also note, over the past few years, relationships between Saudi, Russia, and China have grown very close.  Arms deals and energy deals are becoming the mainstay of trade, and this has also led to a quiet distancing of the Saudis using U.S. dollars to trade oil.  Recently, the dominoes seemed to have been set with Saudi Arabia announcing at Davos that they are now willing to trade Oil in alternative currencies to the dollar. 
Not to mention from an age perspective, the current Saudi regime is at an age they could be viewing the next few years as their last hoorah to make as much money as they can from traditional energy sources before the world evolves and incorporates more and more energy alternatives.
Conclusions
The importance of the Saudi announcement and willingness to trade oil in alternative currencies to The Dollar, along with the continued strengthening alliance between East vs West, can not be overstated; this is the beginning of a global shift in reserve currencies similar to when The British Sterling imploded many decades ago which resulted in the rise of The Dollar to take its place as the “global petro currency.”
The consequences of this could be very devastating to the US economy. The ability to defer inflation by exporting it overseas is a superpower only the US enjoys. Currently, the Fed can print money perpetually if it wants to in order to fund the government or prop up US markets, as long as foreign central banks and corporate banks are willing to absorb dollars as a tool for global trade. If the dollar is no longer the primary international trade mechanism, the trillions upon trillions of dollars the Fed has created from thin air over the years will all come flooding back to the US through various avenues, and hyperinflation (or hyperstagflation) could be the result.
The effects of the dollar decline may not be immediately felt or become obvious for another year or two. What will happen is consistent inflation on top of the high prices we are already dealing with. Meaning the Federal Reserve will continue to hold interest rates higher, and prices will barely budge, or they may climb in spite of monetary tightening.
All the while, the mainstream media and government economists will say they have “no idea” why inflation is so persistent and that “nobody could have seen this coming.”
While this can sound dire and cause you to reach for a bottle of ludlum to numb the pain, there are and will be significant investment opportunities for those that are savvy enough to see the changes that are taking place in front of us.

Safeguarding your retirement savings in today’s economic climate requires more than a casual approach. Complacency may be the most significant risk to your financial security, especially for retirees. With potential changes in business cycles and an uncertain future, inactivity could be the proverbial deer in the headlights, putting your retirement plan at risk.
That means taking proactive measures to protect your retirement savings to ensure a worry-free post-retirement life. The importance of being involved with your retirement money can’t be overstated. We’ve all spent years dreaming about our dream retirement—and with the proper planning, that’s precisely what we can get.
Typically, that means finding the right balance of safety, growth, and income rates to create a healthy retirement account.
So let’s talk about how to keep retirement money safe!
The Risks of the Current Environment 
Retirees may find the current financial environment challenging depending on their investment temperament. The conservative investor looking for stability and some yield for their savings might struggle with low-interest rates on savings plans. Add in market volatility and inflation, and even a seemingly stable investment might fail to keep pace, reducing the future purchasing power of your retirement income. Recently, there’s been the added fear of “What if my bank fails?”
On the other end of the spectrum, aggressive investors might feel like they’re treading water. Those with a diversified portfolio of stocks, bonds, and mutual funds might have noticed stagnant growth or even losses in the past year. The fear of future financial security may lead to rash decisions that could harm long-term goals.
Engagement and Education: Your Armor Against Uncertainty
The best defense against these challenges is engagement and education. Investing an hour daily to deepen your investment strategies and knowledge can yield considerable benefits. There are many resources, from YouTube and blogs to podcasts, designed to help you learn how to achieve the highest yield with the lowest risk. However, while you broaden your financial horizons, remember to be discerning and a bit cynical. Not all information is reliable, and some may even lead to financial harm.
Building Your Network of Advisors
While you educate yourself, consider building a network of advisors. These individuals can offer second opinions, answer your queries, and provide insights into your investment strategies. This network could include your tax consultant, a financial advisor, an investment club, or friends successful at investing. I recommend the “trust but verify” approach. This helps keep your mind open while also introducing a measure of risk mitigation to your decision-making process. 
Proactive Steps to Protect Your Retirement Savings
Education and understanding where you stand financially are essential to ensuring a healthy retirement income. But what does that look like?
When looking to combat financial complacency, consider taking the following proactive steps:
1. Review Your Savings Account Yield: In the high-inflation economic environment of 2023, compare your savings yields to inflation. If your yields are too far below inflation, you lose more than you earn! So, if your bank savings or CDs earn less than 4%, it’s time to shop around for a better yield.
2. Monitor Your Monthly Expenses: Creating and following a budget is always a sound financial decision! Scrutinize your expenses and eliminate unnecessary costs or forgotten subscriptions. Every penny saved contributes to your retirement security. With the rising cost of day-to-day living expenses, every little bit helps!
3. Strategize Your Required Minimum Distributions (RMDs): If you’re withdrawing RMDs from your IRA, be thoughtful about which accounts or investments to draw from. Selling an investment with a temporary dip could hamper the recovery rate of your portfolio.
4. Become a Tactical Investor: Consider investing strategically. With market volatility high, it’s critical to understand where we are in the business cycle. We’re in a peculiar phase of that business cycle that could last another year. Those with more savings than they need may be able to ride this phase out. But if you need your savings for future healthcare or life expenses, this is the time to deepen your knowledge and expand your network of experts. The goal is to position your savings for the best risk/reward ratio possible.
Timing is Everything
First, if you’re not retired and haven’t started saving for retirement, start! The best time to start saving is yesterday—the second best time is today. It’s likely your employer offers a 401(k) or similar plan, and signing up is typically a simple process.
For those who have already retired or are preparing to, don’t forget to consider your full retirement age (FRA). While you can start receiving Social Security benefits if you retire early, you won’t receive your full benefit. However, delaying Social Security until reaching FRA guarantees full benefits. Furthermore, these benefits progressively increase each year you wait beyond your FRA.
Timing your RMDs is also important. Yes, Required Minimum Distributions are required for 401(k)s and traditional IRAs. But when you begin taking RMDs is based on your age, not your retirement status. In fact, the age requirements for RMDs were recently extended! The longer your plans remain untouched, the more your investments can grow. So, if you can afford to, consider waiting until the legally-required age for RMDs.
Explore Your Options
When it comes to saving for retirement, you have many options. Just like a diversified portfolio is essential for maximizing investment earnings, a diversified selection of retirement plans can help optimize your retirement income.
A good mix of workplace retirement plans (401k), defined contribution plans (IRA, etc.), and defined benefit pensions (if available) can offer diverse investment options, income sources, and tax benefits.
For instance, contributions to a traditional 401(k) or IRA are tax-deductible, meaning they reduce your taxable income for the year you make the contribution. However, when you start making withdrawals in retirement, those will be taxed as ordinary income.
On the other hand, contributions to a Roth IRA are made with after-tax dollars. While this offers no immediate tax benefits, your money can grow tax-free. In addition, you won’t owe income tax on distributions you take during retirement.

Inflation is an economic phenomenon that can stir stress, particularly among retirees. As the costs of goods and services rise, seniors often wonder how to cope with inflation effectively.
Coping with inflation can be challenging, especially in the short term. It's important to remember that inflation, like all economic phenomena, is cyclical. A robust plan, along with some lifestyle adaptations, can go a long way in helping retirees deal with inflation effectively.
Staying informed, reducing costs where possible, investing wisely, and managing your information intake can significantly lessen the burden of inflation. By keeping an eye on the long term and remembering that periods of high inflation are usually followed by deflation, you can weather the inflation storm and stay on track with your financial goals.
Understanding Inflation
Inflation occurs when the price of goods and services in an economy increases over time. While it's a sign of economic growth, it can lead to higher prices at the grocery store, at the gas pump, and in many other aspects of daily life. This can understandably strain anyone's monthly budget—especially for retirees with a fixed income or who have chosen to "age in place."
Inflation is influenced by several factors, such as supply constraints, central bank policies (including those of the Federal Reserve), and overall economic growth. Understanding these factors can help in the formulation of an effective inflation-fighting strategy.
Recreating the Past to Fight Inflation
One direct approach to coping with inflation is to harken back to childhood days when your parents would encourage conservation by urging you to turn off the lights or adjust the thermostat. Today, these seemingly small practices can translate into significant savings, particularly during high inflation. 
Reducing spending on inflation drivers such as food, energy, and transportation can be an effective defense. Consider creating a garden, relying more on public transportation, or even building a chicken coop to cut costs in the long term.
Of course, not all of those are options for everyone. But most people likely have small costs able to be cut from the budget. Enough of those cuts can add up over time. Every penny saved in these areas can reduce the inflationary impact on your daily life.
Investing to Cope with Inflation
For retirees with assets or a healthy savings account, investing in inflating sectors can be a fruitful strategy to cope with inflation. If industries such as energy, mining, or food production are causing inflation-induced stress due to higher prices, consider investing in them. 
These sectors are often home to dividend-paying companies. Investing in them can generate a steady cash flow that could help offset the inflationary pressure on your budget. While interest rates may fluctuate, and investing always carries some level of risk, a well-planned investment can aid in combating the financial effects of inflation. Of course, a financial advisor can help you develop a strategy anytime you consider investing.
Mindfully Managing Information Consumption
Another crucial aspect of dealing with inflation lies in maintaining a level-headed approach. A significant part of this is managing where your information comes from. Media outlets may hype the rhetoric to grab attention, sometimes leading to a distorted view of the situation.
Remember, economic phenomena like inflation are part of the natural ebbs and flows of the economy. Although we are currently experiencing a period of rising prices, it's essential to remember that inflation will eventually find a point of resistance, often followed by a period of deflation. 
Preparing for Deflation
While it's important to have strategies to fight inflation, it's equally crucial to prepare for the next phase: deflation. Deflation, the reduction in the general level of prices in an economy, often follows periods of high inflation. 
During deflation, goods and services become less expensive, presenting an opportunity to make necessary purchases at lower prices. By staying calm and focusing on the long-term view, you can take full advantage of these lower prices when they occur. This can help average out your expenditures over time.
Adapting Lifestyle Choices
Reviewing lifestyle expenses and making adjustments is one of the best money-saving tips for retirees.
Minor adjustments to your lifestyle, like cutting back on discretionary expenses, can help you cope with inflation. Do you have a streaming service you rarely use or a gym membership that's gathering dust? Eliminating these non-essential costs can free up more of your budget to accommodate higher prices for essential goods.
Additionally, consider using a credit card that offers rewards or cash back. If used wisely, credit cards can become a tool that helps, rather than hinders, your budget during inflationary periods.
Exploring Additional Tactics for Reducing Inflation's Impact
While the strategies above provide a robust plan for dealing with inflation, there are more avenues worth exploring when it comes to reducing inflation's impact on your retirement budget.
Adopting Cost-Saving Habits
Everyday habits can play a crucial role in reducing the effects of inflation. This goes beyond turning off the lights and conserving energy. It extends to grocery shopping, where buying in bulk, using coupons, or choosing store brands over name brands can lead to considerable savings. 
Re-evaluating your service providers can also bear fruit. Shop around for the best deals on your phone, internet, or cable TV services. You might find that switching providers or renegotiating your contract terms could lead to lower monthly bills.
Higher Interest Rates and Your Investments
Inflation often influences central banks, like the Federal Reserve, to raise interest rates to slow the economy and curb inflation. These higher interest rates can have a significant effect on your investments.
For bond investors, higher interest rates can mean lower bond prices. However, the higher interest also means that newly issued bonds will offer a higher yield, which could compensate for any capital losses over time.
For stock investors, higher interest rates can impact companies' borrowing costs, potentially affecting their profitability and, subsequently, their stock prices. However, companies that can pass higher costs to their customers may fare better in inflationary times.
One investment that tends to do well during inflationary periods is real estate, as rising prices often lead to increasing home values. For retirees who own their homes, this can increase their net worth.
Looking Beyond Traditional Savings Accounts
With higher interest rates, traditional savings accounts may appear to offer more attractive returns. However, other types of accounts like Money Market or High-Yield Savings Accounts could provide even better returns, helping you to preserve your purchasing power during inflationary times.

Navigating through the retirement planning process can be daunting. It requires some math, some best guesses, and a lot of self-reflection.
One aspect of retirement planning sometimes gets overlooked: timing. The age you retire can impact your retirement and how you plan for it.
I’ve gotten the question many times: “When is the best age for retirement?” As always, the answer can vary depending on the individual and their retirement goals. The answer requires considering the nuances of receiving social security benefits, the implications of working longer, economic factors (such as inflation), and the delicate balance between retirement savings and retirement income.
However, some common guidelines and considerations can help you determine what works for you and your situation.
Today, I want to delve into the topic of Full Retirement Age (FRA), outlining three best practices to maximize your Social Security benefits and highlighting two common pitfalls to avoid.
Three Best Practices for Maximizing Social Security Benefits
How can you maximize the benefits you receive from Social Security? Believe it or not, timing can make all the difference. So, if you want to get the most out of your Social Security, keep in mind the following best practices:
1. Delaying Retirement to Reach Full Retirement Age
One of the most significant considerations when contemplating early retirement is Social Security. Did you know that your benefit amount directly correlates with your birth year and the age at which you start receiving benefits? For example, people born in 1960 or later reach full retirement age at 67.
An essential best practice is to delay receiving Social Security until you reach your FRA to receive 100% of your benefit. If you start receiving benefits before your FRA, your monthly benefit will be a percentage that’s less than the FRA amount.
Consider delaying payments even beyond FRA to give your retirement account an additional boost. Ideally, you’d want to delay Social Security until you reach age 70. This tactic may earn you ‘delayed retirement credits,’ an increase in your Social Security benefit amount by an impressive 8% per year every year you delay receiving benefits until age 70.
2. Maximizing Your Income
The second best practice revolves around your earnings. Your Social Security benefit amount is calculated using your highest 35 years of earnings. If you’ve worked fewer than 35 years, 0’s get averaged in, potentially reducing your benefit. So, it’s beneficial to your retirement income to work at least 35 years or longer to maximize your Social Security benefits. A longer working tenure could also help beef up your 401(k) plan.
3. Coordinating Benefits for Couples
If you’re married, coordinating benefits with your spouse can help maximize your retirement income. For instance, one spouse may choose to delay receiving benefits until age 70, while the other spouse claims at an earlier age. This strategy allows the couple to benefit from the higher monthly benefit amount resulting from delayed retirement while still having some income from Social Security in the interim.
Two Common Mistakes to Avoid
The above best practices can help you remember what to do when determining when to retire. But what should you not do? Here are two of the most common mistakes you should avoid when deciding when to receive retirement benefits:
1. Don’t Get Penalized by the “Earnings Limit”
If you choose to claim Social Security benefits before reaching FRA while continuing to work, beware of the “earnings limit.” This earnings limit changes each year. If you earn more than this limit, it may reduce your benefits. This trap can significantly impact your retirement savings if you’re not careful.
2. Understand the Difference Between Social Security Benefits and Medicare
A frequent misconception conflates the timeline for applying for Social Security benefits with applying for Medicare. Many people think that if they’re not filing for Social Security until age 70, they don’t need to file for Medicare until that age. However, this can lead to costly late enrollment penalties, which can be as high as 10% per year.
To avoid these hefty penalties and maintain your health insurance, you must apply for Medicare at age 65 regardless of when you plan to retire or file for Social Security benefits.
And don’t forget: purchasing a Medicare supplement is one of our top money-saving tips for retirees!
Conclusion
To wrap up, your Full Retirement Age is more than just a number; it’s an integral part of your retirement planning. Whether you’re contemplating early retirement or delaying it until 70, understanding the intricacies of Social Security and Medicare can make a world of difference. It’s about building a financially secure future where your retirement savings and income effectively support your lifestyle and health insurance needs. 

What is the number one question you get asked by business owners.
WHAT IS THE BEST ENTITY TO OPERATE IN AND HOW CAN YOU SAVE ME TAXES WITHOUT TOO MUCH COST HAVING TO INCLUDE EMPLOYEES IN A PLAN.
Let’s shift gears a little and talk about some of the Major changes that 2023 is bringing for Business owners.  Those of you watching please keep in mind that the items we cover in this video are not all inclusive and you should consult your tax professional to make sure you cover all changes that might affect you.  
Secure Act and 2.0 changes for 2023 
In another video Justin and I talked about the free 401k tax credits that the government is offering.  If you missed that we will post a link in the description.  I highly recommend watching that one. 
For those that have heard of these changes, we wanted to bring in Ms. Stern to talk about how she sees the credits playing out and what key features you should look out for. (ie: Paperwork, forms, documentation.)
 
Bonus Depreciation is going away. 2023 instead of 100%, drops to 80% then 2024 60%
           Then 2025 40%, 2026 20%, 2027 gone, unless government writes new law which they
           do when economy slows down.
 
Claiming a net operating loss.Post 2020 no carryback anymore, carryforward indefinite
            80% limitation
 
Excess Business loss limits For noncorporate taxpayers. Extended trhu 2028. Limitation       
            $270,000 or $578,000 filing jt
 
Interest expense limitation
Part time employees now available to participate in 401K
Credit available with 50 or fewer employees, credit for setting up plan
Meals and entertainment were 100% deductible during covid, 2023 back to 50%
SEP IRA can now have as a Roth
Long term care insurance premium can be deducted like self-employed health insurance
           But it has a cap based on age and only long term care part, not life ins part of premium.
 
We also want to cover a few unique tax strategies that most people don’t know are at their disposal and could drastically change their tax liabilities.
Business rents your home for up to 14 days a year
 
Employing your children - benefit you can exclude social security on them if you like. 
            I would pay it so they start racking up their credits in case social security still exists then.
 
MERP - Medical Expense Reimbursement plan.Need formal document. You can use
            for C corp for you and employees or sole proprietor for employees only. 
 
Donna you brought up SDI  can you explain what you mean by that?
Cap on SDI disappearing so recommend to stop SDI withholding for owners
Using form DE459 because no more cap on wage amount
There are also the employee retention credits but there are plenty of firms pushing that.  One of the topics we wanted to get into today was Cost Segregation Studies but because there is so much to unpack here we don’t have time, so if you would like to learn about how you can implement these topics into your tax savings please reach out to us. 949-492-6900.
 
To go along with that, Donna has a great website you can subscribe to to be able to ask a multitude of questions.  It’s like having a CPA in your back pocket you can bounce ideas and questions off of.  Check that out at Prepaidtaxadvice.net
I think we will leave it here for this session.  Thank you for everyone tuning in.  Don't forget to subscribe and check out all of our other videos on Business education.  Thank you Donna for Joining us  and we will see you all again soon.

One of our passions is guiding clients into a comfortable and secure retirement. We have seen firsthand how crucial the five years leading up to retirement (aka the “red zone”) can be in shaping a person’s retirement future.
Planning for retirement may seem overwhelming, especially if you aim to retire in the next five years.
But there’s good news: it’s not too late to take action!
Whether you’re working with a financial advisor or navigating your retirement path independently, taking that first step is crucial. To help, I’ve put together this guide to help you learn how to navigate the crucial five-year period without jeopardizing your retirement goal.
The Two R’s of Retirement
As you approach retirement age, your “long term” is no longer synonymous with Wall Street’s “long term.” At this point, it becomes even more important to remember the two R’s of retirement: Review and Risk.
Review
In the years leading up to retirement, it’s crucial that you review everything that could impact your income or budget. This includes reviewing your net worth, comparing your assets to your debts, understanding your income needs pre- and post-retirement, and considering how your health may affect your future income.
This might seem obvious to some. But many people, busy with life, often overlook this fundamental step. It can help to pause and review your current financial situation with a financial advisor. This simple step can help provide the clarity you need to move forward.
Risk
As you review your long-term financial situation, assessing the risk management within your retirement savings is essential.
Any investment mistakes made during the Retirement Red Zone can significantly impact your retirement security, income during retirement, and ability to retire on time. Assessing and mitigating your risk levels can help you avoid the pitfalls I’ve seen in 1999, 2007, and 2022, where a lack of risk aversion caused many 401(k)s to drop in value. This led many people to delay their retirement as they waited for their retirement investment accounts to recover.
Estimating Your Retirement Needs
How much money do you need to retire? The answer to this question is tricky because it’s different for everybody. I’ve previously provided a more in-depth overview of how to calculate your retirement needs. But here’s an additional, helpful piece of advice:
Don’t assume you can predict everything you need. Build a buffer into your retirement plan. Treat your retirement budget like a home remodel project. Expect it to take longer and potentially cost more than initially planned. Anticipate that your retirement expenses could fluctuate by as much as 20% in any given direction. 
To maintain a tight budget after you retire, it helps to eliminate potential variables that could spike your expenses in retirement. For instance, if you have an adjustable-rate mortgage that may reset after retirement, consider refinancing to a fixed rate before retiring.
Diversifying Retirement Income Streams
In retirement, your income will likely come from various sources, such as 401(k) plans, 403(b) plans, SIMPLE IRA, Roth 401(k), Social Security benefits, pensions, brokerage accounts, and personal savings. Market cycles can influence these income sources’ performance, making regular reviews essential. Spreading your investments across several of these options can help you reduce the risk of watching your entire retirement savings drop at once.
Simplify your strategy
As a rule of thumb, seek income sources backed by real assets, like real estate or quality companies that produce a product or service you understand and that also pay a dividend. Keeping it simple is critical. The KISS (Keep It Simple, Stupid!) method has worked for hundreds of years and will continue to serve you well in retirement.
Kick up the income!
Prepare for future withdrawals by repositioning your investable assets into higher income-producing investments at least a year before retirement. This allows income to accumulate before you start withdrawals, helping you manage risk and providing an emergency fund for unexpected expenses that can often crop up in the first year of retirement.
Dealing with Retirement Shortfalls
If you aren’t on track for your retirement goal, it’s crucial not to panic. You can often improve the situation by reducing expenses and increasing your savings rate. Reviewing your retirement savings and possibly adjusting to a more growth-focused approach can also help bridge the gap.
If you are still working, consider maximizing your retirement benefit contribution limits, taking advantage of employer contributions, and utilizing the tax-deferred or tax-free growth offered by retirement accounts like 401(k) plans and Roth 401(k)s.
Utilizing Tax Advantages
Strategic use of tax-advantaged retirement accounts is an integral part of retirement planning. In 401(k) plans, contributions are made pre-tax. This results in tax-deferred growth over time. Similarly, a Roth 401(k) offers tax-free growth and tax-free withdrawals in retirement, providing a significant source of retirement income.
If you’re self-employed or own a small business, versions of these retirement plans are available to you. So, you can still use tax-advantaged accounts as you prepare for retirement.
A financial advisor can help you navigate the complexities of these tax rules and ensure you are optimizing your retirement plan to help build your nest egg.
Setting Your Retirement Age
The age you retire can drastically impact your Social Security benefits. Your full retirement age can vary depending on the year you were born. For most people, it’s around 66-67 years of age. While you can begin claiming Social Security at 62, waiting for full retirement age can help you receive bigger Social Security checks.
 
 

401(k) plans can be a set-it-and-forget-it retirement account. In some ways, this is great—once you set them up, they continue to grow without any further input from you.
Once you check your balance several years later, you might realize how much money you have in your account. And having access to that much money can be quite alluring!
But these funds are intended to become your retirement income. With that in mind, you might wonder at what age you should start making withdrawals from your account.
When it comes to figuring out the right age to withdraw funds from your 401(k), there are several factors to consider, such as age, taxes, and retirement goals. So, let’s go over those factors to help you better understand what age is the right age to start making 401(k) withdrawals.
How Taxes and Age Impact 401(k) Withdrawals
When it comes to 401(k) withdrawals, there are two key factors to consider: taxes and your age.
Taxes
401(k) plans, just like Traditional IRAs, are pre-tax retirement accounts. This means that you won’t need to pay taxes on the income you contribute. However, you’ll need to pay taxes when you withdraw that money from your 401(k).
The amount you’ll pay in income taxes depends on your tax bracket at the time of withdrawal. You’ll owe these taxes on top of any withdrawal penalty you might incur. For larger withdrawals, it’s best to consult with a tax expert before acting to avoid unexpected tax implications.
Age
On the age side, the magic 401(k) withdrawal ages are 59 1/2 and 72. Age 59 1/2 is the threshold to avoid the 10% early withdrawal penalty on top of ordinary income taxes. While there are some exceptions to this penalty for reasons like disability or certain health expenses, the standard rule is that withdrawing funds before this age will incur the penalty.
At age 72, the IRS requires that you start taking Required Minimum Distributions (RMDs) from your traditional 401(k) or Traditional IRA. If you fail to withdraw the required amount, the penalty can be as much as 50% of the amount you were supposed to withdraw. Consulting with a financial advisor or tax professional as you approach this age can be crucial for ensuring compliance with RMD rules.
Other Considerations
Withdrawing money from your 401(k) before the minimum withdrawal age can have significant financial implications. If you withdraw before 59 1/2 and don’t qualify for any of the few exceptions, be prepared to pay both ordinary income tax and an additional 10% early withdrawal penalty on the amount withdrawn.
Keep in mind that a 401(k) offers tax-deferred growth. So, if you can afford your lifestyle until age 72 without making withdrawals, your investments can continue growing even during retirement. This can help you maximize your retirement income after taking RMDs at age 72.
You should also consider your retirement goals. Accessing your 401(k) funds early could prevent you from having enough money for retirement. Generally, taking early withdrawals from your retirement plans should always be your last resort.
401(k) vs. IRA
When it comes to withdrawals, the rules for a traditional 401(k) and a traditional IRA are essentially the same. Both are pre-tax retirement accounts that require you to pay income taxes upon withdrawal. They also abide by the same age-based withdrawal rules and early withdrawal penalties. So, choosing between a traditional 401(k) and IRA can come down to their one primary difference: who manages the account.
Typically, employers offer a 401(k). The plan administrator is often either the employer themself or a financial institution they’ve chosen.
An IRA is an individual plan you shop for and buy yourself. So, you have greater control over the management and investment options, such as mutual funds, stocks, or bonds.
Converting Your 401(k) to an IRA
If you’ve left your employer or are considering more investment options, you might consider converting your 401(k) to an IRA. The process of converting a 401(k) into an IRA is called an IRA conversion. It might also get referred to as a 401(k) rollover, though this more often means rolling over funds from one 401(k) to another.
First, you’ll need to pick a custodian—the company from whom you’re buying the IRA. Many custodians are out there, so choose one that offers extensive education and support to manage your IRA effectively. If you’re planning a conversion, make sure they can accept qualified funds from a 401(k). Once you’ve selected a custodian and opened an IRA with them, you can then request a rollover from your 401(k) provider.
This process typically involves providing the name and account number of your new IRA, so it’s best to have this ready before initiating the rollover. Sometimes, your 401(k) provider might send you a physical check payable to your new IRA custodian. If this happens, you have a 60-day window to deposit these funds into your new IRA. If you fail to deposit the funds within 60 days, they’re considered taxable income, and you’ll be required to pay taxes on them. 
Roth 401(k) and Roth IRA
Another option to consider in your retirement plan is the Roth 401(k) or the Roth IRA. Unlike traditional 401(k) plans and IRAs, these accounts are funded with after-tax dollars. This means that when you withdraw funds from a Roth 401(k) or Roth IRA, the withdrawals are typically tax-free, provided certain conditions are met.
In the case of Roth 401(k) plans, the same age rules apply as traditional 401(k)s. You can withdraw your contributions and earnings tax-free if you’re at least 59 1/2 and the account has been open for at least five years. For Roth IRAs, you can always withdraw your contributions tax-free and penalty-free at any age. However, to withdraw earnings tax-free, you must be at least 59 1/2, and the account must be at least five years old.
The Importance of a Strategic Retirement Plan
Creating a strategic retirement plan is more than just saving money in your 401(k) account. It involves understanding how and when to withdraw funds, managing your tax bracket, and potentially diversifying with other retirement accounts (like a Roth IRA).
A well-rounded retirement plan considers your current financial situation, your retirement goals, and the best ways to utilize your retirement accounts to achieve those goals. This includes understanding the benefits and drawbacks of early withdrawals, the implications of your tax bracket on your retirement savings, and the potential advantages of a Roth IRA.
It’s also important to remember that every individual’s circumstances are different. What works best for one person may not be the best solution for another. This is where the expertise of a financial advisor comes in. By considering your personal financial circumstances and goals, you can create a retirement plan tailored to your needs.

It’s no secret that healthcare services can cost what might be described as “too much money.” When a patient suffers from a disability, injury, or illness that requires long-term care, those costs can compound quickly.
Enter long-term care insurance. Policies are available for purchase as either a standalone policy or as a rider on a life insurance policy. Whichever option you choose, the insurance helps cover some of the costs associated with long-term care.
When you shop for long-term care insurance, you have a lot of options to choose from. As with most insurance policies, they often come with restrictions, regulations, and varying factors that can affect the cost of premiums. Understanding these nuances can help you find a policy that meets your needs and budget.
Today, we’re offering five helpful long-term care insurance facts and tips so you can better understand what to look for when shopping for a policy that suits your needs.
1. Coverage
Long-term care insurance covers various services associated with extended care needs that are not typically covered by regular health insurance or Medicare. This includes:
Help with activities of daily living, like bathing and dressing
Skilled nursing care (at home)
Physical and occupational therapy
Hospice care
Home modifications, like grab bars and wheelchair ramps
This insurance may also cover the cost of care in different settings, such as in-home care, adult day care, nursing homes, and assisted living facilities.
2. Elimination period (EP)
The elimination period of long-term care insurance refers to the period between triggering an insurance payout and receiving the benefits. During this time, the policyholder must pay out-of-pocket for any care they receive. This waiting period is similar to a deductible in other types of insurance, except that it is measured in time rather than in dollars.
The length can vary depending on the policy and the insurer and can last as long as a year. With a typical policy, you’ll receive between a 30 day EP and a 90-day elimination period.
Choosing a more extended elimination period can help lower the cost of premiums. Still, it also means that the policyholder will have to cover more of their care expenses before the insurance benefits kick in.
It’s important to consider the length of the elimination period when selecting a long-term care insurance policy to ensure it fits your financial situation and care needs.
Elimination periods usually count time in one of four ways:
Calendar days: the number of benefit eligibility days following the insurance provider approving the claim
Service days: The number of days a patient receives (and pays for) qualified care services
Service days with credit: Similar to service days, with one change: patients who pay for one day of service in a week can receive a whole week’s (7 days) credit toward their elimination period
Waiver of EP for Home Care: If receiving care at home, the patient might qualify for an elimination period of zero days. With this, the patient can immediately receive benefits for care received at home.
3. Tax benefits
Here, there’s good news and better news.
The good news: the benefit payments you receive are not considered income. Because of this, they’re non-taxable and don’t increase your tax burden.
The better news: Like long-term care expenses, your insurance premiums might be tax-deductible! However, there are two catches:
To earn the deduction, you must itemize your taxes.
Your premiums must exceed 7.5% of your Adjusted Gross Income.
Additionally, a qualified family member who pays for the premiums can deduct the payments from their taxes. To qualify, they usually need to be a close family member and be the only person claiming the deduction on that policy. Again, the premiums must exceed 7.5% of their AGI.
4. Disqualifications
Several factors may disqualify a person from obtaining long-term care insurance. Some of these factors include:
Age: Some insurers may have an age limit for coverage eligibility. Usually, patients considered elderly (age 85 and older) can no longer apply for insurance.
Pre-existing medical conditions
History of drug or alcohol abuse
A criminal record
History of mental illness
It’s important to note that each insurance company has its own underwriting guidelines, so an individual may be denied coverage by one insurer but be eligible for coverage with another.
5. Costs
One of the first things to consider when shopping for long-term care insurance is the cost of premiums. Premiums vary widely depending on various factors, making them hard to predict. The primary factors that can affect the costs of your long-term care insurance premiums include:
Age
Health
Amount and duration of coverage
Marital status
Gender
The insurer’s policies
The American Association for Long-Term Care Insurance (AALTCI) releases extensive cost studies every year.
Because age is a factor, it can help determine the best time to purchase an insurance policy. It’s generally recommended that individuals purchase a policy by age 65, as premiums tend to increase as they get older. This is partially because we’re more likely to suffer from increased health problems as we age.
Waiting too long to purchase coverage can also increase the risk of being denied coverage due to pre-existing conditions or other factors. However, it’s important to note that everyone’s situation is different, and it’s never too early or too late to start planning for your future care needs.
Consider consulting a financial advisor to help guide you through the process.