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6 Rarely-Celebrated Financial Milestones

Personal Finance Retirement

There are certain financial milestones that tend to get the lion’s share of attention—namely, retirement, buying a home, or selling a business. But there is a huge variety of financial goals you might have. In fact, there are some financial milestones you may not even be aware of! Take advantage of the varied opportunities on your long-term wealth-building path, and celebrate achievements along the way.

1. Kids graduating or leaving the nest

When the kids move out, some of your household expenses may go down, providing you the opportunity to ramp up savings for retirement or other goals. You will also enjoy more time and flexibility to go and do things—all while you are still in the workforce and have income.

2. Reaching a saving milestone.

Whether it’s your first, fifth, or twentieth million (or more), securing your financial future is an achievement! Of course, the number in itself is fairly arbitrary—having $5 million is not significantly different than having $5,000,001 or $4,999,999. However, it is a threshold bringing you closer to your goals, which is an achievement worthy of celebration.

3.  A "birthday gift" at age 50

At age 50, the government gives you a birthday gift in your workplace retirement plan (such as a 401(k) or 403(b)). At this age, you may start making catch-up contributions of $6000, in addition to the maximum contribution (currently $18,500 per year). Catch-up contributions give you the opportunity to put away more in a pre-tax account. The average American expects to retire at age 66. Given a 7% annual return over those 16 years, you could accumulate a whopping $731,085 from maxing out your retirement plan contributions, including the catch-up amount. Nearly a quarter of that total ($179,041) would be just from your catch-up contributions alone!

4. Opportunity to save on costs at age 65

Most people qualify for Medicare Part A at age 65, and will be signed up automatically if they are currently receiving Social Security Benefits. If you are not receiving Social Security benefits yet, you must sign up for Medicare within certain timeframes (3 months before you turn 65, during the month you turn 65, or up to 3 months after you turn 65). After this time you may have to pay higher premiums.

Don’t miss the deadline, and make sure to sign up for Medicare Part B plus a Medicare supplement if it makes sense for your situation. Completing this process correctly will save you money in the long term, and is likely far cheaper than what you had been paying for health coverage.

5. Navigate RMDs at age 70.5

Tax-deferred growth is a powerful wealth driver, but when you turn 70.5, the IRS comes knocking. At this age you must start taking your Required Minimum Distributions and paying taxes on these distributions. Not the most exciting milestone, admittedly.

However, your Required Minimum Distributions do play an important role in your retirement income strategy, and can provide you with a reliable income stream for years to come. Halpern Financial’s Retirement Income Security Plan report helps our clients to visualize how the RMD can be used to replenish certain accounts, providing additional peace of mind for your retirement.

6. Business anniversary

Small business survival rates are notoriously low. About two-thirds of businesses with employees survive 2 years and about half survive at least 5 years. As one would expect, after the first few relatively volatile years, survival rates flatten out. (Source: Bureau of Labor Statistics, Business Employment Dynamics.) Just 10% of family businesses remain active, privately held companies for the third generation to lead (Harvard Business Review). If you own a successful business, you know that success is no accident. So be sure to celebrate with your team!

 

 

 

 

 

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Halpern Financial, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.


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