Monthly Newsletter: 2017 Financial New Year’s Resolutions

Turning the calendar to a new year can be an exciting time filled with optimistic goals for the new calendar year. Frequently heard New Year’s resolutions are to work out more, eat healthier, get into better shape, make better choices and get finances under control. As the year progresses, those who have a plan in place to achieve their resolution stay focused and keep their resolution top of mind. Come December, about 9.2% of people will be able to say with conviction they were successful in achieving their resolution.[1] That means roughly 90.8% of those who make New Year’s resolutions will fail to achieve their goal.

Do you want to be part of the 9.2% to achieve your 2017 New Year’s resolution? It all starts with a plan. When it comes to health and fitness, it means planning your workout schedule, finding a workout partner, avoiding fast foods, taking the stairs instead of the elevator, and making healthier choices at restaurants and at the grocery store.

When it comes to your financial resolutions, it’s important they are realistic and achievable. You may not be able to pay off your entire mortgage this calendar year, but you should be able to create a monthly family budget so you know what you’re spending and where you’re spending it, pay off a high interest rate credit card, or create an emergency savings fund.

For more information on how to manage your finances by creating a family budget, read our whitepaper.

If you feel like you’ve got a good handle on your finances, perhaps your resolution should focus on retirement or planning and protecting your legacy. Although your retirement may be years away, achieving a realistic goal this year will go a long way towards creating good habits in the years to come so you can enjoy a comfortable retirement down the road. Here are some examples of resolutions that are easy to accomplish and will give you a head start on your retirement or legacy plan:


Increase your 401(k) contributions by 1% or more

Something as simple as increasing your 401(k) contribution election by 1% or more can have a dramatic effect on your retirement. If you’re in line for a merit based or cost of living increase, the effect of this change should be minimal on your take home amount. And it may be as simple as logging in to your employer sponsored plan or letting your payroll department know of your changes. For example, a 45-year old making $70,000 per year would only need to contribute an additional $58 per month to achieve an estimated additional $1,880 yearly income in retirement.[1] And if you’re fortunate enough to be in your 20’s, consider that a 25-year old who makes $40,000 per year would only need to contribute an additional $33 more per month to achieve an estimated $3,870 annual boost to their retirement income.[2]

Not bold enough for you? – Watch this video for tips on how you can reach 401(k) extraordinaire status.


Fully Fund an IRA

Did you know you can make 2016 IRA contributions until April 18, 2017? Whether you have a Traditional or Roth IRA, your total contributions to all of your IRAs cannot be more than $5,500 (or $6,500 if you’re age 50 or older) per calendar year. Contributions to a Traditional IRA can be tax-deductible but may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels, as shown in the following chart[1]:


If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
single or
head of household
$61,000 or less a full deduction up to the amount of your contribution limit
more than $61,000 but less than $71,000 a partial deduction.
$71,000 or more no deduction.
married filing jointly or qualifying widow(er) $98,000 or less a full deduction up to the amount of your contribution limit
 more than $98,000 but less than $118,000   a partial deduction.
 $118,000 or more  no deduction.
married filing separately  less than $10,000   a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “single” filing status.


Update Estate Planning Documents

When was the last time you looked at your estate planning documents? Think about everything that has happened in your life since then. Estate Planning is about more than avoiding taxes and designating beneficiaries. Do you have minor children? Have you designated who could become their guardian in the event of your death? In the event of your incapacitation, who do you want making health and financial decisions for you on your behalf? If you haven’t met with an estate planning attorney in the past five years, this could be an easy to implement resolution that will provide peace of mind.

Not sure if you need a will or a trust, read our whitepaper.


Evaluate Insurance Coverage

In addition to auto and homeowners insurance, consider an umbrella liability insurance policy, especially if your assets exceed the liability coverage provided by your other property and casualty policies. Ask your insurance advisor for quotes on disability and life insurance coverage and purchase supplemental coverage if you need more. You may also want to consider purchasing long term care insurance, as the costs of health care can have a detrimental impact on your retirement and financial legacy.

Let’s make 2017 the year you join the 9.2% of people who can confidently check off their New Year’s Resolution! Contact your Wealth Advisor and make a plan today![/vc_column_text][vc_separator color=”mulled_wine” style=”dashed” border_width=”8″][vc_column_text]

Monthly Investment Review: December 2016


The equity investor enjoyed December as the rally continued into the early part of the month on the market’s expectations of a Trump presidency and further economic growth. The Dow Jones Industrial Average, up 3.34% for the month, stole many of the year-end headlines as it marched towards the record-breaking 20,000 mark before pulling back by year-end. The Dow is a price-weighted index, meaning that stocks with the highest price have a larger impact on the overall movement of the benchmark. Companies like Goldman Sachs at $240 per share, 3M at roughly $177 and IBM at $168 per share alone make up nearly 20% of the benchmark as of this writing. The S&P 500 along with the NASDAQ Composite, however, are weighted by the company’s total value rather than price. Both of these indices were up 1.82% and 1.12%, respectively for December. Contributing to the positive momentum was the Federal Reserve and the announcement of a rate hike that took place before end, commenting that the economy was looking stronger and the job market appeared to be at or near full capacity. What’s more, the Fed is projecting three more hikes in 2017 given the current trajectory of the economy. While this was seen as good news by equity investors, it was another blow to those in fixed income as rising rates continue to weigh on the performance of bonds. All else being equal, rising rates cause bond prices to fall. Looking ahead, there exists a lot of uncertainty as it relates to exactly how the Trump presidency will unfold and China’s growth expectations. We will also be paying close attention to the Eurozone and its future as well as the health of its banking industry which has been under stress. While we don’t’ claim to hold a “crystal ball”, we feel an actionable financial plan can help investors weather whatever 2017 may bring.[/vc_column_text][vc_separator][vc_column_text]


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