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How To Financially Survive The Holidays

The holiday season can be a joyful, magical time for the kids and older folks alike.  While there are so many reason s to love the holidays, there are also plenty of reasons to be careful during them.  Why?  Because the holidays can be a season of poor financial choices.  That’s according to the researchers.  In fact, one study found that 2 out of 3 people plan to make bad financial decisions during the holiday season.  That’s right, they plan to make poor decisions!  They are taking money out of savings, racking up credit card debt, and simply spending more than they can afford.  Having a plan is the most important thing during the holidays.

“A goal without a plan is just a wish.”  These famous words by author, pilot, and war hero Antoine de Saint-Exupery ring true in many aspects of life – including the holiday season.

In fact, one of the best ways to manage holiday stress is to make a plan for everything you need to do – and then stick to the plan.  A good plan can keep you on track to enjoy a wonderful holiday season.  Planning your schedule and your “To Do” list is just one way to plan for a more enjoyable holiday season.

It’s also a good idea to make a plan for what you’ll do when you face holiday stress triggers.  Finding the perfect holiday gifts can be a major stressor.  Usually, that stress doesn’t come from the time or money spent searching for the perfect gift.  Instead, gift giving anxiety mostly comes from trying to find the ideal gift to send the right message and provide enough meaning.  One way to avoid holiday gift stress is to focus on giving an experience that has lasting value.  In fact, research shows that experiences make people happier than possessions.

If you are struggling to figure out what to give your loves ones, consider things they have always wanted to do or things you can do with them.  The gift of an experience can create lasting happiness and memories that a cherished for a lifetime.

With a plan, some boundaries, and the right priorities, you can invest your time and money into things that give you joy during the holidays.  And that can mean a far better outlook as you enter the New Year.

As a financial adviser, I’ve seen how the holidays pressure takes focus away from what really matters and causes financial and mental stress.  And I’ve helped many clients embrace the holiday spirit without going off track.  The truth is good financial health isn’t just about portfolios and investments – it’s also about good day to day behaviors, budgets, and thoughtful spending.

If you are stress about finances this holiday season, give some thought to the tips I gave about and give my office a call. I’d love to hear your holiday plans and help you create a personal financial strategy for the holiday season!

By Kurt Arseneau

DIRECT: 470-839-9005  •  EMAIL: kurt@arseneauadvisory.com  •  WEB: www.ArseneauAdvisory.com

 

Disclaimer: Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM).  AEWM and Arseneau Advisory Group are not affiliated companies.  Arseneau Advisory Group is not a CPA but provides tax services through it’s sister company Vickery Tax and Accounting, LLC.

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Congress New Secure Act of 2019:  Market Risk Volatility Has Nothing on Tax Risk Volatility

By Kurt Arseneau

In May, the U.S. House of Representatives passed a retirement savings bill.  The Setting Every Community Up for Retirement Enhancement, or the SECURE Act of 2019.  The SECURE Act, on paper, looks very good at first glance, but the devil is in the details.

There are many key provisions that have been adopted in this new bill to help boost American’s retirement savings.  Some of those key provisions are:

  1. Small Business 401ks – You would be able to have multiple small businesses band together to group their plans for their employees.
  2. Annuity Adoptions – This would allow employer-sponsored 401k plans to add annuities as investment options on the menu.
  3. 529 plans – 529 plans would be extended to pay for expenses related to apprenticeship or to pay back as much as $10,000 in student loans.
  4. Grant part-time workers benefits – Long-term part-time employees would be able to participate in their company’s 401k plans.
  5. More time in IRAs and 401ks – The bill pushes back the age for required minimum distributions (RMDs) from 70 ½ to 72 years old

On the surface, the above provisions, seem like a good thing.  However, the devil is always in the details.  The age limit being moved to 72 from 70 ½ on RMDs is a good idea, except that we are in $22 trillion of national debt.  You don’t really think Congress would want to go without this tax revenue, do you?  They need to make up for this loss of revenue in some form.  Here is the money grab and a bigger risk to your nest egg then Market Volatility, Tax Risk Volatility: to make up for the lost tax revenue, the House bill would require Americans who inherit an IRA to withdraw the money within 10 years of the accounts owner’s death, along with paying any taxes due.  What’s important here is that the surviving spouses and minor children would be excluded.  They have essentially created higher costs for your children and grandchildren.

This would be the death of the estate planning strategy known as the “stretch IRA.”  Under current law, heirs spend down the inherited IRA over their lifetime, reducing the tax hit all at once.

There is a Senate version to this same bill known as RESA.  This version is a little less punitive and may call for a 5-year payout for inherited IRAs over $400k per heir.  I am sure we will see a few more iterations of the bill from both the House and the Senate, but all signs point to change on the stretch IRA component.  Details need to be hashed out between the two bodies, but they both agree for changes to inherited IRAs after December 31, 2019.

 In closing, your favorite Uncle Sam will get his revenue in some way or another.  The big question is what will you do to keep from losing your long hard nest egg from the Tax Risk Volatility?  Call us today to find out how we are planning for these changes and continue to create an environment for our clients to win by purpose driven planning.  Till next time, be well!

Kurt Arseneau,

Investment Advisor Representative

Registered Financial Consultant

DIRECT: 470-839-9005  •  EMAIL: kurt@arseneauadvisory.com  •  WEB: ArseneauAdvisory.com

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5855 South Vickery Street
Cumming, GA 30040

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