There have been many tax changes in recent years. In 2017, we had the Tax Cuts and Jobs Act (TCJA), which arguably was the largest tax reform in the past two decades. Two years later, in 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. This brought substantial changes to tax law and retirement planning. Finally, and most recently in 2020, we have The Coronavirus Aid, Relief, and Economic Security (CARES)Act – the largest stimulus care package in U.S. history ($2.2 trillion) that was designed to stimulate the economy after being crippled by COVID-19. For context,…
Insights & Advice
Zack Marcotte
Your expenses change with your age
Traditionally, many financial planners have used the income replacement ratio to determine how much money you will need to fund your retirement. The age-banding approach is an innovative strategy chosen due to its increased accuracy and lower initial money required to create an income stream throughout a 30+ year retirement. A hypothetical retirement will be divided into three separate periods. A different investment mix with different amounts of risk taken is then used for each period. Separating expenses into various bands allows your financial planner to develop a plan with both improved accuracy, and outcomes. Age banding is a relatively…
How to Achieve Financial Agility
What is financial agility? Well, it’s a term I made up, but it seems descriptive enough to be easily understood. Financial Agility is the ability to adapt to changes to your financial future, as well as to overcome any challenges along the way. Your “agility score” is tied to one simple metric: your fixed expenses. If we look at the costs you face every month compared to your total income, we will have our starting place. There are numerous ways to increase your agility, but not all of them are easy. First, you need to reduce your fixed costs. Things…