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A Sophisticated Approach to Financial Services
EVERY investor or retiree deserves to have innovative and sophisticated portfolios typically reserved for the institutional and high net-worth investors.
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Who We Are
We are driven by the belief that EVERY investor deserves to have the type of innovative and sophisticated portfolios typically reserved for the ultra-high net worth or institutional investors. Our clients gain clarity and transparency of their retirement through portfolios which are uniquely crafted to each individual. Hawks Financial is a boutique firm, specializing in innovative investment and retirement solutions not typically available to the traditional investor through a “big-box” investment firm.
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AFFILIATE PARTNER OF 401(k) MANEUVER
Professional Account Management to help employees Grow and Protect their 401(k)
Risk Management And Financial Planning
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Investment Management
You deserve a portfolio uniquely designed around you and your goals. Experience sophisticated strategies not typically found in a "big box" firm.
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Retirement Income Planning
Is the possibility of outliving your savings a concern? Create peace of mind through a portfolio designed around sustaining income.
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Estate and Legacy Planning
The concept of estate planning is simple. The vehicles, planning, and implementation to make it happen is not. We help direct you in ways to make your legacy secure.
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Wealth Management
Experience personalized guidance for 401(k) and IRA Rollovers, Roth Conversions, and Cash Management. Understand fully how to mitigate current portfolio fees and expenses and learn if tax-free growth is right for you.
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Long Term Care
Did you know the average Home Health Aide service in Iowa costs $5,577 per month? Create a strategy for funding Assisted Living or other long-term care needs without draining your retirement assets.
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Life Insurance
Life insurance can be a cornerstone of retirement protection. From protecting loved ones to providing tax-advantaged assets and income, create a life insurance plan as unique as your goals.
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Federal Reserve’s Stance on Interest Rates
Historical Precedence and Market Concentration
The AI Revolution: Driving the Market Forward
Looking Ahead: Continued Growth and Potential Challenges
- Lower interest rates and a 95% expectation of a Fed rate cut by September.
- Slowing but still reasonable economic growth.
- Improving earnings and margins.
- The positive impact of AI on various industries.
Check out the video as Mark Sorensen, our Chief Investment Officer, provides further insight into current economic conditions, how the election may affect the markets, and where he thinks we’re headed from here.
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Plus chart reviews!
401(k) Maneuver exists to help employees grow and protect their 401(k) accounts. Our done-for-you, virtual service allows you to keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions.Find out what 401(k) Maneuver may do for your retirement account balance. Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.
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Women are saving less for retirement than men – and not just by a little.
Prudential’s 2024 Pulse of the American Retiree survey found, “Across all age groups, women are particularly vulnerable, with less than a third the median savings of men. They are nearly three times as likely to delay retirement due to caregiving duties.”¹
Take a look at the following recent stats that show women are saving less.
- “Men had saved a median of $157,000 for retirement, women had only set aside $50,000.”²
- “46% of men surveyed said they were looking forward to retirement and had more plans, compared with 27% of women polled.”³
- “On average, women retire with a 30% lower balance in their 401(k) plans than men do.”⁴
- A 2024 Goldman Sachs report found more than a quarter of women (28%) are saving less than $50,000 for retirement. “Assuming a 4% withdrawal rate, $50,000 in retirement savings provides $2,000 of income per year.”⁵
- “Half of women say they feel ‘uncertain’ or ‘worried’ when they think about how prepared they are for health costs later in life.”⁶
- 43% of working women report their savings are behind schedule.⁷
- More than half of women workers, or 57%, feel they don’t have enough income to save for retirement, and only 19% are “very confident” that they will be able to fully retire with a comfortable lifestyle.⁸
Catherine Collinson, CEO and president of Transamerica Institute and TCRS, told CNBC, “Today’s women are more educated and enjoy unimaginable career opportunities than previous generations. […] Yet, despite these advancements, women continue to be at greater risk than men of not achieving a financially secure retirement.”⁹
As you can see, women are saving less for retirement than men, and it’s a significant problem.
Why Women Are Saving Less
There isn’t just 1 reason women are saving less.
First, women continue to be paid significantly less than men.
Second, women tend to take off work for caregiving, which means they have fewer years to contribute to a 401(k).
Third, women received a different financial education than their male counterparts.
For instance, the Equal Credit Opportunity Act was not passed until 1974, when women were allowed to get a credit card in their own name.
As a result, women were not managing their finances as men did.
Rita Soledad Fernández Paulino, personal finance coach and founder of Wealth Para Todos tells CNET, “We have a whole generation of women whose mothers weren’t necessarily engaging in debt management.”¹⁰
The Retirement Savings Gap
Women are facing a retirement crisis.
This is even more apparent when considering Americans in general are experiencing a retirement savings gap.
[Related Read: Over Half of Americans Think There Is a Retirement Crisis]
The retirement savings gap refers to what people are saving versus what they actually need.
Unfortunately, Americans need significantly more money during their retirement savings than they are actually saving.
Experts today believe retirees need approximately 1 million dollars (1.46 million) to retire comfortably.¹¹
However, a 2024 Vanguard report found, “The average balance in employer-sponsored retirement contribution plans rose to $134,128 in 2023. […] The median account balance was $35,286.”¹²
That’s a long way from a million-dollar nest egg.
Now, factor in the fact that women have even less in their retirement accounts, and it is abundantly clear that women are facing a retirement crisis.
Another primary consideration is that women outlive men, on average.
This means the retirement savings gap is even more significant for women.
According to CNBC, “In developed societies like the United States, women are expected to live for 79 years while men are expected to live around 72 years. This seven-year difference means women need to save a little more money than men to fund the last chapter of their golden years. Even for someone who spends a modest $40,000 a year in retirement, this amounts to an additional $280,000 to cover those final seven years.”¹³
[Related Read: How Long Will Your 401(k) Savings Last in Retirement?]
Reclaim Retirement Planning for Yourself
Whether you are a woman (or a man hoping to pass along essential information to the women in your life), you’ve come to the right place.
Women can boost their retirement savings and get to a place where they feel more financially secure for their future.
- Familiarize Yourself: You can start to reclaim retirement planning by familiarizing yourself with your 401(k) plan. Unfortunately, many women place retirement planning solely in their spouse’s hands. This is a mistake. Take an active role in planning for your future – especially considering you may outlive your spouse.
- Educate Yourself: If you need to be more knowledgeable about finances, saving, and investing, give yourself permission to learn. Read financial blogs, listen to financial podcasts, and read books on retirement savings.
- Review Your Plan’s Rules: If you are in a relationship, you must ensure you and your partner participate in the best 401(k) plan and take advantage of company matching contributions. Read The 401(k) Mistake Married Couples Make to learn more.
- Start Saving More Now: Don’t put off saving for retirement. Start saving now and give your savings time to grow. Make it a goal to save enough to get the employer match.
Speak with a Professional: If you have questions, ask the experts. If you want advice, ask the experts. Closing the savings gap for women may come down to simply seeking help from a professional.
Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.
Sources
- https://news.prudential.com/latest-news/prudential-news/prudential-news-details/2024/2024-Pulse-of-the-American-Retiree-Survey/default.aspx
- https://www.foxbusiness.com/economy/retirement-crisis-looms-womens-savings-just-one-third-mens
- https://www.foxbusiness.com/economy/retirement-crisis-looms-womens-savings-just-one-third-mens
- https://www.prudential.com/wps/wcm/connect/9575b53b-09cd-4373-a88e-992f63088683/19-4354573-infographic.png?MOD=AJPERES&CVID=ncgAm0r
- https://www.wealthmanagement.com/retirement-planning/goldman-sachs-more-one-four-women-retire-less-50k
- https://www.ncoa.org/article/american-women-report-economic-stress-worry-about-how-they-will-afford-future-health-costs-and-retirement
- https://www.gsam.com/content/gsam/us/en/advisors/about-gsam/news-and-media/2024/retirement-gender-report.html
- https://www.cnbc.com/2023/12/29/women-face-a-retirement-savings-shortfall-three-ways-to-close-the-gap.html
- https://www.cnbc.com/2023/12/29/women-face-a-retirement-savings-shortfall-three-ways-to-close-the-gap.html
- https://www.cnet.com/personal-finance/banking/savings/why-women-save-less-money-than-men/#why-do-women-save-less-than-men
- https://www.foxbusiness.com/personal-finance/americans-saving-more-retirement-theyre-nowhere-near-magic-number
- https://www.foxbusiness.com/personal-finance/americans-saving-more-retirement-theyre-nowhere-near-magic-number
- https://www.cnbc.com/select/why-women-dont-save-as-much-as-men/
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When it comes to investing for your financial future, understanding the tax consequences is important to growing wealth.
Because it’s not just what you make, it’s what you keep, that counts.
How tax savvy are you with regards to your 401(k)?
Are you aware of the 401(k) tax implications on withdrawals? Or the real benefit of growing your savings tax-deferred?
Keep reading for more on 401(k) tax implications and how they may or may not impact your future.
#1 Tax-Deferred Contributions
Contributions to a traditional 401(k) are made before taxes are withheld, which reduces your taxable income.
This means you don’t pay income taxes on the contributions immediately.
You get a tax break for every dollar that you invest into your 401(k) with pre-tax dollars.
For example, if you earn $50,000 per year and put 3% of your pay into your 401(k), your investment in your 401(k) would be $1,500.
This $1,500 drops your taxable income down to $48,500.
In some cases, it is even possible for your 401(k) contributions to push you into a lower tax bracket, which may result in paying a lower tax rate.
[Related Read: What to Know Before You File 2023 Taxes]
#2 No Deductions on Tax Returns
Unlike other retirement accounts, you do not need to deduct 401(k) contributions on your tax return.
The contributions are already taken out of your paycheck before taxes are applied.
This means you save money on taxes today.
Turbo Tax explains, “At the end of the year, when you receive your W-2 form that shows your earnings, you will notice that your wages subject to federal income tax are lower because of your 401(k) plan contributions.”¹
[Related Read: A Good Way to Spend Tax Refunds Wisely]
#3 FICA Taxes
Although you don’t pay income taxes on 401(k) contributions, you still pay FICA taxes on your payroll contributions.
FICA taxes fund Social Security and Medicare programs.
Your FICA taxes are calculated based on your paycheck amount, which includes your 401(k) contribution.
Keep in mind that even though your taxes go toward funding Social Security and Medicare, you will likely still need more money during retirement to cover costs.
Do not plan to rely solely on Social Security and Medicare.
[Related Read: Are You Saving Enough to Cover These Retirement Expenses?]
#4 Tax-Deferred Growth
The investments within your 401(k) grow tax-deferred, meaning you don’t pay taxes on the earnings until you withdraw the money.
This means any income that is gained over time from your investments is tax-deferred.
When you contribute to a 401(k), your money earns interest, and that interest compounds over time – you earn returns on your returns.
The longer your money is invested, the more it may grow.
Keep in mind that 401(k) plan participants can rebalance their assets to take advantage of potential growth opportunities, which means boosting your savings even more!
[Related Read: 5 Perks of Saving for Retirement in a 401(k)]
#5 Taxable Withdrawals
When you withdraw money from a traditional 401(k), it is taxed as regular income in the year you withdraw it.
And you pay taxes on the withdrawals at your current income tax rate.
If you want to take a withdrawal from your 401(k), you need to be at least age 59½ to avoid paying an early withdrawal penalty to the IRS.
These withdrawals are subject to ordinary income tax on the amount you withdraw plus a 10% early withdrawal penalty.
[Related Read: Why a 401(k) Withdrawal Should Be Your Last Resort]
#6 Roth 401(k) Contributions
With a Roth 401(k), your contributions are taxed when they go into the plan.
Contributions to a Roth 401(k) are made after income taxes are withheld, so you pay taxes on the contributions upfront.
However, once your money is invested, your contributions and any earnings grow tax-free and you will not be taxed when you withdraw money from your Roth 401(k) plan.
Plus, all withdrawals made during retirement are tax-free – including contributions and earnings.
This may provide significant savings for those expecting to be in a higher tax bracket during retirement.
[Related Read: Should I Consider the Roth 401(k)?]
#7 Tax Benefits in Retirement
When you start withdrawing funds during retirement, you’ll need to pay taxes on both the contributions and the earnings, and they are subject to ordinary income tax rates.
However, the tax benefits of a 401(k) plan are designed to help you save for retirement.
By deferring taxes until retirement, you may be in a lower tax bracket than you would have been when you initially made the contributions.
This results in a lower tax bill on withdrawals.
[Related Read: Pros and Cons of a Roth 401(k): Key Differences and Tax Implications]
#8 Employer Contributions
Employer contributions to a 401(k) are generally not taxable to you when made, but you will pay taxes on them when you withdraw the money.
Employee matching contributions are tax-deferred, but these matching contributions are taxed when you withdraw money in retirement.
Your 401(k) company match counts toward your total contribution limit.
[Related Read: 4 Ways to Potentially Maximize Your 401(k) Company Match]
#9 Catch-up Contributions
Employees with 401(k)s can contribute up to $23,000 for 2024.
For those 50 and older, there is an additional catch-up contribution limit, which may help prepare for retirement.
For 2024, those ages 50 and older, can utilize catch-up contributions up to $7,500 – for a total of $30,500.
[Related Read: Retirement Plan Contribution Limits for 2024]
#10 Early Withdrawals
Withdrawing money from a 401(k) before age 59½ may result in penalties and taxes on the withdrawals.
The IRS requires automatic withholding of 20% of a 401(k) early withdrawal.
Along with the withholding taxes, the IRS will also hit you with a 10% penalty if you’re under the age of 59½ on all funds withdrawn when you file your tax return.
The amount withdrawn will also be taxed as ordinary income for the year the money was taken out, which could push you into a higher tax bracket and force you to pay even more taxes.
Let’s say you’re under 59½ and you withdraw $15,000 from your 401(k).
You will wind up having 20% plus the penalty withheld, leaving you with only about $10,500 of the $15,000 early withdrawal.
[Related Read: 401(k) Early Withdrawals May Cost You More Than You Think]
Make Sure to Seek Professional Advice
Not only do you need to understand the 401(k) tax implications, but you also should seek advice from a professional.
This is your retirement we’re talking about – and every dollar you keep helps.
Reach out to your CPA or accountant for specific tax advice.
A CPA or tax professional can help you determine the 401(k) tax implications regarding your personal financial situation.
In addition, seek help from a financial advisor to determine how to get the most out of your 401(k) plan.
Have questions or concerns about your 401(k) performance?
Book a complimentary 15-minute 401(k) strategy session with one of our advisors.
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While we are all about celebrating the birth of our great nation, we don’t believe you should spend a lot of money (or go into debt) celebrating it.
But that wasn’t the case in 2023. Americans spent more than ever.
“Total consumer spending [for 2023’s] Fourth of July holiday is expected to reach $9.5 billion, up from $7.7 billion in 2022 and $7.5 billion the year before, according to the National Retail Federation’s annual Independence Day consumer survey. The 23% jump in spending is the most growth recorded by the survey.”¹
In a time when social media reigns supreme, it can be easy to get caught up in it all and think your 4th of July celebration needs to have more than it actually does.
Do you really have to buy new American flag-specific décor for every area of your home? Probably not.
For those looking to celebrate on the cheap, check out these ten budget-friendly 4th of July ideas.
#1 Say No to Hosting Fireworks
Probably the most budget-friendly 4th of July thing you can do is not to host your own fireworks displays.
Fireworks can be really expensive.
In 2022, Americans spent $2.3 billion on fireworks.²
The average cost of a fireworks display ranges from $2,000 to $20,000.³
Instead of spending money to put on your own fireworks show, go to a community event instead.
If you plan to host an event, host it in the early afternoon so people can go elsewhere in the evening for fireworks.
#2 Embrace Sparklers
If you are set on adding some sparkle to your 4th of July, but don’t want to head to a public fireworks display, stock up on sparklers.
Sparklers are significantly cheaper than fireworks, and the kids love them.
#3 Host a Potluck
One of the more traditional budget-friendly 4th of July ideas is to host a potluck.
Rather than supplying everything, ask guests to contribute.
As the host, you may choose to provide the main course, such as hot dogs and hamburgers.
Then, ask guests to bring sides and desserts.
If you do want to contribute more than the main dish, be on the lookout for budget-friendly 4th of July recipes.
Here’s a fun, inexpensive recipe for Red, White, and Blue Finger Jell-O from Parade.
Ingredients
- 1 (6-oz) box Berry Blue Jell-O
- 1 (6-oz) box Strawberry Jell-O
- 4 envelopes Knox unflavored gelatin
- 1 (14-oz) can sweetened condensed milk
- boiling water and cold water
Directions
- Spray a 9×13-inch Pyrex pan with nonstick spray.
- Make the blue layer: In a medium bowl, mix the blue Jell-O with 1 envelope of the unflavored gelatin. Add 2 cups boiling water and stir to dissolve. Cool to room temperature and pour into the prepared pan. Refrigerate for about 30 minutes or until quite firm.
- Make the white layer: In another bowl, mix sweetened condensed milk with 1 cup boiling water. In a separate small bowl, sprinkle 2 envelopes of unflavored gelatin over ½ cup cold water. Let stand for a few minutes and then add ½ cup boiling water to dissolve the gelatin. Add to the milk mixture and stir to combine. Cool to room temperature. Pour the white layer over the firmed-up blue Jell-O layer. Refrigerate for at least 30 minutes, or until quite firm.
- Make the red layer: In a medium bowl, mix the red Jello with 1 envelope of the unflavored gelatin. Add 2 cups boiling water and stir to dissolve. Cool to room temperature and pour over the firmed-up white layer. Refrigerate for at least 30 minutes or until firm.
- Slice into individual servings (small enough to hold in your hand), scoop out with a small spatula and serve. For a more festive look, turn some of them upside-down so you have both red and blue showing on your serving platter.
#4 Decorate with Food
A cheap and easy way to make any 4th of July event more festive is to embrace the color theme with food and beverages.
For instance, serve red sangria, white sangria, and blue lemonade.
Or make a red, white, and blue bundt cake like this one from Yummy Healthy Easy.
Ingredients
- 1 box white cake mix
- ingredients required from cake mix oil, egg whites
- red food coloring
- blue food coloring
- 2 cups powdered sugar
- 2-4 Tbsp. fat-free milk
- 1/2 tsp. vanilla extract
Directions
- Heat oven to 325ºF. Generously spray a bundt cake pan with cooking spray.
- Make cake mix according to the box directions, using water, oil, and egg whites.
- Pour 1 1/4 cup of the batter into a small bowl and color it red with food coloring.
- Pour 1 cup of batter into another bowl and mix in blue coloring.
- Pour red batter into the bottom of the prepared pan. Carefully pour the white batter over the red batter in the pan.
- Now, carefully pour the blue batter over the white – it doesn’t need to cover the white all the way.
- Bake as directed on the box, or until toothpick comes out clean. Cool until warm, and then flip over onto a serving platter or plate.
#5 Wear Red, White, and Blue
If you search for 4th of July clothing, you will find a lot of patriotic clothing designed just for this one day.
Rather than purchasing something new that you will only wear one day a year, just wear patriotic-colored clothing you already own.
It’s simple and classic.
#6 Play Old-Fashioned Lawn Games
Lawn games are a great form of entertainment, but you don’t need to go overboard.
If you already own a cornhole set, great!
If you don’t, you don’t need to go out and buy one.
Set out decks of cards on the tables.
Throw some frisbees and footballs on the lawn.
Turn the sprinkler on so the kids can run through it.
Host a variety of old-school games such as:
- Egg spoon races
- Tug of war
- Sack races
- Three-legged races
- Limbo
#7 Decorate on the Cheap
The stores make it easy to overspend on holiday decorations, including the 4th of July.
You don’t need to buy special 4th of July decorations.
If you do, then buy cheap ones.
For example, buy red, white, and blue balloons to decorate the tables.
Use plain red tablecloths.
Put out markers, crayons, and paper for kids to DIY decorate as part of their entertainment.
#8 Borrow Instead of Buy
If you are hosting, look for opportunities to borrow things you need rather than buying them.
For instance, ask neighbors if you can borrow tents, chairs, and fans.
#9 Make Your Event BYOB
One of the most expensive parts of hosting is purchasing beverages.
Rather than splurging on alcohol for all your guests, tell those invited to BYOB.
Have coolers, cups, and ice ready.
#10 Shop for Next Year
If you enjoy celebrating the 4th of July, consider heading out on July 5th and stocking up on discounted supplies for next year.
Have fun, and stay safe!
Better Prepare for a Life of Abundance in Retirement.
Check us out on YouTube.
Sources
- https://www.investopedia.com/americans-set-to-spend-more-than-ever-on-4th-7555153
- https://www.fool.com/the-ascent/personal-finance/articles/americans-spend-how-much-on-fireworks-each-year-the-amount-may-astound-you/
- https://leaders.com/news/markets/how-much-americans-spend-on-fireworks/
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In mid-2024, Americans are still facing high inflation and high interest rates.
And they are saving less and spending less.
According to data from the Commerce Department, “The personal saving rate, the share of income that Americans are squirreling away, was 3.8% in January, well below the recent peak of 5.3% last May and the roughly 7% share before the pandemic.”¹
This makes sense, considering Americans entered 2024 with $17.3 million in household debt – the highest in the history of our country.²
Sadly, many Americans have not been saving enough in 2024 to cover themselves in the event of an emergency.
Forbes explains, “Americans spend, on average, $3,372 per month on essential expenses like housing, healthcare, food, transportation, and taxes. Unfortunately, the majority of survey respondents have less than this amount in savings—meaning if they had to rely on their savings in a time of emergency, they’d have a hard time making it through a single month.”³
Not only are Americans not saving, but they are also dipping into their retirement accounts.
A February 2024 Wells Fargo Money Survey found that “two-thirds (67%) of Americans say that they’ve cut back on spending, and almost half (45%) say they’ve put some life plans on hold. A third (35%) have dipped into their savings or investments.”⁴
People are making hard choices.
As we approach the second half of the year, now is the time to consider the following third quarter finance tips to turn things around.
#1 Review Your Goals
Take time to consider (and reconsider) your financial goals for 2024.
As we said, it’s been a doozy of a year already.
You may need to adjust your financial goals to keep of the still-high inflation and interest rates.
You may need to make hard choices about how you spend money to achieve your financial goals.
For example, this may have been the year you planned to build a solid emergency savings fund, but if you are still spending as you did in 2020, you may not have any money left over for savings.
Consider which of your financial goals are most important, and then devise a new strategy to get back on track for the next half of the year.
#2 Check Your Budget
If you did not create a new budget for 2024, it’s time to do so.
2024’s grocery bills are higher than 2023.
It is costing you more to pay for the essentials on your budget sheet.
Adjust your budget to reflect these inflation changes.
If you discover you do not have as much money left over after raising the budget for essentials, look for costs you can cut.
For instance, you may need to forego your gym membership and opt for using free YouTube workout videos. Instead of a Netflix subscription, you may need to visit the local library for free movies.
#3 Contribute More to Your 401(k)
It’s tempting to contribute less when times are tough, but hold steady!
As you adjust your budget, make sure you continue to pay yourself first and prioritize your financial future.
You may not see the money today, but you will be thankful you have it in the future.
Whatever you do, make sure to contribute at least enough to get the company match.
#4 Rebalance Your 401(k)
Another third quarter finance tip for turning things around is to rebalance your 401(k).
This step doesn’t require you to save more or cut back, but it may help you boost your retirement savings.
Rebalancing your 401(k) account allocations may help you earn and keep more of your retirement savings.
Because unmanaged allocations may experience much larger losses in down markets and may miss the opportunity for growth during good markets.
[Related Read: What Every Investor Needs to Know about Rebalancing a 401(k)]
#5 Build Up Your Savings
If an emergency occurs, it may have devastating effects on your finances if you are unprepared.
In your revised budget, make sure you include a budget line for emergency savings.
Additionally, when you receive any extra money, such as bonuses, tax returns, or gifts, put it in your emergency savings fund.
Look for opportunities to earn extra money, such as selling used items or working a side hustle.
[Related Read: Close the Gap on Financial Goals with a Side Hustle]
#6 Plan for Fourth Quarter Now
Third quarter finance typically involves summer spending – travel, vacations, and graduations.
But the spending doesn’t stop at the end of quarter three.
The fourth quarter rings in the holiday season.
Knowing the holiday season immediately follows Q3 should influence how you spend and save.
Now is the right time to add Christmas savings to your budget.
#7 Check Credit Reports
According to the Federal Trade Commission, “Credit Card tops the list of identity theft types reported in 2023. The FTC received 416,582 reports from people who said their information was misused with an existing credit card or when applying for a new credit card.”⁵
When was the last time you reviewed your credit report?
Credit card fraud can happen to anyone, and you may not even realize it has happened to you unless you check.
In addition to checking your credit reports, another third quarter finance tip is to enroll in identity theft monitoring services.
#8 Review Insurance Policies
Buying an insurance policy shouldn’t be a lifetime purchase.
You want to review your insurance policies and shop around yearly to find the best rates for your current home, auto, and life insurance.
Things change from year to year.
If you have made improvements to your home, your home insurance replacement value should reflect these improvements.
If your driving history has improved, you may be able to find a better price for car insurance.
If you have made positive health changes, you may be able to receive a lower price on life insurance.
#9 Deal with Debt
It’s difficult to save for emergencies or invest in your future when you are chained to past purchases.
It’s important to make a plan to get out of debt.
Don’t keep putting it off and piling on more debt.
Make the third quarter the season you start lessening your debt load.
#10 Get Help from a Professional
Once you’ve reviewed your goals, you have a better understanding of where you are and where you want to be.
What you may be struggling with is how to achieve those goals.
That’s where a financial advisor comes in.
It doesn’t matter if you are on track to meet your goals, struggling to pay off debt, or where you are in your retirement savings journey, a financial advisor can help.
When selecting a professional advisor, it’s important to work with an advisor who has a fiduciary duty to you.
A fiduciary is legally obligated to put your needs above his/her own and act in your best interest – ahead of any brokerage firm, investment provider, or company-provided representative.
Better Prepare for a Life of Abundance in Retirement.
Check us out on YouTube.
Sources
- https://www.marketwatch.com/guides/banking/financial-trends-2024/
- https://www.usatoday.com/story/money/2024/02/29/economy-saving-rate-recession-risk/72790561007/
- https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/
- https://newsroom.wf.com/English/news-releases/news-release-details/2024/Two-thirds-of-Americans-have-decreased-spending-due-to-economy-Wells-Fargo-Money-Study-finds/default.aspx
- https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Annual-Data-Book-2023.pdf
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Fidelity Investments recently released a report on 2024 trends, and Q1 shows record high 401(k) savings in 2024.
Read on to discover more about the current 401(k) savings rate, why rates have increased, and how you can save even more.
Record High 401(k) Savings
According to Fidelity’s Q1 2024 Retirement Analysis, “Total average 401(k) savings rates reached a record high of 14.2%. […] This savings rate is the closest it has ever been to Fidelity’s suggested savings rate of 15% (this includes employee and employer contributions).”¹
Fidelity analyzed approximately 26,000 corporate 401(k) plans and 24 million plan participants.
The report revealed that “employees deferred an average of 9.4% of their income during the first quarter, and companies contributed an average of 4.8%, including matches, profit sharing and other deposits.”²
Experts believe this record high 401(k) savings is due to two factors – automatic 401(k) plan enrollment and automatic contribution increases.
Additionally, auto-enrollment for many participants is set to a higher savings rate than before.
Fidelity found, “While the default contribution rate for such auto-enrolled 401(k) plans was 4.1% last quarter, nearly 40% of auto-enrolled plans started employee deferrals at 5% or higher.”³
Not only are many auto-enrollment plans set at a higher contribution rate, but many are also designed to automatically increase by 1 percentage point each year.
This is often referred to as auto-escalation.
Consider this information about auto-escalation from an annual survey by the Plan Sponsor Council of America.
- About 64% of companies with a 401(k) plan automatically enrolled workers in 2022.
- Of those companies, 78% also automatically increased workers’ savings.
- Most, or 84%, of these 401(k) plans raise workers’ savings rate by 1 percentage point a year.⁴
This tracks with Fidelity’s recent survey.
Mike Shamrell with Fidelity explains, “More than 33% of plan participants increased 401(k) contributions at the end of 2023 – and about three-quarters of those increases were automatic adjustments.”⁵
Were you auto-enrolled in your company’s 401(k) plan?
What was your original contribution rate? Has it increased without your knowledge?
Review your 401(k) statement to find out!
Overall Savings Records
The good news continues – especially for long-term savers and younger plan participants.
Fidelity reports, “The average balance for 5, 10 and 15 year continuous savers increased this quarter, with 15-year savers seeing a 7% increase in their account balances, demonstrating the value of consistently contributing in the same plan for an extended period of time.”⁶
When it comes to long-term savers, Gen X participants have surpassed Boomers.
According to Fidelity, “The 15-year continuous balance for Gen X4 participants ($543,400) surpassed the 15-year continuous balance for Boomers4 ($543,200).”⁷
Younger plan participants are also embracing saving more.
Fidelity reports, “The number of Gen Z Roth IRA accounts increased 71% in Q1 2024 compared to Q1 2023, with average contributions increasing by 11.1%.”⁸
Speaking of the record high 401(k) savings rate, this is a good time to remind you that Fidelity also reported that there are more 401(k) millionaires than ever before just a few months ago.
[Related Read: 401(k) Millionaires Soared at the End of 2023]
4 Ways to Save Even More in 2024
Americans are recognizing that retirement isn’t cheap and are making an effort to boost 401(k) savings.
As great as auto-escalation is, you should take an active role in saving more.
The goal of auto-escalation is to boost 401(k) savings for workers who do not take action on their own.
But don’t let your savings stop there. Follow these four steps to save even more in 2024.
#1 Contribute More
The best way to boost your 401(k) savings is to contribute more.
Don’t rely on your plan’s possible auto-escalation.
If your plan does offer auto-escalation, it escalates slowly.
You need to boost your contributions on your own – even a small bump in your contributions may make a significant difference.
Consider this example.
Let’s say you make $75,000 a year and contribute 6% to your 401(k) plan. This equals $4,500 a year (or $187.50 per paycheck twice a month).
If you bump your contributions to 7%, you’ll save $5,250 a year (or $218.75 per paycheck twice a month).
Your goal should be to contribute at least enough to receive the company match.
Don’t miss out on free money!
Additionally, look for opportunities to maximize your regular contributions to take advantage of tax-deferred growth.
For example, if you’re 50 or older, utilize catch-up contributions to increase your savings rate.
#2 Rebalance Your Account
Rebalancing is the process of realigning the weightings of your portfolio’s assets (investments) to stay in line with your risk tolerance and retirement timeline.
This means periodically buying or selling assets in your portfolio to maintain the initial desired level of asset allocation.
Rebalancing today may give you opportunities to boost your 401(k) – and help protect you from potential losses.
Ideally, you should rebalance your 401(k) as needed throughout the year.
Read more in What Every Investor Needs to Know about Rebalancing a 401(k).
#3 Educate Yourself
Don’t think of a 401(k) as something that is hands-off.
401(k) millionaires are very much hands-on.
If you want to boost your 401(k) savings, you must educate yourself.
Learn how to read your 401(k) statements.
Ask HR or your plan provider questions about the specifics, such as fees and vesting schedules.
Review your investment choices and take advantage of growth opportunities.
Subscribe to our 401(k) blog, listen to financial podcasts, and watch YouTube videos from trusted financial experts.
Stay engaged with your 401(k).
#4 Get Help
If you’d like to take control of your financial future and potentially have more income at retirement, we strongly suggest getting third-party advice.
If you’re hesitant to reach out for advice because you think your account balance isn’t big enough, or you think you’re too close to retirement to get help, don’t let that stop you!
401(k) Maneuver provides professional account management with the goal to help you grow and protect your 401(k).
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that harm your account performance.
There are no time-consuming in-person meetings and nothing new to learn, and you don’t have to move your account.
Simply connect your account to our secure platform, and we regularly review and rebalance your account for you, when necessary.
If you have questions about your 401(k) or if you need help, we’re here for you. Click below to book a complimentary 15-minute 401(k) Strategy Session.
Sources
- https://www.fidelity.com/about-fidelity/Q1-2024-retirement-analysis
- https://www.cnbc.com/2024/06/03/average-401k-savings-rate.html
- https://www.cnbc.com/2024/06/03/average-401k-savings-rate.html
- https://www.cnbc.com/2024/05/24/401k-plans-automatic-retirement-savings.html
- https://www.cnbc.com/2024/05/24/401k-plans-automatic-retirement-savings.html
- https://www.fidelity.com/about-fidelity/Q1-2024-retirement-analysis
- https://www.fidelity.com/about-fidelity/Q1-2024-retirement-analysis
- https://www.fidelity.com/about-fidelity/Q1-2024-retirement-analysis
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You’ve worked hard to build up your savings to ensure you have a comfortable retirement.
What if cybercriminals stole from your 401(k)?
Sadly, it’s happening, and experts are fearful it may happen more frequently with retirement accounts – with some even referring to the risk as “a sleeping giant.”¹
While most of the time it’s personal information that’s stolen, money being taken is on the rise.
Criminals know 401(k)s are a jackpot if they can get into it.
And they understand that the set-it-and-forget-it mentality many 401(k) investors have means accounts are rarely monitored.
By the time you realize your account has been compromised, the thief is usually long gone.
You can no longer just sign up for a 401(k), contribute, and hope your money grows safely.
In addition to being an active participant in growing your 401(k), it’s advisable to monitor your accounts regularly for cybersecurity purposes.
Read on to find out how 401(k)s can be hacked and what you can do to protect yourself.
How 401(k)s Are Hacked
When it comes to retirement accounts or 401(k) accounts, it is often a matter of account takeover via stolen login information from phishing scams or malware attacks.
A cybercriminal can use cybercrimes, such as phishing, to obtain a 401(k) plan participant’s login information.
Once the cybercriminal has personally identifiable information (PII), such as contact phone number, address, or login password, the criminal logs into the employee’s 401(k) account and changes key information, such as the employee’s address.
Should these changes go unnoticed, the cybercriminal will then transfer funds from the 401(k) account into a separate bank account.
Consider this example as reported in Forbes.
“One retiree at a large employer […] recently realized his monthly pension check hadn’t been deposited by the usual date. He contacted the retirement administrator who, after some research, found that the bank account designated to receive the deposit had been changed. The retiree hadn’t changed the account. Instead, an unknown person submitted the request. The change request included all the relevant and accurate information, so it was processed by a plan employee.”²
What You Need to Know
The law that governs 401(k)s, the Employee Retirement Income Security Act (ERISA), hasn’t fully addressed cyberfraud prevention and response measures.
This ambiguity can leave 401(k) investors in a tough spot.
Many plan providers promise to return stolen funds, but the fine print sometimes suggests they could find ways to avoid fulfilling that promise.
Some only cover you if you follow certain security practices.
While 401(k) providers invest in cybersecurity, your own vigilance is often the best defense.
What to Do If You Are a Victim of Retirement Cyberfraud
Cybersecurity for retirement accounts isn’t foolproof.
Should you be the victim of retirement cyberfraud, there are steps you can take to be reimbursed.
Note – While plan sponsors and fiduciaries may have cyberfraud security, there may be contingencies that make it harder to be reimbursed.
For example, if you wait too long to report potential cyberfraud, the money may be lost.
If you believe you are the victim of cyberfraud, contact your plan sponsor immediately.
After contacting the plan sponsor, you may need to contact the FBI or the Department of Homeland Security to file a report at https://www.fbi.gov/file-repository/cyber-incident-reporting-united-message-final.pdf/view or https://www.cisa.gov/report.
Tips to Protect Your Retirement Savings
Even with cybersecurity for retirement accounts at the top level, you must take steps at the personal level to protect your assets.
- Monitor your retirement accounts. Stay aware of what is happening with your 401(k) account. It’s imperative that you read your 401(k) statements. The sooner you recognize discrepancies, the better.
- Know your 401(k) plan’s security measures. Make yourself aware of your plan’s security measures. What steps are taken to ensure your retirement account is safe? How do they verify account changes are valid? Knowing this information up front will help you decipher a phishing scam from the real thing.
- Create long, unique passwords. Experts recommend using password phrases. These are lengthy phrases consisting of multiple words and numbers that would be difficult for hackers to guess (no Abcde or 1234). Also, don’t use this password for anything else.
- Use multi-factor authentication. Use multi-factor authentication when accessing any site that includes PII (personally identifiable information). This requires the user to not only submit a password but also gain access via an additional code sent by text message or email.
- Do not give out PII or account information. Often, retirement accounts are breached because an individual provides a criminal with personal information unknowingly. Be skeptical. You should never give out personal information (such as login information or banking information) over the phone, text message, or email. Always verify the sender requesting information.
- Educate yourself on cybercrime. Take time to learn new strategies cybercriminals are using to gain access to personal information. Learn how to identify phishing emails.
- Avoid public Wi-Fi. Free Wi-Fi networks allow cybercriminals to gain access to personal information.
Sign up for security alerts. Sign up for security alerts with your bank and credit card company. In addition, monitor your credit reports and banking statements for any unauthorized transactions.
Better Prepare for a Life of Abundance in Retirement.
Check us out on YouTube.
Sources
https://www.nbcchicago.com/consumer/sleeping-giant-thieves-target-retirement-accounts/2518741/
https://www.forbes.com/sites/bobcarlson/2023/01/20/cyber-thieves-are-going-after-retirement-accounts/?sh=aee60d651005
Sources
- https://www.nbcchicago.com/consumer/sleeping-giant-thieves-target-retirement-accounts/2518741/
- https://www.forbes.com/sites/bobcarlson/2023/01/20/cyber-thieves-are-going-after-retirement-accounts/?sh=aee60d651005
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Now that we’re halfway through the year, are you looking for ways to boost your 401(k) savings?
Many Americans are struggling to save like they used to, and their retirement accounts are taking a hit.
According to recent data from the Commerce Department, “The personal saving rate, the share of income that Americans are squirreling away, was 3.8% in January, well below the recent peak of 5.3% last May and the roughly 7% share before the pandemic.”¹
At the same time, Fidelity released data showing 20% of 401(k) investors entered the 7-figure club between September 2023 to the end of December 2023.²
Whether you have saved less or contributed more in the past, there are ways to easily boost your 401(k) and get ahead on your retirement savings.
With half a year left, here are 6 things you can do to boost your 401(k).
#1 Don’t Wait. Start Now.
There is a tendency to think resolutions begin and end on New Year’s Day.
When we stop exercising in mid-March, we think, “Oh well. I’ll try again next year.”
This should not be your attitude when it comes to saving for your future.
Rather than waiting for next year to get your financial house in order, start now.
Make today (whatever day it is you are reading this article) the day you turn things around and boost your 401(k) savings.
Even small changes, such as contributing enough for your company match, could yield big returns tomorrow.
#2 Take a Good Hard Look at Your 401(k)
If you want to boost your 401(k), you need to know where you currently stand.
How much do you have saved, what’s your current contribution level, and what are you invested in?
Take a good look at your portfolio and see if it is meeting your financial goals.
The place to find this is your 401(k) statement.
Regularly opening and reviewing your statements helps you determine whether or not you’re on track to meet your financial goals.
For a breakdown of statement sections and in-depth explanation, check out how to read a 401(k) statement and understand it.
#3 Get the Company Match
One of the quickest and most effective ways to boost your 401(k) savings is to increase your contributions enough to get the company match.
If you don’t contribute enough to get the company match, you are turning away free money.
For example, let’s say your company matches 100% up to 6% of your pay.
If you make $40,000 a year, you could put in $2,400 (or 6%) for the year, and your company would match this 100%.
This means if you started contributing 6% halfway through the year, you would still get $1,200 of free money that will continue to grow in your 401(k)!
[Related Read: 4 Ways to Potentially Maximize Your 401(k) Company Match]
#4 Take Some Risks
Many Americans are auto-enrolled in a 401(k) plan, and they never change their plan options.
It may be time to make some changes – especially if you were auto-enrolled in a target date fund.
The issue with target date funds is that investors are grouped solely based on their expected retirement date, while other important traits, such as location, profession, salary, risk tolerance, goals, and objectives, are NOT taken into consideration.
If you want to boost your 401(k) savings halfway through the year, you may need to take some risks, which you cannot do with a conservative target date fund.
The more risks you take, the bigger the potential gains may be.
Consider taking risks, such as having a diversified stock portfolio.
BUT, if you are close to retirement, you may want to do just the opposite and play it safe.
For example, while more risks may mean greater gains, more risks may also mean greater losses.
Now may be the time you need to focus on maintaining and preserving assets.
Take your personal risk tolerance into account.
Do you have time to take some risks? Or is it time to play it safe?
[Related Read: Are Target Date Funds Good or Bad?]
#5 Rebalance Your 401(k) Regularly
Rebalancing is the process of realigning the weightings of your portfolio’s assets (investments) to stay in line with your risk tolerance and retirement timeline.
This means periodically buying or selling assets in your portfolio to maintain the initial desired level of asset allocation.
Whether you have never rebalanced or just haven’t yet this year, now is a good time to rebalance.
When you review your 401(K), ask yourself if the investments you have are working for you.
Rebalancing today may help protect you from losses and give you opportunities to boost your 401(k).
Ideally, you should rebalance your 401(k) every quarter.
Read more in What Every Investor Needs to Know about Rebalancing a 401(k).
#6 Talk with an Expert
If you are feeling discouraged because you aren’t where you hoped to be with your 401(k), reach out to an expert.
Speaking with a financial advisor could give you back the confidence you need to stay the course.
If you noticed mid-way through the year that something wasn’t right physically, you’d seek help from a medical professional.
You should do the same when it comes to your financial situation.
401(k) Maneuver provides independent, professional account management to help employees, just like you, grow and protect their 401(k) accounts.
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance.
With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are managing your 401(k) for you.
Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.
Sources
- https://www.usatoday.com/story/money/2024/02/29/economy-saving-rate-recession-risk/72790561007/
- https://www.fidelity.com/about-fidelity/Q4-2023-retirement-analysis
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It’s important to your retirement savings and to your future retirement lifestyle to understand what you’re invested in.
If you have a 401(k), this begins with asking questions – the right questions about your 401(k).
Read on to see the top five 401(k) questions and answers investors have.
#1 What Type of Contributions Should I Make?
When choosing a 401(k) plan, it is important to know your options.
Many employers are now offering a Roth 401(k) plan option in addition to traditional 401(k) plans.
The Roth plan option is a type of 401(k) you fund, just like a traditional 401(k), but it has different tax benefits.
The key difference is you receive a tax break today if you contribute to the traditional 401(k) each year.
With the Roth 401(k), you lose the opportunity of a tax break upfront since your contributions are made with after-tax dollars. But your earnings are tax-free in retirement.
With a Roth 401(k), you must wait until the future to enjoy tax benefits.
This is a personal decision.
Some people need a tax break today, while others aren’t concerned with it and would rather have their retirement totally tax-free.
[Related Read: Pros and Cons of a Roth 401(k): Key Differences and Tax Implications]
#2 What Investment Choices Are Available to Me?
Many 401(k) participants are concerned about the investment options available in their plan and how well those investments are performing.
Unfortunately, many employers now auto-enroll new employees in a 401(k) plan using the default investment option.
Often, this default option is a target date fund, which doesn’t allow as much room for personal investment choices based on performance.
The issue with target date funds is that investors are grouped solely based on their expected retirement date, while other important traits, such as location, profession, salary, risk tolerance, goals, and objectives, are NOT taken into consideration.
Target date funds were created to take away the hassle of having to research mutual funds in your 401(k) and build and construct your own portfolio. They make investing easier.
But the reality is that target date funds may often underperform in good markets and may do a poor job of managing downside risk during down markets.
They do not take into consideration changes in the economy, tax policy, trade, earning reports, or investment trends – and may not make adjustments for any of these driving factors that affect investment performance.
If these adjustments are not made, you may not stay on course to reach your retirement goals.
The good news is, you don’t have to stay with the default option.
The first step is to contact your plan representative or HR department and find out if you were automatically enrolled in a target date fund or not.
If you are, then your second step is to find out what other 401(k) investment options are available to you.
[Related Read: Why Relying Only On Target Date Funds May Hurt Future Retirement Account Performance]
#3 Should I Roll Over My Old 401(k)s or Not?
Another important 401(k) question investors have is what they should do with their 401(k) when changing jobs.
Should they just leave the 401(k) behind? No!
Here are the options for 401(k)s when you change jobs:
- Leave the money behind in the former employer’s 401(k) plan. We don’t recommend it, but it is an option.
- Roll over the 401(k) savings into an individual retirement account (IRA). This option allows you to consolidate more than one 401(k) account into an IRA.
- Roll over the old 401(k) into a new 401(k) account if permitted by your new employer. If you have at least $5,000 saved in your old 401(k), most companies allow you to roll the 401(k) over.
- Cash out your 401(k). While this is an option, you will face penalties and pay taxes for cashing out before age 59 1/2.
Each choice has its own set of considerations regarding taxes, investment options, and fees.
It’s critical to understand the rules before you make the move.
[Related Read: 401(k) Rollover Mistakes to Avoid]
#4 Is It Really a Bad Idea to Borrow from My 401(k)?
Borrowing from your 401(k) seems appealing because 401(k) loans require you to pay interest to yourself rather than a creditor.
With a 401(k) loan, you can borrow as much as your 401(k) plan allows as long as the funds are paid back within 5 years.
However, there are other considerations.
Some 401(k) plans do not allow you to contribute to your 401(k) plan while you have a 401(k) loan, which means you cannot grow your nest egg.
If you fail to pay back the 401(k) loan, the loan may go into default and be converted to an early withdrawal.
[Related Read: 401(k) Loans: Stop Using Your 401(k) as a Bank]
Early withdrawals are also costly.
Even so, many Americans take early withdrawals to cover costs today rather than thinking about tomorrow.
According to Capitalize, “Half of Americans have made early withdrawals from retirement savings. […] These withdrawals will cost Americans $6.12 billion in penalties to the IRS in 2023.”¹
Even if you are tempted to take an early withdrawal from your 401(k), consider the penalties.
[Related Read: 401(k) Early Withdrawals May Cost You More Than You Think]
The IRS requires automatic withholding of 20% of a 401(k) early withdrawal for taxes.
In addition to withholding taxes, the IRS will also penalize you with a 10% penalty on all funds withdrawn when you file your tax return if you’re under the age of 59½.
That’s not all.
The amount withdrawn is taxed as ordinary income for the year the money was taken out – which could push you into a higher tax bracket, and you’ll be forced to pay even more taxes.
Should you take money from your 401(k) early – whether it’s a 401(k) loan or withdrawal – you miss out on the compounding effect and the potential growth.
As a result, taking money from your 401(k) before retirement may significantly impact your retirement savings over time.
#5 Do I Really Need Help with My 401(k)?
It may be well worth your time to get third-party advice – especially when it comes to something as important as your retirement future.
David Blanchett, former Head of Retirement, CFP, CFA at Morningstar reported that participants that received expert guidance had as much as 40% more income during retirement versus those who received no help at all.²
401(k) Maneuver provides professional account management with the goal to help you grow and protect your 401(k).
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that harm your account performance.
There are no time-consuming in-person meetings and nothing new to learn, and you don’t have to move your account.
Simply connect your account to our secure platform, and we regularly review and rebalance your account for you, when necessary. Check here for more info on how it works.
Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.
Sources
- https://www.hicapitalize.com/resources/fire-401k/
- David Blanchet, Morningstar Analyst 2014, “The Impact of Expert Guidance on Participant Savings and Investment Behaviors”
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It’s easy to see why people are searching for free or inexpensive things for families to do this summer – summer isn’t cheap!
Mass Mutual reports, “Nearly half of Americans plan to travel this summer – a ten-point increase over last year – but an astounding 36% say they cannot afford to.”¹
As a result, many Americans may find themselves in debt at the end of summer.
Consider the results from last summer’s NerdWallet survey, which found, “More than a quarter of 2023 summer travelers using a credit card to pay for those travel expenses (26%) say they won’t pay off the balance within the first billing statement, meaning they will likely incur interest.”²
Experts are also predicting that car rental rates and hotel rates will climb in the summer of 2024.³
Given that inflation is still hitting hard, and Americans are stretched thin, it is not just wise but necessary to look for free or inexpensive things for families to do this summer.
Here are 20 ideas for inspiration.
#1 Take a Staycation
Instead of going into debt or not being able to continue meeting your savings goals, plan a staycation for the whole family.
Take the days off work, but instead of spending tons of money on an out-of-town adventure, stay home and explore your area.
Use it as an opportunity to visit some of your family’s favorite spots or find some new ones.
If you take a day trip or a quick overnight trip, don’t spend money on tourist traps.
Instead, download a free city explorer map.
There are many available that offer narrated audio tours and plan curated itineraries.
#2 Visit National Parks
It is relatively inexpensive to visit our National Parks.
Most are free, and the ones that do charge entrance fees are not too expensive.
Even better, there are free entrance days and passes available that make it affordable for all.
According to the National Park Service, “The annual $80 America the Beautiful National Parks and Federal Recreational Lands Pass allows unlimited entrance to more than 2,000 federal recreation areas, including all national parks that normally charge an entrance fee. There are also free or discounted passes available for senior citizens, current members of the military, families of fourth-grade students, and disabled citizens.”⁴
#3 Take the Family Camping
It is significantly cheaper to go camping than it is to stay in a hotel. And it gives the family a chance to disconnect from technology and reconnect in a profound way.
If you don’t have gear, you can find inexpensive camping gear at secondhand stores or rent it for cheap.
If your crew likes to hike, use apps like All Trails or Gaia GPS to find hiking trails wherever you go.
#4 Get a Membership to a Community Pool
Depending on where you live, you may be able to enjoy a free community swimming pool.
If there are no free pools in your area, get a membership to one. Some pools offer swim classes or the opportunity to join the swim team.
If your children love to swim, the cost is well worth it.
#5 Explore Local Museums
Use your days off to check out some local or nearby museums. Many offer free days, so check ahead for times and dates.
#6 Get Library Cards
The best place for free or cheap things for families to do this summer is the local library.
Libraries are not simply buildings full of books.
Modern libraries offer free digital products, crafts, and more.
Plus, summer reading programs tend to include several free events for all ages – everything from water wars to yoga to concerts.
#7 Embrace a Summer Reading Challenge
In addition to summer reading programs through your local library, there are many businesses that offer rewards for summer reading.
Head to Barnes and Noble for a free book or Pizza Hut for a free personal pan pizza (upon completing your summer reading challenge, of course).
#8 Volunteer as a Family
Why not grow closer as a family and volunteer this summer.
Contact an organization you support and see what needs they have.
Families can volunteer together at outdoor gardens, animal shelters, soup kitchens, and more.
An added bonus to this is that it teaches kids the importance of giving back.
#9 Explore with a Scavenger Hunt
Spend a day on a scavenger hunt in your town or somewhere close by.
Check out Where’s Waldo Local to find which cities are hosting this unique scavenger hunt.
You can also download the app Let’s Roam for a gamified scavenger hunt for more than 3,500 cities.
#10 Hunt for the Best Ice Cream
Make this the summer your family discovers the best ice cream.
Create a list of all the businesses selling ice cream in your town. Then, make your way to each one over the summer.
#11 Become a DIY Family
Instead of splurging on expensive summer toys, make some fun things together.
For example, find a recipe for DIY sidewalk chalk and giant bubbles. Fix a piece of furniture instead of giving it away. Try canning preserves.
Pinterest has a ton of ideas if you’re at a loss.
#12 Have a Themed Movie Night
Take advantage of free streaming services (or free digital movie rentals from the library) and watch a classic with your kids.
Introduce them to a classic like Swiss Family Robinson and enjoy tropical punch and seafood.
#13 Head to the Movies
Major movie theater chains offer discounted movies throughout the summer.
For example, in the summer of 2023, Regal Cinemas offered the Summer Movie Express program that included $2 showings of family-friendly movies.
#14 Go Bowling for Free
Did you know your kids can bowl free all summer long? They may get in enough play time to turn pro!
Check out Kids Bowl Free to see if a bowling alley in your area participates in this program which provides kids with 2 free games of bowling each day during the summer.
#15 Have a Family Yard Sale
Work together as a family to declutter and make some money in the process.
Have a yard sale and include your kids in the entire process.
This is a fantastic way to teach kids financial skills.
#16 Go Stargazing
Download a free astronomy or stargazing app and head somewhere that your kids can see the stars.
Pack a blanket, some snacks, and your phone.
In addition to astronomy apps, you can track the phases of the moon with apps and even the location of the International Space Station.
#17 Take Advantage of Free Local Events
When you feel the itch to take your family somewhere and spend money, do a little research.
Look online to see what free events are happening in your area.
Many communities offer free summer concerts or free outdoor movies.
#18 Play Games
When was the last time your family played a board game or card game together?
Pull out your old favorites or introduce some new ones.
Our family even takes our card games with us on vacation!
#19 Challenge Each Other to a Physical Competition
Rather than being bored indoors on a beautiful summer day, gather the family and head outdoors for some friendly competition.
Play a round of kickball, capture the flag, or hide-and-seek.
#20 Hit the Roller Rink
Like Kids Bowl Free, many skating rinks also offer Kids Skate Free.
Skating rinks offer free skating for children during certain hours.
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SOURCES
- https://www.massmutual.com/about-us/news-and-press-releases/press-releases/2023/06/massmutual-consumer-spending-and-saving-index-summer-fun-shaded-by-financial
- https://www.nerdwallet.com/article/travel/inflation-is-putting-a-damper-on-summer-travel-survey-finds
- https://www.usatoday.com/story/travel/columnist/2024/01/07/predictions-travel-2024/72094405007/
- https://www.nps.gov/planyourvisit/fee-free-parks.htm
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