A 60-second read by the Baron Team: Congratulations 2018 College graduates! Throw that mortarboard as high in the air as you can and before it circles back down to earth, start thinking about saving for your retirement. You are most likely going to be responsible for setting yourself up for a successful retirement, so your best bet is to invest early and often.
Invest in yourself first. Most people think investing is the key to wealth, but while certainly important, you have to have some money first to invest. So as soon as you begin your first job out of school, start saving a minimum of 10% of your annual income for retirement. This will ensure that you invest in yourself first. You should plan on saving this much or more for the rest of your working career.
Here is a behavior trick to help you accumulate savings: have money taken out of your paycheck automatically and deposited into a 401(k), 403(b), thrift savings plan, or other retirement account. Read our previous post on “What is the Best IRA for a Young Investor?”. Almost all employers offer retirement investment vehicles like these, where you can contribute a certain percentage of your salary for the future. What you put into the account will grow tax deferred and be earmarked specifically for retirement. Because your contributions are automatically saved, it forces you to invest, which you might not otherwise do, and the money will be spent. Consider the IRS’s system of collecting taxes throughout the year through tax withholding. They know that if it was up to us to save and pay them one big check at the end of the year, we would have already spent the money. The same is true with investing. If a percent is taken out of every check directly, you won’t miss it. This is all part of behavioral finance, or the study of human behavior in financial decision-making. A fascinating field that we wealth advisors see play out on a daily basis.
Another behavioral finance mental trick is to keep three to six months of living expenses in a separate account from your checkbook, also known as an emergency fund. This will provide you with peace-of-mind to always know that no matter what bills come in or what happens in your career, you’ve got this safety-net of cash at your disposal that you can tap into. Keep the money liquid by putting it in a savings account or money market mutual fund. This will help protect you from those potential future financial downturns.
A 30-second read by Nicholas Scheibner: When a family member passes away, it is of course an emotional and stressful time. For most, a significant portion of the stress can stem from the financial decisions the deceased made, or did not make, during their life, and what needs to be carried out by the loved ones left behind. In many instances, a will is constructed to help direct some of the financial assets, per the request of the deceased. However, financial accounts are not the only stress inducers. Online and social media accounts are increasingly becoming more important to people. There are things you can do now to help your family put in order your “online life”, often referred to as a “Digital Estate”, when you are no longer around.
We suggest keeping a separate document with your will, containing any usernames and passwords to your online accounts. The most important item will be your list of email accounts. With access to your email accounts, a trusted family member can “reset/forgot password” most of your financial and social media accounts in order to close, or manage the accounts. Also – this can sometimes be a quicker way to stop any recurring payments for online services, instead of calling the company and proving the person has passed away.
If you are uncomfortable writing out all of your usernames and passwords, you can begin to use a “password manager” that will store all of your information in a secure digital vault. The only information your trustee will need is the username and password for the “password manager”.
Keep in mind, it is extremely important to watch over a deceased family member’s financial assets and credit, as a deceased person has a very high risk of becoming a victim of financial fraud and identity theft.
In order to prepare your family for what needs to be done towards end-of-life and once you have passed, we recommend reading some of our other estate planning posts. And again, do remember to consider all of the online, financial, billing, and social media accounts that will continue if you were to pass on.
Please reach out to your Baron Team with any estate planning questions.
Baron hosted their fourth annual Casino Night event on May 3, 2018, at the newly-renovated Macaluso’s in Hawthorne, New Jersey. Attendees were given “play” money to participate in the casino games, ensuring no one could lose real money. Chips were cashed in for raffle tickets for the chance to win some great prizes, including gift baskets, and gift cards to various local businesses. The ultimate and most coveted prize of the evening was two tickets to see Beautiful: The Carole King Musical on Broadway.
Although guests had an opportunity to win raffled prizes, the big winner was the “Fair Lawn Food Pantry”, who received a monetary donation from Baron to honor our clients and friends.
Baron Financial Group recognizes that there are members of the community who are not as fortunate as others, who need help to meet the most basic of needs. Baron’s purpose is to help our clients reach their financial goals and to secure a better future for them and their families. With that purpose in mind, we are also committed to making the community a better place. It is our hope that together, we can look forward to a future of promise for all.
Editor’s Note: This post was originally published December 1, 2016. The information is still current as of this date.
A 30-second read by the Baron Team: For students with divorced parents who live separately, the FAFSA (Free Application for Federal Student Aid) asks that you fill out financial information in regards to the custodial parent. For FAFSA, the custodial parent is the parent who the child has lived with the most over the last twelve months.
Provided that the ex-spouse is the non-custodial parent:
Many private colleges assume that the non-custodial parent could be a possible source of funding, and therefore require that they fill out a supplemental financial aid document.
In that case, any financial support the non-custodial parent may give would only affect financial aid provided by the school, not the student’s federal and/or state aid benefits.
Baron Financial Group sponsored HONOR’S annual “Concert to End Homelessness.” The event was held Saturday, April 28, 2018 in Greenwood Lake, NY, with close to 500 people in attendance. Rob Cannillo, the brother of Baron Principal/Partner Victor Cannillo, helped coordinate the fundraiser and helps to raise awareness for HONOR.
HONOR has been helping Orange County, New York residents in need since 1974. On their website, it states: Since 1974 HONOR has provided all Orange County residents in need a safe environment that is committed to rebuilding the self-esteem and dignity of all those we are blessed to serve. With the goal of self-sufficiency in mind HONOR provides:
Residential stabilization & rehabilitation
HONOR’s vision is to “assist all clients to receive help appropriate to their needs so they may enjoy the growth and development which is their right as human beings.”