Category

Financial Planning

Here’s how much to keep in savings

“How much should I/we keep in my/our savings account?”

This is a common question I get when I first sit down with an individual or couple.

You may be familiar with the rule of thumb answer: 3-6 months of living expenses. That makes sense! If you lose your job or your spouse gets transferred to a new state, those funds will serve as a cushion until you find a new position.

Your savings account will allow you to keep all of your subscriptions and avoid ramen noodles every night for dinner.

If you are looking for the short answer, the paragraph above is a great start. However, everyone’s financial situation is different, so if you want to hear what I actually tell my clients, keep reading.

For young people just getting started, I encourage them to save $10,000 in the bank as fast as they can. For some, this will only take a few months and for others, a few years. This amount is attainable when considering what young, single people do with their money.

There shouldn’t be an emergency or fun opportunity such as a friend’s wedding that will deplete the $10,000 in one swoop.

Once achieving $10,000, I recommend clients find their own comfort level. This amount totally depends on the person. For some, they feel confident with $10,000 in their bank.

Other clients prefer $100,000 and can’t sleep at night if that number drops to five digits. Being comfortable and secure in your bank puts you in a better position to optimize other areas of your financial plan. (Personally, I’m a big fan of cash and the flexibility it provides.)

The next question that often follows is about how to allocate the dollars that are above and beyond a comfort level: “Megan, I’ve surpassed $10,000. If I see it in my bank, I’ll spend it. What do we do now?”

If you read my budgeting blog post (click here), you can do what my husband and fellow financial advisor, Nick, does. We put $416.67 a month toward savings. That odd amount adds up to $5,000 a year. Once our savings rose to $25,000, we opened a savings account that earns more than our day-to-day savings.

We called our new bank and they did all of it electronically. We have no cards attached to this account so if we really want the money, we must physically walk into one of their branch locations and make a withdrawal. I don’t even know where their closest branch is to us so you can be assured that this strategy to never touch this account works! I am not worried that I will tap into those savings unless there is truly an emergency. Only then will I look at their website’s branch locator. 😊

The second thing we did once we achieved $25,000 in savings was to increase our monthly contributions to our non-retirement investment account, rather than a savings account. In addition, anytime our bank accounts at our primary bank (our day-to-day bank) get higher than our comfort level, we will do additional deposits into our investment account.

A lot of my clients do this too! They have their bank account linked to their investment account so that anytime they want to make contributions to their investments, they simply give me a call. Conversely, if they need money for something, I can sell the security, and send cash to their bank.

Here’s the last scenario that my clients inquire about: “Megan, I don’t want to leave extra money in my savings account, but I also plan on using that money for something that will take place in the near future. What do I do?”

If you haven’t been able to tell by now, I use myself as an example so my clients know that the advice I give I apply to my own finances!

To answer the question, I put the money I’ll want in the near future in my non-retirement investment account and, specifically, into a fund that would be considered a money market or a money market alternative. I call this my future house money.

For my clients, they may call it future pool, future boujee vacation, future cottage, etc. It’s simply money they don’t need now but will when the opportunity presents itself.

The goal is to not lose money but earn more than a savings account at a bank. If a clients’ goals change and they won’t need the money as soon as they thought, we can turn the dial to make the investments more aggressive. Thankfully, we adapt with clients as their lives change!

If you had any of the questions above, I’m glad you sought out answers to how much you should keep in savings, what to do next and how to optimally plan for future and larger expenses.

Everyone’s comfort level and financial situation is different so I want to leave you with one last piece of advice: never compare your finances to others but rather, find what is right for you.

Want to talk about your specific situation and comfort level? I’m happy to talk! My contact information is available at my webpage: https://savageandassociates.com/megan-savage-rightnowar

Savage and Associates
Direct: 419.725.7201 | Office: 419.475.8665
655 Beaver Creek Circle Maumee, OH 43537

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

Will you have enough, when you’ve had enough?

Retired couple walking dog

“How much money will I need in retirement?”


It’s a question we get asked often, from people in all age groups, professions, income levels, and geographical locations. And from people with diverse spending habits.

Of course, lots of people stand ready to share a formula or fixed-target amount they’ve heard. One recent study found that average Americans believe they’ll need $1.7 million to retire. Another often-mentioned opinion suggests you’ll need 80 percent of your pre-retirement annual earnings after retiring.

But there is no cut-and-dry answer to the question. Therefore, our response when people ask us how much they’ll need for retirement is not what most expect to hear.

“You tell us,” we say.

The fact is, how much money you need for retirement depends on the lifestyle you want when you retire. And that requires asking yourself some questions.

Do you want to live in your current home, downsize, or move to a more pleasant climate? Are you planning to drive a similar car or splurge on that rebuilt 60s classic you’ve always wanted? Are you looking to travel more often and, if so, to where?

And those are the easy questions. Harder discussions involve how you plan to pay for healthcare, at what age you will begin drawing Social Security benefits, who else depends on your income, and how much debt you still have.

Only with answers to those and many more issues could we begin to project how much money you’ll need to set aside for retirement. So don’t be surprised when a professional financial advisor responds to your how-much-money-will-I-need-in-retirement inquiry with a list of questions for you.

The good news is that collecting answers to those questions enables your financial advisor to help you begin budgeting for retirement. So while we can’t provide a one-size-fits-all solution to determining how much you’ll need when you stop working, we can help prepare you to answer the question for yourself.

Talk to Steve


Prepared by The Creative Block, Inc. Copyright 2020.
The Creative Block, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Six benefits to starting your financial planning now

Last month, I posted a picture on Instagram with a cake to celebrate my company’s 5th birthday. I had planned to write a blog post to go along with it but due to the coronavirus, my world has been pretty crazy. Instead of blogging, I’ve been doing a lot of tax loss harvesting and taking on new clients who wanted to take advantage of the downturn in the market.

However, this long holiday weekend (happy belated Fourth of July!) brought some time to reflect on these past five years. While year one looks vastly different than today, one question from clients has remained the same: “Megan, how come they don’t teach this in school?”

What follows that comment is often the client’s regret of wishing they had started their planning earlier in life. While we do our very best to set a client of any age up for retirement success, this is why I love meeting with young individuals/couples. A bonus is that our similarity in age means that we usually become friends and I love new friends. I also have a single younger sister, so I am on the hunt to find her a man … kidding … (maybe)!

Coming from my five years of experience with clients who started their financial planning at an earlier age as well as the alternative, the former has benefits of:

  • seeing their investments grow over a longer period of time with compounding returns,
  • having a higher risk tolerance and therefore, possibly greater returns,
  • potentially getting better life insurance rates before they may face possible medical issues,
  • knowing exactly what to do when their employer offers them a 401(k), Simple IRA, health insurance plans, etc.,
  • feeling confident with their day-to-day budget right out of the gate, knowing that they are setting themselves up for short and long-term success,
  • creating flexibility and control with their future retirement (e.g., a few clients I work with are projected to retire early).

I’m sure I will continue getting the question, “Why don’t they teach this in school?” for the next five years or more. Either way, what matters is that people understand why they should begin financial planning early on. I always joke, “No one has ever said I’m intimidating!” and make it clear that I don’t bill for my time.

If you’d like to not wait a day longer to kick off your financial plan or get a second opinion, don’t hesitate to reach out using the contact information at my page. It’s important that you work with someone who you like and trust. I may not always have birthday cake, but my door is always open!

What are catch-up contributions, and should you be making them?

Man review finances on tablet

Man reviewing finances on tablet

If you’re among the millions of Americans putting money into a workplace retirement plan, you probably know that IRS rules limit annual tax-deferred contribution amounts. For example, 401(k) and 403(b) participants can set aside a maximum of $19,500 in income on a tax-deferred basis in 2020. But if you’re age 50 or older, you could be eligible to contribute amounts that exceed the standard IRS limitations.

Catch-up contributions, as the name implies, allow workers to save more tax-deferred income as they get closer to traditional retirement age. Allowable catch-up amounts vary depending on the type of retirement plan. For our 401(k) or 403(b) example, the catch-up amount is $6,500 in 2020.

Catch-up contributions only extend the amounts workers can contribute to their plans each year. They do not increase employer-match limits.

The IRS updates annual contribution limits each year—including catch-up contribution amounts—for each type of retirement plan. A professional financial advisor can explain the rules that apply to your specific account to you.

Should you get in on this?

If you’re 50 or over and looking to grow tax-deferred savings for retirement, and you already max out your plan’s limits each year, making catch-up contributions might be right for you.

On the other hand, if a large portion of your retirement savings is in tax-deferred dollars, you could be facing a sizable income-tax burden when you retire and begin taking plan distributions. In that case, there might be better retirement savings options for you than increasing your tax-deferred contributions.

Because everyone’s financial needs and objectives are unique, we can’t over-stress the importance of consulting a trained financial advisor when planning for retirement. A qualified professional can help forecast whether you’re saving enough for the retirement lifestyle you want—and help you determine if you have any “catching up” to do.

Talk to Steve


Prepared by The Creative Block, Inc. Copyright 2020.
The Creative Block, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Are you ahead of the pack?

Man out for a jog

Do you ever wonder whether you’re doing enough to plan for retirement?

Man out for a jog
Do you question, from a savings perspective, whether you’re on track to retire when you hope to? Have you thought about how much retirement savings you should have at this point in your life?

If those questions sound familiar, you’re not alone. Clients often ask how their current financial situations compare to others in their age groups. The national statistics might shock you.

According to the nonprofit think tank Economic Policy Institute, nearly half of working-age families lack any retirement savings at all. Zero. That means whatever amount you’ve accumulated puts you further ahead than many people. Unfortunately, most individuals who do have retirement savings accounts are significantly behind where they need to be to retire comfortably.

Retirement Savings by Age Group

Looking at typical retirement accounts—for only those who have one—helps provide a perspective on how your savings compare to your age-group cohorts.

The following table uses data from the Federal Reserve to show both average and median retirement account balances by various age groups. NOTE: The material is provided for informational purposes only and not intended as investment advice.

Age Group
Average Retirement Account
Median Retirement Account
Under age 35
$32,500
$12,300
Age 35 – 44
$100,000
$37,000
Age 45 – 54
$215,800
$82,600
Age 55 – 64
$374,000
$120,000
Age 65 – 74
$358,000
$126,000
Dollar amounts rounded to nearest hundred.

What’s Your Plan?

Now that you know how you stack up to others when it comes to saving for retirement, it’s time to consider more relevant questions. First, how much income will you need in retirement? And second, what steps should you be taking toward reaching your retirement savings goals?

Every person’s situation is unique, of course. That’s why it’s helpful to work with a professional financial advisor when planning for retirement. A trained advisor can help project the retirement income you’ll need to enjoy life the way you want. And with that knowledge, your advisor will work with you to develop and execute a comprehensive retirement savings plan.

Talk to Steve


Prepared by The Creative Block, Inc. Copyright 2020.
The Creative Block, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Savage and Associates adds three advisors

Savage and Associates announced the addition of three advisors to its team, bringing the total number of associates to its highest level in company history:

  • Craig Bruning, financial professional
  • Julie Fullerton*, benefits advisor
  • Joshua Holzemer, employee benefits consultant

“More than ever, Savage has the resources to service clients to a wider area and through a larger scope with the addition of Craig, Julie and Joshua,” stated J.R. Toland, president and CEO, Savage and Associates. “They each have a unique skill set and expertise that will provide great value to our clients.”

As part of his responsibilities, Bruning will assist clients in a holistic way through investments, risk management, and group health. Fullerton has more than 15 years of experience in health insurance, specializing in Medicare supplements and individual health insurance. Joining his father’s practice, Holzemer will primarily focus on employee benefits, in addition to offering investment services and individual strategies.

Founded in 1957, Savage is a full-service financial, insurance, and group benefits services firm partnering with clients across the nation.

(* Julie Fullerton is not affiliated with Royal Alliance Associates, Inc.)

My clients LOVE this financial tool!

When I sit down with new clients, I love getting to know them and learning what makes them unique. Whether they are a college student or graduated decades ago … single or married with four kids … I typically observe one common denominator: people are overwhelmed by the complexity of financial planning.

Knowing this, the easy response to them would be, “trust me, I’m a financial advisor!” But that is never my approach. I believe that building trust with my clients is something that should not be taken lightly, especially when their financial success depends on it. I do not want people to nod their head to my advice, then walk out the door without really understanding what I said. I want clients leaving curious, excited, and motivated about ways to set themselves up for success. That means they need to be provided the tools to do just that.

In the last year, I made a couple key investments in my practice. My number one favorite investment will be shared in a future post – stay tuned! My second favorite investment has been implementing a wealth management portal for my clients called Right Capital. Right Capital creates an interactive experience for my clients to link their accounts and assets in one place, view their accounts in real time, and see many “what if” scenarios that they may face in their lives — such as how retiring one year later may impact their situation. By helping them see the benefits of making sound decisions today, they are more likely to stay the course in times of uncertainty. Bonus: it’s an app on your smartphone!

Above, you can see a few screenshots of the many tools that Right Capital provides my clients. Whether they are getting started and trying to figure out how to pay off student loans (debt management), or want to know if they are on track to meet their long-term goals (retirement analysis), this platform helps them visualize the importance of proper planning. I want to make sure my clients understand my job doesn’t end at selecting investments, but also educating them in all facets of their financial picture.

My husband and I, as well as other advisors at Savage and Associates, use this tool too. Having found so much value from it, I couldn’t help but to offer it as a complimentary resource for all my clients!

Would you like to see every detail that affects your financial wellness in one spot? Maybe you are more curious about knowing if you are on track to accomplish your retirement goals? Give me a call directly at 419-725-7201 and I’d be happy to find out together.

About Megan:
Megan Rightnowar got into the financial services business almost five years ago to help individuals and families create a plan for financial freedom. She believes that money doesn’t have to control your life and she helps people live that out.  As an extension of her love for educating clients, she enjoys writing blog posts covering a myriad of financial topics. Megan also teaches finance and personal planning for pharmacy students at the University of Toledo.

*Megan Rightnowar was not provided free services or sponsored by Right Capital. All idea expressed above are her own.

Megan Savage Rightnowar
Direct: 419.725.7201
Office: 419.475.8665
655 Beaver Creek Circle Maumee, OH 43537

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

Brimley earns AIF designation

Investment advisor representative Jonathan Brimley of Brimley & Frisch Wealth Management, a part of Savage and Associates, achieved his AIF® (Accredited Investment Fiduciary) designation from the Center for Fiduciary Studies. This certifies that Brimley has reached expert fiduciary care standards (a fiduciary acts on behalf of an individual or more to manage assets) – and how to apply those standards in their investment management practices. Earning this professional certification involves participating in a rigorous training program, passing a comprehensive exam, satisfying experience requirements, and agreeing to abide by the Center’s code-of-ethics and conduct standards.

Jonathan and his family

“Jonathan always talks about putting his clients first, and this designation is another great example of his unwavering dedication toward those he serves,” stated Russ Karban, vice president and managing executive, Savage and Associates. “For those in the Findlay area, and surrounding communities, are in very good hands with Jonathan as their advisor. It’s no wonder his practice continues to grow each year through so many pleased clients.”

Brimley specializes in comprehensive goal-based planning for his clients, largely in the Findlay, Ohio market, striving to give them increased confidence and maintainable wealth. To learn more visit: https://www.facebook.com/BrimleyFrischWealth/

The coronavirus and its impact on financial markets

Photo of Chinese Man in surgical mask

As a financial advisor, a big part of my role is to educate clients on the stock market. My job doesn’t end at picking investments for my clients but to openly communicate during times of intense media headlines and market volatility. Whether it’s trade wars, a negative fourth quarter in 2018, an election year, or the current coronavirus panic, I like to make sure my clients hear from me not only when we have regularly scheduled review meetings but when their account(s) are being affected.

Yesterday I sent an email to my clients, and I thought it would be valuable to turn that email into a post that others can gain insight. The subject matter: coronavirus. But from the standpoint of its overall impact on the stock market.

As you may be aware, there has been a growing number of cases throughout China, Italy, Iran, Japan and South Korea. Consequently, the global market has experienced increased volatility. It’s no coincidence – the stock market tends to react when a widespread illness breaks out. Two days ago, February 24, 2020, the S&P 500 declined about 3.5 percent, making it the worst day in about two years.

Regardless, if your reaction to the previous paragraph was “YIKES!”, this does not come as a big shock to the financial industry. Business has been slowing overseas with products/services that come out of the affected countries. I am also going to take a wild guess that you haven’t booked your dream trip to Italy in the past few weeks. The global economy is dipping and the market is reflective of that.

We do not know how long the coronavirus will continue to spread and dominate the headlines. Likewise, predicting the end of this current market volatility is equally challenging. As a silver lining though, we can see in the chart created by Dow Jones Market Data (below) that epidemics have historically not impacted the market for a significant length of time. I think you will find relief that only one of the previous 12 epidemics resulted in negative percent changes of the S&P over a six and 12 month period.

In closing, when it comes to the obstacles we are facing in the market, I’m not fretting and it is my hope that you aren’t either. Focusing on long-term objectives when it comes to investment accounts helps provide clarity in times of uncertainty. In the meantime, I’m praying for effective treatment and prevention and I hope you’ll join me.

Savage’s Frisch earns ChFC® designation

Curtis FrischCongratulations to Savage’s own Curtis Frisch, CFP®, for earning yet another professional designation. He achieved his ChFC® (Chartered Financial Consultant) designation from The American College of Financial Services – the leader in financial services education.

Estate, special needs clients, divorce, business succession, behavioral finance and financial plan development are all part of the preparation for this designation, which prepares an advisor to assist clients on a highly diverse set of financial matters.

Frisch is an owner of Brimley & Frisch Wealth Management – a part of Savage. Their company focuses efforts on individuals and businesses in the Findlay, Ohio market.

Frisch’s niche in the industry is spending necessary, focused time on comprehensive financial plans that analyze cash flow, risk management, investments, taxes, employee benefits, retirement planning, estate planning and education planning.

To learn more visit: https://www.facebook.com/BrimleyFrischWealth/

 

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