With the November 15, 2024 ruling by the United States District Court for the Eastern District of Texas (District Court, E.D. Texas) that the new rule governing overtime pay to employees, issued on April 23, 2024 by the U;S. Department of Labor (DOL) was unconstitutional, and banning its implementation nationwide, this issue may be a dead letter.

However, the DOL has filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit with District Court, E.D. Texas as of November 26, 2024, so it may be too soon to write the rule off just yet.

Background

Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees was issued on April 23, 2024, as noted above, and published April 26, 2024), was to take effect on July 1, 2024.

The new rule streamlined the testing procedures for determining the overtime exemption for executive, administrative, and professional (EAP) personnel, as well as those for highly compensated employees (HCE).

This rule also increased the salary thresholds for EAP and HCE workers, from the then-current $35,568 and $107,432 to $43,888 and $132,964, respectively. These thresholds were to be effective from July 1, 2024, through December 31, 2024, only – as of January 1, 2025, they would increase to $58,656 for EPA personnel and $151,164 for HCEs.

As was to be expected, several lawsuits against the DOL rule were filed. In one of these, State of Texas v Department of Labor, et. al., District Court Judge Sean D. Jordan of the District Court, E.D. Texas, granted the State of Texas’ Request for Preliminary Injunction against the DOL on June 28, 2024, blocking the overtime rule’s taking effect on July 1, 2024 – but only in the State of Texas.

The Principal Lawsuits

The principal lawsuits filed in opposition to the overtime rule were:

Plano Chamber of Commerce, et. al., v Su, et. al.
Full title: Plano Chamber of Commerce; American Hotel and Lodging Association; Associated Builders and Contractors; International Franchise Association; National Association of Convenience Stores; National Association of Home Builders; National Association of Wholesaler-Distributors; National Federation of Independent Business, Inc.; National Retail Federation; Restaurant Law Center; Texas Restaurant Association; Cooper General Contractors; Dase Blinds, Plaintiffs, v Julie Su, Acting Secretary, United States Department of Labor, in her official capacity; Jessica Looman, Administrator, Wage and Hour Division, U.S. Department of Labor, in her official capacity; and United States Department of Labor, Defendants.

This case was filed on May 22, 2024, in the Sherman Division of the District Court, E.D. Texas. On July 28, 2024, it was consolidated with the below case:

State of Texas v Department of Labor, et. al.
Full title: State of Texas Plaintiffs, v United States Department of Labor, Julie A. Su, in her official capacity as United States Secretary of Labor, the Wage and Hour Division of the Department of Labor and Jessica Looman in her official capacity as Administrator of the Wage and Hour Division, Defendants.

Like Plano Chamber of Commerce, et. al., v Su, et. al., State of Texas v Department of Labor, et. al. was filed in the Sherman Division of the District Court, E.D. Texas (on June 3, 2024). That being the case, and since both suits concerned similar matters of law, he two cases were consolidated on June 28, 2024 by District Court Judge Sean D. Jordan on the same day he granted and issued the preliminary injunction in the State of Texas case.

Again, Judge Jordan ruled on November 15, 2024, in these consolidated lawsuits that the new overtime rule violated the Constitution and vacated it altogether.

And the DOL filed its Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit with District Court, E.D. Texas as of November 26, 2024,

The remaining principal case is:

Flint Avenue LLC v U.S. Department of Labor et al.
Full title: Flint Avenue, LLC, Plaintiff, v. U.S. Department of Labor; Julie Su, Acting Secretary, U.S. Department of Labor, in her official capacity; Jessica Looman, Administrator, Wage and Hour Division, U.S. Department of Labor, in her official capacity, Defendants.

This case was filed on June 3, 2024, in the United States District Court for the Northern District of Texas Lubbock Division.

In this case, Senior U.S. District Court Judge Sam R. Cummings denied Plaintiff’s Request for Preliminary Injunction on July 1, 2024 – although this refusal was, at least to some extent, a non-issue, since the June 28, 2024 preliminary injunction issued in the State of Texas case barred the rule’s enforcement in Texas.

While the Flint Avenue case is officially still pending, it is likely to hold fire until and unless a determination is made in the Fifth Circuit with respect to the State of Texas case.

Does the Overtime Rule Have a Future?

We don’t think it’s very likely that the Fifth Circuit will reverse Judge Sean Jordan’s ruling in State of Texas v. Department of Labor, et. al. before January 20, 2025, and a new administration takes the reins of the DOL along with the rest of the federal government.

Normally, we would not expect an incoming Trump administration to defend a rule expanding mandatory overtime pay. In his first administration, President Trump’s DOL declined to defend a related rule concerning overtime issued by President Obama.

However, in 2024, candidate Trump made some very labor-friendly proposals, including one which would exempt overtime pay from federal income taxes. So, we don’t think it’s quite safe to predict the stance he will take with regard to this overtime rule.

For now, though, employers can breathe easier, knowing the rule has, for now, been struck down.

If you have any questions concerning overtime pay, or if there is anything else we can help you with, please click here to email me directly. RFG is here to help you – that’s our passion and our reason for existing.

Until next time –

Peace,

Eric

This new year of 2025 is likely going to bring us some big changes. One question of particular concern to us – and, we assume, to our readers – pertains to changes to the tax code the incoming administration may foster.
In particular, the Tax Cuts and Jobs Act of 2017 was the signature achievement of President-elect Trump’s first administration.

However, due to the bill’s having been passed via the budget reconciliation process, many of the tax cuts for individual taxpayers (and some concerning only business taxpayers) are due to sunset at the end of this year.

The President-elect campaigned to retain most of these tax cuts, either by extension or by making them permanent. However, it remains to be seen whether he actually achieves this ambitious goal in 2025. The incoming Republican majorities in the U.S. Senate and the House of Representatives makes this more likely, but it is by no means a certainty.

Here are some of the TCJA’s provisions set to expire at midnight on December 31, 2025, what President-elect Trump has proposed for them, and what will happen if they are not extended.

Income Tax Rates

The TCJA reduced the top income tax rate from 39.6% to 37% and made changes to the income limits which fall into most brackets.

The Republican platform includes the goal of making the TCJA changes permanent.

For comparison, below are the tax brackets for pre-TCJA 2017 and post-TCJA 2025.

Tax Brackets 2017 v 2025

Unless the TCJA’s provisions are extended or made permanent, as of tax year 2026 the brackets will revert to 2017’s classifications, and so will the income limits, adjusted for inflation.

Alternative Minimum Tax

While the TCJA retained the Alternative Minimum Tax (AMT), it considerably eased the burden for millions of Americans.

• The TCJA, for the tax years 2018 through 2025, rescinded the requirement for 2017 and prior that taxpayers had to add back personal exemptions, interest on home equity debt (if not used to buy or improve the home), and most Schedule A miscellaneous itemized deductions before calculating their AMT liability.
• Under the TCJA’s provisions, the AMT income exemption amounts were raised from 2017’s $84,500 for married joint filers, $54,300 for single filers, and $54,700 for married couples who filed separately. For 2025, the exemptions are $137,000 for married couples filing jointly, $88,100 for single filers, and $68,650 for married separate filers.
• For high earners, one of the most significant changes to the AMT was the dramatic increase in the phaseout thresholds for the income exemptions listed above – in 2017, the phaseout on AMT exclusions started with incomes above $160,900 for married joint filers and $120,700 for single filers. The phaseout thresholds for 2025 are $1,252,700 for married joint filers and $626,350 for single filers.

 

SALT Deduction Cap

The TCJA limited the federal deduction for state and local taxes (SALT) to a $10,000 maximum.

SALT encompasses state and local income taxes, sales tax, and some property taxes, including some real estate and most personal property taxes.

Real estate taxes which are not deductible are those which are not “uniform for all real property in the jurisdiction at a like rate.”

Examples of non-deductible property taxes include:

• Assessments for special benefits, such as those for new sewers or sidewalk improvements, for a particular neighborhood or district, which are not assessed against all real estate properties in the district.
• Transfer (or stamp) taxes on the sale of property.
• Estate and inheritance taxes.

 

Taxpayers may deduct state taxes, plus either local income tax or local sales taxes – not both local income and local sales taxes.

Currently, the incoming administration has indicated it hopes to allow this cap to expire as of December 31, 2025, as it is scheduled to do.

No matter whether he SALT cap lapses, we would recommend keeping meticulous records of local sales taxes paid, in order to ascertain whether a deduction of local income tax or local sales tax is more advantageous to you.

Capital Gains Taxes

The TCJA made, effectively, no change to the taxation of short-term capital gains (gains on sales of assets held for less than one year), which remain taxed as ordinary income tax rates.

For long-term capital gains (assets held over a year before disposal) and qualified dividend taxation, prior to the TCJA (i.e., for tax years prior to 2018), these taxes were applied to ordinary income tax rate brackets.

• If your ordinary income fell within the 10%- or 15%-income tax brackets, no tax on long-term capital gains or qualified dividends was payable.
• If your income fell into the 25%, 33%, or 35% tax brackets, you incurred tax liability of 15% of the gains.
• For taxpayers subject to the highest bracket of 39.6%, the capital gains tax rate was 20%.
• For those taxpayers with adjusted gross income (AGI) of over $200,000 ($250,000 for married couples filing jointly), an additional net investment tax (NIT) of 3.8% was levied.

The TCJA enacted the following changes to taxation of long-term capital gains and qualified dividends (adjusted to reflect inflation adjustments as of 2025):

• Zero tax liability for those with incomes of $47,025 or less ($94,050 for married joint filers).
• For those with incomes between $47,026 and $518,900 ($94,051 and $583,750 for married joint filers), the tax is calculated at 15%.
• Long-term capital gains for those with incomes of $518,901 and above ($583,751 for married joint filers) are taxed at 20%.
• The NIT, and the income levels at which it was assessed, remained unchanged. This threshold is not subject to indexing for inflation.

 

President-elect Trump has proposed making the lower TCJA capital gains and qualified dividend taxes permanent.

All these are currently scheduled to sunset as of December 31, 2025, with the old rules and brackets, adjusted for inflation, set to come back into effect starting with tax year 2026.

These are only a sampling of the many tax-related proposals set forth by either President-elect Trump, the Republican party platform, or both.

Let Rigby Financial Group help you make tax-savvy plans, for whether the TCJA provisions (or some of them) sunset or are extended or made permanent. We are also well-aware of numerous other ways in which the tax proposals of the incoming administration might help you save money.

Please click here to email us directly – our tax expertise is broad and deep, and our commitment to helping you hang onto your hard-earned money equally so.

Until next time –

Peace,

Eric

As we stand on the threshold of a new year, I am reminded of the timeless wisdom of the Stoic philosophers, whose teachings continue to inspire and guide us in both our personal and professional lives.

Embracing Change and Opportunity

The dawn of a new year presents us with a unique opportunity for growth and renewal. As Epictetus wisely noted, “How long are you going to wait before you demand the best for yourself?”

This sentiment encapsulates the essence of what we at Rigby Financial Group strive for in our professional relationship with you – to consistently deliver the best possible service to help you achieve your financial goals.

Focus on What We Can Control

In the realms of finance and planning, uncertainties abound, as they always will. However, the Stoics remind us to focus on what lies within our control. Marcus Aurelius advised, “You have power over your mind – not outside events. Realize this, and you will find strength.”

As we navigate the complexities of the financial world together, let us concentrate on making prudent decisions based on sound analysis and strategy, rather than being swayed by emotional reactions to external factors beyond our influence.

Continuous Improvement and Adaptation

The Stoic philosophy emphasizes the importance of continuous self-improvement. Seneca noted, with truth, “If a man knows not to which port he sails, no wind is favorable.”

In our professional journey together, we commit to staying informed, adapting to changing market conditions, and refining our strategies to ensure we’re always steering towards your financial objectives.

Virtuous Action and Ethical Practice

At the core of our service is a commitment to ethical practice and virtuous action. As Marcus Aurelius stated, “Waste no more time arguing about what a good man should be. Be one.”

We pledge to uphold the highest standards of integrity and transparency in all our dealings, ensuring that your trust in us is well-placed and continually reinforced.

Gratitude and Partnership

As we reflect on the past year and look forward to the new one, we are filled with gratitude for your continued trust and partnership. Epictetus reminds us, “He is a wise man who does not grieve for the things which he has not but rejoices for those which he has.”

We are truly thankful for the opportunity to serve you and contribute to your financial well-being. In closing, let us embrace this new year with optimism, resilience, and a commitment to excellence. As Zeno of Citium wisely said, “Well-being is realized by small steps, but is truly no small thing.”

Together, let us take those small steps towards your financial goals, knowing that each one brings us closer to realizing your vision of success.

Here’s to a prosperous and fulfilling new year for all of us!

Please click here to email me directly – I’d love to know your goals, your thoughts, and your plans for 2025.

Until next time –

Peace, happiness, prosperity, and fulfillment in 2025,

Eric

 

The IRS has increased retirement plan contribution limits for 2025, adjusted for inflation. The contribution limits for 2025 are:

IRAs:

Traditional and Roth: the 2025 annual contribution limits will remain unchanged from 2024’s $7,000 for those under 50, while those age 50+ can contribute an additional “catch-up” of $1,000 per year for a total contribution limit of $8,000. Note that this limit applies to all IRAs held by a single taxpayer, not each IRA – i.e. if you want to contribute to more than one IRA in 2025, the total amount contributed cannot be more than the limit for your age ($7,000 or $8,000, depending on whether you are over or under 50).

SEP IRAs:

The contribution limit for 2025 (made by the employer on behalf of an employee) is the lesser of 1) 25% of the first $350,000 of compensation (with some minor adjustments) or 2) $70,000 per employee (an increase from the 2024 limit of $69,000). No catch-up contributions are permitted.

SIMPLE IRAs:

The 2025 maximum contribution will rise to $16,500, up from $16,000 for 2024. If you are over 50, a catch-up contribution of up to $3,500 – unchanged from 2024 – is permitted. However, for SIMPLE IRA account owners between the ages of 60 and 63, catch-up contributions greater than $5,000 or 150% of the over-50 catch-up limit can be made. For 2025, those aged 60-63 can make catch-up contributions of $5,250 to SIMPLE IRAs in 2025. Cost of living adjustments will be made to this catch-up limit starting in 2026.

Employer-Sponsored Retirement Plans:

The 2025 contribution limit for 401(k), 403(b), and most 457 plans will rise from $23,000 in 2024 to $23,500 for employees under 50. For those over 50, a catch-up contribution of up to $7,500 annually is permitted – no change from 2024 – allowing you to contribute up to $31,000, assuming your employer-sponsored retirement plan is structured to allow catch-up contributions.

We strongly recommend contributing the total amount to your retirement account(s) – or as close to the limits as possible if you can’t max out.

Further, we would advise checking into all retirement options available through your employer. Public schools, colleges, universities, churches, hospitals, and other tax-exempt organizations may offer more than one option, including 401(k), 403(b), and/or 457 plans. They may also allow you to participate in and contribute to more than one employer-sponsored plan—e.g., offering you both a 401(k) and a 403(b) plan.

If you have a 401(k) and 403(b) plan account, be aware that the total annual contribution to these employer-sponsored retirement plans is $23,500 for 2025 – or $31,000 if you are over 50. However, having more than one employer-sponsored plan account may still be a good idea, especially if one or more plans do not allow catch-up contributions. In such a case, you can contribute the amount of your catch-up to the second retirement plan account – the IRS permits you to treat this additional contribution as a catch-up for their purposes, even if your plan does not.

However, if your employer offers you both a 401(k) plan and a 457 plan, a deferred compensation plan, you can contribute $23,500 to each plan in 2025, not counting catch-up contributions. If you have this option available and are over 50, you can contribute up to $31,000 tax-deferred to each account for 2025 – $23,500 plus $7,500 in catch-up. This would mean that, for those over 50, a total tax-deferred contribution of $62,000 can be made for 2025.

For 2025, workers turning 60 to 63 may be able to contribute a super catch-up of $11,250 to 401(k) and similar plans.

Final Thoughts:

Certain strictures and limits on income eligibility exist to fully deduct contributions from your taxable income for some retirement plans. Consult your virtual CFO or another trusted financial advisor to ensure you get every possible benefit you are legally entitled to.

If you have any questions about leveraging these new contribution limits to maximize your retirement assets, reduce your tax liabilities, and plan for a secure and happy retirement, our vCFOs / financial planners are always here to help.

Please click here to email us directly – let us help you plan to make the most of your retirement savings.

Until next time –

Peace,

Eric

Are you happy with your estate plan? Is it comprehensive, updated and complete?

Do you have a well-maintained financial & estate planning organizer?

Have you considered using a trust, or trusts, as part of your estate plan? 

For any estate, and particularly for those which will contain significant assets, there are certain steps you should take in order to ensure your assets go where you want them to.

To help, Rigby Financial Group is delighted to offer you a free copy of our latest whitepaper – Succession Planning for Business Owners – Part II!

Find out more – click here to get your free copy!

We’re excited to offer this opportunity to our loyal subscribers!

If you would like to speak with one of our estate and financial planning specialists, please click here to email us and schedule an appointment.

Until next time –

Peace,

Eric

Inflation has eased a bit over the past year, the IRS’ adjustment to the income tax brackets for 2025 is lower than it has been the past couple of years, by ~2.8%, compared with 5.4% for 2024 and 6.6% for 2023, based on the consumer price index (CPI).

Income Tax Brackets – 2024 – 2025:

Standard Deduction:

The standard deduction is also increased—for individuals, to $15,000 for 2025 from $14,600 for 2024; for married joint filers, to $30,000 for 2025 from $29,200 for 2024. Taxpayers over age 65 can claim an additional standard deduction of $2,000 for single filers and $1,600 per qualifying spouse for married joint filers, up from $1,950 and $1,550, respectively, in 2024.

Gift & Estate Exclusions:

The annual gift tax exclusion will rise in 2025 to $19,000 from 2024’s $18,000 limit.

The estate tax threshold will increase in 2025 to $13,990,000 per individual from $13,610,00 in 2024.

Alternative Minimum Tax:

The Alternative Minimum Tax (AMT) exemption for 2025 is increased to $88,100 for individuals from $85,700 in 2024 and to $137,000 from $133,300 in 2024 for married couples filing jointly. Phase-out begins at $626,350 for individuals and $1,252,700 for married joint filers, compared with $609,350 and $1,218,700 in 2024.

Final Thoughts:

Of course, these are only some of the significant changes the IRS has announced for 2025. Most tax credit limitations have been increased for 2025, though some items are not, by statute, indexable to inflation.

In addition, if you itemize, we want to remind you that one of the provisions of 2017’s Tax Cuts and Jobs Act (TCJA) was to remove the limitation on itemized deductions. Please take advantage of this lesser-known benefit while it lasts!

There may be additional opportunities to leverage these increases to keep even more of your hard-earned money – consult with your virtual CFO or financial planner to develop the best strategy (or strategies) for you and your family.

If you are interested in developing new tax planning and estate strategies for 2025 or updating your existing plans, please click here to email us directly helping you is our mission!

Until next time —

Peace,

Eric

The year flies by, and here we are at Thanksgiving! Time to take stock of what we’re grateful for—in a world of turmoil.

Wars seem to be everywhere—and the dangers of their escalating loom, even as we hope with all our hearts for peace.

Hurricanes have devastated the South this season—just a couple of months ago, New Orleans, and all of Louisiana, was struck by Hurricane Francine. Then, Hurricanes Helene and Milton, which largely passed us by, exceeded Francine in damage done by orders of magnitude.

But there are always things in our lives to cherish with gratitude.

We have our feast to look forward to, our beloved family and friends to celebrate with.

We have our work, we have purpose, and we have life itself.

As we count our blessings, let’s remember to celebrate, and be grateful for, the beauty of this world—nature gives us so much of that, as well as the food we eat—and the enormous variety of beauty we can see.

Mountains, valleys, rivers, oceans, trees, flowers, prairies—the beauty of the animal kingdom, from majestic stags to the tiny flying jewels we call hummingbirds. And let’s not forget our pets, if we have them—don’t they bring joy and comfort to our lives?

Let’s be grateful for the beauty of smiling, loving faces around us at the table, and make sure we do our part to inspire and encourage those smiles and that love.

Let’s be thankful for the children who are our hope for the future.

Let’s be grateful for every child’s smile we see. For every uplifting song we hear. For every heart we’ve somehow managed to miraculously touch, and every heart that’s touched our own.

Let’s celebrate with the fullest hearts, and the greatest and most wide-spreading gratitude we can muster. Let’s be thankful for everything on our tables, from the Turducken to the oyster dressing to the centerpiece to the salt and pepper shakers, tablecloths and napkins, plates and silverware.

For everyone whose love makes our lives better places to live.

What are you grateful for, this Thanksgiving?

Please click here to email me directly – I’d love to know what’s on your gratitude list this year.

Until next time –

Peace,

Eric

While making mistakes is inevitable – we’re all human, and that comes with the territory – in many cases mistakes can be at least mitigated by course correction. Retirement planning – and, indeed, all financial planning – is, thankfully, one of the areas where we can adjust.

But it’s important to make that course correction as soon as possible – and keep a clear eye ahead, so as to avoid making more mistakes (insofar as we can).

There are common mistakes people make when planning for retirement – and they may not all be what we think they are.

Here are some of those mistakes – and ways to avoid them:

Not Starting with a Clear Goal

From the moment you start saving for retirement (ideally, as soon as you start working), you need a clear goal for those retirement savings. That goal is your destination – and without a destination, you can’t map a clear course. This is not to say your goal can’t change – very likely it will, and that’s when we re-draw the map. But without a goal, a destination to aim for, it’s all too easy to get lost along the way.

And that goal is what you – not your friends, not your colleagues – want out of your retirement. That’s personal, unique to you as an individual. You want a certain, specified amount of capital and/or income so you can (fill in the blank – spend more time with your family, open a bed and breakfast in your dream location, buy a racehorse, volunteer for your favorite charity, etc.).

Again, this goal can alter – the important thing is that you save with a purpose. Write your purpose down – keep it, refer to it, change it when your goals change. But keep it like a talisman, to remind yourself of your purpose in saving.

Trying to Navigate Your Road Alone

Now that you have your goal, your purpose, you’re all set, right? All you have to do is save! Unfortunately, that’s an unwise attitude, which usually doesn’t pay off. Take guidance – ask your virtual CFO or other trusted financial advisor to help you devise a plan – your roadmap to get you from where you are now to where you want to arrive at the end of the journey.

Your advisor is the mapmaker who can point the clearest path toward your goal – avoiding circuitous routes, helping you move down your road effectively and methodically – in line with your purpose. S/he can point out that what you may be doing isn’t actually advancing your stated purpose. Sometimes that will mean correcting what you’re doing; other times your advisor can help you realize your goal has changed without your knowing it. Then, it’s time to re-draw your map in light of the new destination.

But your trusted financial advisor is also your guide along that road – your co-pilot, your wingman (or woman), riding shotgun for you. S/he will be there to ensure you are on track at every checkpoint.

Spending Time and Money Against Your Purpose

Part of developing your goal is understanding what you value – and, even before you retire, your time and your money should be spent, not only on working and saving for the future, but living toward your goals – i.e., spending your time and money consistent with your purpose in the present. While delayed gratification is an important part of planning and saving, it’s important that your goal, your purpose, is paramount, and you should be furthering that purpose throughout your life.

Don’t put in 80-hour weeks on a regular basis (sometimes this may be necessary, but it shouldn’t be your default). This will result in burnout for yourself, shortchanging not only your work itself, but your family and friends, your recreational activities – starving yourself and them of the attention and focus on the super-values away from work which will give you a well-lived life. And if a well-lived life isn’t part of your goal, ask yourself why.

Studies show that over time, the happiest people are those who spend their time and money on what matters most to them. So, do that, and be happier.

Letting Your Money Sit Idle While You Work

Your virtual CFO or trusted financial advisor can help ensure you are saving enough, and investing it wisely, so that it will always be working for you; growing as you grow.

Spend what your financial planning allows for – it may come as a surprise, but a lot of people spend less than they could, given their income, even when they are saving a generous amount toward the future.

Don’t be afraid to live as big as you dream – and never be afraid to dream big, bigger, biggest – to the limit of what’s realistic for you in light of your purpose and goals.

Again, delayed gratification is an excellent habit, but it’s no substitute for a purpose, or for a fully experienced life. There’s room for all of these in everyone’s life.

You work hard for your money – make it return the favor.

Letting Money Become Your Goal

Investing is not the game, it’s the strategy. Because the game itself is living life as you want to – now and in the future.

Money shouldn’t be an end in itself – it’s a means toward an end – and that end is your goal – the place you want to get to.

Investing for its own sake becomes an empty pursuit. What you should strive toward, in your work, your free time, and your financial planning, is something far more real and personal to you.

Don’t get me wrong – it’s great to save, to invest, to watch your assets grow. But growth means harvest – never lose sight of the fact that your money is invested to bear fruit to sweeten your life, and the lives of your loved ones.

Not Letting Your Guide Help You on the Downslope

More mountain climbers die on the way down than they do reaching the peak. The reason these deaths on the downslope have declined is that more climbers take guides with them all the way, up the mountain and down.

Once you’ve saved enough (or think you have) to achieve your retirement goals, you still need guidance in developing and executing a plan for what comes next.

You have enough money to fund your goals – but have you taken into account the other expenses reaching retirement age will bring?

Your virtual CFO or financial advisor will help you develop a retirement plan which can help you safely navigate your way through retirement – achieving your end-goals (whether they are exactly the same as when you started saving or have evolved into something altogether different) while ensuring you and your family are taken care of in the day-to-day process of living.

At Rigby Financial Group, we aim for long-term relationships with our clients. We don’t stop working for you when you have a financial plan, or when tax season is over. Rather, we want to be there for you and with you as you travel your unique, individual path.

We will help you:

• Identify why money is important to you – what you want from it, what it can help you avoid, etc.
• Clarify what you value in your life and help devise ways to get more of that now, even while saving for the future.
• Get to know your unique picture – your life, your goals, your family, your financial picture, are not the same as anyone else’s – and RFG celebrates you in all your individuality.
• Devise plans, strategies, and processes to help the unique you follow your singular path through an irrepeatable life toward your individual goal.
• And be there with you all through the long process of implementing, revising and adjusting the plans and processes as your life, family, and financial picture change.

 

For better or worse, you are in your life for the long haul – don’t you deserve an advisor who is, too?

Whatever stage in the retirement planning process you are in, RFG can help you get your ducks in a very tidy row! Please click here to email us directly – we are always here to help.

Until next time –

Peace,

Eric

For more on planning for retirement, see:

What Your HSA Can Do for You – Now and in the Future

Increased Retirement Plan Contribution Limits for 2024

Roth IRAs and Income Tax Liability – How to Protect Your Assets

SECURE 2.0 Enacted – Key Highlights

Ensuring a Happy Retirement

Taxation in Retirement – Be Prepared!

Roth IRAs – To Convert, or Not to Convert?

Should You Roll Your 401(k) Into an IRA When You Retire?

The Ins and Outs of RMDs – Explained

Allocating Your Retirement Portfolio

Planning for Retirement in a Volatile Market

How the SECURE Act Changed Retirement Plans

The SECURE Act of 2019

Retirement looms for an ever-increasing number of baby boomers (I suspect a lot of us qualify).

Many of us may shy from what we perceive as an uncomfortable – but postponable – subject – but we shouldn’t.

Rather, we should plan carefully for what is inevitable. Unless we “die in harness,” which God forbid, we have a long life to experience and enjoy after our working lives are over.

And we shouldn’t put this planning off until after the fact – as all too many of us are inclined to do.

Here are some steps we suggest taking the year before you retire – if you haven’t done so before.

Create An Income Plan

Do you have a clear picture of where your income will come from after you retire?

How much income can you expect from:

• Social Security
• Your individual retirement accounts (IRAs)
• Any employer-sponsored retirement plans you participate in, whether defined-benefit (e.g., pension plans) or defined-contribution (e.g., 401(k)s, 403(b)s, 457(b)s, etc.)
• Other sources, such as income from real estate investments or new business ventures, inheritances, etc.

 

It’s important to know where your income will come from, and how much that income will be in aggregate.

Develop a Plan for Your Post-Retirement Healthcare Needs

Age, if we’re lucky, brings us greater wisdom. Unfortunately, it also brings us increased expenditures on healthcare – even if we eat healthily, exercise, and do everything we can to optimize our health.

When planning for retirement, you need to consider:

• Health insurance. While you have paid for Medicare coverage throughout your working life, automatic coverage is limited to Plans A (inpatient care at hospitals, skilled nursing facilities, nursing homes, and hospices, and some home health services) and B (medically necessary services, including ambulances, preventive services including most visits to physicians, limited prescription drugs, and some medical equipment such as those which provide oxygen). You can also opt for Parts C and D coverage (private company offered Medicare Advantage plans, which cover Parts A and B and often offer additional services and/or Part D, which provides more coverage for prescription drugs). So, you need to determine which Medicare plan you need, as well as allow for costs such as premiums, co-pays, etc.
• Any hereditary propensity toward areas of concern – are you genetically predisposed to develop any serious conditions? If so, that, too, needs to be considered.
• Some businesses offer lifetime health coverage for partners or high-level employees – does yours? Is there a premium or other charge to you after retirement?

 

And once you’ve allowed for all these factors, you need to incorporate those fixed and potential costs into your retirement planning.

Cut Down on the Pieces of Your Financial Puzzle

Often, we accumulate many pieces which make up our financial picture – but, when planning for retirement, consider:

• How many retirement accounts do you have? What type(s) are they – IRAs, 401(k)s or other employer-sponsored plans? Maybe you have a mixture of both. Do you need all of them individually? Maybe the answer is “yes,” but it’s important to see whether they can be streamlined. Multiple IRAs can be combined into one, even if you want to keep your employer-sponsored plan assets where they are.
• How many in-force life insurance policies do you have? Do you need them all? If your children are grown and self-supporting, and your spouse is well-provided for via other estate planning vehicles, you may not need any of them.
• Do you have disability insurance, other than that which may be provided by your employer? The latter will likely cease to be effective once you retire; and when you’re no longer receiving earned income, do you really need disability insurance?
• You may need or want to have several non-qualified investment accounts (separate accounts for yourself and your spouse, a joint investment account, etc.). But can you consolidate at all?

 

Create a Post-Retirement Spending Plan

Taking into account the post-retirement income you can count on, determine:

• Your fixed expenses (e.g., medical insurance, home maintenance, utilities, landscaping, vehicle purchases and maintenance, etc.).
• If you will have more than you need for these, congratulations! What, then, do you want to do with your extra cash?

 

Additional Pre-Retirement Considerations

Other aspects of retirement planning include:

• Your asset allocations. Whether you have one investment account or 20, and whether you have all your assets in qualified retirement accounts or not, the best asset allocation for you before you retire may not be optimal afterward.
• Your home – do you want to stay in the home you have now, or do you want to change. Whether that change is downsizing, upscaling, or moving to an entirely different place, it’s a choice you need to make, and once your family needs to be in the loop about – though the final decision is and should be yours (and your spouse’s, if you’re married).
• Any travel plans you have. Many people put off travel they would dearly love to do until they’ve retired. That’s not a right-or-wrong choice, it’s a preference. But if you do want to travel, that represents additional projected expenditures which need to be factored into your planning.

 

This touches on the final, vital consideration:

What’s Next?

Retirement, of course, represents, if not necessarily the end of your working life, at least the end of a significant portion of it.

But, as T.S. Eliot wrote,

In my end is my beginning.

You can choose to start a new business or buy an existing one that’s been your dream – like a winery, if you’re an oenophile.

You can choose to stay quietly at home, enjoying time with family and friends, read the books you’ve never had the time to, attend musical concerts, theatre, more films – in short, you can do anything your income allows and your inclination sends you toward.

But it’s vital to know what those options are – and which ones you want to pursue.

Because one thing about retirement – it takes away the structure your working life gave you.

Structure is important – and even more so is having purpose in your life.

Never let yourself waste away the rest of your life drifting – unless that’s your deliberate and desired choice.

But make that choice – don’t let idleness – or anything else – choose you.

Your virtual CFO can help you plan for every aspect of your retirement. This planning, in turn, needs to focus on what you want out of your retirement – your goals, your needs, your desires.

At Rigby Financial Group, we will custom-tailor a retirement plan to meet your needs. We never take a cookie-cutter approach.

Please click here to email us directly – we are here to help.

Until next time –

Peace,

Eric