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Mid-Life Financial Planning:

Guided Planning Strategies (GPS)

Explore tax strategies for maximizing retirement, effective risk management, and family financial planning. Secure your future by integrating college savings and navigating the accumulation vs. distribution phases of retirement planning. Tailor your financial journey with Menninger & Associates' Guided Planning Strategies (GPS).


Leveraging Your Mortgage As An Asset

When we talk about financial planning, we often focus on saving, investing, and managing expenses. But there's one important financial tool that sometimes doesn't receive the attention it deserves – your mortgage. Including your mortgage as a central component of your financial plan is essential.

Your home is not just a place to live; it's an investment. By building equity through your mortgage, you're essentially creating a form of forced savings that can appreciate over time. It's a powerful wealth-building tool.

A mortgage enforces financial discipline. It requires you to make regular, structured payments. This can help you develop strong budgeting skills and financial responsibility. As you pay down your mortgage, you're effectively reducing a significant monthly expense. This can free up funds for other important financial goals, such as retirement savings.

If needed, home equity can serve as a source of low-cost financing for other major expenses or investments or can help balance periods of reduce cash-flow.

Balancing your mortgage within your financial plan involves making informed decisions about the type of mortgage, interest rates, and the pace of repayment. It's about aligning your mortgage strategy with your overall financial goals.

Remember, your mortgage is not just a debt; it's a financial tool that can work for you when managed wisely. Integrating it into your financial plan ensures that your homeownership journey is not just a place to live but a path to financial security and wealth.

establish a mortgage plan with menninger & associates

Tax Planning Strategies to Maximize Retirement

We like to say, “It’s not how much you make, it’s how much you keep.”  Tax planning is not something you do on April 15th.  All you’re doing is turning in your scorecard – it’s called a 1040.  A tax planning strategy is something you create for the year, and throughout your life.  In some cases, our recommendations may help you today, while others are designed to help you later in life.  In fact, it’s remarkable how much of a high percentage of our clients (and likely middle and upper middle class Americans) are actually in a lower marginal income tax bracket today than they will be in retirement. We aren't here to replace your accountant, but instead work with them to create your personalized tax planning strategies.

Proper tax planning makes it easier to build your personal finances and afford the things you want. Additionally, by anticipating taxes when you create your financial plan, it's possible to significantly boost how much money you will have in retirement.

talk to a tax planning advisor

Risk Management in Comprehensive Personal Finance Planning

Effective personal finance planning helps individuals weather economic and financial challenges and ensures they don’t outlive their money. Through risk management, account holders can improve the long-term sustainability of their savings and investment portfolios by identifying and planning against potential threats to their financial stability.

Inadequate risk management could result in limited and less desirable financial options during retirement or the loss of income. In worse cases, account holders may face increased debt and a vicious cycle of high-interest rates. These negative cash flows ultimately compromise a person’s quality of life, which worsens with excessive stress levels.

With the right amount of risk management in personal finance planning, individuals can make the most of their insurance policies, generating more retirement savings, cushioning against unexpected healthcare expenses, and building a more comfortable inheritance for the next generation.

questions about risk management? contact m&a

Financial Planning for Long-Term Care

While professional long-term care is expensive, using insurance as part of a plan for care can make a difference in everyone's quality of life as a person ages. The key to good decision-making is to weigh everyone’s needs against the costs and potential benefits of the options. In addition to traditional long-term care insurance policies, newer "hybrid" policies are designed to provide a benefit even in the event that the policyholder does not file a claim. Be sure to ask about these options when you meet with your financial advisor.

Faced with these costs, some families might prefer to shoulder the burden of caring for a loved one themselves. Almost 7 out of 10 people surveyed by the Nationwide Retirement Institute said they would prefer to receive long-term care at home and rely on a spouse or family member for care–but would not expect a family member to provide long-term care if they were unable to compensate them.

A thoughtful long-term care plan is all about balance—weighing what you can afford, the kind of care you expect, and the risks you might face. It is not just a financial decision because using insurance may help meet the emotional and physical needs of caregivers such as family members and friends. Made carefully, it's a decision that may help provide you with some peace of mind for your retirement.


The Importance of Family Financial Planning

Family financial planning takes into account the needs of each family member and how they interact with everyone else’s needs to create a holistic plan. A financial plan provides a road map for achieving financial goals and ensuring a secure future for the entire family.

Family financial planning involves assessing and managing a family’s financial resources holistically, addressing the specific needs and goals of each family member. This comprehensive approach includes essential aspects such as budgeting and spending, setting financial goals, debt management, college planning, retirement planning, insurance coverage, and estate planning.

It is crucial for a financial advisor to educate clients on the importance of financial planning and provide them with the necessary tools and guidance to develop a customized plan. By involving the entire family in the process and addressing each aspect of their financial lives, financial advisors can help clients achieve financial security, meet their long-term objectives, and protect their loved ones from unexpected events.


Integrating College Savings Into Your Financial Future

Like so many items these days, college is getting increasingly expensive. Starting to save early can be a big help, especially if you look at investment opportunities offering tax free growth.

Paying for college and other forms of private or higher education can severely strain family finances, so it’s essential to start saving as soon as possible. Having time on your side, especially if you’re focused on a college savings plan, allows you to take advantage of compounding returns and may provide some discipline as you make cash management decisions.

Because the goal of financial planning is to ensure you can pay for everything important to you while achieving financial independence, college savings planning is an integral part of the financial planning process.

A 529 plan is not only a potential useful tool in your overall financial plan, but it can also offer many tax advantages. Read on to find out about the contribution and withdrawal rules and how 529 plans can impact financial aid. When considering how it may fit into your financial goals, there may also be federal and state tax benefits along with gift and estate tax benefits if you implement your 529 plan correctly.

contact M&A about college savings planning & student loans

Planning Doesn’t End at Retirement - Accumulation vs. Distribution

Retirement planning takes on two phases:  accumulation and distribution.  The pinnacle is the point in which people retire, and the biggest question they ask is, “Will I have enough to live comfortably in retirement?”.  That’s where we help our clients the most.

  • Accumulation Phase - Retirement Planning:

During the accumulation phase, this is when clients can take advantage of tax-preferred opportunities such as 401(K)s, 403(b)s, IRAs, Roth IRAs, SEP IRAs, pensions, etc.  During this phase, it’s important to assess a client’s current and anticipated marginal tax brackets so that they utilize the most appropriate and tax-effective retirement savings vehicle. Further, it's important to assess one's investment risk to maximize growth potential without taking undue risk.

  • Distribution Phase - Retirement Planning:

During the distributions phase, it takes on an entirely more important concept, which is a science of its own.  This is when its important to understand the mathematical phenomenon known as sequencing of returns, as improper planning could have an enormously adverse impact on the success of one’s retirement goals if they experience a downturn in the markets in the early years of retirement.

Also, during the distribution phase, it become imperative to have a firm grasp on the tax effects of taking withdrawals from taxable retirement accounts.  Most notably, it is important to understand the impact of those distributions on Social Security.  Specifically, the taxation of Social Security income is predicated on other income such as income from pensions, IRAs, and other investment income.  Thus, certain amounts of income will effectively cause the Social Security income to be taxed, causing phantom taxation of Social Security, and an abnormally high effective marginal tax bracket.  Strangely enough, we have encountered a retired client who has about $40,000 in IRA and investment income, and that placed her into an effective marginal tax bracket over 50% (that means for an extra $1,000 of IRA income, they would pay an extra $500 in Federal tax). Further, it is important to understand that Medicare premiums are also means-tested, so additional income in retirement could cause these premiums to increase.

Planning for Future Wealth with Menninger & Associates

(610) 422-3773