Happy New Year!! You did it! You survived the gauntlet of Holidays that end each calendar year. With the new year comes new opportunities and new changes - some good and some bad; and with so much on your mind and in the business of life at the end of the year (traveling to friends and family, buying gifts, making meals, playing games and watching college football), it is easy to get caught up in bad habits and forget to finish the year strong. Getting Out of Bad Habits If you’re like me, no matter how well I plan, the end of the year always tempts me to jump back into bad habits - like spending more than I make or eating too much food, etc. I’ve heard all the excuses… “Everybody’s doing it!” “But I have to buy presents for my ex-wife’s second cousin’s stepson.” “I want my kid to have the best Christmas ever.” “I just HAVE to have it!” Bad habits create a hectic lifestyle, and that’s not how you want to begin a new year. For instance, if you spent more than you made over the holidays, you start the new year off having to get out of debt. The Bible clearly states that the borrower is a slave to the lender (Proverbs 22:7). I’m not saying you can’t have fun, but what are the consequences of your actions? How will you pay off that debt? Do you have to pause your contributions to your 401(k) or Roth IRA? If so, this has a compounding effect on your retirement. And for what? So, you could “keep up with the Jones’s?” Playing Catchup There is hope! This is a new year, and with the new year comes new goals and resolutions. Did you know you have until Tax Day of 2023 to max out your IRA or Roth IRA for 2022? That’s right! If you contributed $3,000 through December 31, 2022, and you want to continue to take advantage of 2022, keep plugging away with those contributions! Just make sure your contributions are coded for the correct year. The maximum contribution limit for IRAs and Roth IRAs in 2022 was $6,000 ($7,000 if 50 or older), so as long as you don’t contribute more than the contribution limit, you can keep contributing towards the 2022 year until Tax Day of 2023. Things to think about for 2023 IRA/ Roth IRA Contribution limit - $6,500 ($7,500 if 50 or older). If you plan to max out your 2023 contributions, here is the simple update you need to do based on how you contribute: Update your monthly contribution to $541.66 ($625 if 50 or older) Update your twice/month contribution to $270.83 ($312.50 if 50 or older) Update your biweekly contribution to $250 ($288.46 if 50 or older) Update your weekly contribution to $125 ($144.23 if 50 or older) 401(k), 403(b), Thrift Savings Plan, and most 457 Contribution limit - $22,500 ($30,000 if 50 or older) Click HERE to see the highlight of changes for 2023 Now What?! Luckily for you, we’ve got the answer that works every time. If you’re a Dave Ramsey follower, you’ve heard him harp on 7 action steps that will guarantee you financial success in life: the 7 Baby Steps . No matter where you are financially, these 7 steps will help you get out of debt, build wealth, and “live and give like nobody else.” If you would like help on your financial journey, reach out to your Local & National SmartVestor Pro and schedule a meeting. We are happy to meet you where you are and answer any questions you may have.

Overwhelmed, but you're not alone To say a lot is going on in the world right now seems like an understatement, doesn’t it? Unfortunately, many people have a lot of fear and anxiety regarding their finances. The stats below from a recent Ramsey Solutions study confirm how many feel about these situations. Most Americans feel similar about their finances After a recent study by Ramsey Solutions, results showed it was common for many Americans to have similar feelings about the world around them and how it affected their bank account(s). 80% of Americans are worried about the economy 3.98MM people/month quit their job in 2021 4MM people/month quit their job in 2022 Inflation is at its highest in 40 years 37% of Americans are struggling or in crisis with their finances 25% of Americans say they’re relying on credit cards more to make ends meet Nearly 4 in 10 Americans have $0 in savings Half of Americans say finances have had a negative impact on their mental health 4 in 10 people have cried or had a panic attack over their money in the last year 82% of Americans are somewhat or extremely worried about their student loan payments restarting There is HOPE While all of these issues exist, there is hope. There is no shortcut or secret. However, we believe the basic principles that Ramsey Solutions teaches work exceptionally well. They are tried and true, straight from God and Grandma. They work 100% of the time. Dave Ramsey calls them the Baby Steps . It doesn’t matter where you are in life; you can begin anywhere and anytime. For those who are serious about getting their financial situation under control, Dave and his team put together a course called Financial Peace University which is a nine-lesson course that teaches you how to save for emergencies, pay off debt fast, spend wisely, invest for your future, and build wealth. If you become a client with us, you will have access to Ramsey+; this membership of Ramsey+ includes access to Financial Peace University so that you can take this course at your leisure. If you want to learn more about the 7 Baby Steps, this article on our website outlines them well. The baby steps are a proven step-by-step plan to help you achieve your financial goals. A common question is, “how long will it take me to pay off debt or build savings?” While everyone’s situation is unique, we have listed the average time frames for people to complete the 7 baby steps below. Again, these are averages, so if you have more debt than the average or make more than an average income, your time frames will likely vary accordingly. Baby Step 1 – Build a $1,000 Emergency Fund - 30 days Baby Step 2 – Get out of consumer debt - 18-24 months Baby Step 3 – Build a 3–6-month Emergency Fund - 6 months Baby Steps 4,5,6 – Intentional until retirement Baby Steps 7 – Live and Give like no one else for the rest of your life If you are feeling stressed and overwhelmed with your finances, we hope this article has let you know that you are not alone but that there is HOPE! Please contact a Financial Advisor or Financial Coach who will help you take the next step in your financial journey. We would be happy to help!

THE BENEFITS OF LONG-TERM DISABILITY INSURANCE Long-term disability insurance is a type of insurance that provides financial protection to individuals in the event of an illness or injury that results in a long-term disability. This insurance is designed to replace a portion of the insured person’s income, typically up to 60% or 70%, if they cannot work for an extended period. While many people believe that they will never experience a long-term disability, the reality is that it can happen to anyone at any time. In fact, according to the Council for Disability Awareness, one in four 20-year-olds will experience a disability before retirement age. This means that it is essential for individuals to consider the importance of long-term disability insurance. The Benefits of Long-Term Disability Insurance Income Protection The most significant benefit of long-term disability insurance is that it provides income protection. If an individual cannot work due to a long-term disability, the insurance policy will give a portion of their income to help them cover their expenses. Dave Ramsey tells the story of a man who approached him at a book signing and thanked him for his general advice to purchase long-term disability insurance. He was making about $100,000 at his place of employment, had a family, and the unthinkable happened. Luckily, he had long-term disability insurance in place so that he and his family could enjoy an annual income of $65,000 while he was not able to work. Peace of Mind Knowing that you have long-term disability insurance can provide peace of mind. If something were to happen, individuals could rest assured that they have financial protection. Employer Benefits Many employers offer long-term disability insurance as part of their employee benefits package. This means that employees can take advantage of this coverage at a lower cost than if they were to purchase it on their own. The Risks of Not Having Long-Term Care Disability Insurance Financial Instability Without long-term disability insurance, individuals may struggle to make ends meet if they cannot work due to a long-term disability. This can lead to financial instability, making paying bills and covering expenses challenging. Increased Debt Without long-term disability insurance, individuals may rely on credit cards or loans to cover their expenses. This can lead to increased debt, which can be challenging to pay off over time. Reduced Standard of Living Without long-term disability insurance, individuals may need to make significant lifestyle changes to make ends meet. This can include downsizing their home or making other significant sacrifices that can reduce their standard of living. A healthy piece to the financial puzzle Long-Term Disability Insurance is an essential component of a comprehensive financial plan. It provides income protection, helps cover medical expenses, and provides peace of mind. This is why we suggest considering long-term disability insurance to help you have coverage to protect yourself and your family. Luckily, Whitaker-Myers Wealth Myers is part of the Whitaker-Myers Group , which has a department that handles long-term disability insurance. If you have questions about long-term disability insurance, talk with your financial advisor . If you’re interested in a quote, they can put you in contact with a member of our insurance team. Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures. Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner. Whitaker-Myers Wealth Managers is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed.

Roth and Traditional IRAs With a Roth Individual Retirement Account (IRA), money is put in after paying income tax on it, and then you get the best benefit of any retirement account: TAX-FREE GROWTH & TAX-FREE WITHDRAWALS (once you reach age 59 and a half and have had the Roth for 5 years). As I tell every person I talk to, imagine taking money out of your checking account, which you have already paid tax on, making a contribution to your Roth IRA, and sitting back to enjoy the tax-free growth for the rest of your life. For example, you are 35 and will max out your Roth IRA in 2023, so you contribute $6,500. Click HERE to see contribution limits (based on age, how you file your taxes, and how much money you make). You are planning to retire at 65, so you let the money grow in the stock market over the next 30 years. Assuming a 7% annual growth rate over those 30 years, the $6,500 you put into your Roth IRA will be $52,757. * That’s $46,257 of tax-free growth you never have to pay taxes on. With a Traditional IRA, you get an immediate tax break on your contribution, your money grows tax-deferred, and you pay income tax when you take a distribution in retirement. So, using the same example above, you make a $6,500 contribution into a traditional IRA, let it grow tax-deferred over the next 30 years, and the numbers are the same – you still have $52,757. The difference is that now you have to pay income tax on all of it as you take distributions in retirement. I don’t know about you, but scenario one sounds much better since it means I am paying less in taxes. Backdoor Roth IRA A backdoor Roth IRA is the way that high-income earners can benefit from the tax-free growth of the Roth IRA. Click HERE for the 2023 Roth IRA income phaseout to see if you must use the backdoor Roth to take advantage of tax-free growth. If Dave Ramsey can use it, I bet you can too. How to execute a Backdoor Roth? To take advantage of the backdoor Roth IRA, you must make a non-deductible contribution to a traditional IRA, then convert that money to your Roth IRA. WARNING – if you have a Traditional IRA, SEP-IRA, SIMPLE IRA, or another pre-tax non-employer sponsored retirement account, you will be held to the pro-rata rule unless you convert all of your pre-tax dollars to Roth. Talk to a Whitaker-Myers Wealth Managers SmartVestor Pro or Tax ELP if you have questions about the backdoor Roth IRA. 401(k)’s and 403(b)’s All 401(k) and 403(b) plans allow employees to make pre-tax contributions up to the annual limits. Click HERE to see a summary of the changes from 2022 to 2023. Most employers also offer employees the option to make Roth contributions to their employer-sponsored retirement plans. This allows your payroll-deducted contributions to be taxed now and grow tax-free moving forward. There is a third bucket of contributions that are rarely seen inside employer-sponsored retirement plans known as after-tax deferrals. These additional contributions are not taxable upon withdrawal, but the growth of the funds will be taxed upon distribution. If this option is available in your plan, you can make after-tax contributions above and beyond the normal contribution limits of $22,500 (under age 50) or $30,000 (50 or older). In 2023, the contribution limit for combined employee and employer contributions is $66,000 (under age 50) and $73,500 (50 or older). If you contribute after-tax contributions to your employer plan, then you will likely want to convert them to Roth using the Mega Backdoor Roth strategy. What Is a Mega Backdoor Roth? The Mega Backdoor Roth is a financial strategy that allows individuals to contribute significant amounts of money to their employer plan and then convert the after-tax funds to a Roth IRA. This technique lets you take advantage of the tax benefits and potential growth opportunities a Roth IRA provides, even if your income exceeds the limits for direct Roth contributions. How Do I Know If I Can Take Advantage of the Mega Backdoor Roth? · Make sure your 401(k) or 403(b) has a Roth option, allowing you to make Roth contributions. If yes: · Confirm that your 401(k) or 403(b) allows after-tax contributions. If yes, you have two questions to ask that could potentially allow two options for you: 1. Does the plan allow for “in-service withdrawals?” This allows employees to roll over after-tax contributions into an outside Roth IRA at a custodian of their choice like Charles Schwab. 2. Does the plan offer the ability to make “in-plan conversions” to Roth? · Choose which option best fits your situation. Your employer-sponsored retirement plan has limited investment options, so we suggest choosing the “in-service withdrawal” option if available. This will open up the investment universe for your hard-earned dollars. · Max out your Roth 401(k) for the year ($22,500 if under age 50; $30,000 if 50 or older). · Max out the after-tax contributions, then convert those funds IMMEDIATELY to Roth. If you don’t convert immediately, you will have to pay taxes on the growth of the after-tax portion. If you have questions on what is the best way to invest for yourself, reach out to one of our financial advisors. They can help answers questions you have, and help you decide which option is best for your situation. *The annual rate of return given in this article is used for informational purposes to illustrate an example. This is not a guarantee of return.

An emergency fund is like a safety net, providing peace of mind during unforeseen circumstances. This money needs to be liquid and accessible in case an expense arises out of the blue. There are many names that an emergency fund can go by, some of which are the following: rainy day fund, savings account, contingency plan, stockpile of cash, stash, or cash reserves, but they all serve the same purpose: to provide relief in the event of a job loss, pay cut or significant unexpected expense. How Much Should I Set Aside in My Emergency Fund? Dave Ramsey and Ramsey Solutions suggest that you set aside at least 3-6 months of expenses once you no longer have any consumer debt (student loans, car payments, credit cards, etc.). As a general rule of thumb, save three (3) months of expenses if you are single with no dependents and a stable income or married and each of you has a steady income. You’ll want to save six (6) months of expenses if you’re married with a single income, you’re a single parent, you have a seasonal job, you or someone in your home has a chronic illness, or if you or your spouse are self-employed, works on commission or has a highly irregular income. Where Should I Put My Emergency Fund? There are many places where you can put your emergency fund: a savings account, a high-yield savings account, an online bank, or a money market fund , to name a few. The most common mistake that people make is commingling their money. An example would be someone putting their “emergency fund” money in their checking account. This provides easy access to the “emergency fund,” which most people don’t have the discipline to let sit there without spending it. Not to mention that a checking account is a terrible place to put your emergency fund due to no interest being earned. Did you know the Charles Schwab money market currently pays a 5.21% annualized interest rate? That’s right! Over the last ten years or so, if your money was in a savings, high-yield, or money market account, you were probably getting 0.1% or something to that effect. At this moment in time, with inflation sitting around 3.3%, your money can actually outpace inflation if you do your homework and put your money to work for you. Talk to a SmartVestor Pro today to get into Schwab’s money market. When To Use My Emergency Fund The first question I ask myself when I am tempted to use my emergency fund is, “Do I really need this?” or “Is this a true emergency?” I don’t want to get into the conversation of “needs” versus “wants,” but there is a very distinct difference between the two, and it is necessary for you to know the difference. The second question I ask myself is, “Can I pay for this expense by adjusting my budget?” Maybe a little delayed gratification can prevent you from spending your emergency fund. You might have to sacrifice your “fun” or “fast food” money for the month to fix your vehicle. From the Ramsey article referenced above, here are three questions that you should ask yourself if your budget can’t cover an emergency: 1. Is it unexpected? 2. Is it necessary? 3. Is it urgent? If the answer to all three of these questions is a resounding “YES,” then you can give yourself permission to use the emergency fund. Just don’t forget to rebuild it. Creating an Emergency Fund A monthly budget is a time-proven tool to help you build an emergency fund. It outlines your necessary monthly payments and gives you goals to stay under in areas with potential overspending. We suggest using a zero-based budget template, so you know where each dollar of your monthly income goes and how it is being spent, saved, or planned for. If you are unfamiliar with budgeting or emergency funds, we have a financial coach on the team who can help create and tailor a budget to help fit your specific needs and lifestyle while keeping you accountable along the way.

A brokerage account is a “non-retirement” account with no contribution limits, no income limits, and no penalty for taking money out before age 59 and a half. It can go by many names: individual account, joint account, gap account, bridge account, non-retirement account, cash account, business account, or margin account, to name a few. It will never be the advice from a Whitaker-Myers Wealth Managers SmartVestor Pro to borrow money from a bank to invest, so please be very careful about opening or using a margin account. What Can a Brokerage Account Be Used For? A brokerage account can be used for anything. Want to save for a vehicle over the next five years and allow that money to work for you? Dollar-cost average your money into a brokerage account and invest it as conservatively or as risky as you would like! Want to put your emergency fund to better use? Move it over into a brokerage account, and one of our SmartVestor Pros will invest it into the Schwab Money Market , which is currently yielding about 5.26% as of 11/13/2023. Want to save for a down payment on a house? Talk to your local SmartVestor Pro to go over your options. What Are the Tax Implications of Using a Brokerage Account? Brokerage accounts do not have the tax benefits your traditional 401(K) or a Roth IRA has. When it comes to a brokerage account, you have short-term capital gains/losses and long-term capital gains/losses. A short-term capital gain is when you sell the position within one year of holding it, and there is a gain. A short-term capital gain is taxed at your ordinary income tax rate. Here are the 2023 ordinary income rates: A long-term capital gain is when you sell the position after holding it longer than one year, and there is a gain. Here are the long-term capital gains tax brackets for 2023: If you have any tax questions, please get in touch with our Tax ELP, Kage Rush . When Should I Open a Brokerage Account? When you’ve maxed out your employer-sponsored retirement account(s) and your Roth IRA(s) When you are looking to invest more than 15% of your income ( Baby Steps ) When you want to retire early and avoid early withdrawal penalties When you have a long-term savings goal and want to make your money work for you This would be using it for a sinking fund to save for things such as: Down payment for a house A new (to you) car Home repairs Wedding Vacations What Is the Difference Between Retirement Accounts and Brokerage Accounts? Source: Ramsey Solutions Want To Open a Brokerage Account? Talk to your local SmartVestor Pro . Our team of advisors is happy to walk through any questions you may have and help guide you through your investing process.

Do you have charitable intent?  Maybe you are already an active donor.  Do you generate a high annual income and want to take advantage of the greatest allowable deduction?  Do you like the idea of a private foundation but don’t want the complexity, burden, and expense of its administration?  Do you want to give anonymously?  Do you own liquid assets, such as stock, mutual funds, etc., on a low-cost basis and don’t have a plan to sell them?  In other words, do you want to organize your charitable giving more efficiently?    As a Financial Advisor, I often hear this question: “What is the best way to donate money to a charity?”  The reality is there isn’t just one right answer.  There are a few different tax-efficient ways to donate your money, which certainly depends on your specific situation, but today, I want to focus on giving through a Donor Advised Fund.     What is a Donor Advised Fund (DAF), and who should use them? A Donor Advised Fund is a charitable giving account established for future giving while receiving a tax deduction immediately upon the contribution.  Essentially, a DAF is like a charitable bank account.  Once you place your money or asset into the DAF, you immediately qualify for a tax deduction for that year.  Those funds then sit in the DAF until you are ready to donate to the non-profit or social venture of your choice.    Here is a list of the most common examples of when DAFs are used: Liquidity event (selling business, appreciated assets) Unexpected income (bonus, inheritance, etc.) Capital gains management in a brokerage account Custom indexing Charitable bunching (example below) Retirement planning Multi-generational giving   Here are some interesting stats about DAFs: There are roughly $234 billion in DAFs Approximately 10% of all gifts given to charities come from DAF’s Nationally, the average DAF size is approximately $183,000 In 2017, just over $30 billion was contributed to DAF, which has almost tripled in the last six years.      Tax Benefits of a DAF One of the great features of the DAF is the fact that you qualify for a tax deduction in the year that you make the contribution to the donor-advised fund. Yet, you still have the flexibility to choose the timing of your donation to your chosen non-profit or social venture.  Simply put, you get the opportunity to optimize the timing of the tax deduction AND the donation to the charity.    Important Tax Benefits: Up to 60% AGI tax deductibility (cash) Up to 30% AGI tax deductibility (public securities) All securities deducted at Fair Market Value   Example 1 Donor with AGI of $100,000 Donor contributes $80,000 cash  to a DAF $60,000 is the max deduction the donor can take in this year, reducing AGI to $40,000 (60% * $100,000 = $60,000) $20,000 can be carried forward up to 5 years for deduction   Because the standard deduction in 2023 was $27,700 (married filing jointly), the donor in this example benefited from the contribution to the DAF by $32,300 ($60,000 - $27,700 = $32,300).   Example 2: Charitable Bunching Assuming $20,000 donations per year in the 24% marginal tax bracket Limitations of Using a DAF To ensure the integrity of the social impact, there are restrictions on how funds in a DAF may be used: Must hold less than 20% ownership interest (voting stock) May not invest in businesses with ownership interests of disqualified persons: DAF managers (including trustees, directors, officers) Substantial contributors to DAF Family members Cannot participate in self-dealing Cannot make grants to individuals (i.e., a direct individual scholarship) Donors may not receive personal benefits from the transaction   In conclusion, if you are charitably inclined and have the means to donate some of your hard-earned money (or an inheritance), please talk to your advisor today to see if a Donor Advised Fund may be right for you. If you don't have a financial advisor , we have a team here at Whitaker-Myers Wealth Managers who can help talk through your specific situation.

Are you thinking about selling your small business  and sailing into the sunset?  Have you poured blood, sweat, and tears into your small business over the years and are now ready to settle into retirement ?  That’s great, but where should you begin?  In this article, we will discuss a few simple questions that will help you in the planning of the sale of your small business.    Question 1 – When Do You Plan To Retire? This question sounds relatively easy, but the reality is that over 70% of small business owners don’t know how to answer it.    Fear of the unknown is a real thing.  Questions like, “If I sell my business, will I have enough to live on?  Will I be able to find the right buyer?  What are the tax implications of the sale of my business?  What is my business worth?  How do I plan to retain key employees?”  Facts are your friend, so let’s start putting some data together to help you in the decision-making process.   Question 2 – What Is Your Exit Strategy? These questions build on each other, and there is some overlap in the responses to some of them.  However, this question starts to help you gather relevant data about your business, which will, in turn, help you answer the question, “When do you plan to retire?”    In this stage, you will begin to answer questions about the future of your business, management, and ownership structure.  Can you sell your small business outright?  Do you have equipment to sell?  Do you need to stay on as a consultant for several years?    These are just a few simple questions to ask yourself as you begin to plan to exit your business.    Question 3- Have You Planned Your Exit Strategy? Did you know that the average small business owner has 90% of their wealth wrapped into their business?  No wonder it is hard to answer the question, “When will you retire?”    Here is another stat for you: 70% of Baby Boomers (roughly ages 60-78) don’t have a plan for exiting their business.  Maybe some enjoy what they do, and they don’t intend to slow down at the moment.  Others can’t fathom the thought of not having an income and they don’t have a retirement plan in place.  Some don’t know if they have saved enough for retirement.    A wise and smart business owner will plan for their retirement about five to six years before actually retiring.  Why?  Part of that question is answered in Question 4 (Do you have three years of financial audited statements by a reputable third party?), and part of that answer is in Question 2 (Will you need to stay on as a consultant for a few years?).   Question 4 – How Do You Plan To Maximize The Value Of Your Business? Do you know what your company is worth?  Before selling your business, you should have three years of financial audited statements by a reputable third party to get an accurate valuation.  Most small businesses have their books done by a spouse, the owner, a friend, etc., but to maximize the sale of your business, you need to have a professional “sure things up.”    Question 5 – What Is Your Plan When You Exit The Business? Lastly, for the purposes of this article, what does retirement look like for you?  How much can you spend in retirement?  Are you going to outlive your money?  Being able to quantify this in our brains is impossible.  We all know that saving in an employer-sponsored retirement account is good, and saving in a Roth IRA is also good.  But what does it really mean in the end?    This is where a Financial Advisor can help create some projections for you on paper that will aid you in the decision-making process of planning for life after retirement .  Maybe you aren’t retiring. Perhaps you are just selling the business and moving on to something else.  Either way, you need a plan that answers the question, “What will I do after I sell my business?”    Conclusion Have you figured it out yet? Many of these questions can be answered by meeting with a Financial Advisor and CPA, and many more need to be answered.     As a small business owner, you probably feel like you work 80 hours a week, and maybe you do; so, when do you have time to plan for the sale of your business?  Here at Whitaker Myers Wealth Managers, we will do our best to help you in the sale of your small business, and we have a 3-step process to help you maximize the valuation of your business, mitigate the risk during the sale of your business, and map out the future as you sail into the sunset.  So please reach out to an advisor today so you can be confident in the timing of your decision to sell your business.

As with many things in life, knowing what we’re supposed to do and actually doing it are two separate things. This is true for our health, relationships, careers, and, of course, our finances. When it comes to investing, it’s well known that adequately diversifying and staying invested are the best ways to achieve long-term financial goals. However, this is often easier said than done, especially when market and economic outlooks are uncertain, as they have been for many years. Fortunately, there are investment methods for managing the emotions that come from market volatility.   This raises a good question: “What should you know about sticking to an investment plan throughout your life ?”  Dollar-cost averaging and Lump-Sum investing Knowing when and how to invest in the stock market can be challenging, especially if you suddenly come into a large sum of money. This could be through an annual bonus, the sale of a business, or an inheritance, to name a few. In the long run, investing properly can turn savings into wealth. However, market volatility can derail even the most steadfast investors in the short run.   Dollar-Cost Averaging This is where dollar-cost averaging can help. With dollar-cost averaging, investors regularly invest a set amount on a pre-planned schedule. This reduces the temptation to follow and react to every market move or to try to time the market . If you make regular, automatic contributions to your portfolio with each paycheck, such as through a 401(k) plan at work , you are technically already using dollar-cost averaging. Whether these investments occur monthly, quarterly, or annually turns out to matter much less than simply sticking to a plan.   Lump-Sum Investing The opposite, investing all at once, is often known as lump sum investing. How your portfolio performs in the short run is very much determined by how the market performs immediately after the investment. This can be seen in the chart above, which shows the hypothetical returns between these two methods beginning in 2000. Investing $100,000 in the S&P 500 would have lost value almost immediately due to the dot-com crash. This would have recovered over the next several years until the housing crash. Finally, the value of this investment would have recovered in 2013 when the S&P 500 returned to all-time highs and then benefited from the long bull market that followed. This chart also shows the hypothetical returns of a dollar-cost averaging approach in which the investor splits up the $100,000 into monthly investments over this entire period. Given the length of the time period, this is a rather extreme example, but it serves to highlight some key facts.Dollar-cost averaging on a monthly schedule would have avoided the market drawdowns early in the period when the portfolio would have mostly been held in cash, remaining relatively flat through the mid-2010s. There is an inflection after this when the lump sum portfolio catches up and outperforms due to the strong bull market. So, both methods had their benefits and time to shine over the past two-and-a-half decades.   Dollar-cost averaging can make it psychologically easier to invest The takeaway here is less about maximizing returns (in the moment) and more about staying invested through the years and decades to maximize your returns overall. Dollar-cost averaging can help reduce risk in situations where markets fall sharply, especially early on. However, lump sum investing tends to outperform dollar-cost averaging in the long run since, historically, markets have steadily risen over time. This is analogous to comparing a 100% stock portfolio to a properly diversified one with a balanced mix of stocks, bonds, and other asset classes . The 100% stock portfolio might outperform over long periods, especially during strong bull markets like today’s, but it will also experience sharper pullbacks. On the other hand, the diversified portfolio will experience steadier growth and more muted declines, making it easier for investors to stay level-headed. This is especially relevant today, with the market near all-time highs. The truth is that markets are always uncertain. Whether it’s the upcoming presidential election, geopolitical conflict, or the direction of interest rates and the economy, investors may worry that the market could pull back just after they invest. It’s important to keep in mind that just because the market is near a current peak doesn’t necessarily mean it’s “due for a pullback.” By definition, markets achieve many new all-time highs as they rise during bull markets . While significant uncertainty has occurred this year due to interest rates, inflation, and the Fed, the S&P 500 has already experienced 24 new all-time highs. This includes a sharp rally in May after a slump in April.   Ironically, it can be psychologically challenging to invest both when the market is rising and when it is falling, for fear that the market might be at its peak in the first case and that it might fall further in the second. So, whether dollar-cost averaging or lump sum investing makes more sense depends on the individual investor, their ability to handle risk, and their time horizon.   Getting invested sooner is better than waiting for the right timing Whether you choose to dollar-cost average or invest all at once, getting into the market sooner has historically been better than “waiting for a pullback.” As the accompanying chart shows, waiting for a better time to buy or trying to “buy the dip” has tended to backfire. Since the market tends to rise over time and can rebound unexpectedly, even the worst timing is often better than being out of the market. For example, an investor waiting for a 5% pullback before investing would, on average, have waited 291 days. Even though 5% or worse pullbacks do occur periodically, the fact that the market rises over time means that there are often “higher lows” – i.e., the next dip is higher than before. Historically, markets have gained a whopping 13% during these periods, including the pullback itself. Just as a diversified portfolio can help reduce overall risk and volatility, so can dollar-cost averaging when it comes to investing over time. Dollar-cost averaging may not be the mathematically optimal way to invest since lump sum investing has tended to outperform over history. However, it can help investors stay focused in the long run without worrying about every market event or trying to time the market  perfectly. As is always the case, seeking the guidance of a trusted financial advisor  is the best way to determine the approach that works best for your specific goals. If you do not have an advisor, the team at Whitaker-Myers Wealth Managers  is available to help answer questions you have about investing if you are interested in learning more. The bottom line? Dollar-cost averaging and lump sum investing are both ways to invest cash. History shows that investing sooner is the most important way to achieve long-term financial goals.

After a historic campaign, Donald Trump has won the 2024 presidential election and Republicans have won control of the Senate. For half the country, this is a cause for celebration, while for the other half, this is a disappointing result that will require time to process. This reflects the divisions in our country on both social and economic matters that we hope will heal in time. The stock market has performed well across both parties It’s clear that political outcomes can influence our daily lives and the direction of the country. However, regardless of which side of the aisle you’re on, history shows that the impact of politics on portfolios is often overstated. It’s important in the coming weeks to not overreact in either direction, but to instead keep a level head. Putting politics aside, what might this result mean for the economy and financial markets over the next four years? From a broad perspective, history shows that the stock market and economy have performed well under both parties over the past century. In the coming weeks, there will likely be both bullish and bearish predictions. Some may expect a significant rally similar to the 2016 election, while others will expect issues like tariffs to slow the global economy. When it comes down to it, long-term investors should continue to walk the line by staying invested, diversified, and focused on fundamentals. On the one hand, stock market valuations are already well above average, making it more important to be thoughtful when building portfolios, ideally with the guidance of a trusted advisor. On the other hand, investors should also be wary of overly pessimistic views on the market. It's likely that predictions for market crashes have been made about every president in modern times. In recent years, it was certainly said about Obama in 2008, Trump in 2016, and Biden in 2020. Thus, it's important to separate personal and political feelings from financial plans and investments.   This is not to say that good policies don’t matter, but instead that business cycles are driven by factors beyond politics. What’s more, policy changes tend to be incremental, even when a President’s party controls Congress. History also shows that it is very difficult to predict how any particular policy might affect the economy and markets since stock prices adjust to new policies and companies adapt quickly as well. The Tax Cuts and Jobs Act will likely be extended Regarding taxes, a Republican Party victory makes it likely that much of the Tax Cuts and Jobs Act will be extended beyond its 2025 expiration. The TCJA overhauled the tax code for both individuals and businesses, including cutting corporate taxes to 21%, reducing many individual rates across tax brackets, lowering income taxes for many Americans, doubling the estate tax exemption, and more. In addition, the uncertainty over these provisions during the election season made tax planning more complex. The expiration of the TCJA would create a potential “tax cliff” for many individuals and businesses. As a result, Roth IRA conversions, for instance, reportedly increased leading up to the election as individuals took advantage of current low tax rates. It’s important to maintain perspective around tax policy since these issues can be politically charged. While taxes have a direct impact on households and companies, they do not always have a straightforward effect on the overall economy and stock market. This is because taxes are only one of the factors that influence growth and returns, and there are many deductions, credits, and strategies that can reduce the statutory tax rate. The market has performed well across many tax regimes across history, including periods when the highest marginal rates were between 70% and 94% after World War II. Taxes today are low by historical standards. As the national debt grows, it’s prudent for investors to expect tax rates to eventually rise. Planning for this possibility is only growing in importance. Tariffs and trade wars are back in focus Looking at proposed policies, many investors worry that a second trade war could result from tariffs on major trading partners including China, the European Union, Mexico, and Canada. During his first term, President Trump increased duties on many goods including steel, aluminum, solar cells, washing machines, and more. On the campaign trail earlier this year, he proposed raising tariffs further, including up to 60% on China. Unlike tax policy, which requires congressional approval, the president can impose tariffs through executive order. While many worry that this could harm the economy, analyzing tariffs can be complex. The Trump administration’s use of tariffs in 2018 and 2019 was often as a negotiating tactic, leading to a “Phase One” trade deal with China in early 2020. While the merits of the deal can be debated, the worst-case predictions for the economy and market never occurred. In theory, tariffs can be inflationary since they increase the final costs of goods for consumers. Additionally, they run counter to long-held economic views that open trade creates mutual benefits for trading partners. However, they can also help to protect domestic industries from unfair trade practices, as well as secure intellectual property from theft and forced transfers. The reality is that many tariffs imposed by the Trump administration were continued under President Biden. The current tariff proposals reflect the trends of de-globalization and protectionism that have emerged over the past decade. Once again, while tariffs and trade wars may impact certain industries and businesses, it’s important to not overreact with our portfolios. Investors should focus on years and decades, not days and weeks With the election now over, investors will shift their focus back to other economic considerations such as the Federal Reserve’s next rate decision, corporate earnings, and consumer spending. The fact that a significant source of uncertainty has been lifted could be enough to improve investor sentiment, as it has in past election seasons. Ultimately, the business cycle is what has driven long run returns over the past century, and not two or four-year election cycles. These long-term business cycles are the result of broader factors such as industrialization, globalization, the information technology revolution, trends in artificial intelligence, and more. For investors with financial plans spanning years and decades, focusing on these longer-run trends is far more important than reacting to daily headlines. The bottom line? Regardless of political views, investors should stay invested and diversified as the election season comes to a close. Clarity around taxes, tariffs, and other policies will help, but maintaining perspective around long-term trends is still the best way to achieve financial goals. If you have questions about investing, reach out to your financial advisor. If you don't have an advisor, reach out to a member of the Whitaker-Myers Wealth Managers financial advising team , as they will be happy to discuss your questions.

Peak Season Temperatures During the height of winter, with frigid temperatures, no one wants to be surprised by a pricey heating bill. Those days are inevitable when you’ll want to crank the heat, but that comes with the anxiety of opening your next gas/electric bill. Instead of the surprise bill or fighting over the thermostat, why not look for other solutions to have your house in optimal condition for those peak season temperatures, whether in the middle of winter or summer? Let’s be proactive in our approach to cold temperatures, so we don’t shake the budget when they do hit. Ways To Save Here are some ways to evaluate your home and prepare ahead of the season to help save on that heating bill. The Thermostat Turn down the thermostat! Whether for work or an extended vacation, times you will be out of the house are great opportunities to turn the thermostat down. In addition, try turning it down a couple of degrees when you head to bed at night. Grab an extra blanket if you need to. Your Bedding There is an excellent reason stores sell flannel and wool in winter – it’s warm! Don’t forget about fleece blankets too. Add those layers to stay warm and cozy. The Ceiling Fan Did you know that even something as simple as switching the direction of your ceiling fans to spin counterclockwise actually helps you reduce your heating costs? Turning your fan counterclockwise brings the warm air back down, which is definitely what you want in colder months. Your Fireplace If you enjoy building a fire in the winter, you will want to close the damper once those final embers lose their glow; that way, you won’t lose warm air through the chimney. You should also be aware that as enjoyable as a fire is, other areas of the house may wind up losing heat as the fire typically only heats the room where the fireplace is located. Possible Air Leaks Check all doors, windows, walls, and cracks for air coming in from the outside. These areas can easily be sealed up with weather stripping or caulking. You can find these materials at any of your local stores. The Sunshine On a sunny day in the middle of winter, open your curtains and blinds to let the sunshine flow into your house! This will help warm the space, and you may be thrilled not to hear your heat working for a while. Plus, seeing the sun instead of the gray days of winter will help chase away those winter blues—just a reminder to close any blinds and curtains in the evenings to keep out extra drafts. Looking Ahead When you receive that heating bill, winter temperatures can shake the budget, but let’s not let it be the case this year and for years to come. Be proactive before the seasons change so your bills aren’t a surprise to you – instead, maybe they’re a surprise because they’re lower than in previous years. That means you did the work and are receiving the reward. Use these tips as a checklist to walk around your home and prepare it for the upcoming season. If you are looking for other ways to reduce spending in your budget, meet with one of our financial coaches today to learn ways to find extra dollars in your monthly budget. Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures. Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner. Whitaker-Myers Wealth Managers is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed.

What are habits, and why should I create them? We all have habits that shape us and how we live our lives. Some of us may be early risers, slowly sipping the same morning cup of coffee each day, or some may barely grab that cup of coffee as we rush out the door to make it to work on time. While some habits are fleeting, others stay with us for our lifetime, both the good and the bad. The reality is that some habits hinder us while others help us. Our good habits can offer health and structure to our otherwise chaotic lives if we recognize their value and keep them going. Sometimes we need the proper tools to begin employing the good habits that are lying dormant. If someone seeks to be physically fit, they will seek a fitness coach. It can be assumed that they would expect this coach to point them in the right direction so they can see the results they’re striving for – physical, mental, and behavioral changes that will benefit their overall quality of life. Their trainer will instill habits such as stretching before workouts or drinking enough water to help them achieve their fitness goals. Like a fitness coach might map out and encourage healthy habits, so does a financial coach. How to create financial habits Habits can impact our finances in a similar way to our physical health. We all have financial habits instilled in us from a young age, whether we’re aware of them or not. If you received an allowance growing up – did you run and spend it on your favorite candy or add it to the piggy bank to save up for that dream toy? Those childhood financial habits factor into your habits surrounding finances today. Creating financial habits takes time and diligence. Seeking a financial coach can be a huge benefit to helping you get on the right track with your finances. Financial coaching is similar to fitness coaching in that it can retrain your brain, allowing you to cultivate healthy financial habits if you are willing to put in the effort. This can also drastically change your quality of life. Given your specific circumstances, a financial coach will work with you to create habits to help you achieve your financial goals. Some financial habits include: Tracking your spending through a budget Creating a financial plan Setting achievable goals Avoiding debt Patiently saving for a larger purchase As your financial habits evolve, you become more aware of where your money is going and where you want it to go. When your financial habits change, you may be surprised that you drove past that coffee shop to save the extra $7. The reality is that healthy financial habits can ultimately lead to a debt-free, financially independent life. Contact one of our financial coaches today to see how they can help you. Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures. Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner. Whitaker-Myers Wealth Managers is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed.