This is a great question that I get quite often. Many married couples have one income earner in the family and in many circumstances, this can limit their ability to save in tax-advantaged retirement accounts. Let’s say a married couple in their early-40’s has one income earner making $190,000/year and they want to save 15% ($28,500) of their income for retirement. The working spouse has a company 401(k) as well as a Roth IRA. Because the income earner is under 50, the maximum elective deferral for 401(k) in 2022 is $20,500 and the contribution limit to the Roth IRA in 2022 is $6,000. $28,500 – ($20,500 + $6,000) = $2,000 Total Savings – (401k Max + Roth IRA Max) = Unaccounted Savings How do we save the additional $2,000 in a tax-advantaged retirement account? Enter, the spousal IRA. This is a strategy designed for married couples with one income earner. Under spousal IRA rules, married couples with one income earner can contribute up to $6,000 ($7,000 if non-working spouse is over age 50) into their spouses IRA on behalf of the non-working spouse. A few things to consider before implementing this strategy. First, married couples must file a joint return to be eligible to use the spousal IRA strategy. Second, income limits apply to Roth IRA contributions. In this example, the couple’s income is under the $204,000 threshold and they are able to contribute the maximum amount to their Roth IRAs. If you are married filing jointly and your Modified Adjusted Gross Income (MAGI) is over $204,000 you should speak to a Financial Advisor at Whitaker-Myers Wealth Managers about the possibility of the backdoor Roth IRA. Third, the non-working spouse is the account owner even though the working spouse is funding the account. All of the decisions within the spousal IRA are only to be that of the non-working spouse (asset allocation, withdrawals, beneficiaries). The spousal IRA is a great consideration if you are like the hypothetical couple above or if you just want to save in a Roth IRA with tax free growth, tax free distributions after 59½, and NO REQUIRED MINIMUM DISTRIBUTIONS AT AGE 72. If you are interested in opening a spousal IRA or have questions related to backdoor Roth IRAs, retirement planning, or general investing, you can reach out to one of our Financial Advisors here.

Working for a publicly traded company and having the opportunity to purchase company stock in your retirement plan has many benefits. Not only do you get to reap the benefits of your hard work but knowing you have a stake in the company directly leads to working harder and taking more pride in your work and pride in your company. Your company knows this; that is why they offer company stock in your retirement plan. Being proud of your work and company you work for is great but it often leads to biases that can be detrimental and sometimes catastrophic to retirement assets. “My company won’t go out of business.” is probably the most common sentiment of people who are grossly overweight in their own company stock. The fact of the matter is that companies, no matter how profitable they are can and likely will fail. Even Jeff Bezos, Executive Chair and founder of Amazon.com was quoted during an interview saying “I predict one day Amazon will fail” . When a company becomes financially upside down and their assets outweigh their liabilities to a point of no return, they will file for bankruptcy and their stock price goes to zero dollars. That means, any stock you have in that company all of the sudden has no value. If this is stock in the company you work for, not only are you out whatever your investment was but you likely will be laid off at the same time. Some factors that cause companies to fail include: economic issues, management decisions, fraud, competition, technology, legislation, consumer interest changes, etc. Here are a few examples of corporations that filed for bankruptcy much to the surprise of many investors AND employees: Lehman Brothers Total assets at bankruptcy: $691.1 Billion Date of bankruptcy: September 15, 2008 Lehman Brothers at the time was the fourth largest investment bank in the United States, employed 25,000 people and had been in business for 158 years before filing for bankruptcy in 2008. Their downfall came from 3 factors. They were involved in the sub-prime mortgage lending crisis, assets were downgraded by credit agencies and consumer confidence was lost causing the stock price to drastically fall forcing Lehman Brothers to file for bankruptcy. Worldcom Total assets at bankruptcy: $103.9 Billion Date of bankruptcy: July 21, 2002 Worldcom was the second largest telecommunications company in the United States and employed 80,000 people. The corporation was caught up in an accounting scandal where they were using illegal accounting methods to hide a loss of earnings. The consequence of these illegal practices led to the company filing for bankruptcy. General Motors Total assets at bankruptcy: $82.3 Billion Date of bankruptcy: June 1, 2009 Poor management decisions basically led to General Motors failing. According to Harvard Business Review, they were too slow to innovate because of their size, they were too bureaucratic and unable to adjust to changing markets and their dealer network was too large. They were almost forced into bankruptcy in 1991 when they posted a $4.45 billion loss. In 2009 they did not have enough cash flow to stay afloat during the 2008 recession. They received a $40 billion bailout from the United States Government which caused them to have to re-structure the entire company. Even if a company does not go out of business or seems “too big to fail” (which the previous examples should close the book on that) they can still falter during your lifetime. If you are overweight in any stock including your own company stock, one of these falters at the wrong time can be detrimental to your overall portfolio if not still catastrophic. So, how much of your retirement portfolio should be allocated to company stock? A general rule of thumb is no more than 10% . The correct allocation for you will depend on your goals, risk tolerance and time horizon. If you are younger, have a longer time horizon to retirement and willing to take on more risk; 10% of assets allocated to company stock would be fine. If your risk tolerance is low, you are older or already retired and need to focus on asset preservation rather than growth then your allocation of company stock should be lower. If you are a client of Whitaker-Myers Wealth Managers , you likely know your current goals, risk tolerance and time horizon. If you are a prospective client, let’s schedule a meeting and discuss these topics and how it pertains to your particular situation. Goals, risk tolerance and time horizon also change throughout your life. Having an advisor in your corner to keep your portfolio in check with these factors is crucial to a successful retirement plan.

Each morning when I get to my office the first thing, I do is tune the television to Fox Business. I’m not using Fox Business to provide any kind of research or decision-making; I simply use it as it is intended which is for entertainment and informational purposes only. Normally it is just background noise while I go about my day but I do occasionally tune in to my favorite show, Making Money with Charles Payne. Out of all the shows on Fox Business from opening bell to market close, I find Charles to be very well-articulated and probably the most realistic and educated of all the Fox Business hosts. But one thing Fox, CNN, CNBC, and the other 24-hour news networks have in common is that they would like the average person to believe that the world is coming to an end. Between talking heads arguing about the complete economic and social collapse of our society, we get the commercial that tells the us the only thing that will save us all is buying gold from Fancy Name Capital . I would like to share five reasons why I disagree with that and send a warning, especially to those nearing or already in retirement, to steer clear of these “investments” and stick to the plan you and your financial advisor have put together. If you have not had a conversation with an advisor about retirement and investment planning, please schedule a meeting with us . Basically, Zero Federal Regulation I tend to be perfectly at ease with as little federal government regulation in our lives as necessary. However, I welcome government organizations like the SEC when it comes to protecting investors from scammers, charlatans, and snake-oil salesmen. Physical gold, silver, platinum and other precious metals are not securities. The industry is not regulated by the SEC, FDIC, or backed by the full faith of the USA. They are regulated by Federal Trade Commission (FTC). The FTC is the organization that is tasked with regulating basically anyone selling anything. They are notoriously understaffed and have an incredibly difficult time trying to police physical gold and silver schemes. This lack of regulation has made the physical gold, silver and other precious metals industry a hotbed for not so ethical business practices. Boiler room schemes, targeting vulnerable age groups and making it as hard as possible to recoup your investment after you are in are just some of the unethical and sometimes illegal activities within this industry. Liquidity Physical precious metal dealers will tell you your investment is completely liquid! Whenever you want to get out, they will gladly sell your investment often within 72 hours. But, there’s a catch…If you need immediate liquidity, you will likely never get the fair value of your investment back in cash. This is a point where the dealer has leverage over you and whatever situation you might be in. Just like any old business negotiation, the one who is the most desperate has the most to lose. Because gold and other precious metals are simply commodities like rocks, lumber, or oil their value is only worth what the buyer is willing to pay. If the dealer is buying back the precious metals they sold you, they will give you the lowest possible offer to make a larger spread when they sell it to the next consumer that comes along. The best way to get the highest price for your precious metals is to sell it on the open market yourself. This involves more time, skill, knowledge and know how then most people care to invest their time into. Another important note about precious metals and liquidity is that it is not an income-generating asset like stocks and bonds. It is not a good investment for someone that needs to generate income from their investment or is taking regular distributions to meet income needs. Investment Returns The returns on gold and other precious metals are entirely based on their price appreciation. With all investment returns, time is on the side of the investor. Typically, the longer someone has to hold their investment the higher return they will see over someone with a shorter time to invest. But if I had to choose an investment from the previous 30 years, I would take Large-Cap stocks 1639% of the time over gold or silver. The chart here shows the 30-year returns of the Total Return Stock Index (BLACK) vs. Gold (YELLOW) and Silver (GRAY). The Total Return Stock Index is the return of Large-Cap stocks assuming all cash payouts, including dividends, are reinvested. A $10,000 gold investment made in 1992 would be worth approximately $54,000 today while a $10,000 investment in Large-Cap stocks in 1992 would be worth approximately $174,000. “BUT WHAT ABOUT DURING SHORT TERM VOLATILITY AND MARKET UNCERTAINTY!” -Screams the gold dealer. I will entertain that with the chart shown here . Keep in mind this is through one of the most uncertain times of our lifetime (COVID + current market situation) and I am still buying and holding the S&P 500 rather than running to precious metals. Dates: January 1, 2020 – May 24, 2022 Returns: Total Return Stock Index (PINK) = 24.25% S&P 500 (PURPLE) = 26.77% Dow Jones (GREEN) = 21.39% Gold (ORANGE) = 21.85% Silver (BLUE) = 22.24% Hidden Fees The return charts above do not even include the hidden or “not so discussed” fees and that come along with buying physical gold and other precious metals. If you hold physical gold in an IRA for example, the gold will be purchased through a dealer and sent to a custodian where you will be charged fees for storage and insurance annually. The dealer and custodian will likely charge maintenance fees and don’t forget the markups, commissions and transaction fees associated with buying and selling the commodity. An example of this: You want your gold dealer to sell $100,000 of gold bullion you own. The dealer might charge a sales fee of 15% to cover “marketing and listing costs” so you are stuck paying $15,000 dollars to sell. In contrast, if you have $100,000 worth of an S&P 500 Index fund with Whitaker-Myers Wealth Managers and want to sell $100,000, it costs you $0 in fees. Volatility Precious metals are volatile. In fact, gold has about the same volatility as the S&P 500. With regards to possible returns, according to historical data, it would be more prudent to take a similar amount of risk investing in the S&P 500 with a chance of much higher returns than gold. These are just 5 reasons why investing in physical gold and other precious metals can be a dangerous and expensive endeavor. Alternative investments from stocks, bonds and cash can be something that might benefit your portfolio but we would not recommend large portions of your total portfolio be allocated to these alternative investments. Also, before looking to gold and precious metals do some research or talk to us at Whitaker-Myers Wealth Managers about REITS or broad based commodity ETFs. These alternative investments achieve the diversifcation benefit you desire without the hidden fees, lack of liquidity and oversight and general unfamilarity that can make investing dangerous for the uninformed. If you do feel like you need to have gold, consider a gold ETF instead of physical gold which your Financial Advisor can discuss with you. It will be less expensive and easily liquid for the fair market value at the time you sell. Before making any investment decisions you should speak with a professional about the risks, fees, tax implications and other information necessary to make an informed decision.

Growth, Growth & Income, Aggressive Growth, International & Mutual Funds…Why? If you listen to Dave Ramsey enough you will have heard these four asset classes mentioned when he talks about investing. Dave stresses diversifying across these four asset classes and using mutual funds to diversify across many different companies. We could not agree more. In the article below I will define each of these and then discuss a few reasons why we do this. Growth When Dave talks about growth companies he is specifically talking about Large Growth companies. These companies are focused on growing the market share of their business and thus increasing their stock price. Instead of satisfying shareholders with dividends (share of profits) they take those revenues and re-invest in the company. Amazon, Apple, Tesla, and Google are a few examples of Large Growth companies. Growth & Income Growth & Income is often referred to as Large Value. A value company satisfies its shareholders by issuing dividends to shareholders. A company with a good dividend yield will create value for its shareholders without necessarily rapidly growing its stock price. Aggressive Growth Aggressive Growth companies are defined as companies in the mid-cap and small-cap areas that have considerably less market capitalization than large-cap companies. Market capitalization is the value of a company. To get the market capitalization of a company you simply multiply the current share price by the number of outstanding shares. Large-cap companies have a market capitalization of $10 Billion+, mid-cap companies have a market capitalization between $3 Billion and $10 Billion, and small-cap companies have a market capitalization of less than $3 Billion. Aggressive Growth companies typically carry more risk because the companies within this category are not as established as large-cap companies. At the same time, smaller companies tend to have a higher opportunity for rapid growth. International International companies are exactly what it sounds like…International. For us, in the United States, this means companies that are wholly located outside of the United States. One common mistake investors and even some advisors (not Whitaker-Myers) make when choosing a fund for their international exposure is choosing a “global fund”. Why is this a mistake? Because, unlike international funds, a global fund also includes companies in the United States. This means you are not truly diversifying outside of the USA when you pick a global fund and coincidentally skew your asset allocation. Mutual Funds A mutual fund is a collection of companies built into one investment. While individual stocks have their own share price, a mutual fund also has a price to buy into the mutual fund. When you buy into a mutual fund you are subsequently purchasing every stock within that fund. Stock mutual funds hold many different stocks and every mutual fund has its own investment strategy. There are even bond mutual funds, commodity mutual funds, real estate mutual funds, and more. There are about 8,000 mutual funds to choose from. At Whitaker-Myers Wealth Managers we have very specific criteria to filter through the clutter and narrow down these 8,000 funds to about 30 that we would consider to be relevant investments for our clients. The advantage of using mutual funds in investing goes back to the broad diversification of assets. If you have a portfolio with four individual stocks in it and one of those companies file for bankruptcy then your investment immediately loses 25% of its value that you will never recoup. On the other hand, if you have a portfolio with 400 companies and one files for bankruptcy then the negative impact on your overall performance is much less. Diversification As the title says “Smart Investors Diversify”… First, take the four asset classes defined above (Growth, Growth & Income, Aggressive Growth, International). Each of these asset classes grows at different rates in any given year. One year, Growth might be outperforming all other asset classes which has been the case for several years until now. Right now, even with the stock market down, Growth & Income stocks are performing the best (or the least bad). So, let’s take all our money and buy dividend stocks right? Wrong. Trying to time the market is a fool’s errand. The secret is time in the market, not trying to time the market. If you try and guess which asset class will perform the best at any given time then a 10% return could start to look like 5% and over a long period of time this can have a monumental impact on the final value of your portfolio. Instead, buy a little of everything and let it grow over a long period of time. Using these four asset classes we can allocate 25% to Growth mutual funds, 25% to Growth & Income mutual funds, 25% to Aggressive Growth mutual funds, and 25% to International mutual funds. Your financial advisor at Whitaker-Myers Wealth Managers can build a portfolio custom-tailored to your needs that incorporates broad diversification across these four asset classes. This is a great strategy for investors looking to maximize the potential growth of their portfolio while lowering the risk of being too heavily concentrated in individual companies or asset classes. Keep in mind that there still is risk involved in all investments and you should speak to your advisor before attempting to implement this or any investment strategy. If you have questions about anything covered in this article, reach out to one of the Advisors here at Whitaker-Myers!

What You Can Control vs What You Can Not Control You have spent your entire working career accumulating wealth so you could reach this point, retirement. Conventional wisdom might suggest, now that you have reached retirement, you need to be as conservative as possible with your investments in order to preserve them for the rest of your life. But, did you know that being too conservative can create more risk to the longevity of your assets than being more aggressive? Also, withdrawing too much in retirement will limit how long your savings will last. Let us look at some different factors and scenarios together that will give you an idea and hopefully some peace of mind on how long you can expect your assets to last. There are several factors that affect the longevity of a portfolio’s assets. I like to look at it like this: what can we control and what can we not control? Factors we can control: withdrawal rates, asset allocation, taxes . Factors we cannot control: rate of return, inflation, time, and, well…taxes. In a Traditional IRA or any pre-tax account, you will need to pay income tax on any distributions taken. This needs to be considered when deciding on a proper withdrawal percentage. If you have a good mix of Pre-Tax, Roth , and Taxable assets then you can pick and choose where your withdrawals come from to limit your tax liability. For the sake of time, I will not get into that and just focus on withdrawals, inflation, returns, time, and how it pertains to asset allocation. Withdrawals, Inflation, Rate of Return, and Time On its surface, figuring out how long your savings will last is as simple as withdrawing less than what your portfolio is generating plus inflation. A common theory to ensure you never run out of money is withdrawing no more than 4% of the portfolio beginning balance at retirement. Say you have $1,000,000 and you withdraw $40,000 per year from it. How long will the savings last? In a vacuum, meaning 0% inflation and 0% rate of return, the savings would last 25 years. If you retire at 65, that gets you to age 90 before you run out of money. Not bad considering the average life expectancy for women in the United States is 79 and for men is 73. We need to factor inflation into the equation however and cannot assume everyone will pass at their expectancy (my default life expectancy for financial plans is 93 but can change to suit any client’s needs). Unfortunately, inflation is one of the factors we cannot control so we need to use an average of what we would expect. Policymakers at the Federal Reserve believe an acceptable inflation rate is around 2% or below. The current CPI as of this writing is at 7.7%. Over the last 20 years, the average inflation rate has been about 2.64%. I will use 3% as the inflation rate for this scenario. So, you have $1,000,000 and you withdraw $40,000 per year from the portfolio with a 0% rate of return and 3% year-over-year inflation; how long does the savings last? 18 years. I call this the life savings under the mattress guy scenario. So far, the longevity of the portfolio even with a 0% return does not seem that bad. I will do this scenario one more time and will add a 5% rate of return. $1,000,000 portfolio, withdrawing $40,000 per year, 3% inflation, and a 5% rate of return. How long do the savings last? 34 years. Not bad. But what if you need to withdraw more than 4%? Here is the breakdown of how long the $1,000,000 portfolio would last assuming a 5% rate of return and 3% inflation rate: 5% Withdrawal Rate: 25 years 6% Withdrawal Rate: 20 years 7% Withdrawal Rate: 16 years 8% Withdrawal Rate: 14 years 9% Withdrawal Rate: 12 years 10% Withdrawal Rate: 11 years The final factor is time. How long do you plan to live and do you want to have anything left when you die? If you are not taking any withdrawals and never intend to then theoretically your time horizon is infinite and you can be as aggressive as you want with your asset allocation. Most retirees do take withdrawals from their investments and most do not want to run out of money before they die. The need for some level of responsibility regarding asset allocation brings me to the next piece in the article, which is how different portfolio types may limit how long your savings will last. Portfolio Types and Longevity Portfolios can be broken into three categories: Conservative (Income), Balanced, and Growth. The most common portfolio for retirees is balanced with about 60% Stocks, 30% Bonds, and 10% Cash. Using historical returns from 1926 to 2020 of stocks, bonds, and cash and assuming a 5% withdrawal rate of the original balance and increasing withdrawals to account for inflation a study found that this type of balanced portfolio has a 97% probability of lasting 20 years, a 79% probability of lasting 30 years, and a 59% probability of lasting 40 years. The same study showed that a conservative portfolio (20% Stocks, 50% Bonds, 30% Cash) has an even worse probability of longevity with a 90% chance of lasting 20 years, 36% chance of lasting 30 years, and only a 12% chance of lasting 40 years. Alternatively, a growth portfolio (80% Stocks, 20% Bonds, 0% Cash) had a 96% chance of lasting 20 years, 82% chance of lasting 30 years, and 71% chance of lasting 40 years. A lot of people are risk-averse and do not like stocks or investments in general. Possibly because they do not understand investing well enough to feel comfortable taking the risk but the fact of the matter is that risk is your portfolio’s friend and it is necessary to protect your assets. If you want to learn more about your current investments or review your current investments, reach out to your advisor or let me know and I will be happy to sit down and see if we can help.

Follow the Baby Steps in order, and stick with them! It is great when Dave Ramsey shares an exciting social media post about investing $100 a month for 40 years and having over $1,000,000 at the end. I see those posts, and they have some of the highest traffic of replies, likes, and so on, which indicates to me that many people want to follow Dave’s program and really take control of their money. Unfortunately, most people have so much debt, bills, and other expenses that when everything gets divvied out each month, there is barely enough left to buy a pack of gum, or worse! Barely staying afloat, drowning in debt, and losing sleep at night, wondering how to pay the next bill is an awful feeling; I’ve been there, and so have several of my colleagues. That is a significant reason why Whitaker-Myers Wealth Managers was started in the first place. We know what it is like to be sick and tired of being sick and tired, and we love helping people achieve their financial goals through good planning and investments, but we also want to help relieve people from the burden of being slaves to the lender. I am a firm believer and follower of Dave’s 7 Baby Steps , and if you are seeing one of those posts and wondering where you will find $100 leftover in your budget, start here and go in order. Step 1: Save $1,000 as a Starter Emergency Fund This is the beginning of the journey, the first test of your financial fortitude. Your goal in step one is to save $1,000 as fast as possible in a bank savings account. Why as fast as you can? This builds the foundations of being disciplined and intentional with your money which is crucial to find success in steps 2-6. It also provides a small safety net for life’s little whoopsies that will come along. Step 2: Pay Off All Debt (Except the Mortgage) In step two, you want to take all your debts minus the mortgage, put them in order from the smallest to the largest dollar amount, and start knocking them out one by one in that order, regardless of the interest rate. Dave calls this the Debt Snowball Method. I personally used this years ago when I found Dave, and it changed my life. Keep in mind that making minimum payments in this step will not get you to your goal. Sacrifices will be made to beat Baby Step 2. One of Dave’s favorite moments on his show is when he brings people to the stage to do their “Debt Free Scream.” He asks how much they paid off and how fast and sometimes calls them “weird people,” but it is a term of endearment. Being weird is to be hyper-focused or, like Dave says, “gazelle intense” on becoming debt free. Giving up date nights, babysitters, gourmet foods, and streaming services are just some examples of how to focus on your debt-free goal. Step 3: Build a 3-6 Month Emergency Fund After you have been gazelle intense on paying off your consumer debt, you now have plenty of freed-up cash to build a fully funded emergency fund with 3-6 months of living expenses. A common question asked, “Should my emergency fund be three months or six months?” The answer is … it depends. If you are a one-income family, you are self-employed, work on straight commission, or have someone in the family that requires frequent medical needs; then a 6-month emergency fund is better for you. If you are a two-income family or have had a steady job for a long time, then a 3-month emergency fund would be fine. Another important note with the emergency fund is that it should not be commingled with your other checking or savings accounts. One option is to put your emergency fund into a money market savings account where you could earn much better interest than a regular savings account at a bank. Reach out to one of our other advisors or me if you want to know more about that. The difficulty of getting to step three should also have instilled some very strong positive habits about being intentional with your money. This is precisely why you should do the steps in order and not jump around or try to do them all at once. Being financially responsible, just like anything else we excel at in our lives, requires discipline, practice, and effort. Step 4: Save 15% of Your Income Toward Your Retirement Welcome to step four. All those social media posts about becoming a millionaire are right in front of you. This is also where I and our other Smartvestor Pros at Whitaker-Myers come in to help through the rest of the steps. We will help you build a comprehensive financial plan and manage your investment portfolio to help you achieve your goals and keep you on track to retirement and beyond. A good rule is to save at least 15% of your GROSS household income toward your retirement. If you have a 401(k) or another employer-sponsored plan that offers a match, start there and save up to the match. That’s free money, baby. Next, you will want to set up a Roth IRA and start saving there. Roth IRAs are great because you put money in that has already been taxed, it grows tax-free, you get tax-free distributions after age 59.5, and there are no required minimum distributions at age 72. It would be wise to speak to a financial professional at Whitaker-Myers before attempting this on your own. Step 5: Save for Your Children’s Education This step may not apply to everyone, but if you have kids and want them to go to college without student loans, you should start saving as soon as they are born. Every state has at least one 529 plan available that offers tax-free savings on qualified education expenses. Those are pretty good, but if there is doubt, it may be wise to open a UTMA account or even a taxable brokerage account earmarked for education. Your advisor can help you determine how much you need to save and provide investment advice regarding education planning. Step 6: Pay Off Your Mortgage At step six, you should have this whole gazelle intensity down to a science. Making extra payments on your mortgage can potentially save you tens of thousands of dollars of interest payments. For additional motivation, use a loan amortization schedule to figure out exactly how much you will save by paying off your mortgage early. Step 7: Build Wealth and Give I like to say, “The best part about making money is being able to give it away.” I also appreciate Dave’s rationale that one does not reach true financial peace until they are able to give back. Giving should be an essential part of everyone’s life. Many strategies can be implemented to achieve this and continue to grow and protect the assets you have worked hard to save your whole life. We can help build and manage a portfolio to maximize your giving while minimizing your taxes. The steps are designed to help you be intentional with your money and build good habits, but many people need a little extra push to get started, and that is where a financial coach can step in and help. At Whitaker-Myers, we have a financial coach on staff specializing in Baby Steps 1-3 to help you tackle debt, learn budgeting techniques, and help you save for your emergency funds; contact her today if you need help in these areas. If you are in Baby Steps 4-7 and looking for advice, please contact me, Kelly Kranstuber , or any of our other advisors here at Whitaker-Myers Wealth Managers.

Here’s why the world is not ending financially… There has been much talk recently about the world coming to an end financially. Whether it's the growing national debt, the stock market volatility, bank failure, or the economic downturns in various countries, there always seems to be some doom and gloom prediction about the state of the world's finances. However, despite these concerns, there are several reasons why the world is not ending financially. Global Economy First and foremost, the global economy is incredibly resilient. Despite facing challenges such as the 2008 financial crisis, the COVID-19 pandemic, and the Brexit uncertainty, the world's economies have bounced back time and time again. Many major economies have experienced robust growth, and while there may be some bumps along the way, it is highly unlikely that the global economy will collapse entirely. Governments and Banks Secondly, governments and central banks have tools at their disposal to help mitigate financial crises. Governments can implement fiscal stimulus measures to help support the economy, such as tax cuts, infrastructure spending, and direct cash transfers. These tools have been previously used effectively to prevent financial crises from spiraling out of control. Incomplete Data Furthermore, many concerns about the world's financial stability are based on flawed assumptions or incomplete data. For instance, the growing national debt of many countries is often portrayed as a ticking time bomb waiting to explode. However, while high debt levels can be a concern, it is essential to note that debt is only one piece of the puzzle. Factors such as economic growth, interest rates, and inflation all play a role in determining the overall health of an economy. Global Connections Lastly, it is worth noting that the world's economies are becoming increasingly interconnected. This means that when one economy experiences a downturn, it is less likely to have a catastrophic effect on the global economy. In fact, the interconnectedness of the world's economies can help mitigate financial crises by spreading risk and diversifying investments. Seek Advice With all of that said, it is important to take a long-term view when it comes to the state of the world's finances and not give in to fear and panic. As Dave Ramsey always says, don’t make decisions out of fear because it will not be your best decision. This is where a financial advisor can come in to help stop you from making an ill-informed decision. Your advisor knows the world is not ending financially and can keep you on the right path to reach your long-term goals. If you do not have an advisor, please contact me or any of our other advisors at Whitaker-Myers Wealth Managers today and schedule an appointment. We will review your current investments and help you build a plan and a portfolio to reach your goals based on your specific needs and risk tolerance. 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.

Rules for Investing Investing in the stock market can be profitable, but it also comes with several complexities and rules that investors must know. The rule we are writing about today is the wash sale rule. The wash sale rule can significantly impact an investor's taxes and investment strategy. What is the “Wash Sale” Rule The wash sale rule prohibits investors from claiming a loss on the sale of a security if they purchase or acquire a substantially identical security within 30 days of the sale. Essentially, if an investor sells a security at a loss and then buys the same security or a similar one within 30 days, they cannot use the loss to offset gains in the current tax year. Instead, the loss gets added to the cost basis of the newly purchased security. How does it affect me? The purpose of the wash sale rule is to prevent investors from manipulating their taxes by artificially creating losses. For example, an investor could sell a security at a loss to offset gains in the current tax year and then immediately repurchase the same security to maintain their position in the market. Doing so would allow the investor to avoid paying taxes on the gains while still holding the security they want. While the wash sale rule may seem straightforward, there are some nuances that investors need to be aware of. For one, the rule applies not only to identical securities but also to substantially similar securities. If an investor sells a stock in one company and then purchases a stock in a similar company within 30 days, the wash sale rule may still apply. Additionally, the wash sale rule only applies to losses, not gains. An investor can sell a security at a gain and immediately repurchase the same security without triggering the rule. However, the investor will still be responsible for paying taxes on the gains. It is important to note that the wash sale rule applies to individual and institutional investors, including mutual funds. Mutual fund investors need to be aware of the rule when buying and selling shares of the fund, as the fund may be buying and selling securities on their behalf. Strategy, Strategy, Strategy Selling at a loss in your Brokerage Account (aka Bridge Account ) may allow you to claim that loss on your taxes, but making a mistake and triggering a wash sale can ruin that, so it is essential to know the appropriate actions. What are the appropriate actions to take to avoid a wash sale? One strategy is to wait at least 31 days before repurchasing a security sold at a loss. This allows you to claim the loss on your taxes while maintaining your market position. Another option is to purchase a similar but not substantially identical security. It can be tricky to know what a similar but not substantially identical security is, so having a Financial Advisor help you with this strategy is important. The Advisors at Whitaker-Myers Wealth Manager s are familiar with this rule and its nuances, so feel free to contact one of them for help.

You recently left an employer where you were contributing to their 401(k), 403(b), or some other qualified retirement plan. Now what? This article will outline your options and point out some pros and cons of each option. Option 1: Leave the funds in the former employer’s plan You can leave your savings in the old plan if its terms allow it. While most plans will let you do this, that is not always true. Many plans will automatically roll your savings into an IRA if it is under a certain balance. They stipulate this in the plan’s description, but most people do not realize that, and trying to track down the IRA becomes a burden. Here are some pros and cons of this option: Pros: 1) Continued investment and growth potential in a tax-deferred account. 2) If you leave the employer in the year you turn 55 or older (50 or older for certain public safety employees), you can take distributions from the plan without having to pay the 10% IRS tax penalty that would typically be imposed for taking a distribution before 59 ½. Keep in mind this only applies to CURRENT plans. This rule no longer applies if you start contributing to a new employer plan. 3) Generally lower fees and expenses than an IRA. Cons: 1) Not all employer plans allow funds from former employees to remain in the plan. They could roll it to an IRA as mentioned previously, OR if it is under a certain amount, they could even force it out by sending you a check, and then you are hit with the taxes and penalty. 2) Leaving behind savings in old plans increases the probability of losing track of them. 3) Limited to the investment options available in the plan only. 4) You will no longer be able to contribute to the plan after your termination. Option 2: Roll funds from the employer plan into an IRA An Individual Retirement Account (IRA) is a tax-deferred investment vehicle that allows you to invest in marketable securities. An employer does not sponsor an IRA. If you hire an independent fiduciary advisor, like Whitaker-Myers Wealth Managers, we can help you with the rollover process and build a portfolio that fits your needs and risk tolerance to achieve your goals. We can also ensure you avoid common mistakes people make when attempting a rollover independently. Here are the pros and cons of rolling your funds into an IRA: Pros: 1) More investment options than an employer-sponsored plan. 2) Gives you the ability to consolidate other tax-deferred accounts into a single IRA. 3) Option to have your IRA managed by one professional. 4) Ability to make additional contributions. 5) Continued tax-deferred growth potential. 6) If appropriately executed, there are no tax consequences or penalties to rollover from an employer plan to an IRA. Cons: 1) Fees and expenses might be higher than an employer-sponsored plan. 2) High-income earners may lose the ability to make deductible contributions to an IRA or to contribute to a back-door Roth IRA. Option 3: Withdraw the funds from the employer plan Another option is to take a partial or full distribution from the plan. This is generally not wise, especially if you are under 59 ½. Here are a few pros and cons of cashing out your savings: Pros: 1) Immediate access to your money. 2) If applicable, the rule of 55, as discussed in the previous option. Cons: 1) All withdrawals are subject to a mandatory 20% federal tax withholding. State and local taxes may apply too. 2) If you are under 59 ½ and do not qualify for the rule of 55, an additional 10% tax penalty may be imposed on your distribution. 3) The funds will no longer have tax-deferred growth potential. Option 4: Roll funds from the old employer plan to a new employer plan This option is not always available. Employers are not required to allow funds from previous plans or IRAs into their sponsored plan. While this is not the worst option, it does come with its pros and cons: Pros: 1) Continued tax-deferred growth potential. 2) Consolidation of assets makes it easier to keep track of savings. 3) Ability to invest in securities available in the plan. 4) No tax consequences or penalties rolling from one plan to another. Cons: 1) Limited to the investments available in the plan. 2) Fees and expenses might be higher than the previous plan. Conclusion This article is for informational purposes only and should not be taken as advice or a recommendation. Several other factors may affect which of these options is best for you. If you have funds in an old employer plan or want to consolidate accounts, we suggest contacting one of our team's financial advisors. Going through a financial plan might be the best way to find out which option would be best for you. Our advisors would be happy to do that and they will answer any questions to make this a seamless process for you.

Investing Terminology Overview Getting started with investing can be intimidating for many people simply because they do not understand the jargon used in the investment world. News media hosts and financial advisors are notorious for using acronyms and terms that average or new investors are unfamiliar with. A common word for this is “Finglish” or “Financial English.” Whether it is to try and impress their audience or sound more intelligent than they are, using “Finglish” more often than not will turn a would-be investor away. As with all our advisors at Whitaker-Myers, my goal is to advise with the heart of a teacher . This article is intended for people new to investing or considering investing, but it might also be a nice refresher for the investor with more experience. Here are some different terms that should help you become more comfortable investing. Always consult a professional before investing so you understand the risks associated with investing. Investment Terms Security A security is a stock, bond, mutual fund, or other investment that can be traded. The Securities and Exchange Commission (SEC) regulates securities trading. In case you are wondering, gold is not considered a security. Asset An asset is anything that has economic value with a demand to buy. Stocks, bonds, cash, and real estate are all examples of assets. Asset Allocation Asset allocation refers to how investments in a portfolio are chosen to match the risk tolerance and goals of the investor. Blended asset allocations include stocks, bonds, cash, or alternatives like real estate or commodities. Proper asset allocation differs for each investor and can best be determined by speaking with a financial professional. Return Return is the profit or loss made from an investment. Investment Risk Investment risk is the degree of uncertainty and/or potential financial loss from an investment. All investments carry some degree of investment risk. Liquidity Liquidity is the ease of turning an investment into cash and how much it will impact the price. Examples of liquid assets include cash, stocks, mutual funds, and ETFs. Less liquid investments include real estate, annuities, and precious metals. Capital Gain A capital gain is the increase of the value of a capital asset, such as a stock, that ultimately has a higher value than when it was purchased. Ticker Symbol A ticker symbol is an abbreviation (usually one to five letters) used to identify a publicly traded company on a particular stock exchange. Ticker symbols are often used for pooled investments like mutual funds and ETFs. Here are a few examples of some publicly traded companies and their ticker symbols: Amazon (AMZN), Tesla (TSLA), Walmart (WMT), Coca-Cola (KO), and Alphabet (GOOGL). Stock A stock is a security that provides proportionate ownership in a publicly traded company. Stock is a broad term that can mean a single or multiple publicly traded companies. Stocks are bought and sold mainly on stock exchanges, a marketplace for these transactions. A share of stock is a specific number of units owned by the investor that represents their ownership percentage in the company. For example, as of this writing, there are 15,787,154,000 outstanding shares of Apple (AAPL). When you buy a share of Apple stock, you purchase it from another investor, selling it on the open market at a given price. If you buy one share of Apple stock, you become 1/15,787,154,000 owner of Apple. A company's stock price will increase or decrease depending on market conditions, economic conditions, company-specific events, etc. There is no guarantee that the investor will make money when investing in stocks, so they inherently carry more risk than other types of investments. However, buying the right stock at the right time can be highly financially rewarding. Bond A bond is a type of security that a company or government issues to raise capital (money). Essentially, a bond is a loan to the issuer, and you, the investor, are the lender. The bond issued is a legal obligation on the issuer to repay the principal loan, plus interest to the investor. Bonds carry less risk than stocks, but they are most definitely NOT risk-free. Interest rate risk, reinvestment risk, default risk, and liquidity risk are just a few risks associated with bonds. Bonds also have ratings that tell the investor the level of risk they can expect when deciding whether to invest. Lower-risk bonds typically have lower returns, and higher-risk bonds usually offer higher returns. Check out the table below to see different bond ratings and the level of risk they carry. Any rating below BBB is considered a “Junk” bond. Expense Ratio An expense ratio is the cost to the investor that a mutual fund or ETF charges to manage the fund. It covers all the fund's expenses, including management, administration, advertising, etc. The expense ratio is built into the fund's daily net asset value (NAV) and is not a separate charge to the investor. The formula to calculate a fund’s expense ratio is The Total Fund Costs divided by The Total Fund Assets. Net Asset Value (NAV) Net asset value, or “NAV,” is an investment fund’s total assets minus its liabilities. The formula to calculate the net asset value per share is Fund Assets minus Fund Liabilities divided by Total Shares Outstanding. Mutual Fund A mutual fund is an investment where pooled money from multiple investors gets invested in stocks, bonds, or other securities. Investing in mutual funds gives investors more diversification than they would earn from buying an individual security. A stock mutual fund, for example, might invest in all 500 companies that make up the S&P 500. Now, the investor is diversified across 500 companies instead of one, which can mitigate risk. Mutual funds are also managed by a Fund Manager (often an entire team) whose job is to attempt to achieve the goals of the fund they manage. ETF (Exchange Traded Fund) An ETF is like a mutual fund in that it is pooled money by multiple investors that gets invested in stocks, bonds, or other securities. One significant difference between mutual funds and ETFs is that a mutual fund only trades once daily after the market closes at 4:00 p.m. Eastern, and ETFs trade “intra-day” between 9:30 a.m. and 4:00 p.m. EST while the market is open. Also, ETFs tend to be more tax-efficient than mutual funds because of their structure. Large-Cap A company with a market capitalization value of more than $10 billion. If you are familiar with Ramsey Solutions, this will fall in the Growth or Growth & Income category of their 4 categories. Mid-Cap A company with a market capitalization value between $2 billion and $10 billion. Small-Cap A company with a market capitalization value between $250 million and $2 billion. Both Mid-Cap and Small-Cap would be considered Aggressive Growth in the 4 categories. This video on our YouTube Channel discusses the Ramsey Solutions 4 categories of Growth & Growth & Income (Large Cap), International, and Aggressive Growth (Small-Cap and Mid-Cap). We also give examples of stocks that would fall into those categories. Working with an advisor This list barely scratches investing terms' surface but is a good start. You do not need to know everything there is to know about investments to get in the market and start investing for your future. A great place to start would be to schedule a phone call with me or one of our other advisors . We are not the type of advisors that will “Finglish” you out the door. We aim to help you understand the importance of investing and planning and how crucial they are to help you reach your financial goals.

An In-Service Rollover Might Be Right for You Suppose you ever left an employer with a retirement plan you contributed to. In that case, you probably have been given information on how to rollover your old employer’s plan to another eligible retirement plan, like an IRA. A rollover occurs when you withdraw funds from an eligible retirement plan, like a 401(k), to another eligible retirement plan, like another 401(k) or an IRA, within 60 days. This typically occurs when you leave an employer, but many people 59 ½ or older can roll funds from their current 401(k) into an IRA and still contribute to their current employer’s plan. It is a little-known strategy called an in-service rollover, and it can benefit your retirement plan by opening investment options and creating tax advantages that will be beneficial as you approach retirement and beyond.   What is an In-Service Rollover An in-service rollover is transferring assets from your current employer's eligible retirement plan, like a 401(k), to an Individual Retirement Account (IRA). Generally, depending on your employer's plan details, you can roll part or all of your funds into an IRA. It is important to note that not all plans allow for in-service rollovers, and it is entirely up to the employer's discretion. Most plans will allow in-service rollovers for 59 ½ or older employees. Sometimes, the plan will restrict in-service rollovers to employees serving a certain number of years. The information about in-service rollover eligibility can be found in your plan’s summary description. You could also ask your plan administrator.   Advantages of Utilizing the In-Service Rollover 1)     Increased Investment Options Most employer-sponsored retirement plans are limited to the investment options that they offer in that plan. For example, 401(k)’s typically have a handful of mutual funds to choose from and provide at least one option for each equity asset class, as well as some bond funds and target date funds. Having a 401(k) is nice because often you will receive a company match of some kind, and the amount you can save in a 401(k) is much higher than an IRA. An in-service rollover allows you to invest in whatever you want with the money you roll over while continuing to save to your 401(k). This can provide opportunities to invest in individual companies, better mutual funds than were offered in your plan, and different types of investments like treasuries, real estate, or commodities. 2)     Tax Advantages An in-service rollover allows one to take advantage of certain tax strategies, like converting funds to a Roth IRA. This allows you to diversify your assets between taxable, tax-deferred, and tax-free accounts and can help you control your tax liability during your withdrawal phase. Also, an in-service rollover does not have any tax impact if implemented correctly. 3)     Optimizing Your Retirement Plan Doing an in-service rollover gives you the opportunity to re-evaluate your retirement plan and optimize your investment strategy to meet your risk tolerance and needs. 4)     Possible Lower Fees You might experience lower fees outside of the employer-sponsored plan between lower expense ratios and plan administrative fees. 5)     Ability to Continue Contributing to Your Plan Having the ability to continue contributing to your employer-sponsored plan gives you the opportunity to continue to receive your match from your employer and gives you the ability to save a considerable amount annually on top of what you can save in your IRA. This can also reduce your taxable income if you make pre-tax contributions to your employer plan. 6)     Not Limited to IRA Contribution Limits A common misconception about rollovers is that it will affect how much you can save in your IRA. A rollover does not count toward your yearly IRA contribution limit. There is also no limit to how many 401(k) rollovers you can do. 7)     Professional Management If you do not have a financial advisor, you should. They can help you develop a plan to reach your retirement goals and help you avoid blunders that many investors make trying to plan their retirement on their own. They can also provide peace of mind while you work toward your retirement goals and during your retirement years. Executing an in-service rollover allows your advisor to better match your investments with your retirement goals, income needs, and risk tolerance.   Considerations There are several considerations to keep in mind before attempting an in-service rollover. First, are you even eligible? Does your plan even allow it? Generally, in-service rollovers are only available to those 59 ½ or older and meet whatever other criteria the plan requires. You can find this information in your 401(k)-summary plan description or talk with your plan administrator or financial advisor, and they should be able to help. Another consideration is the frequency at which you do in-service rollovers. Although there is no limit on 401(k) rollovers to IRAs, there will still likely be a small fee that the plan administrator will charge for each rollover. If you do not already have an IRA, you must open that before initiating the rollover. This will be required information for the plan administrator. If you have accumulated after-tax or Roth dollars in your 401(k), you must set up a Roth IRA before attempting your in-service rollover.   Conclusion If you have the opportunity to do an in-service rollover, you should consider the advantages and also know the requirements for eligibility and fees that may be associated with it. Speaking with a financial advisor is highly recommended. I or any of our other advisors at Whitaker-Myers Wealth Managers   can help you navigate the process to avoid any potential pitfalls or mistakes when executing an in-service rollover. We will also discuss your retirement goals, assess your risk tolerance, and build a customized portfolio to meet your specific situation. If you would like to discuss more about an in-service rollover or have the opportunity yourself, please reach out to me, and let’s schedule a meeting .

A Quick Backstory People told me growing up that I needed debt in my life and that debt was good. “I can’t get a mortgage without a credit score,” “I need a good credit score to get a personal loan,” “I can use credit cards for reward points,” and, of course, “I will just pay my card off every month,” are just a few examples that I and many others have used before. I always had a personal credit card to use for gas or small expenses and pay off the entire balance (almost) every month. I also had a rewards card that I would run as many expenses through as I could to rack up airline miles. I had a nice SUV with a monthly payment, but hey, I “owned” it. I felt accomplished as a young professional back then because I had nice stuff…until I met my neighbor.   My Neighbor We both moved to the neighborhood around the same time, and it was both of our first homes. We were about the same age and shared many common interests, so we hit it off fast. We would hang out almost every day. Whether helping each other with home projects, playing sports, or hosting barbecues, we spent a lot of time together. We would even joke with our friends that we were going to tunnel through the basements to join the houses together. All the time we spent together was memorable and fun, but there was one day that would set in motion a different path that would change my life.   Introduction to Dave Ramsey I was over at my neighbor’s house one afternoon, sitting around watching TV and chatting about random subjects. At one point, we got onto the topic of personal finances. Something I did not give much thought to because I had a steady job, a roof over my head, and a nice SUV…then he said, “Hey, have you ever heard of Dave Ramsey ?” At the time, I had not, so he pulled up an hour-long seminar hosted by Dave Ramsey on YouTube. At the time, I was thinking, “Why are we watching this?” But, not too long in, it started to click. After the video was over, my neighbor gave me his extra copy of Dave Ramsey’s book, The Total Money Makeover . The book reiterated much of what Dave talked about in the YouTube video, and I realized, “I’M BROKE!”   “We Buy Things We Don’t Need with Money We Don’t Have to Impress People We Don’t Like.” -Dave Ramsey While reading the Total Money Makeover, this quote stuck with me. I started looking around my house at all the crap I had accumulated and started adding up the cost. I would think about everything I could have done with that money if I did not buy all that stuff. I thought, “You could have paid cash for that SUV in the garage,” “You could have something saved for retirement,” “You might not be living paycheck to paycheck,” and so on and so on. There was so much truth in that quote, and it resonated with me so deeply that I felt physically ill thinking about all the financial mistakes I had made. I was sick and tired of being sick and tired, and it was time to make a change .   The Baby Steps I started from Baby Step 1 ( Save $1,000 ) and worked through Baby Steps 2 ( pay off consumer debt ) and 3 ( build an emergency fund ) fairly efficiently. A 3-month emergency fund for my household makes sense because we have no children, both are employed, and do not have very many expenses, fortunately.   Through the first three Baby Steps, there were setbacks. Things around the house break, medical issues arise, and unexpected expenses come up. I learned that doing the Baby Steps in order makes perfect sense. At first, I tried to do multiple steps simultaneously and found myself failing. I kept finding myself stopping one step to try and fix or continue another step.   Only when I started doing the steps in order did I begin to see success. Starting at step one, and only baby step one, changed everything. Eventually, I started gaining confidence in the process and never looked back. I am currently working on Baby Step 4 (saving for retirement) and have a long way to go. The first three steps helped me build good money habits   that naturally flowed into Baby Step 4.   It Can Work for Anybody We all tend to make excuses about why we cannot do something. I am the same way from time to time and certainly was making excuses about money and finances. The fact of the matter is, once you make the conscious decision that you are sick and tired of being sick and tired, you are already winning. It is kind of like losing weight; you must want it to succeed.   Getting started is the most challenging part, but the easiest way to do it is starting with Baby Step 1 (save $1,000). There are plenty of motivational success stories out there to get you started outside of mine that you can find with simple Google searches. You can hear them every day just listening to The Ramsey Show .   We at Whitaker-Myers Wealth Managers have a team of financial advisors  to help you reach your financial goals, but we also have a Dave Ramsey-certified financial coach  who can help you on your debt-free journey.   I would encourage anyone to follow the Baby Steps journey  because experiencing debt freedom is a different feeling that I hope everyone can find in their own lives. Thank you for taking the time to read my short story. If I can help you on your Baby Step journey, please do not hesitate to reach out . I will be your biggest fan.   **If you are interested in receiving a copy of Dave Ramsey’s Total Money Makeover book, please email Shelly Sturts  and reference this article (and don’t forget your name and mailing address to send it) for your very own copy from Witaker-Myers Wealth Managers!