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Author: Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.

Maximize Your Social Security Benefit – Explained

Written by Zachary Morris, CFP® on .

Explore Social Security benefits planning, including eligibility, spousal benefits, and strategies to decide when to file for maximum impact.

Are you starting to receive notices about Social Security and wondering when to file or how much you’ll actually receive? Social Security is a cornerstone of retirement income, but navigating its complexities can be challenging. From understanding how your benefits are calculated to deciding the best time to claim, making informed decisions is essential to maximize what you receive.

This article breaks down everything you need to know about Social Security, including qualification requirements, benefit calculations, key terms, spousal and survivor benefits, and important considerations for filing based on your circumstances.

How Do You Qualify for Social Security?

Qualifying for Social Security requires earning 40 credits, which you accumulate by working full-time for at least 10 years. You earn one credit per quarter, and after 40 credits, you become eligible for benefits.

SEE ALSO: Four Financial Strategies for Empty Nesters

How Are Social Security Benefits Calculated?

Your benefits are based on your 35 highest-earning years. The Social Security Administration (SSA) averages these years to calculate your Average Indexed Monthly Earnings (AIME). Your AIME is then used to determine your Primary Insurance Amount (PIA), which is the benefit you’ll receive at your full retirement age.

Key Terms to Know

  1. Full Retirement Age (FRA): This is the age at which you’re entitled to 100% of your PIA. If you were born before January 2, 1955, your FRA is 66. For those born after, the FRA increases incrementally up to 67.
  2. Delayed Retirement Credits: If you delay claiming Social Security beyond your FRA, your benefit increases by 8% per year (non-compounded), up to age 70.
  3. Early Filing Penalties: Filing before your FRA results in a reduction of benefits—potentially as low as 70% of your PIA if you file at age 62.

Spousal and Survivor Benefits

  • Spousal Benefits: If one spouse’s benefit is higher, the other spouse may be eligible for up to 50% of the higher earner’s PIA at their FRA. However, the higher-earning spouse must file for benefits before the spousal benefit becomes available.
  • Survivor Benefits: The surviving spouse receives 100% of the higher earner’s benefit. If the deceased spouse delayed claiming Social Security and earned delayed retirement credits, the survivor receives the higher amount. Survivor benefits can be claimed as early as age 60, allowing the survivor to let their own benefits grow until age 70 if advantageous.
SEE ALSO: Social Security Benefits: Timing and Strategies for Maximizing Your Income

What Happens if You’re Still Working?

If you file for Social Security while earning income, your benefits may be reduced based on your earnings. For example, in 2025, benefits are reduced by $1 for every $2 earned above $23,400 if you haven’t yet reached FRA. In the year you reach FRA, the reduction changes to $1 for every $3 earned above $62,160 until the month you reach full retirement age.

Making the Most of Social Security

Deciding when to file for Social Security is not a one-size-fits-all decision. Factors like your income, health, and financial needs play a role. For many, waiting beyond FRA to earn delayed retirement credits can make sense, while others may benefit from filing earlier, particularly in cases of spousal or survivor benefits.

Understanding how Social Security fits into your overall retirement strategy is critical. By reviewing your options, knowing key terms, and planning for potential reductions, you can make informed decisions that align with your goals.

If you’d like to learn more about optimizing your Social Security benefits, we’re here to help. Contact Paces Ferry Wealth Advisors to discuss your retirement strategy and how Social Security fits into your financial plan.

 

Can Small Business Owners REALLY Achieve Financial Freedom?

Written by Zachary Morris, CFP® on .

As a small business owner, have you ever wondered, “How much do I need to sell my business for to retire comfortably?” In this video, I’ll guide you through the essential steps to calculate your number—the amount you need from the sale of your business to achieve your retirement dreams.

Planning for retirement as a business owner is different. Unlike traditional employees, your business is likely your largest asset—and your key to financial freedom. But how do you bridge the gap between your business’s current value and your ideal retirement target? That’s exactly what we’ll cover.

I’ll show you how to determine your “number” by considering factors such as your desired lifestyle, anticipated expenses, and current savings. I’ll also discuss strategies to increase your business’s value to close the wealth gap.

Building a strong team of financial advisors, CPAs, and legal experts is critical to navigating the complexities of a business sale and ensuring a smooth transition to retirement.

Whether you’re planning to sell in 2 years or 20, running your business with a buyer’s perspective will ensure you’re ready when the time comes. If you’ve ever felt unsure about whether your retirement goals are achievable, this video will provide clarity and direction.

Are You Making This COSTLY Backdoor Roth Mistake?

Written by Zachary Morris, CFP® on .

If you’re planning a Backdoor Roth IRA conversion, understanding the pro-rata rule is crucial to avoid unexpected tax bills. This often-overlooked rule can significantly impact your retirement strategy, especially if you have pre-tax funds in any of your IRAs.

In this video, I explain the complexities of the pro-rata rule and how it can affect Backdoor Roth conversions. I’ll start with the basics of IRA contributions, breaking down how pre-tax and after-tax contributions differ. Understanding this distinction is key to helping your conversion go smoothly and minimizing additional taxes.

Additionally, I’ll guide you through the mechanics of Backdoor Roth IRAs, a strategy often used by high earners who exceed Roth contribution limits. You’ll learn to move after-tax contributions from a traditional IRA into a Roth IRA while avoiding unnecessary tax liabilities. Keeping track of your contributions and knowing the difference between pre-tax and after-tax funds is essential for creating a tax-efficient retirement strategy.

The pro-rata rule’s impact is also explored, especially how it applies across all your IRAs, even those held at different financial institutions. Using a practical example of $93,000 in pre-tax funds and a $7,000 Roth conversion, I’ll show how the IRS calculates taxable income during conversions. By understanding this rule, you can optimize your IRA transactions and avoid paying taxes on more than you need, helping you reach your retirement goals more efficiently.

The 4 Best Ways to Save for Your Child’s Future: Pros and Cons Explained

Written by Zachary Morris, CFP® on .

In this video, I’m breaking down four popular ways to save for your child’s future—from college savings to long-term investment accounts—and weighing the pros and cons of each. If you’re exploring options for your family, understanding these choices can help you create a plan that aligns with your goals and your child’s needs.

We’ll discuss 529 plans, UTMA accounts, Roth IRAs, and Joint Accounts, covering their unique features and tax benefits, along with any potential drawbacks. From education savings to general-purpose funds, you’ll get a clear picture of which option might work best for your family’s needs.

We’ll explore how a 529 plan can optimize college savings, the flexibility of UTMA accounts, the retirement potential of a Roth IRA for kids, and the simplicity of Joint Accounts. Each has its own purpose and tax implications, so you can make an informed decision about what works best for your family.

4 Savings Options for Your Child’s Future:

529 Plan:
A 529 plan is a tax-advantaged savings account specifically for education expenses, allowing your investments to grow tax-free if used for qualified expenses. This is a great choice for college savings, though it does limit funds to educational purposes, and using funds for non-qualified expenses may incur penalties.

UTMA Account:
A UTMA (Uniform Transfers to Minors Act) account allows you to transfer assets to a child, which they gain control over at a certain age. These accounts offer flexibility in spending, so the funds aren’t restricted to education. However, since it’s in the child’s name, it may impact financial aid eligibility.

Roth IRA:
A Roth IRA for kids allows you to save for their future retirement by contributing earned income to this tax-advantaged account. This is a long-term savings strategy that grows tax-free. While it provides excellent retirement benefits, accessing the funds early may result in taxes and penalties.

Joint Account:
A Joint Account lets you and your child share an account for general savings or future expenses. It’s easy to set up and allows full control, but unlike other accounts, it doesn’t come with specific tax advantages or protections, which may limit its growth potential.

Cash Crunch? Here Are 4 Tax-Friendly Ways to Get Cash Quickly!

Written by Zachary Morris, CFP® on .

Are you facing a short-term cash crunch and need money without triggering taxable events by liquidating your investments? In this video, I share four practical strategies to generate the funds you need quickly and efficiently, usng the example of making a down payment on a home purchase.

We will walk through the following strategies using an example where Bob and Jennifer are purchasing a $1.5 million home and need $225,000 for their down payment:

→ Home Equity Line of Credit (HELOC): Learn how to leverage the equity in your current home to secure funds for a down payment while keeping your mortgage terms intact.

→ Non-Purpose Margin Loan: Discover how borrowing against your investment portfolio can provide liquidity without triggering taxable events.

→ Intrafamily Loan: If you have a wealthy relative, you can borrow money through a structured family loan with favorable terms, avoiding tax complications.

→ IRA Rollovers: Explore how you can use an IRA for a temporary withdrawal, with the funds rolled back within 60 days, avoiding penalties and tax implications.

These strategies are ideal for those needing cash without disturbing long-term investments or assets. This video will help you understand the advantages and risks of each option.

Setting Financial Goals for the New Year: A Comprehensive Guide

Written by Zachary Morris, CFP® on .

Start 2025 strong with our guide to setting financial goals for the New Year and learn practical wealth management tips.

The start of a new year often feels like a clean slate—a perfect opportunity to reflect, recalibrate, and set meaningful goals. While personal resolutions like exercising more or learning a new skill may top your list, prioritizing financial goals can have a transformative impact on your long-term well-being. By setting financial goals in the new year, you can create a roadmap to not only work toward financial security but also build the life you envision. Let’s explore how to approach this critical process with purpose and clarity.

Why Setting Financial Goals in the New Year Matters

Every January offers a unique chance to reassess your financial habits and establish a clear plan for the months ahead. Financial goals serve as guideposts, keeping you focused on what truly matters – whether it’s saving for retirement, reducing debt, or funding a dream vacation. Without defined objectives, it’s easy to drift, letting your money slip away on nonessential expenses. Setting intentional goals helps align your financial decisions with your broader aspirations and values.

Step 1: Reflect on Your Current Financial Situation

Before you set new goals, it’s essential to understand where you currently stand. Take time to:

  • Review Your Net Worth: Subtract your total liabilities (debts) from your total assets (cash, investments, property, etc.).
  • Examine Your Budget: Evaluate your monthly income and expenses to identify areas where you can save or cut back.
  • Analyze Debt Levels: Note outstanding balances on credit cards, loans, or mortgages, and their respective interest rates.

Reflection provides a starting point, giving you the insights needed to craft realistic and achievable financial goals.

Step 2: Define SMART Financial Goals

Goals are more likely to succeed when they’re specific, measurable, achievable, relevant, and time-bound (SMART). Here’s how to apply this framework:

  • Specific: Instead of saying, “I want to save money,” set a clear target like, “I will save $5,000 for a vacation.”
  • Measurable: Quantify progress. For example, save $500 per month for 10 months.
  • Achievable: Make sure your goals align with your income and current obligations.
  • Relevant: Focus on goals that align with your personal and financial priorities.
  • Time-Bound: Set deadlines, such as “Pay off $3,000 in credit card debt by September 2025.”
SEE ALSO: How Risk Management Helps Protect Your Financial Future

Step 3: Categorize Your Goals

To maintain balance, organize your financial goals into short-, medium-, and long-term categories:

  • Short-Term Goals (0-12 Months): Examples include creating an emergency fund, reducing discretionary spending, or paying off a small credit card balance.
  • Medium-Term Goals (1-5 Years): These might involve saving for a down payment on a house, funding a family vacation, or paying off a car loan.
  • Long-Term Goals (5+ Years): Common goals in this category include retirement savings, college funds, or building generational wealth.

Step 4: Create an Actionable Plan

Once your goals are defined, develop a plan to work toward them. Key steps include:

  1. Automate Savings: Set up automatic transfers to savings or investment accounts to build consistency.
  2. Reduce High-Interest Debt: Focus on paying off high-interest debts, such as credit card balances as quickly as possible.
  3. Track Progress: Use apps or spreadsheets to monitor your progress monthly or quarterly.
  4. Adjust as Needed: Life is unpredictable. Be prepared to revise your plan if circumstances change.

Step 5: Stay Motivated and Accountable

Sticking to financial goals can be challenging, especially when faced with unexpected expenses or temptations. Consider these tips:

  • Celebrate Milestones: Reward yourself when you hit a major milestone, such as fully funding your emergency account.
  • Share Goals with a Partner or Friend: Accountability can help you stay committed.
  • Visualize Success: Keep a vision board or other reminders of what you’re working toward.
SEE ALSO: Planning for Early Retirement: Accelerating Savings and Investment Goals

Tools to Help You Succeed

Modern technology offers numerous resources to simplify financial planning. Consider using:

 

  • Budgeting Apps: Tools like Mint or YNAB (You Need a Budget) can help track income and expenses.
  • Retirement Calculators: Online calculators can estimate how much you need to save for retirement.
  • Financial Advisors: A trusted advisor can provide personalized guidance and accountability.

The Bigger Picture: Aligning Goals with Values

Financial goals aren’t just about dollars and cents. They reflect what you value most, whether it’s providing for your family, experiencing the world, or giving back to your community. By aligning your financial strategy with your core values, you can find satisfaction and fulfillment in the process.

A Fresh Start for Your Financial Future

Setting financial goals in the new year is a meaningful way to take control of your future. With thoughtful planning and consistent effort, 2025 can be the year you make strides toward the life you want. Take the first step today—your future self will appreciate it.

At Paces Ferry Wealth Advisors, we can help you turn your goals into actionable strategies tailored to your unique needs. Start the new year with confidence by scheduling a no-obligation discovery call today. Let’s work together to make 2025 your most intentional financial year yet!

What GRANDPARENTS Don’t Know About 529 College Savings Plans

Written by Zachary Morris, CFP® on .

IIn this video, we’re diving into everything grandparents need to know about 529 plans—a powerful tool for supporting your grandchildren’s educational future. 529 plans are tax-advantaged savings accounts designed for education expenses, and they offer unique benefits that can make a big difference over time. But there are important rules, benefits, and strategies to be aware of if you’re a grandparent looking to contribute to your grandchild’s college fund.

By setting up or contributing to a 529 plan, you can help reduce the financial burden on your children’s family while potentially lowering the value of your estate. We’ll discuss how 529 plans work and explain the key features that make them beneficial for grandparents looking to invest in their grandchild’s future. I’ll break down tax advantages, contribution limits, and the impact on financial aid eligibility, so you can make the most out of each dollar saved. You’ll also learn about the flexibility of 529 plans, including options if funds go unused or if you want to change the plan beneficiary. With these insights, you’ll have the tools to make informed decisions and support your family in a meaningful way.

Save on Taxes by Gifting Money Strategically!

Written by Zachary Morris, CFP® on .

In this video, I’ll explain simple steps for transferring wealth to the next generation without the need for complex estate planning. By planning strategically, you can use these straightforward strategies to lower your taxable estate and allow your loved ones to benefit from your assets now, sharing in that impact while you’re still here. Effective wealth transfer is more than just inheritance—it’s about building a legacy that supports your family in meaningful ways during your lifetime.

We’ll discuss tax-efficient gifting strategies that make it easier to share your wealth without adding unnecessary tax burdens. Key topics include lifetime gift exemptions and how they can be used to maximize wealth transfer and allow assets to grow outside your estate, as well as simple strategies for transferring wealth to the next generation. Together, these approaches help your hard-earned assets make the greatest impact on your family’s future.

What is IRMAA? How to Avoid Medicare Premium Surcharges in 2025

Written by Zachary Morris, CFP® on .

In this video, I’ll explain everything you need to know about IRMAA (Income-Related Monthly Adjustment Amount), including how it affects your Medicare Part B and Medicare Part D premiums. IRMAA is a surcharge added to your Medicare premiums based on your Modified Adjusted Gross Income (MAGI), typically from two years prior. It’s important to understand how IRMAA is calculated because it can lead to higher Medicare premiums if your income exceeds certain thresholds.

You’ll learn the specific income levels that trigger IRMAA, and I’ll walk you through effective strategies to help manage your Medicare costs. I’ll also discuss how IRMAA is tied to your past income and how to handle this during your retirement years to minimize its financial impact. Plus, I’ll share a trick to appeal your IRMAA charge if you’ve experienced a life-changing event that has reduced your income, helping you save money on Medicare Part B and Medicare Part D premiums.

Understanding the Medicare IRMAA appeal process is critical if you’re looking to challenge your Medicare premiums. In this video, I’ll go over the steps you need to take to potentially lower your Medicare Part B premiums using the appeal process, to help you not pay more than you should.

Get the MOST Out of Your Charity Donations with These 3 Simple Strategies

Written by Zachary Morris, CFP® on .

In this video, I’ll break down three powerful methods to give to charity that can maximize both your impact and potential tax benefits. From gifting stock and utilizing required minimum distributions (RMDs) to setting up a charitable gift fund, each approach has unique advantages that can make your contributions go further. Charitable giving isn’t just about financial generosity—it’s a strategic part of your financial plan that helps the causes you care about while benefiting your financial picture.

First, we’ll look at gifting appreciated stock to charity. This approach lets you avoid capital gains taxes on stock increases while offering the full value of the stock to charity, effectively increasing the impact of your gift. Gifting stock can be a tax-efficient way to contribute, especially if you’ve held appreciated stock for over a year.

Next, gifting required minimum distributions (RMDs) directly to charity can help you meet your annual distribution requirements while lowering your taxable income. Instead of receiving RMDs as income, this option allows you to direct them straight to a charity, helping you avoid the tax burden while fulfilling your giving goals.

Finally, using a charitable gift fund offers a flexible way to contribute over time. Charitable gift funds let you make a tax-deductible donation now and decide which charities to support later, giving you more control and flexibility in your giving plan. This can be particularly advantageous if you wish to donate in larger sums or support multiple charities at your own pace.

Through these strategies, you’ll gain insights into how each method can amplify your charitable contributions, optimize tax savings, and align with your long-term financial goals. By understanding the benefits of each approach, you’ll be equipped to make the most out of your charitable efforts.