Tag: financial planning

The Self-Employed Cash Balance Plan

The Self-Employed Cash Balance Plan

Small Business Owners Can Benefit from These Plans in More Ways Than One

Within many companies, employees enjoy a plethora of benefits that come along with their salary. Typically, there’s paid time off, health insurance, and for some, access to retirement savings accounts through the employer. One way a company may offer to help their employees save for retirement is through a cash balance plan, which works almost like a traditional pension plan but with some differences that make it attractive to small business owners. In essence, a cash balance plan provides self-employed individuals the opportunity to make sizable contributions to a retirement savings account while also enjoying tax benefits for their businesses.

This is an important option to consider because, oftentimes, self-employed individuals end up robbing themselves of the benefits that others get because they’re focused on putting all their money and resources into their business. However, cash balance plans come with tax benefits that significantly help any self-employed individual in the present, while offering a valuable way to save for retirement, too.

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Should Your Children Play a Part in Your Business Succession Plan?

Familial Considerations for the Next Generation of Your Business

When you view your business succession plan from a strictly financial standpoint, you’ll cover a lot of ground. You’re likely to think through things like market valuations, trust strategies, taxes, and more. What you might fail to put enough thought into, however, is the more personal aspect of business succession. Specifically, you’ll need to decide whether to include your children in your plans for maintaining the infrastructure of your business after your eventual retirement or death.

If you have adult children with an interest in taking over your company, you’ll need to plan for efficiently transferring both equity and control – as well as how to do so fairly. Below, we’ll talk through four considerations to keep in mind as you explore the more personal and familial aspects of your business succession planning.

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Four High-Impact Financial Resolutions for the New Year

Four High-Impact Financial Resolutions for the New Year

How to achieve a more prosperous 2022

Reflecting on the ups and downs of the current year and setting financial resolutions for future goals is a longstanding tradition to usher in the new year. What better area for focused, deliberate improvement than your finances? If you want to turn your finances around or simply experience more prosperity in 2022, you need to keep three key factors in mind: earnings, expenses, and savings.

If you’d like to improve your finances in the new year, consider the four financial resolutions below.

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7 Steps to Building Your Family Financial Plan

family and finance
How to Develop a Comprehensive Financial Strategy to Set Your Family Up for Success

Every family will experience various stages of life and unexpected events as the members of that family grow. Having a strong family financial plan in place can help ensure that, no matter what your family encounters, you’ll remain on firm financial footing. Developing a comprehensive strategy for managing your money requires that you start with the basics – that means setting up a budget, paying down your debts, and building a solid safety net for emergencies. Depending on the family, it may also mean investing for retirement and starting a special savings account dedicated to future college costs.

Personal financial planning can be complicated enough, so financial planning for your entire family can be especially challenging. However, it’s not impossible. With dedication and deliberate care, you can make a family financial plan that works for everyone. No matter your family’s situation, there are key elements that should be included in any family financial plan. As you get started with yours, here are seven key steps to consider.

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Stay at Home Spouse: Considerations for a One Income Household

stay at home spouse
There are Many Benefits to One Spouse Staying Home, but Don’t Neglect These Crucial Points

In the United States today, about 20 percent of households include one stay-at-home spouse. There are certainly many benefits to a one-income household on the childcare and housekeeping fronts, but there are important financial considerations for stay-at-home spouses that don’t often get the attention they deserve.

Here are four things to keep in mind if you have a stay-at-home spouse in your household, or you’d like to in the future.

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The Cost of College: 5 – 10 – 15 Years from Now

college hats thrown in air
As Educational Costs Continue to Rise, Parents and Students Must Be Prepared

Saving for college can seem like an uphill battle, especially given that costs have risen an average of 5 percent annually for the last decade. Accumulated College Board data for the 2019-2020 academic year showed an average cost of $21,950 as an in-state student at a state school, and a whopping $49,870 for a private school. Doing the math easily reveals that four years at any school will cost a pretty penny, especially if your children aren’t close to college age just yet.

Assuming cost trends continue, parents and prospective students will face steep tuition bills in the future.

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How to Maximize Your Stock Options

The Key Considerations You’ll Need to Best Leverage this Employee Benefit

Stock options have become a popular way for employers to compensate employees and incentivize high-quality work. Not only are they convenient and cost-effective for the employer, but they provide employees with added value for a job well done. When employees feel valued and do good work, the company’s stock value rises, and everyone wins.

Since stock options aren’t as cut and dry as a normal paycheck, though, many employees don’t fully understand how to make the most of them. Below we’ll discuss how stock options work, when to exercise them, and how to maximize this type of compensation.

The Basics of Employee Stock Options

When an employer offers stock options as part of your benefits package, it means you’ll have the opportunity to purchase a certain amount of company stock for a set price called the “grant price”, and typically within a set time frame. Most often, employers want to incentivize you to stay with the company long-term, so you may have to wait until your stock options vest – that is, until they reach the point in time when they become available to you to exercise. This means new employees usually can’t take advantage of them right away. Once they vest, you’ll have a specific time period in which to use your stock options before they expire.

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Planning Assumptions That Should Be Avoided

Even the Most Disciplined of Planners Can Fall Victim to Faulty Planning Practices

Even if you consider yourself an accomplished and disciplined planner – and, perhaps, even more so if you fall into this category – it’s uncomfortable to face unexpected financial hurdles. Since no one can perfectly plan for the unexpected, however, it happens from time to time. It could be that your career takes a turn you didn’t foresee, or maybe your child’s college education ends up far costlier than you expected. All of a sudden, you find yourself facing a future where your savings goals may be in jeopardy.

Although no planning is foolproof, avoiding some common – and faulty – planning assumptions can help ensure your long-term goals won’t be in danger.

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So, You’ve Inherited Money – Now What?

If you’ve been lucky enough to inherit a large sum of money, you probably experienced a flurry of emotions, including excitement at the possibilities it opens up for you and your family. However, once the initial elation wears off, it’s common to feel a bit of trepidation and confusion about how to properly manage your new fortune, especially if you don’t consider yourself particularly savvy when it comes to money.

Luckily, you don’t have to be a finance expert to make your inheritance last. Read on for six simple tips to help you make the most of your newfound financial freedom.

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