Just like last week, this week straddles the holidays, and so regular routines are still a little choppy, probably, for you.
And here at Team Hirlinger, plc, we’re working HARD on end-of-year moves for various Phoenix Valley clients, as I write this, knowing that EVERYTHING changes on Wednesday of this week (which might already be past by the time you read this).
It’s a whole new decade, which I’m sure you’ve heard somewhere. 😉
And, in my opinion, these upcoming weeks are actually crucial to how the rest of your decade goes.
Why? Because intentions backed up by ACTIONS are what matters.
No, I certainly don’t subscribe to a mystical law of attraction — but I DO believe that how we act out what we intend to do sets a subconscious belief system in place which can have an impact for months — and even years (decades?) — at a time.
In other words — do what you *intend* to do this week, and it’ll be much easier to carry that forward into the rest of 2020 … and the entire decade. At least, that’s been my experience.
What about you? Do you find the beginning of the year to be full of opportunity? Or is it full of discouragement? I’d be interested to hear your thoughts.
And as I mentioned, for my staff and me … it’s certainly full of preparation. This is one of our most intense years of groundwork for tax season, simply because we continue to uncover fun little nuggets within the tax code that we are using on behalf of our clients.
Also, an important note: the start of actual tax filing will not begin until January 20, 2020 for most returns. This does NOT mean that we can’t begin the preparation process earlier (we can, if you really have your paperwork in order), but it does mean that the IRS won’t be issuing refunds or otherwise officially accepting returns until that day.
The IRS is also continuing to delay processing (by 2-3 weeks) of those income tax returns that have the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC), since these credits have often been the focus of misuse and abuse. There are other options for faster refunds, if that affects you and is something that matters to your situation.
So, let’s turn the page into the 20’s today, shall we?
Charles Hirlinger’s Guidelines for Setting Financial Goals You Can Keep
“Life is the art of drawing without an eraser.” -John W. Gardner
At the risk of making you feel badly, I should tell you that for every seven years you delay saving and investing for the future, you cut in half the income you might enjoy at the end of your life. So, let’s make 2020 the year we finally do this thing right together.
Here are some guidelines, should you choose to accept them…
1) Set goals that are attainable … and share them.
First, ask the right questions, and stay the course until you’ve found the answers. Goals that are shared are ten times more likely to be acted on. Don’t wait until you have everything set up to seek out accountability.
2) Make the goals CLEAR (and concrete) then write them down.
Set your savings goals as a specific annual percentage of your adjusted gross income (AGI). It’s a great idea to save at least 10% of your AGI in tax-free retirement accounts and another 5% toward retirement in taxable investments. If you are behind on your savings, you may want to save even more in order to catch up.
3) Identify the strategy to meet those financial goals.
This should include prioritizing the appropriate retirement vehicles. Start by investing just enough to get the entire match from your company’s 401(k) plan (if you have one), and then fund your Roth IRA accounts next. After these two, make certain you have enough non-retirement savings.
4) Set it so you can forget it.
Automating the deposit of money in an employer-defined contribution plan is easy. Automating a taxable savings plan is just as painless. Most banks or brokers offer an automatic money link between an investment account and a checking account. They should also offer a monthly automatic transfer between the two accounts.
Going into further detail would entail sitting down and creating a true, full financial plan — which is impossible over a blog post (though very doable in person).
But I will say one last thing: the most critical component of wealth management in the new year will be AGI minimization. It’s never been more important to monitor the number upon which the IRS is basing their picture of you. Let us help you do it right.