retirement

Exercise your financial muscles to get financially fit

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Mark Ziety

“Those who work their land will have abundant food, but those who chase fantasies have no sense.” This ancient advice from Proverbs illustrates the importance of financial fitness.

There are many ways to gain control of your finances; you can increase earnings, decrease spending, start saving more (short-term and longer-term) and implement debt management. For many, earnings are difficult to influence in the short-term, so tackling the spending side of the equation will yield the quickest results. Below we consider six principles that will help you get into financially fit shape wherever you find yourself in life.

Six principles for financial fitness

 “An investment in knowledge pays the best interest.”—Benjamin Franklin

  • Set goals. If you don’t have concrete financial goals, both short and long term, reaching some kind of level of financial fitness becomes much more problematic. Simply put, you don’t have a destination. You are financially adrift. As George Harrison has noted, “If you don’t know where you’re going, any road will take you there.”

Short-term goals you might consider: Establishing an emergency fund with three to six months of cash or saving for a vacation, a car or a down payment on a home. Long-term goals: college savings for your kids and saving for retirement—at least 15%.

  • Know which of the four buckets your income lands in. Use the four Fs: Fixed, Future, “Ph”ilanthropy and Fun.
    • Fixed are your survival expenses like housing, utilities, groceries and transportation. It is not recurring subscriptions each month – those belong in the Fun category.
    • Future is often retirement savings, but shorter-term goals like paying cash for a vehicle or college expenses for kids belong here too.
    • A financially fit person has extra to help those in need, so Philanthropy is one of the four buckets.
    • Fun rounds out the buckets and is self-explanatory.
  • Your lifestyle shouldn’t exceed your income. If it does, you are burning through savings or taking on debt, and your stress level will reflect it.

Excessive spending leads to financial stress rather than financial fitness. You want financial space in your life. You want ‘money at the end of the month,’ not ‘month at the end of your money.’

  • Invest wisely. The proper mix of investments will be influenced by your financial goals, both short and long term, and other various factors. A diversified portfolio that crosses the spectrum can reduce risk and enhance your return over the long run.

“Don’t look for the needle in the haystack. Just buy the haystack!” advises John Bogle, founder of Vanguard. In other words, diversify!

We are here to assist you with that. Our recommendations are tailored to your financial goals and your unique circumstances. Accumulation of wealth over a longer period is our goal. We believe it should be yours, too.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas,” says Paul Samuelson, the first American to win the Nobel prize in economics.

  • Enjoy your retirement. Many enter retirement after accumulating wealth over decades. They have learned how to save. For some, suddenly relying on that savings rather than earning income from labor seems like a daunting leap, one they may be ill-prepared to make. It doesn’t have to be that way.

While your tolerance for risk (losing money) may change, we might recommend a portfolio that allows for a degree of growth and a spending rate that ensures your finances last longer than your retirement.

  • Protect your assets. Do you have life insurance, health insurance and personal liability insurance? Do you have a will and estate plan? Who are your beneficiaries? What happens if you become disabled? Do you have a trusted advisor to handle your affairs?

If you own your home without a mortgage, do you have homeowners’ insurance? Surprise, not all do. If you rent, renters’ insurance is cheap. It’s a must-have protection.

Absorbing the fundamentals—the foundation for success

Every situation is unique. You may have mastered the fundamentals, and only need to apply the principles we highlighted selectively, plugging small holes and shoring up your finances. Or a more aggressive approach might be in order. Focus on one theme at a time. Some might apply, while others don’t.  

Having said all that, you are not alone on a financial lifeboat. We are always here to assist.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

$111,000 more from Social Security

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Mark Ziety

With more than 2,700 rules and 567 separate filing strategies for Social Security, 96% of people fail to make the optimal claiming decision and miss out on $111,000 of benefits for the average household.1

$111,000 – that’s a lot of money. Let’s look at some of the rules for Social Security so your decision is better informed.

  • Normal benefits: Benefits can be claimed between ages 62 and 70. The longer you wait, the larger your check. However, the increase is not linear. In fact, the growth is backloaded thereby encouraging people to delay.
change in benefit amounts from ages 62 to 70
  • Spousal benefits: Married people can claim a spousal benefit worth up to 50% of their spouse’s full retirement age benefit if it’s larger than their own and their spouse has started their benefit. As above, spousal benefits are reduced before full retirement age. However, they do not increase after full retirement age.
  • Divorced benefits: Divorced spouses can also claim a spousal benefit if the marriage lasted at least ten years and they are unmarried at the time they file for spousal benefits.
  • Survivor’s benefits: Spouses and surviving divorced spouses can receive the deceased spouse’s benefit starting at age 60 if the marriage was at least nine months (married) or ten years (divorced).
  • Withheld benefits: Benefits may be withheld if you are under full retirement age and still working. Once you reach full retirement age, the amount will be recalculated to include previously withheld amounts.
  • Taxable benefits: 0% to 85% of Social Security benefits may be included in taxable income. The higher your total income, the more of your Social Security you’ll owe tax on.

Optimizing Social Security also requires coordination with retirement investments, something most Social Security calculators omit. For instance, if you retire at age 65 and delay Social Security until age 70, you’ll spend your retirement investments while you wait. It may make sense to start Social Security earlier, even though the amount is less, allowing you to preserve your investment nest egg.

For many people, it’s wise to get professional help to determine the optimal timing for Social Security. Get it right and it could be worth $111,000.

The Social Security Timing Guide in our resources has even more details. Or, for one-on-one help schedule an appointment.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

1. The retirement solution hiding in plain sight. InvestmentNews. (2020, June 12). Retrieved August 4, 2022, from https://www.investmentnews.com/whitepapers/the-retirement-solution-hiding-in-plain-sight

Build your financial wisdom

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Mark Ziety

Join us for online educational sessions presented by WisMed Financial exclusively for Wisconsin Medical Society members. Session topics include retirement planning, social security and tax planning. Be sure to register – the replay and materials will be provided even if you miss the live event.

Social Security; $111,000 More

September 9 from 12:00-12:30 p.m.

  • Ideal for anyone age 59 and over who has not filed for Social Security
  • With more than 2,700 rules and 567 separate filing strategies, 96% of people fail to make the optimal claiming decision and miss out on $111,000 of benefits for the average household1
  • Uncover various claiming strategies whether single, married, widowed or divorced
  • Optimize Social Security timing

Medicare Open Enrollment

October 19 from 12:00-12:30 p.m.

  • Ideal for anyone age 65 or older
  • The A, B, C and D puzzle of Medicare
  • Pros and cons of original Medicare versus Medicare Advantage
  • Wisconsin Medicare supplements are unique compared to other states
  • Tips when shopping for a policy

Year-end Tax Planning Workshop

November 18 from 12:00-12:30 p.m.

  • Ideal for everyone
  • This is a hands-on workshop, so bring your 2021 tax return
  • Review key tax numbers
  • Adjust your taxable income and deductions for 2022, 2023 and beyond

6 Keys to Retirement Success

January 20 from 12:00-12:45 p.m.

  • Ideal for anyone approaching or in retirement
  • Social Security benefits
  • Bridging the health insurance gap between early retirement and Medicare
  • Generating income from investments
  • Identifying a long-term care plan with or without insurance
  • Estate plan considerations
  • Optimizing the retirement tax bracket drop and rebound

To register, click here.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

1. The retirement solution hiding in plain sight. InvestmentNews. (2020, June 12). Retrieved August 4, 2022, from https://www.investmentnews.com/whitepapers/the-retirement-solution-hiding-in-plain-sight

Your life has only 3 planning scenarios

Mark Ziety

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

You’ll either have a long life, health problems along the way or a short life. That’s it.

Plan for those three situations whether you’re single, married, with or without kids and most of your planning is done. Let’s look at how to plan for each.

First, essential tasks for everyone

  • Manage monthly cash flow. Call it a budget, spending plan, living below your means or whatever makes it appealing to you. It doesn’t matter if you have high income or low income, everyone needs to control their inflow and outflow.
  • Life happens, have an emergency fund.
  • Pay off all high interest consumer debt.
  • Give of your time, resources and be thankful. Live happy.

Plan for a long life

  • Are you saving at least 15% for retirement with the right investments? Boosting it to 20-25% is even better.
  • Have you maximized your tax advantaged retirement accounts through your employer and on your own?
  • Will your tax burden be higher or lower in the future? Hint – if you have a lot of tax deferred investments, you could be igniting a tax bomb that hits later in life.
  • Save for kids’ education expenses.
  • Determine the monthly income you’ll have in retirement from all sources.
  • Dream about your future.

Plan for health problems

  • Health insurance is the obvious answer.
  • Auto and umbrella insurance can provide for you via uninsured/underinsured coverage.
  • Disability insurance that replaces two-thirds of your income if you can’t perform your own occupation is critical, especially during your early and mid-career. A policy with an inflation adjustment is even better.
  • Everyone over age 18 should have health care and financial power of attorney documents.
  • Do you have a source to pay for long-term care expenses? If not, consider an insurance policy.

 Plan for a short life

  • If anyone depends on you for income, get term life insurance. It’s cheap, so don’t skimp.
  • Are your beneficiary designations correct?
  • Do you need a will or trust?
  • Ensure your family knows where to find your documents and accounts.
  • Tell your family you love them. And if you’re faithful, pray.

Since we don’t know the future, all three plans are important for everyone. Our Physician’s Financial Guide has even more tips. Or, for one-on-one help schedule an appointment.

To your best life and healthy finances.

Mark Ziety, CFP®, AIF® 608.442.3750.
WisMed Financial, Inc. part of the Wisconsin Medical Society