Latest news with #MelissaCaro
Yahoo
01-06-2025
- Business
- Yahoo
For Gen Z, retirement feels out of reach. Can advisors bring it closer?
When will you retire? For nearly 1 in 5 Gen Zers, the answer is: maybe never. In a Nationwide survey of 349 Generation Z investors with $10,000-plus in investable assets, 17% of respondents said they're spending more on leisure despite long-term financial concerns, believing they may never be able to retire. Financial advisors say that many younger investors have become disillusioned with the prospect of retirement. "For generations, many people under 30 haven't prioritized retirement, not because they don't care, but because they're still building their lives and careers," said Melissa Caro, founder of My Retirement Network, a digital media platform to promote financial literacy. "For Gen Z, it's even harder. They're bombarded with financial advice online, but many are struggling to afford basics like rent and groceries. When you're in survival mode, saving for retirement feels not just distant but impossible." READ MORE: Saver's match 'free money' could pad millennial, Gen Z retirements Among survey respondents, 4 in 10 investors said that they worry about their ability to afford monthly bills over the next year. Advisors say that even among young investors who have the means to start saving for retirement, many are more concerned with short-term financial goals. In the survey, almost half (46%) of investors said that paying off loans and debts, such as credit cards, mortgages and car payments, is their top financial priority for the next 12 months. A short-term outlook can go hand-in-hand with retirement savings, as long as advisors know how to approach clients about their money practices. "Engaging Gen Z also requires meeting them where they are, which often means emphasizing tangible, short-term goals that stack up upon each other toward their long-term success," said Craig Toberman, a partner at Toberman Becker Wealth in St. Louis. "When conversations feel directly relevant to their lives today, they are more likely to take action." "For example, I often encourage younger clients to start with manageable steps, like directing a portion of irregular income, such as bonus pay or freelance earnings, into the longer-term 'investment bucket.' Focusing on what's possible today builds momentum, even if retirement feels far off," Toberman added. READ MORE: The 10 cities where retirees receive the highest income For many Gen Z investors, advisors say the prospect of a far-off retirement finish line has lost the luster it once held with previous generations. Instead, advisors say that discussions about financial freedom resonate more deeply with younger investors. "They don't want lectures. They want to understand how financial decisions impact their real lives, not just some far-off retirement fantasy," Caro said. "So, instead of starting with retirement, start with what they care about today — freedom, flexibility and experiences — and show how smart financial choices can make more of that possible over time. It's about building trust early and evolving with them as their income and goals grow." Financial advisors know connecting with Gen Z clients is crucial. But some planners find that easier than others. Mike Casey, the founder of American Executive Advisors in Alexandria, Virginia, said that "many Gen Zers seem to be disillusioned with finances and career prospects, but they can't quite articulate the cause." Engaging with younger clients can be difficult if an advisor is struggling to understand what's behind that disillusionment. John Power, a financial advisor at Power Plans in Walpole, Massachusetts, said that many of the young clients he has worked with recently are simply uninterested in retirement planning. READ MORE: Keeping the kids: An advisor's guide to retaining next-gen clients "Of late, I have encountered several younger clients who simply don't 'get it.' I have tried everything I can think of to get them energized, but to no avail," Power said. "My suspicion is that the instant gratification of current technologies has made it difficult for them to concentrate on anything very long, and financial planning does take some work on the client's part. They seem to be more engaged in having fun than taking their financial lives seriously. Some even have good incomes and have kids, but haven't a clue and can't bring themselves to start." Understanding that attitude isn't simple. Landon Tan, the founder of Query Capital in Brooklyn, New York, said that economic challenges, shifting generational opportunities and policy issues affecting young people's futures discourage many young investors from focusing on retirement planning. Advisors say those concerns are real, but they're also not insurmountable. "People really underestimate just how within reach retirement is for young people who have decades of growth ahead of them," Tan said. "By drilling into the numbers, it's easy to show individuals the truth. I hope that more financial advisors will cater to young people and use fee models that expand access so that more people have the opportunity to be persuaded to believe in their futures." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
25-05-2025
- Business
- CNBC
How much cash you should keep in your wallet, according to money experts
Even as more Americans tap, swipe or scan to pay, most still carry at least a little cash — and financial planners say that's a good idea. Americans keep $67 in their wallet, on average, according to a recent Federal Reserve survey on how people use their money. While cash remains widely carried, usage has been slipping: in 2024, 83% of consumers said they used it at least once in the past 30 days — down from 87% in 2023, according to the Federal Reserve. Still, financial planners tell CNBC Make It that it's worth keeping some on hand — particularly for situations when digital payments fall short. Whether it's a power outage, a dead phone, a vendor with a card minimum or just the need to get home, cash can bridge the gap. The amount of cash you should have on hand depends on your routine, says Christopher Rand, a certified financial planner in San Diego. He recommends keeping enough to handle a typical expense if something goes wrong — whether that's gas, food, parking or a tip — but not so much that you'd lose sleep if it went missing. "Generally, $50 to $100," he says. Melissa Caro, a CFP in New York, carries a similar amount — usually $60 to $80, depending on her plans. "If I know I'll need it — say for tipping, parking, or certain small businesses — I'll add a bit more to my wallet," she says. "A good gut check is: If I lost my phone and needed a cab home, would I be covered? That's my 'panic point.'" Other planners emphasize the value of cash when tech fails altogether. Leslie Beck, a CFP in New Jersey, recommends keeping at least $50 in your wallet for outages and emergencies. "When Hurricane Sandy hit the NYC area, ATMs were out, internet was down in many areas, and cash was king," she says. Some people only start carrying cash after a mishap. Brett Anderson, a CFP in Minnesota, says he used to carry less than $5 — until his credit card was declined due to suspected fraud. "It's truly inconvenient and embarrassing, depending on who you're with," he says. As a "financial advisor, your real friends will never let you forget if your credit card gets declined, and they take financial advice from you, I'm just saying." He now keeps a couple hundred dollars on hand as a backup. You probably don't need a lot of cash, and certainly shouldn't carry more than you'd be upset to lose or have stolen. "Having large amounts of cash in your wallet makes you more susceptible to losing the funds." says Tipiwa Walker, a CFP based in California. Unlike cards, "cash simply does not have the protections that credit cards do." But having about $50 can be a smart backup for tips, low-dollar purchases or tech hiccups — even if you rarely use it, financial pros say. Carrying cash isn't about "replacing digital tools, but having just enough cash to handle those moments when tech fails or feels like overkill," says Caro.,
Yahoo
15-05-2025
- Business
- Yahoo
My accountant said I'll have to pay back Social Security I already received if I retire mid-year. Is that true?
My tax preparer said that I should not retire mid-year because of my income level. She said I will have to pay back my Social Security. Do I need to take this into consideration? Ready to Retire My wife and I paid off my stepdaughter's $415K mortgage in exchange for her house, but it's now worth $310K. Should we sue? The retail buy-the-dip move paid off. What that crowd of investors is doing now, according to JPMorgan. Has the stock market's epic rebound come too far, too fast? What investors chasing the rally should keep in mind. My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? Why Friday's options expiration could send this historic stock-market rally skidding to a halt Related: My wife and I have $20 million and plan to retire in 5 years. What's our annual retirement allowance? As the saying goes, timing is everything. When you're financially, mentally and emotionally prepared to retire, there's no 'wrong' time of the year to do so. However, there are some ways to make it a more ideal time, and that is likely what your tax preparer was trying to tell you. Yes, it's true that a mid-year retirement can impact your taxes and Social Security, but it depends on a few factors. Also, you don't exactly 'pay back' your Social Security, but I will get to that in a minute. I don't know your income, but if you stop earning income in the middle of the year and then draw down from your retirement accounts and Social Security, your taxable income may be higher than expected. A much higher taxable income could affect your tax bracket, Medicare premiums and ultimate tax bill, said Nathan Sebesta, a certified financial planner and owner of Access Wealth Strategies. 'The key is making sure withholding and/or estimated tax payments are adjusted accordingly,' he said. 'As long as that's accounted for, retiring mid-year isn't inherently problematic. Planning ahead can smooth the transition and avoid any unpleasant surprises at tax time.' Retiring in the middle of the year can affect a few other things, too. For example, your health insurance. If you aren't 65 yet, you'll have to find healthcare another way. Keep in mind, many health-insurance deductibles are based on the calendar year and, even if you've already started paying toward it, you might have to start over toward a new deductible in the new plan, said Melissa Caro, a certified financial planner and founder of My Retirement Network. She brings up another good point: a pension. If you have a pension, the payout could be based on a formula that averages the highest three or five years of earnings. If you're at your peak earnings and you stop mid-year, you're essentially taking that year out of the running in the calculations, she said. Now for Social Security. It is true that the Social Security Administration does require people to pay back their benefits when there's been an overpayment, but your tax preparer may have been referring to the limit the program has on earned income when beneficiaries have already started collecting. Workers can claim Social Security benefits even if they're not retired yet, but if they're under their Full Retirement Age, or FRA, they may be subject to withholding of part of their benefits. For someone who is under FRA for the entire year, the Social Security Administration, or SSA, will deduct $1 for every $2 above the annual limit, which is $23,400 in 2025. For someone in the year of their FRA, the agency deducts $1 for every $3 up until FRA above a separate limit, which is $62,160 in 2025. Here's more from the SSA on that. Just know you do get that money back. The SSA will recalculate your benefit after your FRA, and there's no limitations once you hit that age. Also, remember that Social Security benefits can be subject to income taxes, too. That's a separate formula, but up to 85% of benefits can be taxable based on your income. One more consideration, per the advisers I asked: if you're up for a bonus, best to stick around for it. 'If your employer has a bonus or vesting program you would hate to work half the year and quit before you get paid on that bonus if they are paid at year end,' said Crystal McKeon, a certified financial planner and chief compliance officer at TSA Wealth Management. But the issue isn't that you shouldn't retire mid-year — just why waiting could be better for you, McKeon said. 'I think retirement is so individualized to each person that making a blanket statement that the worst time to retire mid-year would not give the proper attention to aspects of the particular clients' circumstances.' Your tax preparer's feedback needs more context, which happily you can now provide. My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? I have $50,000 in credit-card debt after my divorce, but received $30,000 after a car wreck. Do I buy a used Lexus? Wall Street's biggest bull held his nerve throughout this year's selloff. What he's saying now. 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? These $5,000 bonds can help you fix a stock-heavy portfolio Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
