Tag Archives: Finances

Thank you to Arlene Ferris-Waks from the NJ Bureau of Securities for her overview of cryptocurrency, a topic that is very confusing and always changing with new developments. While cryptocurrencies have been around since 2009, there is still a lot of uncertainty regarding the viability, stability, and future of the digital asset. Is it safe? How does it work? Should I buy or invest? Arlene addressed all of these questions, so let’s dive in!

What Is Cryptocurrency?

The first and best known cryptocurrency Bitcoin was first released in 2009 in response to the market crash in 2008. Cryptocurrency is a 100% digital asset that is also completely decentralized, meaning it is not regulated or managed by a central authority like government or a bank. It uses strong cryptography through blockchains to secure transactions; those transactions are then recorded in a decentralized, online ledger which are then verified when the cryptocurrency is mined by powerful computers.

You can use cryptocurrency online to buy goods and services through the use of a cryptocurrency wallet. A wallet is needed to provide proof of the digital currency and allows the sending and receipt of digital tokens. These wallets can be either “cold” or “hot”, meaning that they either reside on hardware or software. Keys, randomly generated numbers and letters, are needed to gain access to cryptocurrency wallets and can be public (used only to receive crypto from others) or private (used to provide access to a user’s crypto wallet). While cryptocurrency is not regulated, it is considered an asset class so it is subject to capital gains taxes.

There are over 50 types of cryptocurrencies, with Bitcoin, Ethereum, and Dogecoin being some of the most well-known. Bitcoin is the most popular and known type of cryptocurrency; there is a limit of 21 million Bitcoins that will ever be in circulation. Stablecoins are another form of cryptocurrency, but are pegged to real world currencies and are therefore, less volatile. A third type of cryptocurrency is Non-Fungible Tokens, better known as NFTs. NFTs are digital files (music, artwork, images) of real world objects, encoded with digital rights. In many instances, NFTs are meant to be a digital version of an original work that will never be reproduced, allowing a value to be placed on it and used as a form of currency.

Blockchain

Earlier we mentioned that cryptocurrencies are secured and recorded through cryptography known as blockchain. Blockchain is a database that stores information in blocks that are connected to each other. This data structure holds records while ensuring security, transparency, and decentralization. In theory, different types of information can be stored in a blockchain, but as it relates to cryptocurrencies, blockchains are currently used as a ledger, storing information about each transaction in a chronological order.

These blockchains must be verified and authenticated in order for the cryptocurrency to have any value. This is done through a process called mining. Mining is a energy-intense process where high-powered computers are used to solve complex mathematical equations that are used to verify and authenticate the cryptocurrency, which results in the creation of a coin or token. Some types of cryptocurrencies, such as Polkadot and Cardano, do not require mining.

Concerns and Scams

The biggest concern with cryptocurrencies are that they are unregulated; without centralized control, they cannot be backed by any guarantees from government or a bank. Additionally, there is also the possibility of losing 100% of your investment in crypto. The digital nature of the currency also makes it more susceptible to hackers who can gain access to your digital wallets. Due to the anonymity of crypto, it is popular among hackers as a form of payment.

Cryptocurrencies have also created a new environment from which scammers can prey on unsuspecting or ill-informed individuals. Fake digital wallets can be used to steal all of someone’s investment in crypto. Pig butchering is a common type of scam associated with cryptocurrencies where someone is convinced to slowly invest more and more money into a fake crypto account because the gains are improperly inflated. Once that person is finally willing to withdraw their money or use the cryptocurrency, it is all gone.

Another popular scam that has shifted into the crypto world is the romance scam. With so many people using social media to meet new people and start relationships, it is very easy for people to fall for the romance scam. In this instance, someone is constantly paying for or “investing” their money into crypto at the strong encouragement from someone they met online. Their money is usually never actually invested into crypto or is put into a fake digital wallet. Eventually the person is ghosted by their romantic interest and all of their money is gone, to the tune of millions sometimes.

More Information

Cryptocurrencies are a new, revolutionary type of currency that seeks to let market forces determine its value rather than being tied to solvency of a specific country or institution. Because of it’s novel approach to currency, there is still a lot of volatility and concern surrounding cryptocurrencies so it is of the utmost importance to stay informed if you are investing in or using it. For up-to-date information regarding cryptocurrency prices, please visit:

You can find more information about cryptocurrencies from the NJ Bureau of Securities at https://www.njconsumeraffairs.gov/bos/Pages/Cryptocurrency.aspx. You can view a recording of the webinar on our YouTube channel at https://youtu.be/z6am5cxKjMs. If you have questions or think you may have been a victim of a scam, please contact Arlene at ferris-waksa@dca.njoag.gov or 973-997-3349. A list of handouts from Arlene are available below:

WEBINAR – How to Manage Debt

June 27, 2023

When we think about our personal finances, one aspect we would rather pretend did not exist is debt. According to a recent NerdWallet study, the average U.S. household owed about $222,000 in mortgages, $17,000 in credit card debt as well as $29,000 in auto loans last year. However, there are several strategies we can use to improve our debt situation and help us to become debt free. Please join us as Amanda Griffin from the Credit Union of New Jersey gives a crash course in debt management, including:

The different kinds of debt
The benefits and costs of credit
The warning signs you have too much debt
How to improve your credit report and score
How to tackle your debt and avoid pitfalls
How to rebuild good credit
How to stay out of debt

Amanda Griffith is a Financial Well-being Impact Officer and a Certified Credit Union Financial Counselor at the Credit Union of New Jersey.

Click Here to Register!

The Financial Side of College Graduation Program Recap

May 18, 2023

Thank you to Samantha Benson from the Higher Education Student Assistance Authority for her presentation on what life looks like after graduation in terms of student loans and the costs of graduate school. The most important thing regarding you or your children’s finances after graduation is to make sure you understand all the details of any loans. Some loans have a grace period (such as 6 months for Federal Stafford Loans) before any money needs to be paid back. Consolidation is an option many people take to reduce their monthly payments and interest rate, but it may extend the life of the loan to 30 years and prevent you from over-paying on the loan. It is strongly recommended to visit StudentAid.Gov with your child to learn about available repayment plans, current loan servicers, and take advantage of their Loan Simulator.

Repayment Options

Repayment options for Federal Direct Loans include:

Standard
- 10 years
- Highest payment, but lowest total amount
- will be auto enrolled after school if no other choice is selected during Exit Interview
Graduated
- 10 years
- Payments start off low, but increase roughly every 2 years
Extended
- About 25 years
- Payments are lower, but life of the loan is greatly extended, requiring more to be paid back
- Must have at least $30,000 in student loan debt
Income-Based
- 20-25 years of qualified payments, then rest is forgiven
- 10-15% of discretionary income
Income Contingent
- 25 years, then loan is forgiven
- 20% of discretionary income OR amount if loan was for 12 years, whichever is lesser
- Payment is calculated each year based your AGI (and spouse’s if married), family size, and amount of loans
Pay as you Earn
- 20 years, then loan is forgiven
- capped at 10% of discretionary income
Revised Pay as you Earn
- 25 years, then loan is forgiven
- Payment is calculated each year based your AGI (and spouse’s if married)
- Payments may be higher than Standard repayment

Some loans are also available for loan consolidation, which allows you to combine different individual student loans into one loan with one payment. Consolidation can lower your overall monthly payment and may lower the overall interest rate between the different loans.

Loan Forgiveness

There are also federal and state loan forgiveness programs that will forgive your student loan debt if you meet certain requirements. One popular federal student loan forgiveness program is the Public Service Loan Forgiveness program where qualified borrowers can have their loan forgiven after 10 years of payments in a qualified repayment plan if they work in a government agency or certain other non-profits. Please visit https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service for the most up-to-date information about the PSLF program.

HESAA has some forgiveness programs for state loans, including:

STEAM Loan Redemption Program
Nursing Faculty Loan Redemption for Teachers
Primary Care Physician and Dentist Loan Redemption Program

Please visit https://www.hesaa.org/Pages/LoanRedemptionPrograms.aspx for more information on the different loan forgiveness programs through HESAA.

If a loan is forgiven, the remaining balance MUST BE declared as income on your federal taxes for that year!

Graduate School

Funding for graduate school is much more limited than undergraduate and many of the options that were available to undergraduate students (Subsidized Federal Direct Loan, Pell Grants, TAG). However, you can take out more money per year. Types of financial and state aid available for graduate students include:

TEACH Grant – must attend a school that participates and meet other criteria. Current maximum award is $3,772
Federal Direct Unsubsidized Loan – Interest rate is currently 7.05% with a 1.059% origination fee. The current annual loan amount is $20,500.
Federal Work Study – part time employment
Education Opportunity Fund (NJ) – Needs-based grant with awards from $200 – $3,050.
Grad Plus Loan – Current interest rate is 8.05% with 4.228% origination fee

More Information

For more information on repaying Federal Direct/Stafford loans, please visit https://studentaid.ed.gov/sa/repay-loans. For more information on managing your loans after school and preparing for the job market, please visit https://www.mappingyourfuture.org/planyourcareer/. For a wide variety of information on repaying student loans, please visit http://www.hesaa.org/Pages/PayOnline.aspx.

You can also view a sample Repayment Plan Summary at https://www.njstatelib.org/wp-content/uploads/2018/05/Repayment-Plan-Summary.pdf. You can view a recording of the webinar at https://youtu.be/WhrmNOr1MFM.

Sustainable Income Strategies in Retirement Program Recap

April 27, 2023

Thank you to Larry Metzler from the Society for Financial Awareness for closing out our Money Smart Week programming by discussing types of income that can help you in retirement. Having the right types of income in our retirement can help us ensure that we enjoy a comfortable retirement, even if we live longer than expected. These income sources should be able to sustain us at various points in our retirement, respond to changes in the market or world events, and cover increasing costs of medical care as we age. So what are these strategies and how do we apply them…let’s find out!

Successful Retirement = Preparation

The keys to a successful retirement are planning and preparation. By having a sound financial plan in place, you can help ensure your retirement goals are met, that your money will last for the duration of your retirement, and you are able to sustain yourself during periods of economic unrest. While making your preparations for retirement (the earlier, the better), be sure to address the following concerns:

Longevity – The average life expectancy in the United States is over 85; can your retirement money last that long? Do you need to delay retirement or supplement your early retirement income by working?
Higher Prices – Generally, you should plan for expenses to increase by about 3% each year and the cost of living is often tied to the cost of fuel. Can your retirement money outpace inflation?
Rising Medical and Long-Term Care Costs – It costs roughly $4,300 per month for assisted living care and over $7,000 a month for private/semi-private rooms at a nursing home. If you are living at home, it can cost about $25 per hour for a home health aid. Can your retirement income meet your medical demands?
Possible Changes in Social Security – While it is unlikely that Social Security will disappear completely, it is possible that Full Retirement Age may be extended or payouts will be reduced, perhaps down to 70 cents of what the dollar is worth today. Can your retirement plan absorb a decrease in Social Security payments without having to sacrifice quality of life?
Investment Risks – While the stock market can be volatile, it can generate good returns over the long run. Bonds are tied to the interest rate so when interest rates are high, bonds payouts can be lower. Does your retirement plan account for investment risks and do you have the right asset allocation to respond to fluctuating market forces and world events?

It is never too early to start planning for retirement, even if that means starting by creating an emergency savings fund. A good habit to get into is to use any money that was once being used to pay off a debt to fund a savings or retirement account once that debt has been paid off. If we don’t use that money properly, it might just get sucked into the black hole of our lifestyle; we’ve survived without it so why not make the most of it.

Strategies for Sustainable Income

Sustainable income through proper planning is key to a happy and comfortable retirement. So what are some of the strategies we can use to make sure we have the right amount of cash flow throughout our retirement?

Identifying Sources of Income

There are different income sources that can be used at different periods of your retirement to fund your lifestyle. In early retirement, you may wish to work full or part time to lessen your reliance on retirement accounts. You can also rely on pension payment or Social Security to get you set up early in retirement. These are steady and guaranteed sources of income that will not change as you age.

Later in retirement, you want to start looking at IRA withdrawals, real estate, and 401k withdrawals as more significant sources of income. If you can act as a landlord with property that is debt free, it can be a very lucrative source of money. In regards to retirement accounts, after a certain age, you may be required to take yearly distributions; taking out too much too quickly can drain those accounts and eventually they won’t be able to keep pace with inflation and other rising costs.

Choosing the Best Withdrawal Rate

We often think of retirement accounts and other sources of income without strings attached. The money is there, so we should use it. However, many retirement accounts are tied to rates of return on the investments, which is what grows the money in that account. As mentioned in the previous paragraph, if you take money out at a faster rate than it can replenish itself, eventually you will be out of money.

It is currently recommended to take out funds equal to 3-4% of the total amount of your retirement account annually. While dependent on the account type, this can help with making sure your money is still growing despite inflation and ensure that your money will last for the entirety of your retirement. For example, a withdrawal rate of 3% may mean your account can last for 50 years; double it to 6%, and that account may only last 16 years.

Consider a Bucket Approach

Think of your retirement plan as a bucket; you want to try and fill it with as many different things as possible; also known as asset allocation. You want to be able to meet your short-term, mid-term, and long-term financial goals when planning for your retirement:

Short-Term Income – income that can be used immediately and without tax implications. For example, cash, CDs/Money Market, short-term bonds, immediate annuities.
Mid-Term Income – should be a mix of growth and income vehicles that can both replenish your short-term income as guard against market volatility. These include bonds, deferred annuities, absolute return funds, and asset allocation/balanced funds.
Long-Term Income – should be used as a hedge against inflation and focus on the longevity of the investment and used later in retirement. These include growth-based stocks/funds, real estate, and commodities.

Managing Risk

The best way to manage risk is to be diversified so that you are not significantly impacted when there is an economic downturn, an asset class loses value, or issues within a specific sector. Your retirement plan should be consistently evaluated to make sure that you are meeting your financial goals and best prepared for expected and unexpected situations.

Addressing Specific Risks

Specific risks are often tied to world events or changes within a specific asset class or sector. For example, the conflict in Ukraine had a world-wide impact on fuel costs, causing inflation to rise and dollar to lose some of its value. Should there be a conflict with Taiwan, that may affect the world supply of semi-conductors, which would have an adverse effect on stocks and funds tied to the tech and automobile sectors that rely heavily on semi-conductors. Being aware of world events and working with a financial profession to prepare for significant changes can help reduce the impact of changes to your portfolio.

A Roth IRA as a Tax Strategy

A Roth IRA is a type of retirement account that allows your money to grow tax-free and offers tax-free withdrawals in retirement. A nice way to utilize this to your advantage before retirement is to make contributions to the account based on your tax bracket. If you would enter into a higher tax bracket, you can take that money and move it into a Roth IRA to shield it from being taxed. Consult with your financial professional or a tax preparatory service before making any decisions to ensure you are following the law.

More Information

If you have any questions, please feel free to contact Larry Metzler at lmetzler@metzlerlaw.net or schedule a free, no-obligation appointment at https://calendly.com/lmetzler-1/60min. You can view a recording of the webinar on our YouTube channel at https://youtu.be/6nNunPeSup0. You can download a copy of the The Lifetime Sequence of Returns: A Retirement Planning Conundrum white paper at https://www.njstatelib.org/wp-content/uploads/2021/12/Sequence-of-Returns-Risk-White-Paper.pdf.

Home Buying 101 Program Recap

April 18, 2023

A big thanks to James Goodman, Home Finance Consultant for The Credit Union of New Jersey, for his comprehensive overview of the homebuying process. Buying a home can be a stressful experience, especially for first-timers, so it is important to be well-informed and choose the right agents along the way. While buying a home can be a major milestone in your life and serve as an investment for the future, it is important to ensure that you can financially afford it.

Key Players

There are many people that are involved in the home-buying process:

Buyer and seller (can be an individual person or an organizations such as a bank)
Realtor – often referred to as a buyer’s or seller’s agent responsible for finding homes and drafting your offer. They often earn a commission on the sale of a house.
Lender – Organization that is providing you with any money needed to purchase the house. This will include a loan officer in charge of your account and processor who takes all your information and determines if you qualify for a loan and how much.
Attorneys – It is required in New Jersey to have a real estate attorney who will finalize the contract, ensure all documents are signed, ensure that all money is appropriately distributed, and ensure your receive your keys.
Home Inspector – Does a walk-through of the home to ensure that the home is up to code and can identify current and potential problems with the home.
Appraiser – Assesses the value of the home to determine the fair market value of the home.

Pre-Qualified vs. Pre-Approved

It is recommended to receive a pre-qualification letter from a lender before shopping for a house. A pre-qualification letter will give you an idea of how much you can afford and determine if you will qualify for any of the lender’s loan programs. Generally, this involves a verbal account of your income and debts as well as hard inquiry on your credit. Many sellers like to see a pre-qualification letter since it indicates that you are a suitable candidate.

Pre-approval is a more in-depth process that actually approves your for a specific loan amount. This requires the submission of a variety of documents including your past 2 years of tax returns, a month’s worth of pay stubs, statements from your bank accounts, a hard inquiry on your credit, and other documentation as required by the lender. Your account then undergoes an underwriting process where all of your financial information is examined to determine what your debt to income ratio is to see if you actually qualify for a specific loan. Often referred to as PITI, the pre-approval process will take into consideration the Principle, Interest, Taxes, and Insurance related to the house and corresponding loan and compare that your current income and monthly debt. The calculation consists of your:

Monthly Income/12 months
Total monthly debt
Front end ratio – Mortgage (PITI) is no more than ___ % of your monthly income
Back end ratio – Mortgage (PITI) and your monthly debt is ___ % of your monthly income

While the ration can range between lenders, a good rule of thumb is 29% front end/45% back end. If you are over these numbers, especially the back end ratio, it is likely that you will not be approved for the loan; however, if you are on the cusp, you may receive approval.

Types of Lenders and Loans

When shopping for loan, there are many types of lenders out there. Conventional lenders are often private lenders, such as bank or credit unions, in which the loan is not sponsored or secured by a government entity; the exception to this are the federal agencies Fannie Mae and Freddie Mack. There are also unconventional or governmental lenders such as FHA (Federal Housing Administration) and VA (Veterans Administration) that offer loans to those that may not qualify under a conventional lender, but may also require additional monthly payments called PMI (private mortgage insurance) to help the lender in the event you default on the loan.

Generally there are 3 types of loans – fixed, adjustable, and jumbo. Fixed rate loans have a set interest rate for the life of the loan, which can be 10, 15, 20, 25, or 30 years. Generally, the longer the length of the loan, the lower the monthly payments, but the more you will pay in interest. Adjustable rate loans start off with a lower interest, but will be adjusted at certain intervals based on market conditions. These can be 3/1, 5/1, 7/1, or 10/1, with the first number being the interval at which the interest rates are adjusted. However, as you build equity in the home, you may qualify to refinance your loan at a lower interest rate or transfer to a different loan type. Jumbo loans are loan amounts generally over $424,100 in most counties, and may required certain restrictions in order to qualify, such as a larger down payment or higher PMI.

Closing Costs

Many people are unaware that they will owe money at the closing, above and beyond any down payment, which can lead to a host of problems. During the entire home-buying process, especially when you are under contract, there are many agents that are performing a variety of tasks that will need to be paid during the closing. Here are some of the costs that may appear:

Lender fees – these can include application fee, processing fee, appraisal fee, and others
Inspections – some home inspectors require up-front payment at the time of inspection or some may be filed with your attorney. These generally range from $500 – 700.
Pre-paid interest – You will have to pay for the interest on your loan for the remainder of the month in which you purchase the home. Many people try to close at the end of the month to reduce this amount.
Title – Fee for the title agency to run a title check to ensure that the property is free and clear of any liens and judgements.
Escrow – Mortgage company will ask you to prepay your first property tax payment in case the seller has not paid property taxes for the current term.
Attorney fees – These generally range from $900 – 1,000.
Survey – In conjunction with the appraisal, a survey is done of the property to determine your property lines. This survey may be needed for future improvements such as fences.
Recording fees – Fees charged by the county to register the deed in your name.

Generally, the total of these fees range from $4,500 – 6,000, but can be more. Additionally, at the time of closing, you will be required to furnish the amount of your down payment.

The Mortgage Process

So what does the entire mortgage process look like?

Application – You will fill out an application for a specific loan with a specific lender. It is important to shop around before filing out any application since each application will cause a hard inquiry on your credit and can potentially lower it if too many are made in a short period of time.
Processing and documentation – Your loan officer will request a variety of documentation from you to submit to the underwriter. These will include tax returns, pay stubs, bank statements, and proof of identity.
Home Appraisal – The value of the home will be assessed and if it is appraised lower than the seller’s asking price, you attorney may use this to negotiate with the seller. If the seller refuses, you can use this discrepancy to back out of the contract without penalty.
Underwriting and Approval – Once both parties agree to the contract and final price of the house, the underwriting process starts to approval you for the requested loan amount. During this time, you may be required to explain large deposits in your bank statements, such as gifts or settlements. Additionally, if you are receiving funds for a down payment as a gift from someone else, you will need to provide a gift letter to explain those funds. Additionally, you should not make any major purchases using your credit or open any new lines of credit as your credit score will be checked again at the end of the process. After the underwriting process, if you meet the ratio requirements from the lender, you will receive your approval letter.
Closing – You will meet with your attorney to sign a variety of paperwork to finalize the sale. Additionally, you will need to bring all money owing and due, including down payment and closing costs. Once all papers are signed and money is parceled out, you will receive the keys to the house.

If you have any questions on the home buying process, please reach out to James Goodman at JGoodman@mortgagedept.com. You can view a recording of the webinar at https://youtu.be/w0EPyVT9GpA. You can download a copy of the presentation slides at https://www.njstatelib.org/wp-content/uploads/2023/04/Presentation-Slides.pdf.

WEBINAR – Understanding Cryptocurrency

May 2, 2023

Cryptocurrency is constantly making the news cycle, from its meteoric rise, to a sharp drop, to countries even replacing their paper currency with forms of “crypto”. The essence of cryptocurrency can be very confusing and it can be difficult to determine if cryptocurrency should be part of your investment portfolio. Join us as Arlene Ferris-Waks, Director of Complaints and Investor Outreach from the New Jersey Bureau of Securities, explores the basics of cryptocurrency, including:

What is cryptocurrency
How it differs from paper currency
Types of cryptocurrencies
Scams related to cryptocurrencies

Arlene Ferris-Waks, Director of Complaints & Investor Outreach has been employed with the New Jersey Office of the Attorney General, Bureau of Securities for more than 15 years. Prior to supervising the Investor Education Outreach and Complaints units, Arlene supervised the Bureau’s Examinations unit. In 2015, she received the New Jersey Attorney General‘s award for excellence in public outreach. She has been employed with both the New York Stock Exchange and the American Stock Exchange, worked as a senior compliance officer at a broker-dealer, and as an investment adviser/registered representative. She holds a BA cum laude from SUNY at Buffalo and a Masters Degree from CUNY (Queens College).

Click Here to Register!

WEBINAR – Home Buying 101

March 23, 2023

Owning your own home can offer many advantages; financial investment, stable living environment, and more space and freedom. The American Dream of owning a home is still alive and well, but for many, including first-time home buyers and repeat buyers, the process can be complex, confusing, and outright discouraging. Please join us as we kick off Money Smart Week with James Goodman, Home Finance Consultant for the Credit Union of New Jersey, who will discuss the home buying process, including:

How to get pre-qualified for a mortgage
The costs of home ownership
Available mortgage options
Assistance programs
The mortgage process

Click here to register!

WEBINAR – Healthcare and Your Retirement

March 23, 2023

When we think of retirement, we think of relaxing and living our ideal life; traveling the world, spending more time with family, finding new hobbies. When we plan for retirement, we often plan in terms of making sure that we can afford that life. However, we often overlook a very important component of retirement that is eating more and more of our retirement income…healthcare. In our continued celebration of Money Smart Week, join us as Gerard Raho from Edward Jones discusses the potential impact of rising health care costs on retirement savings. He will touch on medical expenses and potential strategies like long term care policies to help reduce risk.

Gerard Raho is a finance professional with 20-plus years of experience in financial markets. As an Edward Jones financial advisor serving Morris County, NJ, and the NY Metro area, he help individuals with wealth strategies. He works with clients to identify and address their most pressing needs and then creates a custom-tailored strategy to help address those financial needs and goals. He earned an MBA from Duke University’s Fuqua School of Business and a bachelor’s degree in economics from Syracuse University.

Click here to register!

WEBINAR – Strategies for a Sustainable Income in Retirement

March 6, 2023

Planning for retirement can seem like a foreign language with the soup of acronyms, numbers, and investment options. We can no longer rely just on Social Security to be our only source of income in retirement; prices for goods and medical care are rising and life expectancy rates are rising. We need to find other ways to bolster our retirement income, especially if we have plans of traveling, relocating, or creating an inheritance. Larry Metzler from the Society for Financial Awareness (SOFA) will discuss different strategies we can use to create sustainable income in retirement. He will discuss:

Preparation for a Successful Retirement
The Average Cost of Long Term Care and Life Expectancy
Investment, Risks, and Interest Rates
The “Bucket” Approach

Laurent “Larry” Metzler, J.D., RFC, is the President of Apogee Financial Services Group, Inc., The Law Offices of Laurent W. Metzler, Innovative College Funding Solutions, LLC, and President of the Moorestown, New Jersey Society for Financial Awareness. Larry’s entire career has been focused exclusively on financial planning, college planning, estate planning, retirement planning, asset protection and wealth preservation planning, personal and business tax planning, and real estate matters.

Click here to register!

5 Money Questions for Women Program Recap

March 6, 2023

Thank you to Gerard Raho from Edward Jones for his presentation on what women need to consider when planning for their financial future. While everyone’s financial situation is different and needs to be addressed individually, women have some extra considerations to think about. For example, women generally live longer than men so their money needs to last longer. Also, women are more likely to be out of the workforce while caring for children or older family members rather than men so they may have to stay in the workforce longer or work more jobs to ensure they have enough money in retirement. So let’s take a look and see what questions we should consider and how to best tackle them.

The Five Questions

1 – Where Am I Today?

The first thing one should do when trying to plan for the future is take stock of what your situation looks like now. Am I close to when I want to retire? Am I making enough to put away or am I living paycheck-to-paycheck? Do I plan on having a partner or children? What financial services do I already have; pension, IRA, 401k, 529 Plan, Life Insurance, Long Term Care? Only by examining where we are now can we start to make a path toward where we want to be.

This requires self-examination and the willingness to face potential harsh realities. Being financially insecure can cause stress or shame, making it a significant hurdle to get over, but one that must happen to make change. It can also be a big strain in relationships, but ignoring the reality will only lead to more insecurity and missed opportunities to improve your financial well-being.

2 – Where Would I Like to Be?

You need to make your money work for you, so you need to ask yourself what is important to you, what do you envision your money doing in 10, 20, 30+ years. What are your personal values and your financial goals; do they compliment or conflict with each other? Is retirement the most important thing to you right now; what about your child/children’s education? What is your ideal life-style; is it realistic? All of these questions will help you answer “Where would I like to be?”.

There are some common primary financial needs to consider when determining your financial future. These include planning for retirement, living in retirement, paying for education, preparing for the unexpected, and planning your estate/inheritance. These needs will each take precedence at different times and in response to different circumstances, but should become considerations you address at the outset and re-address as you age.

3 – Can I Get There?

Now that you have an idea of where you want to be in life, are you able to actually achieve it? This is where proper-goal setting, whether on your own or working with a financial advisor, can make all the difference. When looking to set your goals, try setting SMART goals:

Specific – Instead of “I want to retire in comfort,” try “I want to retire by age 70 and spend $60,000 annually.” The more specific you are, the easier it is plan for that goal and keep yourself accountable.
Measurable – Instead of “I want my money to grow,” try “I want my investments to reach $100,000 in 10 years.” Goals are meant to be achieved, so make sure you have some metric to measure whether you met your goal or not.
Achievable – Be realistic. You may want to pay off your home in 10 years, but do you have the necessary funds to cover a lost job or sudden medical emergency? Instead, plan for 20 years and make gains where you can, when you can.
Relevant – Make sure your goals are what you want, not what someone else is telling you they should be. Do what is best for you.
Time-Bound – Set a time-limit for a goal, or at the very least when you will evaluate your progress. This will help you stay on track and help prioritize which goals are the most immediate.

4 – How Do I Get There?

Planning, planning, planning. Have a plan for the expected (retirement, education, elderly care, buying a home) as well as the unexpected (sudden death, medical emergencies, loss of a job). This can be done alone or with a financial advisor. Part of the planning process may expose some difficulties in your goals. In order to have enough money in retirement, for example, you may have to work a few more years or find a way to reduce your monthly expenditures.

Once you have a plan, it is just as important to stick to the plan. Just because the stock market had a bad day, month, or year, your plan may be for the long-haul and those fluctuations are not as important. This does not mean sit back and never take action. Plans should be evaluated and re-evaluated to ensure they are meeting your goals. Set a time-frame to examine your plan and be willing to make changes to the plan to meet new or changing circumstances in your life.

5 – How Can I Stay on Track?

Evaluate. Evaluate your goals, your financial situation, and your plans. Life happens and you might need to shift things around to make it work; maybe you need to adjust your asset allocation or cut back on spending to increase your savings. Don’t be afraid to admit is something is not working either. The earlier you can recognize a problem, the less damage it will do to your financial future.

Ask for help. It is very difficult to do this alone and statistically speaking, you will generally make less money than working with a financial professional. Look for someone with a “Financial Advisor” designation as they have to act as a fiduciary, meaning they have to work in your best interest rather than what will make them the most money. Before working with any financial professional, check with the NJ Bureau of Securities, https://www.njconsumeraffairs.gov/bos/Pages/cbyinvest.aspx, to make sure they are registered.

More Information

Unfortunately, there is no one-size-fits-all approach to financial planning. Each person is different; they have different circumstances, goals, and means. Therefore, each person’s plan to financial security is going to be different. This is especially true for women who tend to have more financial challenges when caring for children or aging family members. For more information on making the most of your money and planning for your financial future, please contact Gerard Raho at Gerard.Raho@edwardjones.com.

Identity Theft Program Recap

February 2, 2023

Thank you to Carol Kando-Pineda and Gema De las Heras from the Federal Trade Commission for discussing the different types of identity theft and what you can do if you think you are a victim of identity theft. According to the Department of Justice’s survey from 2018, over 20 million people in the U.S. experienced identity theft that year with financial losses totaling over $15 billion. In 2021, the FTC received 1.3 million identity theft reports with data from 2022 suggesting a similar result. With the pervasiveness of technology in all aspects of our life, it has made stealing identities easier, and harder to track, yet there are some steps you can take to help reduce your risk. Let’s take a look and see how the FTC can help you.

Types of Identity Theft

Identity theft occurs when someone uses your personal information for financial gain through fraudulent actions. Your personal information can be stolen in a variety of ways both on and offline. Data breeches, phishing scams, and skimming are popular ways to steal your information digitally, but thieves can also get your information through lost cellphones or wallets, stolen mail, and even posing as representatives from legitimate agencies or companies to get a look at your personal information.

You may get emails or text messages that appear to come from legitimate financial institutions or other companies with links to input personal information or attachments that actually contain malware. There may be hidden devices in ATMS or credit card readers that can steal the information directly from your card, including your PIN number. Identity thieves are always evolving and finding new ways to get our information, which means that we must constantly adapt how we use, share, and protect our personal information.

“Preventing” Identity Theft

Unfortunately, there is no way to totally protect yourself from identity theft. However, there are steps we can take to help limit our exposure to identity thieves. The first and most important thing we need to get into the habit of doing is routinely checking our credit reports and financial statements. Oftentimes, we won’t know we are a victim until its too late, but the sooner we can identify any issues, the better. Start by checking your credit report at least once a year; you can obtain your free credit report at annualcreditreport.com. Until December 2023, you can get your credit report for free once per week from each of the 3 credit bureaus so take advantage while you can. You can also enroll in fraud alerts or credit freezes for free through the credit bureaus, which will help prevent anyone from opening new lines of credit or attempting to make hard inquiries on your credit.

While online, make sure to set up strong passwords that use lower and uppercase letters, numbers, and symbols. Try not to use the same password for all of your accounts; easier said than done. Additionally, try to pick different and more difficult security questions to serve as an additional layer of security. When available, always enroll in multifactor authentication which will create additional layers of security. Keep your operating system and security programs up-to-date to deal with the constantly changing ways hackers can get into your devices. Don’t click on links or open attachments from emails that looks suspicious or are from unknown senders; a good technique is to look closely at the email addresses for subtle typos or hover over a link to see if the actual address that appears looks suspicious. When in doubt, always contact the company or sender by a verified phone number or email from your credit/debit card or a past statement or bill.

If You’re a Victim…

If you are or even think you have been a victim of identity theft, take action immediately. Change your passwords and security questions is you personal information has been compromised. You can fill out an Identity Theft Report from the FTC at IdentityTheft.gov that you can use when communicating with financial institutions and the credit bureaus. The FTC can also forward this report to other law enforcement agencies and the IRS. Additionally, IdentityTheft.gov also has checklists and personalized recovery plans that can help you stay on track and guide you throughout the recovery process.

Be sure to document everything and get as much communication as you can in writing, whether it is digitally or through the postal mail. The more documentation you have, the easier it will be to move forward. Put a freeze on your credit with all 3 of the credit bureaus and inform them over the phone and in writing of any discrepancies you find on your credit report. Finally, be patient; it may take a long time to receive responses from financial institutions, law enforcement, or credit bureaus. It will take even longer to work on restoring your credit or potentially recoup any financial losses.

More Information

If you want to explore more topics related to identity theft, please visit IdentityTheft.gov; there are so many valuable resources compiled by the FTC. If you have specific questions, please reach out to Carol Kando-Pineda, ckando@ftc.gov, or Gema De las Heras, gdelasheras@ftc.gov. You can view a recoding of the webinar at https://youtu.be/MyemEDA1wq4. For a list of links to other resources, please down the handout at https://www.njstatelib.org/wp-content/uploads/2023/02/FTC-Resources.pdf.

Social Security 101 Program Recap

January 25, 2023