by Scott Marshall | Feb 1, 2020 | News, Other, Planning, Retirement
I hope 2020 has started off well for you. In Mississippi, we have recently been having to choose between wearing rain gear or shorts (or both). It has been an interesting time of weather!
On the business front, did you happen to see what law was
signed just before Christmas? The SECURE Act (The Setting Every Community Up
for Retirement Enhancement) was signed by the President on December 20th
with a January 1, 2020 effective date. This Act was part of the Spending Bill
and significantly affects IRA planning.
We have summarized a few of the major changes that might
affect you and your accounts. It’s worth a quick read to see if any of these
apply to your current situation. Of course, contact us directly should you have
any questions specific to your accounts or overall financial plan.
Required Minimum Distributions
Starting in 2020, the required minimum distribution (RMD)
age changes from 70 ½ to 72. So those of you who are turning age 70 ½ in 2020
have another year and a half before you have to start distributions! If you
turned 70 ½ in 2019, the old rules still apply and you must take your first
distribution by April 1, 2020.
Qualified Charitable Distributions (QCDs)
Some good news from the law is that the opportunity to
donate your RMD is still available, even at age 70 ½. Therefore, even though
you are not required to take any distributions at age 70 ½, it could still make
sense to donate from your IRA using the qualified charitable distribution up to
a maximum of $100,000 per person. Utilizing this strategy allows you to give
pre-tax dollars to charities rather than after-tax.
Non-Spouse Beneficiary/Inherited IRAs
Unfortunately, a quite common planning strategy called the
“Stretch IRA” does not stretch as far. For spousal beneficiaries, the rules are
unchanged. But for non-spouse beneficiaries, the inherited IRA must be depleted
after 10 years if the IRA account holder died on or after January 1, 2020.
Inherited IRAs previously set up are “grandfathered” to the old rules if the
IRA owner died on or prior to December 31, 2019.
There are a few exceptions in the new rules applying to
minor children, disabled and chronically ill individuals, and individuals not
more than 10 years younger than the IRA account owner. Therefore, work closely
with your financial planner and tax professional ensure your calculations are
accurate.
Contributions into Traditional IRAs after age 70 ½
Lastly, a significant change occurred regarding
contributions to Traditional IRAs after age 70 ½. Starting in 2020, every IRA
account holder may make contributions to his or her Traditional IRA after the
age of 70 ½ if they have earned income (W-2 or
self-employment income).
We understand that changes in retirement and tax laws can be
confusing, so please contact us with any questions. We are glad to help.
Here’s to a great 2020! Blessings to you in the New Year.
Important: Specific tax guidelines exists for each of
these items mentioned, so be sure to talk with your tax professional before
implementing any of these strategies.
*For financial planning clients of Rivertree Financial
Planning: Please contact us as soon as possible if you have had any changes in
circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
by Scott Marshall | Nov 1, 2019 | Budgeting, Faith, Other, Planning, Retirement
I hope your fall season is going well and that you’re enjoying the cooler weather. Our newsletter topic this month might seem peculiar. What does money have to do with self-awareness, and self-awareness have to do with money? Quite a bit I’d say.
A Case Made
“Without knowledge of self there is no knowledge of God…without
knowledge of God there is no knowledge of self.” Who said this? John Calvin,
the great reformer! Now, we can take this quote out of context and too far by
saying that introspection or self-awareness is more important than a knowledge
of God. Calvin makes the case that these go together. We must see ourselves for
who we truly are before a holy, righteous God. After true introspection should
come humility.
But what I would also argue is that Calvin saw a place for knowledge of
self. We often hear of self-forgetfulness – ignore our needs and only focus on
others. But as I reflect on the life of Jesus, I can’t help but notice how many
times he left the crowd to be alone. He recognized the times he needed to be
alone with the Father, even though there were sick people to heal and lessons
to be taught. Jesus had greater self knowledge and awareness than any other man
who has walked this earth. He knew his calling, his mission, and his identity.
And these impacted every decision he made.
And Money?
We all relate to money in different ways. Some of us never (or seldom)
worry about it. Others think about it more often. And others are consumed by
it. Where do you fall?
I would argue that first knowing how you personally relate to money is
critical to making progress financially. If we know we’re prone to blow cash
the minute it comes out of the ATM, then maybe that method is not best. Or
perhaps it’s the opposite for you: cash gives you needed boundaries of when
it’s gone, the spending stops. If it’s plastic, then spending continues.
We’re often asked by clients: Which budgeting system is best? We
respond: “The one that you’ll actually do.” If a yellow pad and pencil keep you
on track, then that’s best. If an excel spreadsheet, great. If an app, so be
it! Ultimately, which system best helps you accomplish your goals?
What about investment account balances? TV financial pundits? Research
online? Are these helpful for you, or do they create more stress? Perhaps you
check your blood pressure next time you partake. Or maybe you already know the
answer…you just don’t want to change. That’s okay for now. At least you know.
But maybe change will come when “the pain of staying the same becomes greater
than the pain of changing.” -Dr. Henry Cloud
Having self-awareness about your tendencies with money is critical.
A Helpful Tool
The Rivertree Team recently started the book The Road Back to You:
An Enneagram Journey to Self-Discovery by Ian Cron and Suzanne Stabile.
Whew! We have already had some good laughs as we’ve discussed our types and
tendencies (and some occasional grunts as we read about the not so good parts
of ourselves). The goal is that we know one another and ourselves better to
create an even healthier work environment.
And at the spiritual level, considering what Brother Dave said to Ian,
the author of this book: “Just remember, it’s only one tool to help you deepen
your love for God and others….There are plenty of others. What’s important is
the more you and Anne grow in self-knowledge, the more you’ll become aware of
your need for God’s grace. Not to mention, you’ll have more compassion for
yourselves and other people.”
What used to frustrate us about ourselves and one another can hopefully
be replaced with compassion…and some friendly chuckles.
Now What
Have you taken this journey before? If so, has it been
helpful? If you haven’t taken this journey, I’d encourage you to do so. I am
confident you’ll find it worthwhile.
*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
by Scott Marshall | Jul 1, 2019 | Debt, Faith, Other
I hope you are having a good summer. I always enjoy the 4th
of July holiday. I anticipate good food, good fellowship, and of course, some
fireworks!
Before I continue, I’d like to pause and thank those who have served and fought for our country’s freedom. From the bottom of our hearts, thank you! Thank you to those who are serving now and have served in the past. I am certainly guilty of taking this freedom for granted many times, which is why I’m thankful for holidays and special times as these, when we honor those who have served.
The topic of freedom was discussed in our last Rivertree team
meeting. Specifically, we discussed what freedom looked like in regards to
finances. We could have gone many directions here: budgeting, freedom from debt,
retirement nest egg, etc. But our discussion quickly went into a different
direction.
Children
Many of us have children, grandchildren, or children that we may
not be related to but consider our own. What a blessing children can be! And
oh, what a challenge they can be…
Children need us. It feels good to be needed. And sometimes, it
feels good to just be alone. Both are good and healthy.
But something happens to all children. It’s unavoidable. They grow
up! Yes, I’m stating the obvious here, but humor me and keep reading.
Children grow physically. They grow emotionally. Hopefully for
many of us, they grow spiritually.
But here’s my question: Are they growing into adults? I’m not talking about age of adulthood per your State’s law (FYI it’s age 21 for Mississippi, not 18).
Adults
What am I talking about in regards to adults? A responsible,
contributor to society and at the core, a desire to be an adult.
But what happens? It doesn’t always go this way. Children rebel.
They leave home before they’re ready. They denounce the wisdom they’ve learned
through their early years. They hurt the ones who love them the most.
It’s devastating. What went wrong? Is it our fault as parents? I’d argue for most of us the answer is, “No.” It’s not your fault.
The Counterintuitive Freedom
Thankfully, we find the story of the prodigal son in Luke 15 of
the Bible. The younger son requested an early inheritance (which is seldom a
blessing to a child I might add). The son lived recklessly, wasted his money,
and found himself feeding pigs (and even desiring the pigs’ food!).
At this point, we learn that the son “came to his senses.” He
finally reached his point of true brokenness and need.
So, where’s the counterintuitive freedom I keep referencing? It’s
this – Allowing our children to reach the place of brokenness rather than
rescuing them. We “rescue” by giving them money. We rescue by bailing them out
(including from jail). We rescue by not allowing them to truly experience the
natural consequences of poor decisions and behavior.
“But what about mercy and grace, Scott?” I hear ya. I treasure
mercy and grace. I’ve received it time and time again, from humans and The Lord
Almighty.
When they’re children, we often do extend mercy and grace. We may discipline
using other consequences so they don’t have to experience the natural consequence
(and tragedy) of crossing the road before looking or playing with (or in) the
fire.
But our topic today is adults, not children. For adults, it’s time
that they experience natural consequences. It’s what the father did for his
prodigal son. He allowed him to squander his wealth and live with pigs. Don’t
you think this father had the ability to find his son and go rescue him? We
don’t find this answer explicit in Scripture, but I think we can infer that the
father did have this ability. But in his wisdom, he waited.
As a father, I sure wish Scripture gave us more information about what the father did and what he felt while he waited. How long did it take? Was he angry with his son, and even God? Did he grieve or weep? Did he lose faith? We just don’t know.
Know this: There is counterintuitive freedom in allowing our adult
children to experience the natural consequences of their decisions and
behaviors, even if we have the means and abilities to “help.”
Love your adult children. Pray for them. Share the burden with
God, and others. Give them the space to come to their senses.
Don’t lose hope. And when you feel like you have, God is big
enough to listen and meet you where you are.
(Recommendation: I’m 70 pages into the book “Reaching Your
Prodigal” by Phil Waldrep. Although I have more to read, I feel confident in
saying that the author gets it. It’s answering the questions: What did I do
wrong, and what can I do now?)
*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
by Scott Marshall | Jun 3, 2019 | Budgeting, Other, Planning, Retirement
Ever had a plan not go as expected? Yeah, me too. In fact, my
family and I are living this reality right now.
After twelve years of being in the same house, we decided for several
reasons that it was time to make a move. So, last fall we starting taking steps
to get our house ready to sell. After decluttering, painting, and finally
fixing those pesky issues we’ve been ignoring for months (okay, maybe years),
we listed our house for sale. And yes, we then began to love our house more
than ever! That’s how it goes, right?
We still decided to move forward with selling our house. Our house
sold quicker than expected. So now what? Well, things haven’t gone as planned.
The Plan
We had a plan: Sell our house then quickly (and conveniently) move
into the next house we’ll love for another twelve years at least. Many of us
have a plan, right? The infamous boxer Mike Tyson had something to say about
this: “Everyone has a plan ‘till they get punched in the mouth.” Pretty
straightforward, you think?
I am a planner by personality…and trade. Heck, “planning” is in our business name. It’s what we do! Does that mean we develop the perfect plans without a hitch? Obviously, no. We often say the only 100% guarantee is that the financial plan will not go 100% as planned. Expect the unexpected: Family illness or premature death, job loss, market under-performance, etc. These are all things we plan for but don’t know exactly how these things will look for each client.
So, does that mean don’t plan at all? I’d say not.
The
Response
How do you handle a plan gone awry? I will be honest (otherwise, my wife will call me out). Generally I don’t handle it well. I complain or stonewall. I may even sulk. Just when I get irritated reading and hearing about the Israelites wandering after being freed from slavery, I realize – I. am. them.
So, what might be a better response? Perhaps focusing on the
things we can control: Voicing our
frustration and anger in a healthy way; being thankful that we are not in control; trusting that there is a
better plan ahead…much better than my own.
The Peace
“For I know the plans I have for you, declares the Lord, plans for welfare[b] and
not for evil, to give you a future and a hope. 12 Then you will call upon me and come and
pray to me, and I will hear you. 13 You
will seek me and find me, when you seek me with all your heart. 14 I will be found by you, declares the Lord, and I will restore your fortunes and gather you from all
the nations and all the places where I have driven you, declares the Lord, and I will bring you back to the place from which I sent you into
exile.”
There is a plan
for each and every one of us. We just don’t know (and won’t know) what it fully
is on this side of eternity.
What can we do?
Find peace in the fact that we are not in control. Rest easy that there is a
plan for good, not harm, for those that trust in Him, our heavenly Father.
So, how am I now
handling this time of uncertainty with housing? Honestly, I’m finding peace.
We’re calling it a “family adventure!” The kids are onboard. Who doesn’t want
adventure! (Well, me, sometimes…but
ready or not, this one has begun).
If you’re looking for a financial professional to partner with on your next adventure, we’re on-board. Give us a call.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
by Scott Marshall | May 1, 2019 | Budgeting, Debt, Other, Planning, Retirement
I was challenged this morning by a pastor and friend who spoke to
a group of fathers. The question initially posed was this: “What do I most need
today in regards to decisions?” Answer: “Someone ahead of me, and someone
behind me.” In other words, we were challenged to have a mentor and mentee in
our lives. We briefly journeyed through the life of Luke in the Bible. Luke
traveled with Paul. Paul was ahead of Luke. Luke also had Theophilus in his
life who he mentored.
When we need counsel, we so often go to our peers who are most likely facing the same struggles (and making the same mistakes). Don’t get me wrong – I do think it’s helpful to share our struggles and burdens with peers; but are our peers best for counsel? Or could it be wiser to receive counsel from someone ahead of us in life and who has already faced the struggles? My pastor friend would argue the latter. How would this look for financial decisions?
Why can taking this step be hard for us? I’d say that simply
asking for help doesn’t come naturally to us. We might be ashamed of our
circumstances or situation. We might think that no one else gets it. We might
think there’s just no better way than what we’ve come up with ourselves. As a
person who struggles with trying to think myself through situations, I have
come to learn that sharing and processing what I’m going through with others is
extremely helpful; and that sharing with someone who is ahead of me is even
better.
Think about financial decisions that you have made during your
lifetime – the good, the bad, the ugly. How about buying your first house?
First car? First timeshare (uh oh…). What did you learn? Now rewind: If you would
have received counsel from someone at least ten years ahead of you, do you
think the bad/ugly decisions could have been avoided? Probably so.
What about your peers? Most likely they are signing up for the
same college credit card only to get a free t-shirt. Then
yes, that “free” t-shirt ends up costing you hundreds to thousands of dollars
in interest for the tv or vacation you really couldn’t afford. What if you had sought
counsel from someone at least 10 years ahead of you who showed financial
responsibility? Do you think that they would have advised you differently than
your peers? Most likely so.
What about us – financial planners? We are experts in this field,
but does that mean we don’t need to seek financial counsel from someone ahead
of us? I have been challenged to seek out a financial mentor. Just as you,
we’ve found that it’s 100% impossible to check all emotions at the door when it
comes to our own financial decisions. We need sound guidance – the same guidance
we give to our clients.
As we seek out a mentor, we’re also challenged to seek out someone
behind us that we can help. How do we find these people? Pray that the Lord
would bring these people into your life. Open your eyes to those already around
you. They may not be far away.
In closing, I’ll share wise counsel that the speaker received from
someone ahead of him during a critical time in his life: “Make decisions today
that you will least regret in ten years.” That’s good. What’s this all about?
Priorities.
So now what? Make that call. Send that text or email. Take the
risk. I just did.
*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
by Scott Marshall | Mar 8, 2019 | Other
“A Hare was making fun of the Tortoise one day for being slow.
‘Do you ever get anywhere?’ he asked with a mocking laugh.
‘Yes,’ replied the Tortoise, ‘and I get there sooner than you think. I’ll run you a race and prove it.’”
So the story of “The Hare and the Tortoise” begins…
We’ve all heard it. We’ve all read it (hopefully). What the heck does it have to do with investing? Well, quite a lot, I’d argue.
How did you feel during the time period of October through December last year (2018) as it relates to your investments? Confident? Opportunistic? Concerned? Scared? Fearful?
I would say for most of you, particularly those in or close to the retirement years, that the last three words better describe how you felt. And if so, I don’t blame you. When media networks exclaim that “the sky is falling” and “to take cover,” it’s hard to ignore these statements. We’re human. Our left-side logic part of the brain doesn’t usually rule in these scenarios. The right-side emotional part of the brain often rules; and if acted upon, the effects can be devastating.
If you decided to cash-in at the end of 2018, you would have most likely locked-in investment losses for the year depending on your investment allocations. The Hare certainly would have advised that you cash-in.
Fast forward to February 22, 2019. Below are year-to-date investment returns for a several indices:
S&P 500: +11.3%
Dow Jones Industrial: +11.6%
MSCI ACWI: +10.1%
MSCI EAFE: +8.6%
Not too bad of returns for just 1 ½ months of the year. Of course, we may not finish the year within these return ranges, but the point is made: Had you let fear reign in October through December of last year, you would have missed the upside we’ve received so far this year.
The Tortoise would have capitalized on these investment returns, because “slow and steady wins the race.” The Hare? Perhaps he cashed-in last December, took a nap, and is still waiting for the “right time” to invest again (i.e. buy-in when the price is much higher).
We often say to clients in our office that we sure wish investment returns were these pretty little stairsteps that only went up and never down. Unfortunately, that’s not how long-term investing works. You have to take the good years, and the not so good years. Research continually shows this type of investing to give you the highest probability of achieving your investment goals.
We are sympathetic to our clients when the market volatility occurs. We won’t shame you for feeling the way you do. We will listen. And we will revisit your financial plan that we prepared together and see where we are. This strategy brings us back to the long view. This strategy has proven to be helpful.
The story ends here: “The Tortoise meanwhile kept going slowly but steadily, and, after a time, passed the place where the Hare was sleeping. But the Hare slept on very peacefully; and when at last he did wake up, the Tortoise was near the goal. The Hare now ran his swiftest, but he could not overtake the Tortoise in time.”
As shared by a billionaire investor to my old boss Dave Ramsey: “Every time I read this story to my grandkids, the Tortoise wins the race.”
We are here to run (or walk) the race alongside you.
For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.
