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Financial planning: How to meet your money goals in 2019

My brain goes through the exact same exercise around 5 p.m. every Dec. 31. As I don my tuxedo for a night of revelry – OK, fine, I’m usually in sweatpants settling in for a night of board games – I reflect back on the year that was.

Of course I think about fun family moments such as vacations, birthday parties and youth soccer goals, but I’m primarily evaluating numbers: Did we move forward or backward? And by how much? 

I don’t raise these queries out of greed. Instead I’m trying to determine whether or not I’m a liar. That's because at the beginning of every year, I declare a series of goals that can be quantified. And by New Year's Eve, I've either delivered on those promises or not.  

The primary categories I evaluate my progress against include college fund deposits, health savings account (HSA) deposits, 401(k) deposits, charitable contributions, and

This list has changed drastically over the years. I used to focus on investment account balances, but I realized that was a giant mistake. Yes, the balances will eventually fund my goals, but I can’t control their variable nature, so I was finding myself focusing on something I couldn’t control – a practice as pointless and frustrating as me trying to elegantly wrap holiday gifts. So if my investment balances fall because of some significant global or domestic event, I’ve made the decision to not care. 

But while those accounts may go backward through no fault of our own, if a savings account goes backward, it’s generally our doing. Therefore, I am willing to set a particular deposit goal with a savings account.  

With that as background, it’s worth revisiting the elements of effective financial goal-setting, especially as we reach the end of the year.

Be declarative and use numbers

I prefer to start with the phrase “I will.” I like its declarative nature. It doesn’t hedge the way “I’d like to” does. “I’d like to have zero debt” pales in comparison to “I will have zero debt." 

Five thousand dollars in savings, $6,500 deposited in investment account or zero dollars in credit-card debt are all better than saying subjective words like less, full or more. “I will have less debt” or “I will have more savings” leave you way too much wiggle room.  

Dates are vital too. If you don’t use them, you have an idea, not a goal. “I will have $5,000” is monumentally different than “I will have $5,000 by Dec. 31.” 

What's the purpose?

Recently I began describing what accomplishing a goal will allow me to do. For instance, "I will have $12,000 in  my emergency fund by Dec. 31, and it will allow me to focus on saving for a down payment on a home, going forward.”

I highly recommend you adopt this add-on. It leads you to what’s next. There’s no resting on your laurels or keeping your future at bay. The time wasted between goals is very valuable time, ripe with momentum. Use it.  

Start early

I’m pulling the trigger early this year. Primarily because something funny happened last year. Well, it wasn't so much funny as it was an exercise in advanced face-palming. I had inadvertently forgotten to make a deposit. I don’t know if you’ve ever tried to make money immediately appear in an investment account at 5:15 p.m. on New Year’s Eve, but it’s impossible. And just like that, I was a liar in 2017.  

That’s how effective goal-setting works. Your declaration either will be your reality on the predetermined date, or it won't. There’s no kinda. There’s no sorta. And almost doesn’t matter. If you don’t know whether or not you accomplished a goal, you didn’t. This sentiment scares people away from goal-setting, but those frozen in fear will never experience the glory of consistently hitting well-structured and meaningful goals. 

As you set goals for 2019 and beyond, force your own hand. Set up a scenario in which, in the end, you’re either a liar or you aren’t. It’s better than not knowing.




IRS Warns On Surge Of New Email Phishing Scams

It’s the most wonderful time of the year … for scammers. The Internal Revenue Service (IRS), state tax agencies and the nation’s tax industry are warning taxpayers to be on the lookout for scams at this time of year. The call follows what the IRS refers to as “a surge of new, sophisticated email phishing scams.”

Scammers can take advantage of taxpayers at any time, but the IRS believes that taxpayers may be particularly vulnerable now.

“The holidays and tax season present great opportunities for scam artists to try stealing valuable information through fake emails,” said IRS Commissioner Chuck Rettig. “Watch your inbox for these sophisticated schemes that try to fool you into thinking they’re from the IRS or our partners in the tax community. Taking a few simple steps can protect yourself during the holiday season and at tax time.”

Phishing scams are on the rise. In 2018, the IRS noted a 60% increase in bogus email schemes that seek to steal money or tax data. That marks a dramatic change: Reports had declined for the previous three years. In terms of numbers, more than 2,000 tax-related scam incidents were reported to the IRS from January through October, compared to approximately 1,200 incidents in all of 2017. 

In a typical phishing scheme, scammers attempt to obtain sensitive personal, financial or tax information such as usernames and passwords by pretending to be another person or entity. The emails may appear to be legitimate by using spoofed email addresses and stolen logos to trick the recipient into believing that the email is from a trusted source. Typically, the emails contain hyperlinks that take users to a fake site or PDF attachments that may download malware or viruses. These phishing schemes can endanger a taxpayer’s financial and tax data, allowing identity thieves a chance to try stealing a tax refund.

Last month, the IRS warned about a new “tax transcript” scam. In the scam, taxpayers were tricked into opening emails that look like they are from the IRS—but they potentially carried malware.

In another malware scam, thieves sent email with subject lines like “IRS Important Notice” and “IRS Taxpayer Notice.” In the email, scammers demanded payment or threatened to seize the recipient’s tax refund. 

Don’t respond to these emails, and don’t click on links. Taxpayers can forward these email schemes to—then hit delete.


Of course, not all phishing schemes use email: Some may be phone scams. In a common version of this kind of phishing scam, callers posing as IRS representatives contact taxpayers by phone, claiming that they owe money to the IRS. Taxpayers are told that they must pay the balance promptly using a pre-loaded debit card or wire transfer or be subject to punishment, including arrest, deportation or suspension of a business or driver’s license. The callers may have heavy foreign accents, use common names and fake badge numbers. The number on the caller ID may also look like the IRS since the scammers may spoof the IRS toll-free number.

Reports of phone scams increased in 2018, with the IRS reporting receipt of thousands of such complaints each week. These phone scams are "a major threat to taxpayers" and as such, continued to hold down a top spot on the IRS "Dirty Dozen" list of tax scams for the 2018 filing season.

Don't engage or respond with scammers. Here's how to protect yourself:

  • If you receive a call from someone claiming to be from the IRS, and you do not owe tax, or if you are immediately aware that it’s a scam, don’t engage with the scammer and do not give out any information. Just hang up.
  • If you receive a telephone message from someone claiming to be from the IRS, and you do not owe tax, or if you are immediately aware that it's a scam, don’t call them back.
  • If you receive a phone call from someone claiming to be with the IRS, and you owe tax or think you may owe tax, do not give out any information. Call the IRS back at 1.800.829.1040 to find out more information.
  • Never open a link or attachment from an unknown or suspicious source.
  • If you’re not sure about the authenticity of an email, don’t click on hyperlinks. A better bet is to go directly to the source’s main Web page. 
  • Use security software to protect against malware and viruses found in phishing emails.
  • Use strong passwords to protect online accounts and use a unique password for each account. Longer is better, and don’t hesitate to lie about important details on websites since crooks may know some of your personal details.
  • Use two or multifactor authentication when possible. Two-factor authentication means that in addition to entering your username and password, you typically enter a security code sent to your mobile phone or other device.

As a reminder, the IRS will never:

  • Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card, gift card or wire transfer.
  • Ask for credit or debit card numbers over the phone.

Don’t fall for the tricks. Keep your personal information safe by remaining alert. And, when in doubt, assume it’s a scam. For tips on protecting yourself from identity theft-related tax fraud, click here

The Internal Revenue Service, state tax agencies and the tax community, partners in the Security Summit, are marking “National Tax Security Awareness Week” December 3 -7, 2018, with a series of reminders to taxpayers and tax professionals. Visit “Taxes. Security. Together.” or review IRS Publication 4524Security Awareness for Taxpayers (downloads as a pdf), to learn more.


Young & Scrappy -- And Saving for Retirement

Last spring, I packed my bags and headed to Denver for my first reporting job after college. We had everything you might expect at a scrappy media start-up with four reporters, including craft beer in the mini fridge. But like a lot of cash-strapped start-ups, the company couldn't offer much in the way of employee benefits.

I didn't care about any of that when I took the job. If I could pay the bills and start chipping away at my student loans, why the heck would I think about saving for retirement?

Here's why: Our generation is almost certain to live longer than our parents, meaning our money has to last longer and clear more hurdles on the way.

For starters, no one really knows what Social Security is going to look like in 30 or 40 years. No matter how Congress adjusts the system over the next decade, younger workers shouldn't count on receiving the same benefits as their parents. "I tell younger investors to plan as if Social Security will be nonexistent when they retire," says Ryan Fuchs, a certified financial planner in Little Rock, Ark. "I don't believe that will be the case. But if they can create a successful plan without it, then any money they do receive will be icing on the cake."

The time value of money. After paying rent and maybe student loans, finding the money to save for retirement might seem like an impossible task. In a 2017 survey from GOBankingRates, more than 60% of millennials reported having less than $1,000 in a savings account, and 46% of res­pondents ages 18 to 24 

said they had nothing saved. But time is the most valuable resource you have, and you happen to have a lot of it right now.

"When we meet with younger clients, we'll use simple calculations to show what saving a few hundred dollars a month can do for a portfolio when you extend that growth over 40 years," says Nate Creviston, a CFP in Shaker Heights, Ohio. If you set aside $200 a month and earn an average annual return of 7%, you'll have $480,000 after 40 years. Boost contributions every time you get a raise, and you'll have much more than that. Eventually, you should aim to save 15% of income.

Putting aside the question of Social Security, the big difference in the retirement outlook between past generations and our own is the shift away from traditional pensions. Most private employers have moved toward defined contribution plans, such as 401(k)s, which allow workers to contribute a certain amount of their paycheck into a pretax account. According to Rui Yao, a personal finance professor at the University of Missouri, that shift began right before Generation X joined the workforce and culminated with millennials.

If your employer offers a 401(k) plan and will match your contributions up to a certain percentage of your pay, take it. It's the closest you'll come to getting free money. Even without the match, a 401(k) is a strong starting point as long as it offers a diversified selection of mutual funds that aren't hobbled by exorbitant fees. ( offers a tool that will rank your 401(k) against its peers.)

If you're self-employed or your employer doesn't offer a 401(k), your next best bet may be a Roth IRA. In 2019, you can contribute up to $6,000 to a Roth, as long as your income is less than the IRS's thresholds. The money isn't tax-deductible, but as long as you wait until you're at least 59½, all withdrawals--including earnings--will be tax-free, and you can withdraw contributions at any time without paying taxes or penalties. Many online brokers offer tools to help you create a portfolio and set up automatic monthly contributions, which makes it easier to start saving as a habit.



Here's how to overcome poor retirement planning

  • As the economy strengthens, more workers near retirement age are feeling better about their economic prospects.
  • Still, others haven't saved enough to afford their golden years.
  • Here's how to get on track to financial security.


As the economy strengthens, more workers nearing retirement age are feeling better about their economic prospects. That's the good news.

Still, many others are worried about their savings, or lack of savings, and how they will get by once they stop working for good.

Overall, 85 percent of working Americans said retirement will be a "positive new chapter in life," according to a recent retirement study by Wells Fargo, which polled more than 2,500 adults in August.

However, 70 percent of respondents also said they are concerned about running out of money. And rightfully so.

More than half of Americans, or 57 percent, have less than $1,000 in their savings accounts, according to a separate GOBankingRates survey.

Another report by the Stanford Center on Longevity found that nearly one-third of baby boomers had no money saved in retirement plans in 2014, when they were on average 58 years old.

Among boomers with positive balances, the median savings was around $200,000.

For these soon-to-be retirees, it's not too late to get back on track to financial stability, experts say. Here's how:

Avoid potential problems

"Success in retirement requires awareness of the potential pitfalls that can trip you up," said Greg Sullivan, a certified financial planner and the author of "Retirement Fail."

That includes anticipating a longer life expectancy and higher health-care costs than you might think.

In fact, 43 percent of retirees and 38 percent of pre-retirees fell short by at least five years when asked to gauge the average life expectancy for someone of their age and gender, according to a survey from the Society of Actuaries.

With that — and rising medical costs — comes surging projections of what retirees can expect to spend for retirement health costs.

An analysis from Fidelity Investments estimates that a healthy 65-year-old couple retiring this year will need $280,000 to cover their health-care costs. For individuals, the projection is $133,000 for a man and $147,000 for a woman.

Chances are, that will mean you'll need more discretionary income than you originally thought.

Increase savings

To get there, "increase their monthly retirement savings, as significantly as possible," said Michael LaBella, a CFA and the head of global equity strategy at QS Investors.

The Stanford Center advises saving 10 percent to 17 percent of your income if you plan to retire at 65 — about double what most people are actually socking away.

Reaching such a goal may entail downsizing or cutting off financially dependent adult children, added Sullivan.

"Changing your lifestyle is very difficult for most people," he said. "We try to get our clients to look five and 10 years down the road and then put a realistic plan in place to help you along your journey to security and happiness."

To further shore up your finances, LaBella recommends keeping a chunk of that savings in cash, certificates of deposit and high-quality short-term bond funds as well as "defensive equities," which are less volatile and pay higher dividends.

Work longer

One of the best ways to catch up on retirement savings is to work longer.

Delaying retirement for just three to six months has the same impact as saving 1 percent more of your salary over 30 years, according to a report by the National Bureau of Economic Research.

The power of saving continues to decrease as workers approach retirement age, the working paper found.

Aside from the added income, working longer also allows you to preserve your retirement savings and even keep building those assets in tax-advantaged retirement plans while also reaping the benefits of delaying Social Security past full retirement age.



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