PREMIUM: BENZ

FINANCIAL FITNESS CHECKUP

How fit is your retirement plan? Personal finance guru Christine Benz takes us through a financial wellness checkup.

WEALTHTRACK Episode #1525; Originally Broadcast on December 07, 2018

[learn_more caption=”LEARN MORE ABOUT THIS EPISODE”] Part of Christine Benz’ recommended annual “wellness checkup” is to make sure your portfolio’s asset allocation, how much you have in stocks, bonds, and cash, is where you want it. Specifically, in the stock portion, you should also know what your mix is among different investment styles such as small, medium and large cap stocks and growth vs. value. She recommends using Morningstar’s Style Box as a simple approach.

Morningstar Style Box: Morningstar product designed to visually represent the investment characteristics of stocks and mutual funds

Download the.pdf

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How much money do you need to support your desired lifestyle in retirement? Are you saving enough? Christine Benz recommends doing an annual assessment using one of several free retirement calculators.

Retirement Calculators:

T. Rowe Price Retirement Income Calculator

Vanguard Retirement Nest Egg Calculator

Fidelity Retirement Calculator and Tools

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CHRISTINE BENZ FINANCIAL WELLNESS CHECKUP

• 1. HOW AM I DOING WITH MY FINANCIAL PLAN?
• 2. ASSESS YOUR ASSET ALLOCATION
• 3. ESTIMATE ADEQUACY OF LIQUID RESERVES
• 4. ASSESS THE SUB-ALLOCATIONS AND TROUBLESHOOT OTHER PORTFOLIO RISK FACTORS
• 5. REVIEW TAX STRATEGIES
• 6. TREATMENT OF CHARITABLE DEDUCTIONS
• 7. REVIEW TAX LOSS SALES AND GAINS
• 8. DEVELOP NEXT YEAR’S CASH FLOW STRATEGY

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CHRISTINE BENZ

• Director of Personal Finance,
• Morningstar, Inc.

Newsletter available soon.

TAKE FULL ADVANTAGE OF TAX DEFERRED SAVINGS PLANS

2019 ALLOWED CONTRIBUTIONS RISING

401(k) OR SIMILAR WORKPLACE RETIREMENT PLAN:
• $19,000 for under age 50
• $6000 catch-up contribution for age 50 or older remains the same

INDIVIDUAL RETIREMENT ACCOUNTS – I.R.A.’s:
• $6000 for under age 50
• $7000 for age 50 or older

• HEALTH SAVINGS ACCOUNTS – H.S.A.’s:

 

• $3500 for under age 55

 

$1000 catch-up contribution for age 55 or older remains the same

HEALTH SAVINGS ACCOUNTS = TRIPLE TAX BENEFIT
• tax-free contribution
• tax=free growth
• tax-free withdrawals

INFLATION PROTECTION

• Own inflation-protected bond fund
• Particularly beneficial for retirees and pre-retirees
• Treasury Inflation-Protected Securities -TIPs
• Recommends low-cost index funds
• iShares, Vanguard, and Schwab have good TIPs index funds

No stock mentions in this episode.
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UNMET LONG-TERM NEED

In her role as Morningstar’s Director of Personal Finance Christine Benz tackles the major problems facing retirees. One of the biggest is the cost of long-term health care.
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