2nd Quarter 2022 Newsletter
I’m Self Employed and I Don’t Know What To Do For Retirement Plans
Being self-employed comes with so many great freedoms and rewards. There is nothing like the rush of entrepreneurism and watching the results of your hard work as you are building your own dream. We love to work with entrepreneurs for financial planning because we have been in their shoes. One of the biggest barriers for people going out on their own is the uncertainty of the future, especially when it comes to retirement planning. Let our experts guide you to a plan that will best fit the needs and interests of your business.
Whether you have a handful of employees or hundreds on your payroll, establishing a retirement plan offers incentives to your personnel, as well as providing tax benefits for your business. Remember, all financial strategies have tax implications so it is important to discuss your business’ retirement options with a tax specialist as well as a financial advisor. Our team of experts specialize in building plans that ensure your business gains tax efficiencies while securing you and your employees’ financial futures.
Which Plan is Best for Me?
Sole-proprietor
Simplified Employee Pension (SEP) IRA: This is a good option for self-employed individuals with no employees who want an inexpensive, low-maintenance plan that provides tax-deferred benefits.
SEP IRA Advantages
• Low cost
• Easy setup and administration
• Contributions are not required
• Contributions are tax-deductible
• Ultimate flexibility for employer to determine contribution amounts
• Employer can discontinue at any time
• Immediate vesting of contributions
Small business
Savings Incentive Match Plan for Employees (SIMPLE) IRA: This retirement option is for small businesses with less than 100 employees. This plan is easy to set up and allows employers and employees to make tax-deferred contributions to traditional IRAs.
SIMPLE IRA Advantages
• Low cost
• Easy setup and administration
• No complex IRS paperwork
• Tax incentives for both employees and employers
• Immediate vesting of contributions
Small, Medium, or Large Business
401(k) Plan: This is a competitive benefit for small to large businesses to offer employees. This plan is for the business owner who wants to make larger personal annual contributions in addition to having more flexibility in plan design for the benefit of his or her employees.
401(k) Advantages
• Employer contributions are tax-deductible
• High contribution limits
• More investment choices
• Attractive benefit for recruitment
• Incentives for retaining current employees
Whether you are just beginning to explore retirement plans, or you are reevaluating options as your business grows, call our office to speak with an advisor. Our financial professionals are experts in investing and growing your money. Let us work to build a retirement plan that will bring your business valuable tax efficiencies, attract the best talent in your industry, and retain dedicated employees. Our team thrives on two things: big dreams and thoughtful plans. So dream big and call us to help you plan accordingly!
Quick Tip: Market Timing. Should I be getting out of the market?
here is no foolproof way to predict the market. As we know, unpredictable global events and crises cause the market to fluctuate. Our advisors understand these dips and rises in the market are inevitable and are not cause for emotional investing. When we meet with you to discuss your investment strategy, we will determine the risk level you are comfortable taking and help you manage those risks.
In a hypothetical market performance study where $10,000 invested over a 20-year period, a client who remains in the market all 5,036 trading days would see an annualized return of 7.43%. Despite the ups and downs of the market over those 20 years, the value of that $10,000 would rise to $41,953.72. If that same client moves in and out of the market and misses only 40 days with the biggest gains, their return would see a massive dip to -3.43%. This drop makes their $10k initial investment now worth $4,972.30. Although this is just a hypothetical case, it really illustrates the reasons we encourage our clients to stay the course!
Your best option for balancing out risks is working with a trusted financial professional. Over the years, your budgetary circumstances and fiscal goals will change, causing your risk levels to adjust. Your life will change and so should your plan. Your advisor will help you reassess and revise your plan to create a portfolio that best suits your needs. During times of global uncertainty and stress, let us do the work to provide you financial peace of mind. If the current world events and markets are making you nervous, call our office to talk to a financial advisor about the importance of having an anchor to help you navigate your financial journey.
Social Security Cost of Living Adjustment For 2022
More than 64 million Social Security recipients will begin seeing a cost-of-living adjustment in their monthly payments. The 5.9% increase represents the largest increase in Social Security payments since 1983. Be sure to review your financial plan and make sure you are accounting for the change! Call our office to schedule a review of your financial plan.
Team Member Spotlight: Chris DeSchepper, Business Development and Marketing Manager
What does your day-to-day look like in the office?
Every day is different. My day is split between calling clients and prospective clients to schedule appointments, helping clients with the online access to view their accounts, marketing/event planning/client gifting, and team meetings. That is why I love my job.
What has surprised you the most about your time with Anchor Wealth?
The climate in the office. The entire team cares about our clients and their goals, but we also care about each other and genuinely appreciate the opportunity to work together. We really are a team.
Do you have a particularly meaningful moment with a client you would be willing to share?
We have clients that have lost their spouse or significant other recently. When I call those clients, I always set aside extra time just to talk and see how they are managing through such a life-changing event. I have spent more than an hour on the phone just talking about things that aren’t related to their financial plan. Those extra touches are important and meaningful for both of us.
What is something that your coworkers would describe as “So Chris?”
Party planning for the office. We try to have some kind of an event at least every six weeks or so. We love to eat so themed potlucks are a must. Also, anything that has to do with Disney. I was a Magical Vacation Planner in another life. I am also the office that everyone stops by for their candy fix. I have a very large basket of candy in my office and Peanut M&M’s on my desk.
Lights, Camera, Anchor
Our new video series has debuted. Use the links below to view our story and please share!
Anchor Turns 40!! (sort of)
While Anchor Wealth has not formally hit this milestone yet, we have three team members who are entering their fourth decade. Please help us wish them a happy 40th and another year wiser!
Chris Perry: January 2nd
Cherry Johnson: January 10th
Adam Ludwig: May 31st
