May 2021 Living Debt Free and Wealthy Newsletter
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Throughout your life, people have told you that setting goals are important. Studies have shown, countless times, that people with goals succeed more often than those without goals.
This is because of 2 simple reasons. Imagine for a moment, you are in a speed-shooting competition and you are facing the world record holder, Jerry Miculek. I bet you will beat him every time- provided you blindfold Miculek…and spin him around a couple times. Now you are probably saying, that’s silly how is he supposed to hit a target he can’t see, or even which direction to go? I’d like to ask you the same question. That is why you need goals!
The second reason is commitment. Commitment is the largest factor in how successful something will be. By setting a goal you are committing to completing it. Now, it is important to note, that to get the maximum benefit from goals, they need to be properly set. A proper goal is a “S.M.A.R.T.” Goal.
Specific - Your goal must be exact and well defined. General goals are not helpful as they are not giving you the sufficient direction you need. Remember, you want to be able to focus in on your goal!
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What you Should Know About Your 401(k) Plan!
The 401(K) Plan is a self-directed, qualified retirement plan established by an employer to provide future retirement benefits for an employee. Employee contributions are made on a pretax basis. Employer contributions are usually tax deductible. Roth 401(k) contributions are made after-tax, but qualified withdrawals in retirement are free from federal income tax. Many employers are presently enrolling new hires automatically in 401(k) Plans, allowing them to opt out later if they elect to not participate. This is done in an effort to encourage more employees to participate by starting to save for their retirements at earlier ages.
If you choose to participate in a 401(k) Plan, you are allowed to invest a percentage of your salary into your 401(k) Plan every month. In 2021 the maximum allowable annual contribution is $19,500. If you will reach age 50, or older, before the end of the tax year, you are allowed to contribute an additional $6,500. Contribution limits are indexed annually for inflation. Money in your account accumulates tax deferred until you begin taking distributions in your retirement.
“Vested” Originated By “Placing Money In Your Vest”
Employer contributions are often subject to vesting requirements. Vesting means when the money is yours or when you can take “hold” of the money. Employers can determine their own vesting schedules, making employees partially vested over time and fully vested after a specific number of years. When an employee is fully vested, the employee is entitled to all of the contributions made by the employer upon separating from the company.
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Free Report- Learn How to PAYOFF Your Debts and Truly Live Debt Free!
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"I can't change the direction of the wind, but I can adjust my sails to always reach my destination!”
-Jimmy Dean
Interesting Facts:
-The number of people practicing meditation has tripled since 2012.
-The number one reason people take up meditation is General Wellness.
-Meditation can change your brain to improve memory and concentration.
-Meditation can strengthen your immune system.
-Evidence of meditation was found by archeologists and dated back to around 5,000 years ago.
-The first meditation hall was opened in Japan in 653 CE. Source:
thegoodbody.com
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May is Mental Health Awareness Month!
And is a time for people to learn more about mental health conditions and seek out help for them.
According to the National Institute of Mental Health, mental health concerns affect 1 in 5 Americans today, but fewer than 25 percent of people with a diagnosable mental disorder seek treatment. Worldwide, depression is the leading cause of disability. This Month hopes to help increase the number of people who will talk to their doctor or a mental health professional about their concern.
Mental illness is a real and treatable set of conditions that includes major depression, bipolar disorder, panic attacks, generalized anxiety disorder, attention deficit hyperactivity disorder, and schizophrenia, among dozens of others. These disorders are serious enough to significantly impact a person’s daily life functioning, whether at school, work or in their relationships with others.
The good news is that mental illness can be successfully treated in most people who seek out treatment
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Measurable - You need to be able to monitor your progress towards your goal. Otherwise, how will you know if you are completing it? You don’t want to miss out on the accomplishment/celebration when it’s done!
Attainable - Make sure your goal is something that you can complete. Otherwise, it does not provide the motivation necessary and will only de-rail and demotivate you.
Relevant - Your goal should be pushing you in the direction you want to go. It should be in alignment with your focus. They should not be stretching you thin across a variety of topics.
Timely - Your goal must have a deadline. Deadlines increase your motivation, give you that sense of urgency and allow you to feel a sense of accomplishment when they are done.
Two final tips. Write your goals down! By writing it down, you are committing to it. It also allows you to put it somewhere you can see it every day for a reminder and motivator. Finally, set your goal with a positive attitude. You want it to inspire positive thoughts and motivation not depress you every time you see it! For more about setting proper goals visit www.mindtools.com.
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What you Should Know About Your 401(k) Plan!
In 401(k) Plans that offer loans, you may also be allowed to borrow money from your account, up to fifty percent of the account value, or $50,000.00, whichever is less, with a five-year re-payment period involved. If you leave your job, the loan may have to be paid in full soon after departure from employment.
Funds in your 401(k) Plan are portable. If you leave your job or retire, you are allowed to move your funds or take a taxable distribution. If you leave a company before you are fully vested, you will be allowed to take only the funds that you contributed, plus any vested funds, as well as any earnings that may have accumulated on those contributions. Often the funds in your 401(k) Plan can be “rolled over” into your new employer’s retirement plan or IRA without any penalty to you.
By law you are required to “begin taking minimum distributions from your 401(k) Plan no later than April 1 of the year after you reach age 72.” The actual law also reads, “Distributions from regular 401(k) Plans are taxed as ordinary income and may be subject to a 10% federal income tax penalty if withdrawn before age 59 ½, except in special circumstance such as disability or death.”
Your 401(k) Plan can be an effective vehicle for saving for your retirement if your employer offers matching fund contributions. The biggest drawbacks to 401k accounts are that your funds are subject to fees, and depending how your organizer sets up your account, it can all be at risk, and the money is all taxable when withdrawn. Still, the 401(k) Plan is considered to be a great secondary or additional retirement funding effort. If you would like a free consultation about your current 401k, give my office a call today.
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