Every once in a while, the schedule gets really and truly full. We might have places to be throughout the day, for many days in a row. Weeks might go on like this, in an exciting blur.
It’s not a bad problem to have, but sometimes, it can feel like we’re being pulled in more than one direction.
Some of you may experience this sensation too, as you also wear multiple hats in life. You may have commitments as a parent, an employee or an owner, a teacher, a partner, a community member, and more.
Here’s an idea that might provide some relief: we may have many hats, but we only wear one hat at a time. It’s okay to allow ourselves to focus on one at a time, even if we must switch hats often.
The same general principle is true about our financial goals: it may seem prudent to save for retirement, and a house, and a child’s education, and all the other things one may want in a lifetime… but the secret is that you don’t pay for these things on the same day, or week, or month, probably.
Having many hats doesn’t mean we can’t focus—and strategize. Time is finite, of course. But we take things one hat at a time.
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Clients, it’s Caitie here. I’m so thrilled to introduce you to our newest teammate, Allison Bauers! In a small business, we tend to wear many hats, so this week, we’re chatting about how our roles and duties will change in the coming months.
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It’s one of our core principles for a reason: “avoid the stampede.” We live in uncertain times, and it is understandable to get spooked by the day’s headlines. But we do not believe that safety is found following the herd.
Omaha is famous for its stockyards and slaughterhouses; we know that when the cattle are all getting steered together, it rarely ends well for the cattle.
Consider some lessons from history in this classic message.
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For many people we know, money represents work. It’s the sweat and the time and everything else that goes into one’s livelihood.
It may have started decades ago, perhaps with a job for a local farmer, walking beans or baling hay. (Does that reference date us?) It’s all the jobs that followed, too. No matter where those paychecks came from, the work behind them can become a source of pride—one that can also fund our retirement years.
We’re fortunate to know many people who end their careers with resources beyond their needs. It’s a nice problem to have: what happens when the excess outlives us? What’s the next “life” for what you’ve earned and accumulated?
We’ve been hearing from some of you about these big financial legacy questions, and there are many possible answers. In no particular order, here are a few ideas that you have been sharing with us.
Spend it on shared memories. For many, the pace of retirement includes more travel and experiences that weren’t possible during the working years. And while you’re at it, you might think about including those closest to you. Some might take their children or grandchildren with them on the big adventures. If you don’t want to leave behind wealth well beyond your beneficiaries’ needs, spend well now, with them: create the memories while you have the opportunity to do so. Bonus? They have another shared memory to enjoy, long after the experience is over.
Consider making gifts where they would make a difference now. There’s no rule saying you have to wait until you’re gone to get the excess to your beneficiaries. An inheritance can be life-changing, but who’s to say that a well-timed gift couldn’t make a big impact? It could be that splashing around a little cash now might make more difference in the long run. Maybe a loved is working toward a down payment on their first house, or some seed funding for their business expansion, or some other worthwhile project that you’d like to support. Why not now?
Direct it to the causes you care about. You can turn some of your charitable intentions into plans now, too. Your legacy planning may already involve leaving behind some assets to charity, and there are other strategies that might fit your goals. For example, a Donor Advised Fund (DAF) can be set up to benefit organizations of your choice after you’re gone, but it can also be left to a successor: a person you trust to direct charitable distributions of your gifts. They could carry on the work you start now.
Making these kinds of choices truly is a great problem to have. Generational wealth is a powerful tool and privilege. It also highlights the tensions we feel around money: what is the utility of money in our lives—and beyond? We don’t have to know all the answers, but there might be a chance to unlock some exciting opportunities for the generations ahead, if only we get a little more intentional or organized now.
Clients, may your wealth bring you only the best of dilemmas. We’ll be here to try to help you along your way.
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If you are of a certain age and have certain retirement accounts, you probably need to know about the annually required withdrawals from those accounts. The IRS calls them “Required Minimum Distributions”—RMDs.
One special note: Clients, many of you are already treating your retirement account like an orchard, taking out the fruit crop each year to live on. The RMD is not an “extra” amount on top of the crop: it is just a minimum. If you are already taking out 5% in monthly payments to fund your retirement, you don’t need to worry about what happens at age 73.
We’ll talk about the details here, then how it works out in practice.
People born in or before 1950 with any form of retirement account (other than Roth IRA) have already begun doing this RMD process each year (or should have). People born in 1951 or later will have to begin by the year they turn 73.
Basically, the RMD needs to be calculated for each retirement account you have (except Roth IRAs). You must take out the total amount required by December 31, and you will receive a 1099-R showing taxable income.
Clients, you know we pay attention to this and strive to keep you informed about what needs to be done. But there’s one thing to be careful of: take this as an opportunity to check whether there is some account somewhere that we don’t know about, like a 401(k) from a former employer, an odd IRA balance somewhere, 457 or 403(b) plans, and so on. It happens, but it would be a pain to get yourself into some trouble over an account that’s been out of sight, out of mind.
Some people may choose to use the onset of RMDs as a time to consolidate all of their retirement funds into a single rollover IRA, to make this process simpler going forward.
One of the advantages of Roth IRAs is that they have no RMD requirement. As a matter of good planning, it may make sense to convert partial IRA balances to Roth, pay tax when you choose, and whittle down that balance that is subject to RMDs in traditional retirement accounts.
There are lots of ways to handle things! If you’d like to talk about it, we’re here for it. Email us or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
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Caitie has been serving as Director of Communications full-time since 2020, and our communications program has only grown in those years.
The team has committed to making our messaging more accessible, adding more audio and video in addition to our blog posts. We take pride in making our ideas available in multiple formats, to fit a variety of clients’ lives. We’ve been working to make our contact with you more timely, relevant, and consistent—without clogging up your inboxes!
As Caitie starts to flex her leadership muscles, it’s time to introduce our newest addition: a dedicated Director of Communications who can continue to foster our important connections with each of you. On that note, we’re pleased to introduce Allison Bauers as Leibman Financial’s next Director of Communications.
Allison is a Nebraska native, growing up on a farm near Auburn and moving to Cass County in the mid-1980s. She and her husband Larry raised their children in Louisville, where they were involved in the school system, community theater, and other endeavors over the years. Now they split their time between Nebraska and Arizona spending time with family and making their best attempt at exploring all of our National Parks and the wonders of this country.
Allison’s work includes decades in roles across the fields of education and communication, and her skills suit the demands of this role well. She tells us she is excited to join the team and grow in the specialty role that Caitie helped establish.
We’re already confident that Allison’s attitude and energy will bring fresh possibilities to the firm, as we work to continue to serve our clients in thoughtful new ways.
Communications will remain a team sport here at 228 Main, and we are thrilled to add Allison to that team. We hope you get a chance to meet her soon.
Welcome, Allison!
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The best investors are also rich in another important resource: time. They know that spending habits matter, but it’s not just about investing our money. How do we get our time to pay us dividends? More on building this skill in this week’s video.
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The object of our work can be distilled into four words: Invest wisely, spend well.
You’ll notice that half those words have nothing to do with saving more, investing more, or putting off pleasure today in order to have more wealth tomorrow. They are a call to action for the present moment: spend well.
But who gets to do the spending? And for whose benefit?
(To put it more bluntly, as one of you has told us before, “I’m not living my life to make my kids rich.”)
We each have to decide what it means to spend well. Our spending habits have a chance to make an impression on the next generation. In fact, what we give away today might inspire even more generous habits in our offspring, or our neighbors, or our students.
It can be downright fun to spend today rather than waiting to leave our mark. Bequeathments, retirement gifts, and other forms of legacy planning can be fitting vehicles for our generosity, but for some people, it might also be prudent to consider what it is we’re waiting for.
If “enough is as good as a feast”—another gem one of you taught us!—then the excess might be spent in a specific direction, today.
A Donor Advised Fund (DAF) is one vehicle for committing to a charitable intent, whether or not the exact destination of the gift is known right now. Spending well might actually mean investing for someone else’s long haul: an organization or cause near and dear to us, a community effort that’s bigger than what any one of us could achieve alone.
This is what we do at 228 Main: help connect the resources we manage to their sources of meaning. We’re not accumulating wealth for the sake of having it. It’s what those resources might mean, what they might do.
But if you can “invest wisely,” you may end up with even more to “spend well”—both now and in the future. No guarantees, but this is what we strive toward: Invest wisely, spend well.
Clients, if you would like to talk about this or anything else, email us or call.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is not a guarantee of future results.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
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Clients, the wealth you bring to the shop is meant for the long haul.
We often say that the grocery money doesn’t live in here. The car breaks down or the washing machine gives out? You don’t call us for that. Long-term money lives in long-term investments, aimed at long-term goals—the next stage of life, retirement, perhaps the needs of descendants, and so on.
But once all those different goals are on track, we’ve still got some choices to make. (It’s a nice problem to have, surely.)
As habits or hobbies or whole stages of life come and go, we might take a fresh look at our discretionary spending.
What if you started thinking about your legacy and impact as a regular part of your budget, now?
What are you not doing that you wish you were doing? Maybe you’d love to become a major contributor to a cause you’ve been volunteering for.
What do you wish your community had that it doesn’t have now? Maybe you could lead the driving force behind a park improvement, a new service for a preschool or senior care facility.
Where might your money save time for someone you care about? Maybe someday it would be your turn to be the benefactor of the local library foundation or to help the school go digital with its historical records.
Starting a project like this is just like budgeting for any other financial goal. Just ask the big question today: what would you have to change in order to afford this new choice?
We don’t mean to make any of this prescriptive. After all, you are the one who must live your life—not us! But there might be a chance to unlock some exciting opportunities, if only we get a little more intentional or organized now. Who knows?
Clients, if you would like to talk about this or anything else, please email us or call.
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Money you accumulate can work like an orchard, and the income—the fruit crop—helps run retirement life. Some in the industry would call clients taking out their own money “attrition.” Attrition, per the dictionary: “loss or destruction, corrosion, waste.” But to us, it’s simply investing wisely, spending well. Attrition, shmattrition.
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