Make Smart Mutual Fund Choices for a Smooth Retirement Ride
Choosing the right funds for your retirement plan starts with understanding a few key details, including asset class, average annual return, expense ratio, and how each fund supports your long-term goals. Our team is here to guide you through the process. Click the image below to watch a short video that explains what to look for when evaluating your options.
Caring for an aging parent, spouse, or loved one is one of the most selfless roles a person can take on. However, it often comes with unexpected financial challenges, such as covering medical bills, adjusting work schedules, managing insurance, or dipping into personal savings to cover the costs. Without a clear plan, these costs can strain your current budget and long-term financial goals.
Whether you’re already supporting a loved one or preparing for future responsibilities, these five practical strategies can help you regain financial clarity while continuing to provide meaningful care.
1. Set a Financial Baseline
Start by understanding how caregiving is affecting your personal finances. Are you covering medical bills, transportation, or daily care items? Have your working hours or earnings changed? Track these costs and compare them to your monthly income and savings goals. Knowing where you stand financially is the first step toward making more informed and confident decisions.
2. Explore Financial Support Options
Don’t assume you need to absorb all the costs alone. Research long-term care insurance benefits, veteran support programs, Medicaid, or other local and national resources that can help reduce the financial burden. If you’re managing a loved one’s finances, ensure you have the proper legal access through power of attorney or similar documentation.
3. Create a Shared Caregiving Plan
If other family members or friends are involved, make sure roles are clearly defined, especially when it comes to financial responsibilities. One person might coordinate medical visits, another may help cover specific expenses, and someone else could handle paperwork or insurance. Transparent communication around costs and expectations helps prevent future conflict and supports a more sustainable plan.
4. Don’t Neglect Your Own Financial Goals
It’s easy to place your own retirement savings or emergency fund on hold during caregiving, but that can have long-lasting effects. Continue contributing to your future when possible, and consult a financial advisor about adjusting your plan to reflect new caregiving responsibilities without sacrificing your long-term goals.
5. Get (and Stay) Organized
Keep key documents such as insurance policies, wills, healthcare directives, and financial statements both accessible and secure. Organizing paperwork, whether digitally or physically, can save time and reduce stress during critical moments when quick decisions are necessary.
Being a caregiver requires time, energy, and heart, but it shouldn’t come at the expense of your financial health. With the right planning and support, it’s possible to care for others while protecting your future. If you’re navigating the financial side of caregiving, our team is here to help. Contact us to learn how we can help you create a plan that supports your family and your financial well-being.
Planning ahead for education costs can feel overwhelming, but a 529 savings plan offers a smart, flexible way to get started. Whether you’re saving for college, K–12 tuition, or even your own future learning, 529 plans provide valuable tax benefits and investment growth opportunities. Here’s what you need to know:
Does saving in a 529 plan severely limit financial aid?
No, 529 plans don’t significantly hurt financial aid. Parent-owned 529 assets are counted at a maximum of 5.6% in aid calculations, while student-owned assets can be assessed up to 20%. This makes the impact of 529 savings relatively small.
Will I lose the money if my child or beneficiary doesn’t go to college or doesn’t need all the funds?
No, you won’t lose unused money in a 529 plan. The money can be used for post-secondary education, transferred to another beneficiary, or even used for your own education. If your child or beneficiary receives a scholarship, you can withdraw an equivalent amount without penalty, though earnings will still be subject to taxes. Non-education withdrawals, however, may incur taxes and a 10% penalty on the earnings portion. Contributions are always tax- and penalty-free. Beginning January 1, 2024, the IRS also permits 529-to-Roth IRA transfers under certain conditions.
Can money in a 529 plan be used for K-12 school tuition?
Yes, money in a 529 plan can be used for elementary, middle, or high school tuition, with up to $10,000 allowed per beneficiary each year. At the post-secondary level, 529 plan funds can be used for a wide range of higher education expenses, including tuition, fees, room and board, books, supplies, and computers or related equipment.
Can only parents open a 529 college savings account?
No, parents are not the only ones who can open a 529 college savings account. Anyone—friends, family members, or even non-relatives—can open an account for a beneficiary, regardless of income or their relationship to the student. They can also name themselves as the beneficiary if desired. Additionally, anyone can contribute to the account, so grandparents, uncles, aunts, and friends are all welcome to help. However, it’s important to note that if a family member other than the parent opens the account, it may affect the student’s financial aid eligibility depending on when the funds are used.
Can I save enough to make a difference?
Yes, even small, consistent savings can add up—especially over time with compounding interest. Encourage friends and family to contribute for birthdays or holidays to boost your efforts. Every bit helps reduce future borrowing.
Saving for education through a 529 plan offers flexibility, tax advantages, and long-term benefits that can significantly impact your child’s future. Whether you’re just starting or already saving, every contribution helps reduce future costs. Understanding how these plans work empowers you to make smart, goal-aligned decisions—it’s never too early to begin.
Supporting Financial Literacy in Young Professionals
Young professionals just entering the workforce must learn to balance immediate financial demands with long-term goals. Building financial literacy is a critical foundation for long-term success. You have the opportunity to help your employees build strong habits for a healthy journey toward retirement. Here are five ways you can help guide younger employees toward a firm financial foundation.
Begin with a Budget
About a quarter of millennial and Gen Z workers don’t know how much they need to save to retire comfortably. Establishing a realistic budget is a great first step in working toward long-term savings goals. As an employer, you can offer resources to help employees build a straightforward spending plan that includes saving for retirement and health care expenses.
Emphasize Saving Early
Young professionals have the advantage of a long savings horizon. Help them understand the importance of establishing savings habits early to capture the power of compound interest over time. Aside from the company retirement plan, though, there are other vehicles to support financial goals – like health savings accounts (HSAs).
Educate on Health Savings Accounts
A successful savings approach considers possible medical expenses. HSAs offer trip tax savings and can be used to pay for current eligible health care expenses. But unused funds roll over annually to cover future medical expenses, offering employees a dedicated pool of savings to help them prioritize wellness right into retirement. Despite their clear benefits, there’s still tremendous opportunity to help young professionals engage with their HSAs more fully – nearly one-third of employees under 30 are not contributing anything. Employer contributions can help encourage young professionals to contribute as well. Encourage employees to monitor their accounts and make incremental changes until they are maximizing their HSA contributions.
Promote Building an Emergency Fund
While saving for retirement is crucial, it is equally important to have liquid savings for immediate, unexpected expenses. Encouraging younger employees to establish an emergency fund ensures they have a financial cushion for unforeseen circumstances like a medical emergency or job loss. Challenge them to save three to six months’ worth of living expenses in an accessible account. This reduces the risk of dipping into long-term savings and provides financial security.
Make Wellness Part of Workplace Culture
Gen Z has the least positive life outlook and may be less proactive overall in seeking care. Encourage your younger employees to make routine care a priority and help them understand their role in paying medical expenses. Help them establish wise habits to build their financial literacy and take control of their personal goals.
Tips to Improve Your Credit Score
Keeping up a solid credit history and good credit score is a bit like staying in shape – you have to work at it regularly to stay at the top of your game. If you wanted to run a marathon, you wouldn’t wait to start training until it was a month away. Similarly, you don’t want to neglect your credit until you’re about to apply for a major loan.
Instead, try to incorporate good credit habits into your regular financial routines. That way, if or when you need to apply for new credit, you should already be in a strong position. Below are eight habits to consider adopting to help raise your credit score.
1) Never Miss a Bill Due Date
Paying your bills on time is the cardinal rule of maintaining a good credit score. That’s because your payment history (meaning whether you’ve paid your past credit card and other loan bills on time or not) is typically one of the most important contributing factors to your credit score.
If you have trouble staying on top of bill dates, consider enrolling in autopay, registering for billing alerts, or creating a reminder system.
2) Keep Your Balances Low
If you have revolving lines of credit, such as credit cards or a home equity line of credit, try to make sure you only use a portion of the total credit available to you. One rule is to make sure your outstanding balance is never more than 30% of your credit limit, like staying at or below a $3,000 balance on a credit card with a $10,000 limit. This ratio is called your credit utilization, and it’s typically another important contributing factor to your credit score.
3) Think Twice Before Closing Old Cards
Another contributor to your credit score is the average age of your credit accounts. The longer the average age, the better for your credit (because it shows you have more experience managing debt and means lenders have a longer track record for you to evaluate). That’s why it may make sense to keep old credit cards open, even if you don’t actively use them anymore. However, closing a card could still be the right move if it charges an annual fee or if keeping it open creates a temptation to overspend.
4) Be Cautious About New Loan Applications
When you apply for a new credit card or loan, the issuer or lender will generally make a hard inquiry into your credit. These inquiries hurt your credit, though they typically only affect your credit score for a year (and stay on your credit report for only two years).
You can help reduce the negative impact of hard inquiries on your credit by thinking twice about opening new credit cards, avoiding hard inquiries if you’ll be applying for a major loan soon, and being efficient when rate shopping.
5) Consider a Well-Rounded Credit History
To reach a top-tier credit score, it can help to show that you have experience with a variety of types of credit – such as credit cards, auto loans, mortgages, and home equity loans – instead of only one type (such as only credit cards). This doesn’t mean you should borrow money that you don’t need. But if taking on a new type of loan makes sense within your broader financial plan, know that it might also benefit your credit over the long term.
6) Check Your Credit Report Regularly
You’re entitled by federal law to a free annual credit report from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion. When you check your report, keep an eye out for anything amiss, such as incorrect account details, overlooked past-due accounts, and evidence of fraud or identity theft. Consider checking one report every four months to keep regular tabs on your credit.
7) Dispute Any Errors You Find
If you do ever find incorrect information on your credit report, try to get the information corrected by filing a formal dispute with the credit reporting agency and pursuing the issue with the relevant creditor. Although the process might take some legwork, it can be worth it to make sure your credit history provides a fair and accurate picture of you as a borrower.
8) Keep Your Overall Finances in Shape
It can be easier to stay fit when you lead a healthy lifestyle. Similarly, it can be easier to maintain a good credit score when you keep other areas of your finances on track. To adopt a healthy financial lifestyle, consider following a budget, avoid getting overstretched by debt, and making sure you have an adequate emergency fund.
Saving for Holiday Spending
It can be easy to go overboard on holiday spending and start the new year feeling overwhelmed by credit card debt.
You’re not alone – 70% of Americans say they feel stressed about their expected holiday spending.1
So now is the perfect time to create your financial plan for the holidays! Follow these tips to save for purchases and avoid overspending during the holiday season.
Create your holiday budget
• Determine your gift recipients (remember, you don’t have to buy something for everyone!)
• Project how much you plan to spend on gifts – it might help to look at what you spent last year.
• Don’t forget to include other holiday expenses, like charitable donations, food, clothing, and travel.
Start saving now
• Designate a savings account for holiday spending.
• Calculate how much money you need to set aside each week to hit your spending goal in time for the holidays.
• Set up an automatic savings plan to transfer money from your checking account into this savings account.
Make a plan for paying off your debt
• If you use a credit card for holiday spending, make a plan to pay off the balance before any interest charges are assessed.
• If you know it will take longer to pay off your balance, add that amount to your everyday budget so there’s a clear plan in place.
Avoid overspending
• Track your spending and stick to your limits – once you reach the limit you set, stop!
• Curb your impulse spending by only buying what’s on your list.
• Look for coupons, codes, and deals – you may be able to save money just by keeping your eyes open!
• Identify how to trim travel expenses – can you save money by driving instead of flying?
• Consider gifts that either don’t cost money or cost less – think about a baked goods exchange with groups of friends or giving the gift of your time.
1 https://dadavidson.com/News/ArticleID/3761/D-A-Davidson-Survey-Reveals-Credit-Card-Debt-and-Financial-Stress-Are-on-The-Rise-This-Holiday-Season
Essential Cybersecurity Practices
In an age where digital threats are just a click away, understanding how to protect yourself online isn’t just advisable – it’s essential. This guide is your first step toward mastering the essentials of cybersecurity, providing you with the knowledge to shield your personal and financial data from the evolving dangers of the digital world.
The Foundations of Cyber Safety
Embarking on a journey towards comprehensive cyber safety starts with mastering a few fundamental practices. By adopting the four simple steps outlined below, you can significantly enhance your digital security. These measures are designed to fortify your identity and sensitive data against the myriad threats that lurk online. Each step serves as a pivotal building block in constructing a robust defense for your personal and professional digital environments.
Multifactor Authentication (MFA)
Also known as Two Factor Authentication, Two Step Factor Authentication, MFA, or 2FA, they all refer to the same concept: choosing to add an additional verification step when trusted websites and applications require confirmation that you are indeed the person you claim to be when logging into their system. MFA adds a critical layer of security by requiring two forms of identification before access is granted. This method significantly reduces the risk of unauthorized access, even if a password is compromised, because the likelihood that an attacker also has the secondary authentication factor is minimal.
Regular Software Updates
Keeping software up to date is not just about accessing new features but primarily about securing devices from vulnerabilities that hackers exploit. Updates often include patches for security flaws that, if left unaddressed, could allow hackers easy access to your system. We recommend taking it one step further by enabling automatic updates on your operating systems, which will ensure you’re protected as soon as these fixes are available.
Think Before You Click
Over 90% of successful cyberattacks start with a phishing email. These deceptive messages are designed to look legitimate to trick you into giving away sensitive information or downloading malware. Always inspect emails for unusual language or out-of-place requests and verify the authenticity of the message through other communication channels if possible.
Use Strong Passwords
A strong password acts as the first line of defense against unauthorized access. Use long, unique, and randomly generated passwords for different accounts to prevent cross-site breaches. Password managers such as LastPass or 1Password can help manage the complexity of storing and remembering different passwords, enhancing your overall security posture while maintaining convenience.
Vigilance Against Phishing Attacks
Phishing attacks remain one of the most common and pernicious threats in cybersecurity. These attacks often involve fraudsters masquerading as reputable entities to deceive individuals into providing sensitive data.
Identifying Phishing Attempts
Phishing emails or messages often contain suspicious links, urgent requests for information, and slight inconsistencies in email addresses, links, or formatting. Being aware of the possible threat, along with recognizing the signs is crucial in avoiding phishing.
Preventative Measures
Handle unexpected requests for personal information with skepticism. If you receive such a request, do not respond immediately. Instead, verify the sender by contacting the organization through official channels, such as their verified contact number or email address found on their official website.
Education and Training
Educate yourself about the latest phishing tactics through online resources, safety courses, or webinars. Staying updated on new phishing strategies and learning practical tips can enhance your ability to protect your personal data.
Use of Technology
Employ reliable email filtering tools that can screen out suspicious emails. These filters can significantly reduce the number of phishing attempts that reach your inbox, adding an essential layer of security.
By proactively enhancing your knowledge, understanding the basics, and implementing these strategies, you can significantly lower your risk of falling victim to cyber attacks.
Financial Shutdown
Did the recent 35-day partial government shutdown affect you or someone you know? It’s quite possible, considering it forced 800,000 federal workers to miss paychecks and hurt many small businesses. And since the three-week spending bill expires soon, there could be even more financial repercussions.
These recent circumstances certainly give reason to pause and wonder: are you prepared for a financial shutdown in your life? If that question feels too broad, what about this one: if you were in a serious accident and had to miss work, how long would your current financial situation carry you? 35 days? 6 months?
This is about more than just creating an emergency fund – though you should, since it’s widely touted 40% of Americans can’t cover a $400 emergency. And it’s not just about having proper insurance coverage, though that’s certainly important, too. The bigger issue is thoughtfully creating a financial plan and knowing where to turn if the bottom falls out.
As a plan sponsor, you might feel the pieces in your plan are well-aligned. That’s positive news! But can the same be said for your employees? If they can’t currently address a $400 bill, how would they handle a total shutdown if it occurred? You can help prepare your team by proactively providing education and wellness opportunities, offering useful resources that speak to real situations, and taking the fear out of financial conversations.
Employees don’t get off the hook that easily, though – everyone is ultimately responsible for themselves. Consider the last time you gave yourself a financial checkup. Start with a budget you’ll actually follow, build up your emergency fund, and pay off debt. Then push deeper – ask for help to balance college funding, utilize a health savings account, max out your retirement account options, and optimize tax strategies.
The Shepherd Financial team is always only a phone call away. Whether you’re currently in a financial crisis or want to create a plan to see you through one, we want to help.
But that’s not typical of the majority of America.
No, most Americans have regret about past financial decisions, are embarrassed about their current financial situation, and worry about their financial future. You certainly wouldn’t know it to look at them. Social media perpetuates the myth that all is well, but consider these scenarios:
What you see: A couple strolling through a perfectly-filtered Italian vista.
Reality: A non-budgeted Italian vacation adding to a mountain of credit card debt.
What you see: A sweet fall montage of the family, including a blooper picture where the dog pokes his head out of a pile of leaves.
Reality: A stressed-out couple that doesn’t know how to pay for their kids’ college educations, fund their own retirements, or care for their parents in the coming years.
What you see: A series of self-affirmations suggesting the world is an oyster and positivity is the greatest force of nature.
Reality: A 24-year-old who has no ability to pay off their student loans or get off their parents’ insurance in the foreseeable future.
Reality rarely matches the highlight reel we see online. As we head toward Halloween, I’d urge you to consider taking off the mask and removing your own financial filters. Have you admitted the struggle is real? Is the cost of transparency greater than the actual cost of your financial burden? It’s difficult to get support if people aren’t aware of your real circumstances.
Prioritizing Financial Wellness
We are currently faced with a financial epidemic: many employees are on unstable footing due to debt challenges and a lack of emergency savings; others abruptly find themselves responsible for both their aging parents and dependent children. There’s no doubt about it – many employees are financially stressed.
These financial burdens can have negative effects at home and in the workplace, impacting health, relationships, and productivity. As an employer, this should concern you – aside from the possible adverse bearing on your company’s bottom line, it’s also discouraging to know financial stress can have the power to derail top employees.
In fact, 45% of employees say financial matters cause them the most stress in their lives. We believe it’s essential to closely and honestly examine the financial wellness programs currently in place within your company – are they adequately addressing your employees’ needs? Are they producing the behavioral changes necessary to improve employee well-being? If they’re not, consider the following:
Problem: More than a quarter of employees are using credit cards to pay for monthly necessities because they can’t afford them otherwise – and it’s an issue across all income levels.
Suggested courses of action: Host a budgeting and debt management course to help employees understand where their money is coming from, as well as where it’s going. Teach employees how to monitor their credit scores, emphasizing the power of compound interest and how it can either work for or against them.
Problem: Among employees with student loans, a large percentage indicate these are having a moderate to significant impact on their ability to meet other financial goals.
Suggested courses of action: Provide resources to educate employees about student loans and possible payment plans. Offer opportunities to learn about college savings plans to help ease future student loan burdens. Implement a student loan repayment benefit as part of your overall benefits package.
Problem: 47% of employees have less than $50,000 saved for retirement.
Suggested courses of action: Participants must understand the importance of starting early, how to take advantage of the company match, and what kind of gap they face between what’s saved and their retirement-ready futures. Make sure you’re providing sufficient education about your company’s retirement plan, how to enroll, your recordkeeper and their website, and where they can go with any kind of financial questions.
The Shepherd Financial team specializes in customized financial wellness programming, so we’d love to have a conversation about how we can improve your employees’ well-being. Connect with us today at 844.975.4015 or shepfinteam@shepherdfin.com.
Source: pwc, Employee Financial Wellness Survey, 4.16