Austin Wealth Management

10/11/2024

🎧 New Podcast Episode: Understanding Medicare Enrollment & Planning 🏥

Medicare can be overwhelming—especially with all the marketing materials that hit your mailbox when you turn 65!

Additionally, several recent issues with Medicare Advantage (MA) plans have raised concerns among enrollees and policymakers.

In our latest podcast, Manisha Gupta, CFP® talks with Medicare expert Dana Lasman to break down the complexities and help you make sense of your options.

In this episode, Dana covers:

📌 Medicare eligibility and how to enroll
📌 Unbiased resources to evaluate your Medicare choices
📌 The different parts of Medicare – A, B, C, D (and even N!)
📌 Original Medicare vs. Medicare Advantage: Which is best for you?
📌 Understanding medical expenses—premiums, co-pays, deductibles, and max out-of-pocket costs.

🔗 Listen now: https://austinwealthmgmt.com/podcast/medicare-enrollment-options/

Medicare planning is complex, and people often receive a confusing flurry of insurance marketing material when they turn 65. In today's episode, we talk to Medi

09/27/2024

If you're like many parents who have diligently saved for your child’s education using a 529 plan, you might be wondering what happens to any leftover funds after the tuition bills are paid.

The good news: thanks to Congress and the SECURE 2.0 Act, unused 529 funds can now be rolled over into a Roth IRA for your beneficiary! 🎓➡️💼

Here are a few key rules to keep in mind:

✅ The 529 account must be open for at least 15 years.

✅ The Roth IRA must be in the name of the 529 beneficiary.

✅ Rollovers are subject to annual and lifetime limits, so planning is key.

Though it’s a great new option, navigating the rules can be tricky because there are also income requirements and annual rollover limits. But over the long term, this recent change represents a significant opportunity to enhance both education and retirement savings strategies for your adult children.

Read more tips in our blog by David Lowe, CFP® and reach out to our team for advice on making the most of this opportunity. ⬇️

A 529 account can be a great tool for saving for college. Investment growth is tax-free, and so are the withdrawals (if used for qualifying education expenses).

09/13/2024

📉 Dealing with Market Dips 📈

Investors get paid for taking risks, but when the market dips—like the recent sudden 7% drop between July and August—it can be unsettling.

These dips are inevitable, but predicting their timing and severity is nearly impossible. Instead of trying to outsmart the market, a more reliable approach is to stay the course and invest consistently over the long term.

Whether you're buying into a dip or at an all-time high, history shows that it's the time you stay invested that matters most!

For those with excess cash to invest, a gradual approach can help reduce risk while taking advantage of opportunities to buy at lower prices.

The key takeaway? Avoid reacting emotionally during market downturns, and remember that long-term commitment often leads to better outcomes.

Want more insights on how to handle market dips and optimize your investment strategy? Read our full blog post from Kevin X. Smith, CFA:

Employees get paid for doing work. Investors get paid for taking risk. Risk is the chance of losing value between the time of purchase and sale. We experienc

09/05/2024

🎙️ New Podcast Episode Alert! 🎙️

can be one of the most complicated parts of financial planning, especially when a big bonus, company stock vesting, or a profitable business year leaves you facing an unexpected tax bill.

In our latest podcast, we sit down with Joe Pachuca, CPA to talk about how proactive can help you avoid those unwelcome surprises from the IRS. Joe shared his insights about:

💼 Common reasons clients may face large tax bills

📅 The importance of proactive tax planning

💡 How estimated taxes work and when they’re due

💰 Deciding between paying taxes immediately or reserving funds in a high-yield savings account; and

🧮 How CPAs and qualified tax preparers help you calculate and anticipate estimated taxes.

https://austinwealthmgmt.com/podcast/ep-38-avoiding-surprise-tax-bills-august-2024/

Listen on Apple Podcasts, Spotify, or your favorite podcast player! Search for the Can't Take It With You podcast, and add it to your favorites.🎧

It's great to earn a big bonus, receive a vesting of company stock, or achieve a profitable business year. Unfortunately, without good tax planning, extra incom

05/30/2024

📈 Using Dollar-Cost Averaging to Reduce Risk 📉

▶ Client: "I am sitting on this pile of cash in my account but I don't know the best time to put it into the market." 💰 😕 ⁉

Whether from the sale of a home or business, vested stock, an inheritance, or just disciplined savings, deciding how to move a lump sum of cash into the market can be daunting due to fluctuations -- but also behavioral psychology.

Enter dollar-cost averaging (DCA), a strategy that we use to help manage risk by spreading over time.

Here are some key benefits:

✴ Reduce timing risk: DCA spreads investments to avoid the risk of investing a lump sum right before a downturn. You invest a fixed amount at regular intervals, continuously adding to your portfolio.

✴ Take advantage of unpredictable market dips: Pre-scheduled investments mean buying more shares when prices drop periodically, boosting potential returns. We also use a "trigger schedule" to move additional cash into investment accounts during market declines to capitalize on lower prices.

✴ Encourage consistent investing: DCA offers a structured approach, eliminating the pressure of market timing and removing emotional biases that may discourage "getting into" the market.

For more about how we choose the right DCA model for clients and their situation, read our latest from Kevin X. Smith, CFA:

https://austinwealthmgmt.com/using-dollar-cost-averaging-to-reduce-risk/

Investing a large sum of money can be daunting, especially with the uncertainty of market fluctuations. Enter dollar-cost averaging (DCA), a strategy designed t

05/17/2024

If you're retired and considering charitable or philanthropic donations this year, there are strategic ways to support charitable causes while limiting the tax hit to your IRAs. One of these is a Qualified Charitable Distribution (QCD).

QCDs can help you:

☑ Avoid high tax burdens: Once you hit your 70s, Required Minimum Distributions (RMDs) from pre-tax IRAs become mandatory and are taxed as ordinary income. Amounts given via QCDs are excluded from your taxable income.

☑ Donate up to $105,000 directly from your IRA to a qualified charity -- or multiple charities! Qualified religious organizations, educational and nonprofit groups, and health care and research foundations can all accept QCDs.

☑ Lower your Modified Adjusted Gross Income (MAGI), potentially reducing Medicare premiums and taxes on Social Security benefits. This is beneficial even if you don’t itemize deductions.

Learn more here, and see our case study showing significant tax savings for a couple with $1 million in pre-tax IRAs:

https://austinwealthmgmt.com/qualified-charitable-distribution-philanthropic-impact-meets-tax-savings/

Good news: Through hard work, savings and diligent investing, you retired with $1 million or more in pre-tax IRA funds! Bad news: The government wants its pi

05/06/2024

TFW when it's a perfect night on the Forty Acres and the Texas Exes names you one of the fastest-growing Longhorn businesses in the world, as part of the 2024 ! 🙌⭐️

This prestigious list identifies and celebrates the fastest-growing businesses founded, owned, or led by alumni of The University of Texas at Austin.🤘🏼

We're especially honored that Austin Wealth Management is the only financial planning and advising firm selected for the this year. This is a testament to our fantastic, talented team -- and our equally amazing client family.

For more information on the Longhorn 100 and to view the complete 2024 rankings, visit https://www.texasexes.org/longhorn100/2024

02/28/2024

A frequent question we answer in conversations with clients is how to help kids learn to spend and save responsibly. One way to do this is to introduce teenagers to smart credit card use early on.

Here are strategies from David Lowe, CFP® that you can implement with your teen:

💳 Start Early: Teens under 18 can't open a credit card in their name but can be added as authorized users on a parent's account. This practice, starting as young as 13, lays the foundation for building a healthy credit history.

⏳ Consistent Use and Payment: Encourage your teen to use the card monthly and pay off the balance in full. This habit not only cultivates discipline but also ensures a solid credit score from a young age.

🛣 Graduation to Independence: Upon turning 18, guide them in selecting their first credit card, focusing on student-friendly options that cater to new users. Resources like NerdWallet offer a wealth of information to make informed choices.

🏦 Beyond the Card: Consider taking your teen to sign up at a local credit union or banking institution for a very small student loan — even if you don’t need it! This strategy boosts their credit score and teaches them about different financial tools and investments.

For more tips, check out our blog post:
https://austinwealthmgmt.com/helping-your-teenagers-build-credit/

Parents often have questions about the best ways to help their kids develop wise money habits. Common questions relate to when and how to start teenagers down t

01/24/2024

Attending college isn't just a financial undertaking 👩🏽‍🎓💲. We frequently work with our clients as the young adults in their lives go through the college application process, which is becoming increasingly competitive and complex.

College consultant Marina Glava and AWM partner Derek Ripp, CFP® recently sat down to discuss the key strategies Marina recommends for navigating college admissions:

Listen 🎤
https://austinwealthmgmt.com/podcast/personalizing-the-college-preparation-process/

Marina shares how students can make the most of their high school years to identify their academic interests, including:

📝 Strategies for navigating the new "test optional" landscape

🎭 The level of importance that admissions officials give to extracurricular involvement

🎯 Determining high school students' skills and interests (and how to align those with a plan of study)

📝 Key actions that high school students should take in their freshman through junior years

⚒ How "passion projects" can make a student more appealing to the most selective colleges

Click below to listen ⬇

College consultant Marina Glava discusses key strategies for the increasingly competitive world of college admissions. Marina also shares how students can make

01/17/2024

🚀 T-Bill & Chill? A Nostalgic Journey & Today's Reality 🚀

Let's time travel back to 1981! 🔙 Imagine investing $2M in a 30-year Treasury Bond with a 15% yield: that's $300,000 annually with minimal risk. This was the epitome of sitting back and 'living off the interest'.

But, fast forward to 2023, and things look different, according to AWM partner Kevin X. Smith, CFA. Read our latest blog by to find out how:

https://austinwealthmgmt.com/t-bill-chill/

📉 Today's T-Bills? Not as chill. With 5% yields, it doesn't quite match the golden days of 15%.

While safe, it's not enough for most investors' long-term goals, especially with inflation in play. Our 1981 selves wouldn't recognize this change; they were busy adjusting TV antennas pre-Netflix era!

🧮 The Math Behind Today's T-Bills:

▶ Real Return: It's all about the nominal return minus inflation. A 5% T-Bill with 5% inflation? That's a zero real return. You're not getting ahead, just maintaining.

▶For retirees: Your T-Bill interest rate needs to beat inflation for sustainability beyond 20 years.

▶Accumulators: Reinvesting interest helps, but inflation still erodes purchasing power.

💡 Alternatives? TIPS (Inflation Protected Securities) offer a real return of almost 2.5%, even with high inflation. Corporate bonds might yield 7-10%, adjusting for credit risk. But these options come with their own risks.

🤔 The Bottom Line: Few can truly "T-Bill & Chill" like in 1981. Higher potential real returns often require embracing riskier assets like stocks and real estate.

Hop in the time machine with me. You could have bought a 30 year Treasury Bond in 1981 yielding 15% annual income! That income was backed by the taxing authorit

12/07/2023

Happy holidays to your retirement accounts from the U.S. government! 🌟 🎁

The IRS has recently updated the contribution limits for various investment accounts for 2024. Here's a quick overview:

✅ 401(k), 403(b), most 457 plans, and Thrift Savings Plan: Employee contribution limit is now $23,000, with a catch-up contribution of $7,500 for those 50+, making the total possible contribution $30,500.

✅ IRA (Traditional and Roth): Contribution limit is $7,000, with a catch-up limit of $1,000 for 50+, totaling $8,000.

✅ SIMPLE IRA and 401(k): Contribution limit is $16,000, with a $3,500 catch-up for 50+, totaling $19,500.

✅ Health Savings Account (HSA) [aka, the superior triple tax advantaged account): $4,150 for singles and $8,300 for families, with an additional $1,000 catch-up for those 55+.

Also, keep an eye on the new phase-out ranges for IRA deductibility and Roth IRA eligibility, as well as the positive changes in the SECURE Act 2.0 for SIMPLE IRA plans.

For detailed breakdowns, tips to help with your paycheck calculations, and more insights, check out our blog post by David Lowe, CFP®:

➡ https://austinwealthmgmt.com/2024-retirement-plan-limit-changes/

The IRS recently announced that the maximum contribution for various investment accounts has increased for 2024. 401(k), 403(b), most 457 plans, Thrift Savin