Some of last year’s many financial events will continue to impact our personal finances in 2014. Anthony A. Saccaro, ChFC, was invited to appear on KCAL9 News in order to provide insight into understanding how these events may affect Americans and what personal changes could be made in order to limit any negative repercussions. He talked about getting caught up in the market hype, locking in variable interest rates, keeping track of tax deductions and credits, and reliably saving for the future.
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STUDIO CITY (KCAL9) — Anthony Saccaro, president of Providence Financial & Insurance Services, stopped by KCAL9 Thursday to give tips to keep financial resolutions on track throughout the New Year.
Here are the tips:
Don’t get caught up in market “hype” – invest according to your risk tolerance
- Markets had an impressive year, but while we marvel at the record highs, let’s remember the lessons of history.
- The drop of 2008 was only months after markets experienced record gains, and many Americans lost considerable portions of their life savings in the downturn that followed.
- Evaluate how much risk you are willing to take on in order to capitalize on market upsides but protect yourself from a potential downturn. Those who are retired or closer to retirement have less time to make up for any major losses.
Lock in any variable interest rates.
- With the Fed starting to taper its bond-buying program, interest rates could increase in 2014.
- If you have any loans that have a variable interest rate, make it a goal this year to lock those in. While you’re at it, create a plan to pay down debt. If you don’t have debt, you don’t have to worry about what the interest rate is for lending.
- The money you pay in interest could go to better uses, like saving for retirement.
Keep track of tax deductions and credits.
- Because of new federal and state taxes that came into effect in 2013, California now has the country’s highest income tax rate – the highest income earners could pay as much as 53.8 percent in state and federal income taxes.
- Taxes have also gone up for average earners in the form of higher payroll taxes, and anyone who doesn’t have health insurance in 2014 could face tax penalties under Obamacare.
- While paying taxes is part of our patriotic duty, don’t pay more than necessary.
- Resolve to stay extremely organized and maintain quality records. Keep track of deductions and credits all year that could help lower your tax bill when it’s time to file.
Save for your future – reliably.
- Pensions here in California and across the nation are underfunded and in crisis.
- Whether public or private, it’s become clear that you can’t solely rely on your pension for retirement, and that saving for retirement is your responsibility.
- No matter your age, put money away each month into a retirement plan. As you move closer to retirement, be sure to diversify your savings with the goal of lessening your risk.
- Something to remember: work with a financial professional who specializes in your needs and stage of life. If you are on the brink of retiring, you might want to seek out a transition specialist.
- If you are new to the workforce, look for an adviser who can help you develop an investment plan and start growing your savings. Working with the right professional will make sure that your current and long-term objectives are properly addressed.