Your Social Security retirement benefit may be taxable?

Did you know that you might have to pay federal income tax on your Social Security retirement benefit? If the only income you had during the year was Social Security income, then your benefit usually isn't taxable. However, if you earned other income during the year or had substantial investment income, then you might have to pay federal income tax on part of your benefit if your total income exceeds a certain base amount.

Is your benefit Taxable?
If you have earned income or investment income over the base amount, you can use certain strategies to minimize (or even eliminate) the amount of tax you have to pay on your Social Security benefit. These strategies include changing your filing status and reducing your modified adjusted gross income (MAGI). However, before using these strategies consult your tax advisor for information on your individual situation.

Determining whether your Social Security retirement benefit is taxable
Before you consider ways to minimize taxation of your Social Security retirement benefit, you must determine whether your benefit is taxable at all. Your benefit is taxable if one-half of your Social Security benefit plus your MAGI exceeds the base amount for your filing status.

Your MAGI includes taxable pensions, wages, interest, dividends, and other types of taxable income. It also includes tax-exempt interest income plus normally excludable income such as interest from Series EE savings bonds (which may also be called Patriot bonds) and the foreign earned income of U.S. citizens and residents.

Your filing status
When you fill out your federal income tax return, you choose your filing status based on your marital status. You can file in one of five ways: single, married filing jointly, married filing separately, unmarried head of household, or qualifying widow or widower (with a dependent child). For Social Security purposes, your filing status is important because the amount of income you can have before your benefit is taxable depends partly on your filing status.

The base amount for your filing status
How much income you can have before your Social Security benefit becomes taxable is known as the base amount. The base amount is determined by law and is not adjusted annually for inflation. The base amount that you use to determine the taxability of your Social Security benefit depends upon your filing status. Your base amount is:

• $25,000 if you file as single, head of household, or qualifying widow(er)
• $25,000 if you file as married filing separately and you lived apart from your spouse for all of the tax year
• $32,000 if you file as married filing jointly
• $0 if you file as married filing separately and you lived with your spouse at any time during the tax year

How much Social Security retirement benefit you received.
At the end of each tax year, the Social Security Administration (SSA) will send you a form (SSA-1099 or RRB-1099) showing the amount of benefit you received during the year. You can use this to figure out whether any of your benefit will be taxable.

Adding it all up
You can use Worksheet A in IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits to calculate whether your total income (as defined above) exceeds the base amount for your filing status. This worksheet has the following steps:

• A. Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full amount of any lump-sum benefit payments received in the current tax year, for the current tax year and earlier years. (If you received more than one form, combine the amounts from box 5 and enter the total.)
• Note: If the amount on line A is zero or less, stop here; none of your benefits are taxable this year.
• B. Enter one-half of the amount on line A.
• C. Enter your taxable pensions, wages, interest, dividends, and other taxable income.
• D. Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income.
• E. Add lines B, C, and D.
• Note: Compare the amount on line E to your base amount for your filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You need to complete Worksheet 1.

How much of your benefit is taxable?
What percentage of your retirement benefit is taxable?
​Even if you determine that your Social Security retirement benefit is taxable, you won't have to pay tax on your whole benefit. Either up to 50 percent or up to 85 percent of your benefit will be taxable, depending on your filing status and whether the total of your MAGI and one-half of your Social Security benefit exceeds a certain limit.

What is your modified adjusted gross income?
On IRS Form 1040, adjusted gross income (AGI) is your gross income minus certain "above-the-line" deductions allowed by law. These include:

• Certain business expenses of reservists, performing artists, and fee-basis government officials
• IRA deduction
• Student loan interest deduction
• Health savings account deduction
• Deductible part of self-employment tax
• Self-employed health insurance deduction
• Self-employed SEP, SIMPLE, and qualified plans
• Penalty on early withdrawal of savings
• Domestic production activities deduction

Your MAGI is your AGI, minus (or not including) the taxable amount of your Social Security benefits, plus income that is normally not included in AGI (such as foreign earned income and income from qualified U.S. savings bonds).When up to 50 percent of your retirement benefit will be taxable

When Up to 50 percent of your retirement benefit will be taxable
if the total of one-half of your benefits and your MAGI is more than the following base amount for your filing status:

• $25,000 if you're filing as single, head of household, or qualifying widow(er)
• $25,000 if you're filing as married filing separately and you lived apart from your spouse for the whole tax year
• $32,000 if you're filing as married filing jointly

When up to 85 percent of your benefit will be taxable
Up to 85 percent of your retirement benefit will be taxable if one-half of your Social Security benefit plus your MAGI exceeds the following base amount for your filing status:

• $34,000 if you're filing as single, head of household, or qualifying widow(er)
• $34,000 if you're filing as married filing separately and you lived apart from your spouse for the whole tax year
• $44,000 if you're filing as married filing jointly
• $0 if you're filing as married filing separately and you lived with your spouse at any time during the tax year

Calculating your taxable benefits
Because the calculation is complex, you need to use a worksheet to compute your taxable benefit. Several worksheets are available from the IRS. What worksheet you use depends upon your situation. In general, you can use the worksheet available in the instructions for IRS Form 1040 (or 1040A) or Worksheet 1 in Publication 915. However, you must use a worksheet specified by the IRS if any of the following situations apply to you:

1. You contributed to a traditional individual retirement arrangement (IRA) and your IRA deduction is limited because you or your spouse is covered by a retirement plan at work. In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits.
2. Situation (1) doesn't apply and you take an exclusion for interest from qualified U.S. savings bonds (IRS Form 8815), for adoption benefits (IRS Form 8839), for foreign earned income or housing (IRS Form 2555 or IRS Form 2555-EZ), or for income earned in American Samoa (IRS Form 4563) or Puerto Rico by bona fide residents. In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits.
3. You received a lump-sum payment for an earlier year. In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915.

Tax considerations
You may be able to deduct the amount of Social Security retirement benefit that was taxed from your state income tax return.

Check with your tax advisor or state tax official to find out if your state allows this deduction.

​Questions & Answers
If your child receives Social Security benefits but the check is made out to you due to his or her age, do you need to include the amount of benefit your child receives in the calculation to determine whether your own Social Security benefit is taxable?
No. Your child's benefit doesn't affect whether your benefit is taxable, even if the check is made out in your name.

When will you receive your annual statement from the Social Security Administration showing how much benefit you were paid during the year?
You should receive your annual statement by January 31 of the year following the year of benefit payments.

If you know that you're going to owe income tax on your Social Security benefit, can you have that tax withheld?
Yes. You can fill out IRS Form W-4V, Voluntary Withholding Request, and choose to withhold a specific percentage of your total benefit payment. If part of your benefit is taxable, you may have to make estimated tax payments or request additional withholding from other income next year.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This article was prepared by Broadridge.
LPL Tracking #1-276503

There are out-of-pockets, limitations and gaps that Medicare doesn’t cover

Medicare is a federal health insurance program for individuals aged 65 or older and certain younger people with disabilities.

​And despite being a widely used program, there are several misconceptions surrounding Medicare, one of the most pervasive being that it will cover all healthcare costs.

Myth or Fact: Medicare Will Cover All Health Care Costs
Medicare is a comprehensive health insurance program that covers a range of healthcare services, including hospital stays, doctor visits, preventive care, and prescription drugs. However, it does not cover all healthcare costs, and there are several out-of-pocket expenses that individuals may be responsible for.

One of the most significant gaps in Medicare coverage is the lack of coverage for long-term care. Long-term care refers to the ongoing assistance with daily activities such as eating, bathing, and dressing, which is typically provided in nursing homes or assisted living facilities. Medicare will only cover a limited amount of skilled nursing care following a hospital stay, and only under certain conditions.

Another area where Medicare coverage falls short is with dental, vision, and hearing services. While some preventive services are covered, such as glaucoma tests and hearing exams, most routine dental, vision, and hearing care is not covered by Medicare.

Furthermore, there are deductibles, copayments, and coinsurance that individuals are responsible for under Medicare. These costs can add up quickly, especially for individuals who require frequent medical care. While there are several programs available to help individuals with low incomes cover some of these costs, such as Medicaid and Medicare Savings Programs, many individuals still face significant out-of-pocket expenses.

Medicare’s Limitations
There are also limitations on the types of healthcare providers and services that are covered under Medicare. For example, individuals may be limited to seeing healthcare providers who accept Medicare and may not have access to all types of medical procedures or technologies.

Despite the limitations of Medicare coverage, it is still a critical program that provides essential healthcare services to millions of Americans. It is also important to note that there are additional insurance options available that can help fill some of the gaps in Medicare coverage.

One option is a Medicare Supplement plan, also known as Medigap. These plans are sold by private insurance companies and can help cover some of the out-of-pocket costs associated with Medicare, such as deductibles, copayments, and coinsurance.

Another option is a Medicare Advantage plan, which is an all-in-one alternative to original Medicare. These plans are also sold by private insurance companies and often include additional benefits, such as dental, vision, and hearing care, that are not covered by original Medicare. However, Medicare Advantage plans may come with certain limitations, such as a restricted network of healthcare providers.

Make Sure You Plan
Medicare is a critical program that provides essential healthcare services to millions of Americans. However, it is a myth that Medicare will cover all healthcare costs.

While there are insurance options available that can help fill some of these gaps, individuals should be aware of the limitations of Medicare coverage and plan accordingly to ensure they have adequate healthcare coverage.

The Medicare website (medicare.gov) can be a valuable resource. Every year, Medicare also mails Medicare & You to beneficiaries and makes this fact-filled publication available online. You may want to review it to make sure you have an accurate understanding of the Medicare program.
Your financial professional can help you plan appropriately for your needs.
 

​Important Disclosures
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
This article was prepared by FMeX.
LPL Tracking #1-05361628

​When discussing multigenerational wealth it is common to come across proverbs that acknowledge the fact that generational wealth typically won’t make it past the third generation. In the United States the saying goes, “from shirtsleeves to shirtsleeves in three generations.” [i] In China it is said, “rags to rags in three generations.” [ii]
 
Generational wealth encompasses financial assets with a monetary value. These include investments, real estate, land, cash, collectibles, etc., that are passed from generation to generation.
 
Why does wealth seem to disappear within three generations? Several reasons include:

• Mismanagement of wealth leading to an inheritance tax burden
• A growing family
• Spendthrifts
• Lack of financial education for those who are receiving the inheritance

 
If you have concerns about assets being passed down, please view our checklist and determine where you stand.
 
☐  Do you participate in effective gifting?
Using the annual gift exclusion and lifetime exemption is an effective strategy for passing on wealth to beneficiaries without being subject to significant tax responsibilities. The gift tax exclusion for 2023 is $17,000. That means both parents are allowed to give someone up to $17,000 per year ($34,000 per person), to as many people as they want. Should any of their gifts happen to exceed the gift exclusion limit, the amount in excess will go toward the lifetime exclusion amount which is currently $12.92 million in 2023. [iii]
 
☐  Are you familiar with how trusts work to preserve generational wealth?
Trusts are legal entities that preserve wealth and allow the issuer of the trust to distribute the wealth as they see fit. They mitigate the risk of beneficiaries losing assets through lawsuits, divorce, or unexpected occurrences, and trusts also provide certain tax incentives. They can help you avoid probate, provide for a disabled beneficiary, establish a spousal trust, and other benefits. There are a variety of options to choose from and it is encouraged that you consult a financial professional to help you determine what works best for you and your family. Some of these trusts include:

• Living trusts
• Charitable and Charitable Remainder trusts
• Testamentary trusts
• Dynasty trust
• Spendthrift trust
• Irrevocable trust

 
☐  Are you teaching financial skills to the children who will inherit your wealth?
It is critical to teach children the value of saving and how to invest. This can help to preserve the wealth they will one day inherit. It is a common theme that beneficiaries who inherit wealth will be tempted to spend it. However, this may stem from the fact that they don’t understand how to make the money work for them. Parents can educate their children and grandchildren on investing in financial instruments like stocks, bonds, CDs, annuities, and real estate interests. They can walk them through preparing a budget, provide them with financial literacy books, and even consider granting them a small sum of money to practice money management (while the parents monitors their progress).
 
☐  Do you know how taxes affect generational wealth as it is passed down?
Depending on the amount of assets distributed to beneficiaries, and the manner in which they are passed down, the act of giving may trigger a gift tax. There are several methods of giving that can help to lessen the tax burden including:

• Annual gifting
• Lifetime gift exclusion
• Charitable giving
• Taking capital losses to offset capital gains
• Deduct medical expenses that exceed 7.5% of your adjusted gross income
• Tax credits can be more beneficial than tax deductions as they lower your tax bill dollar for dollar as opposed to reducing your taxable income, like the plug-in electric vehicle credit and residential energy efficient property credit [iv]

 
☐  Do your beneficiaries understand the value of compounding wealth?
The earlier they begin investing money, the more beneficial the compounding interest will work on their behalf. The idea is long-term growth. To take full advantage of compounding wealth you have to be patient. A few common ways of investing where your interest compounds over time include:

• Dividend stocks
• High-yield savings accounts
• Bonds and bond funds
• Certificates of deposit (CDs)
• Real estate investment trusts (REITs)
• Simple interest annuities

 
It is highly encouraged that you enlist the help of a financial professional to learn which investments would be appropriate for you and your family’s generational wealth distribution goals.
 
☐  Is there a family member you want to help with education expenses?
A popular way to transfer wealth is by paying for a family member or friend’s education. With this strategy, the tuition is paid directly to the institution, which permits the giver to be exempt from gift taxes. Money used for books, room and board, and other educational expenses is not tax exempt.
 
If the preservation of wealth over multiple generations is a plan that you are interested in exploring, consider consulting a financial professional who can help you design a strategy to pursue your financial goals.
 
Important Disclosures
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 investment(s) may be appropriate for you, consult your financial professional prior to investing.
 
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.
 
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
 
An increase in interest rates may cause the price of bonds and bond mutual funds to decline.
 
CD’s are FDIC Insured and offer a fixed rate of return if held to maturity.
 
Non-traded Real Estate Investment Trusts (REITs) invest in commercial real estate or real estate related debt, but unlike exchange-traded REITs are not listed on a national securities exchange. Non-traded REITs differ from exchange-traded products with similar strategies, and can carry significant risk that should be understood prior to investing. Significant risks include, but are not limited to: sector concentration, geographic, illiquidity, interest rate, change in governmental, tax, real estate, and zoning laws, and debt. Alternative investments, including REITs, may not be suitable for all investors, and the strategies employed in the management of alternative investments may accelerate the velocity of potential loss.
 
Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.
 
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
 
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
 
This article was prepared by LPL Marketing Solutions
 


[i] How to beat the third-generation curse (smu.edu.sg)

[ii] Why wealth lasts 3 generations ? - Entrepreneur Post

[iii] IRS bumps up estate-tax exclusion to $12.92 million for 2023 (cnbc.com)

[iv] 9 Best Ways to Lower Your Taxes - Experian
 
 
LPL Tracking # 1-05361300
 

Due to recent increases in the price of fuel, the IRS has increased the optional standard mileage rates for computing the deductible costs of operating an automobile for business purposes for 2023. However, the standard mileage rates for medical and moving expense purposes remain the same for 2023. The standard mileage rate for computing the deductible costs of operating an automobile for charitable purposes is set by statute and also remains unchanged.
For 2023, the standard mileage rates are as follows:

• Business use of auto: 65.5 cents per mile (up from 62.5 cents for the period July 1, 2022, to December 31, 2022*) may be deducted if an auto is used for business purposes. If you are an employee, your employer can reimburse you for your business travel expenses using the standard mileage rate. However, if you are an employee and your employer does not reimburse you for your business travel expenses, you cannot currently deduct your unreimbursed travel expenses as miscellaneous itemized deductions.
• Charitable use of auto: 14 cents per mile (the same as for 2022) may be deducted if an auto is used to provide services to a charitable organization if you itemize deductions on your income tax return. Your charitable deduction may be limited to certain percentages of your adjusted gross income, depending on the type of charity.
• Medical use of auto: 22 cents per mile (the same as for the period July 1, 2022, to December 31, 2022*) may be deducted if an auto is used to obtain medical care (or for other deductible medical reasons) if you itemize deductions on your income tax return. You can deduct only the part of your medical and dental expenses that exceeds 7.5% of the amount of your adjusted gross income.
• Moving expense use of auto: 22 cents per mile (the same as for the period July 1, 2022, to December 31, 2022*) may be deducted if an auto is used by a member of the Armed Forces on active duty to move, pursuant to a military order, to a permanent change of station (unless such expenses are reimbursed). The deduction for moving expenses is not currently available for other taxpayers.

*Last year, in a rare mid-year adjustment to the standard mileage rates, the IRS increased the rates for the second half of 2022.
 
This article was prepared by Broadridge.
LPL Tracking #1-05356623

​A Health Savings Account (HSA) is a type of savings account designed to help individuals and families save money on their health expenses and reduce their future tax bill. To be eligible for an HSA, you must be enrolled in a high-deductible health plan (HDHP), which is a type of health insurance that has a higher deductible but lower monthly premium.
An HSA offers several tax benefits, including tax-deductible contributions, tax-free investment growth, and tax-free withdrawals for eligible medical expenses.
The following are some of the key benefits of an HSA and how you can use it to help reduce your future tax bill.
Tax-Deductible Contributions
One of the primary tax benefits of an HSA is that contributions to the account are tax-deductible. This means that you can lower your tax bill by the amount you contribute to your HSA, up to the maximum contribution limit for the year.
For the tax year 2023, the maximum contribution limit for an individual is $3,850 and $7,750 for a family. If you are over the age of 55, you may also be eligible to make catch-up contributions of up to an additional $1,000 per year.
Tax-Free Investment Growth
Another benefit of an HSA is that any interest or investment growth in the account is tax-free. This means that you can grow your HSA balance without having to pay taxes on the investment earnings, which can help you build up your savings faster.
Tax-free Withdrawals for Eligible Medical Expenses
When you use the funds in your HSA to pay for eligible medical expenses, the withdrawals are tax-free. This includes expenses such as deductibles, copays, coinsurance, and certain prescription drugs. It is important to keep receipts and documentation of all medical expenses you pay for with your HSA, as you may need to provide proof if you are audited by the IRS.
In addition to the tax benefits, an HSA also provides other benefits, such as:

• Portability: An HSA is an individual account, so you own it and can take it with you from job to job.
• Flexibility: You can use the funds in your HSA for eligible medical expenses whenever you need them, regardless of the time of year.
• Cost savings: Using an HSA can help you save money on your health expenses, as you can use the funds in your HSA to pay for eligible medical expenses that your insurance does not cover.

To maximize the benefits of an HSA, it is important to plan ahead and be strategic in how you use your HSA. The following are some tips for utilizing your HSA to help reduce your future tax bill.
Make the Max Contribution to Your HSA
Each year, contribute the maximum amount allowed to your HSA to take advantage of the tax savings. Keep in mind that contributions must be made by the tax-filing deadline, which is usually April 15th of the following year (April 18th in 2023). If you are over the age of 55, you may also be eligible to make catch-up contributions of up to an additional $1,000 per year.
Invest the Funds in Your HSA
If you have a high-deductible health plan, you may have a large balance in your HSA, especially if you have been contributing to it for several years. Consider investing some or all of the funds in your HSA to take advantage of the tax-free investment growth. Many HSAs offer investment options such as mutual funds or ETFs, so you can choose the investment strategy that best fits your goals and risk profile.
Your Financial Professional Can Help
Utilizing a Health Savings Account (HSA) to help reduce your future tax bill is a smart and beneficial strategy for individuals and families. With:

• tax-deductible contributions,
• tax-free investment growth, and
• tax-free withdrawals for eligible medical expenses,

a HSA provides several tax benefits that can help you save money and work towards your financial goals. Talk to your financial professional for more guidance.
 
Important Disclosures
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 investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
Investing in mutual funds involves risk, including possible loss of principal.
An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.
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.
This article was prepared by FMeX.
LPL Tracking #1-05359893

The Old Age and Survivors Insurance (OASI) benefits, known as Social Security, pay retirement and survivors benefits through The Social Security Trust Fund. The U.S. Social Security Administration oversees this fund. Social Security (SS) taxes and other income are deposited into the trust fund accounts, and SS benefits payout from them. The only purpose for which these trust funds are used is to pay benefits and program administrative costs.
The Trust Fund’s Problem
The fund faces insolvency with fewer SS payroll taxes collected due to a declining workforce and longer life expectancy. With less collected, The Social Security Administration has been spending more on benefits than bringing in from payroll taxes.
Initially designed for retired workers and survivors, the program's funds depletion date is 2035. The Social Security Administration anticipates paying only 75% to 78% of benefits to retirees and beneficiaries at that time. The Social Security Administration continues to sell Treasury bonds to keep the fund afloat. However, the fund will significantly deplete in the next twelve years. Some proposed solutions from the fund's board of trustees include:

• Increasing payroll taxes to help fund the Social Security program.
• Reducing or eliminating annual increases in Social Security payments.
• Increasing the full retirement age from 67 to 69.
• Increasing the required number of years participants must work before receiving Social Security retirement benefits.

The 2023 OASDI tax rate is 6.2% each for employers and employees; self-employed individuals pay the full 12.8% themselves. The tax is collected on wages up to $160,200.
A poll conducted by Gallup found that 38 percent of working U.S. adults thought Social Security would be a significant source of their income. Today, 57 percent of retirees rely on Social Security as their primary source of income. Here are additional strategies to help you get the most out of your Social Security Retirement Benefits:

• Work 35 or more years and earn a higher salary year after year.
• Do not claim Social Security retirement benefits until your full retirement age.
• Use a Social Security spousal benefits strategy.
• Maximize Social Security survivor benefits and claim survivor benefits for your children.
• Estimate your longevity before taking Social Security Retirement benefits.

Those retiring after 2035 must rely more on other retirement savings and less on their Social Security retirement benefits. Here are some ways to help you save for retirement:

• Participate in your employer's retirement savings plan and contribute enough to receive the match.
• Automate your retirement savings contributions to increase yearly to maximize your savings.
• Contribute to a Traditional or Roth IRA and invest in stocks, bonds, real estate, mutual funds, and other strategies in addition to your employer’s retirement savings plan.
• Work with a financial professional to help you plan for retirement and evaluate your current retirement savings, goals, and timeline.

Whether Social Security retirement benefits are available at the current levels or not, planning for your future is essential.
Important Disclosures
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 investment(s) may be appropriate for you, consult your financial professional prior to investing.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Investments in real estate may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Other risks can include, but are not limited to, declines in the value of real estate, potential illiquidity, risks related to general and economic conditions, stage of development, and defaults by borrower.
Investing in mutual funds involves risk, including possible loss of principal.  The funds value will fluctuate with market conditions and may not achieve its investment objective. Upon redemption, the value of fund shares may be worth more or less than their original cost.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
LPL Tracking # 1-05359383
Sources:
https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.htm
https://www.ssa.gov/policy/trust-funds-summary.html
https://news.gallup.com/poll/350048/retirees-experience-differs-nonretirees-outlook.aspx
​

Everyone needs to have some level of financial literacy to help manage their finances. However, financial literacy becomes even more crucial when you're a business owner. You need to become familiar with common terminology and business finance principles to help you stay abreast of trends in a constantly changing market. Here are some concepts that financial literacy encompasses and why having financial literacy is crucial in business.
What is Financial Literacy?
At the broadest level, financial literacy is understanding and implementing various financial skills, including budgeting, investing, and personal financial management. These activities may also include creating contingency plans, forecasting, and understanding balance sheets or cash flow statements in the business context.
How Business Owners May Benefit from Financial Literacy
You are operating blindly without financial literacy and a solid grasp of your business's numbers. You may not know if the company is profitable, what areas you should focus on or improve, and what the prospects are for your company.
Create a Financial Plan
Your company should have, at a minimum, a balance sheet, an income statement, and a cash flow statement. These documents give a snapshot of your business's financial health and help you identify areas for improvement or impending future expenses. They help you create a financial plan for your business.
Your financial plan should include factors such as:

• Startup costs
• Annual and monthly operating expenses
• Projected revenues and monthly or annual targets
• Depreciation
• Overhead costs
• Personnel costs

After your financial needs are clear, you have a better idea of how much revenue you need to generate to work toward your goals.
Track Your Progress
Just as it is important to set up a financial plan and begin tracking cash flow and operating expenses, it is also important to regularly track your progress and ensure that you are hitting your financial targets. Some business owners review statements every week. Others do this monthly or quarterly. If you are not seeing the progress you hoped for, you can make changes before things go too far down the wrong path.
 
Manage Cash Carefully
Cash is one of the most common vulnerabilities for any small business. Cash on hand accounts for 15% of all embezzled funds, and cash theft is among the toughest types of theft to trace.1 Using software to help log and track cash transactions and employing cash control measures may help secure these funds from theft while you are not paying attention.
When it comes to business, profit, and cash flow are key. Without some financial literacy to help you evaluate the many economic measures you may track; you may not be able to make the well-informed decisions necessary to keep your business moving forward. Consulting with a financial professional may help guide your business in a positive direction regarding financial decisions.
 
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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Footnotes
1 56 Relevant Employee Theft Statistics: 2023 Data on Perpetrators & Prevention
https://financesonline.com/employee-theft-statistics/