September 2024

As we approach the end of the year, it’s a good time to review and maximize your retirement plan contributions. If you’re turning 50 this year, you can take advantage of catch-up contributions, allowing you to contribute an additional $7,500, bringing the total to $30,500 for 2024.

It’s important to check your year-to-date contributions to ensure you reach the maximum amount by the end of the year. If you joined the plan late in the year, you can catch up by adjusting your savings rate for the remaining pay periods. You’re allowed to contribute up to 100% of your remaining payroll, if needed, until the end of the year. Once the new year begins, you can revise your savings rate accordingly.

Remember, you’re in control of how much you save and where you invest within your plan.

Read more: The Motley Fool

When evaluating investments, it's easy to focus solely on the returns. However, returns without considering the risk involved can paint an incomplete picture. At Vibrance Wealth Management, we believe risk-adjusted return is a crucial metric that provides a more holistic view of an investment's performance by factoring in the amount of risk taken to achieve those returns. This concept is particularly important for investors who seek to maximize returns while minimizing risk.

Risk-adjusted return is essentially a measure of how much return an investment generates relative to the risk it takes on. Tools like the Sharpe Ratio help investors identify investments that provide the best balance between risk and reward.

This approach is particularly useful in volatile markets just like what we are experiencing now, guiding investors to make informed decisions that maximize returns while minimizing unnecessary risks. By focusing on risk-adjusted returns, you can better navigate the complexities of today's financial landscape.

Read more: BENZINGA

In California, the popularity of disclaimer trusts has been rising, particularly as an alternative to bypass trusts, due to their flexibility. A disclaimer trust allows the surviving spouse to decide whether to disclaim assets and fund the trust after the death of the first spouse. This "wait-and-see" approach can be beneficial, especially when there is uncertainty about the estate tax laws in the future or the couple's asset value at the time of death. The flexibility offered by disclaimer trusts contrasts with the more rigid structure of bypass trusts, which require the division of assets immediately upon the first spouse's death.

However, disclaimer trusts also come with some challenges. The surviving spouse must act within nine months of the first spouse's death to create the trust, which can be difficult during the grieving process. Additionally, if the surviving spouse does not act, all assets remain in the revocable trust, potentially missing out on tax advantages.

For those with estates close to or above the estate tax exemption threshold, $13.61M per person in 2024, a disclaimer trust might be a good option, but it's essential to understand how the trust works and discuss your specific situation with an estate planning attorney to ensure it aligns with your legacy goals.

Read more: Investopedia

Like auto and home insurance, the premiums for life and long-term care insurance have been rising. When shopping for a policy, it’s essential to understand the factors that affect insurance costs so you can find ways to lower them. However, in our experience, the biggest cost comes from waiting. The cost of life insurance increases not only because companies raise premiums, but also because as we age and our health potentially declines, premiums go up even more.

That’s why it’s crucial to work with a qualified financial planner to customize a policy that fits your goals for the next 20 years or so, ensuring you won’t need to repurchase or seek additional coverage later on. The sooner you find the right policy that meets your needs, the more you can save.

Read more: Forbes