You may have heard that the Social Security Administration officially announced that Social Security recipients will receive a 1.6% cost-of-living (COLA) adjustment for 2020. Those increased payments will start in January 2020. The purpose of the COLA is to help the purchasing power of Social Security benefits keep pace with inflation. Congress first enacted the COLA provision as part of the 1972 Social Security Amendments, with automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
Atlanta Financial Blog
Mergers & Acquisitions: Marriage Edition
Of all the things we look forward to when planning to get married – from picking a venue to a honeymoon locale – one area we tend to glaze over is our finances. Conversations about money with our significant others can oftentimes be difficult or uncomfortable, but making sure you are both on the same page about your finances is a crucial part of any relationship. In fact, studies by SunTrust Bank and Kansas State University found that finances are the leading cause of stress in relationships and the number one reason for divorce in America. When preparing to join finances in holy matrimony there are several things to keep in mind:
Communication is key. Finance expert Larry Burkett has said, “Money is either the best or the worst area of communication in marriages.” Without open and honest lines of communication about our finances, it can be very difficult to go from a mentality of “my money” to one of “our money.” When Erin and I got married we talked about how we both felt about managing our individual finances and felt that the most likely path to success in managing our money was to approach it as a team. That means being fully transparent about short- and long-term spending and saving goals so that we can work to achieve them together.
Know your net worth. One of the most effective starting points in merging your finances is to know where you are today. Building a balance sheet listing all of your assets and liabilities is a great way of laying your financial cards on the table. If one spouse has greater assets (or liabilities) than the other, it is important to be up-front about how that will impact you as a team rather than as individuals. This is especially crucial when it comes to debt planning. Having a list of all outstanding debts in one place – student loans, car notes, credit card balances, etc. – makes it much easier to create a plan for eradicating that debt and growing your net worth.
Consolidate your accounts. Of all the conversations I’ve had with married couples about their finances, the question of how to combine accounts has yielded the widest range of answers. Some couples opt for a joint “house” account that they each contribute a set amount to each month for household expenses. Others choose to have joint checking and savings accounts but give themselves a set allowance in an individual account to do with as they please. Personally, Erin and I decided to “go big or go home” by combining everything into joint accounts – checking, savings, and credit cards. By having all our income and expenses go into and out of a single account, we have found that it is much easier to manage our monthly cash flow and feel comfortable that we can both see where our money is going.
Money has an emotional connection to every aspect of our lives, which means that managing combined finances is one of the most critical pieces to a successful relationship. By maintaining open lines of communication and working as a team toward common goals, you can make that piece much easier to grasp. Successfully merging and managing your finances as a couple is definitely a topic that requires more than a few hundred words to cover. If you and your partner are wondering where to begin, then get in touch with us and allow Atlanta Financial to help you map out your path to financial success.
The holidays are the perfect time to express our thanks for your business and to think about those less fortunate. Please join us for our 11th Annual Holiday Open House and Toys for Tots Collection on Thursday, December 12, 2019, 11:30 am – 1:30 pm at our office – 5901-B Peachtree Dunwoody Road, Suite 275, Atlanta, GA 30328. Lunch will be served.
All of us at Atlanta Financial want to congratulate Harrison Fant on recently passing his five year anniversary at Atlanta Financial in September. Since joining AFA in 2014, Harrison has rapidly ascended through the different positions to his current position as Wealth Manager. Harrison has a unique combination of technical financial planning skills and the ability to present those complex concepts in easily understandable ways to all of his clients.
In working with my retired or soon-to-be retired clients, perhaps the most frequent question I am asked is “What is the best way to withdraw from my investment and retirement accounts in retirement in order to provide me my desired retirement income?” I believe they ask me this question because many of them have investments in a mix of different accounts with varying tax characteristics such as taxable investment accounts, IRAs, 401k or retirement plan accounts, Roth IRAs, and possibly real estate investments such as rental property. In addition to that, they may also have retirement income coming in from multiple sources and at different times such as Social Security income, pension income, and deferred compensation. If you are interested in increasing what you can spend in retirement and reducing the impact taxes have on your retirement nest egg, it is important to have a multi-year retirement income plan that takes into account the impact taxes will have on both your retirement income sources, and the withdrawals you take from your different investment and retirement accounts.