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Presented by MidAmerica Financial Resources. You can reach them at 618.548.4777 or greg.malan@lpl.com or on the web at www.mid-america.us

 

Balancing Your Checkbook

Balancing Your Checkbook

A useful skill, even in a digital age.

Provided by MidAmerica Financial Resources

Do you know how much money you have in your checking account? If you keep your checkbook balanced, answering that question becomes easier.

  

Balancing, reconciling, whatever you want to call it – this is a core financial skill, even if you happen to do all your banking online. If you bounce a check, overdraft fees can be high.

 

While apps like Mint and Prism give you a real-time look at account balances, transactions, and monthly debts to pay, their alerts and notifications do not necessarily instill good money habits. Balancing a checkbook takes just a few minutes a month and having a hard-copy portrait of your checking account is a plus. Noting your transactions (and fees) helps you keep on top of your personal finances. (It may even help you spot a mistake.)1

 

First step: consistently record what happens with your checking account. Consistency is everything. Record debit card withdrawals, ATM deposits and withdrawals, even fees. If jotting all this down in that bland-looking check register gives you the blues, consider using a check register app on your phone or tablet as an alternative.

 

Second step: reconcile. Reconciling occurs when you compare your monthly checking account statement with your personal record of checking account activity. Ideally, you look at them and find no difference. If something seems amiss, you can quickly determine whether it is a case of bank error or human error. (Some personal financial apps have a reconciling function that makes this whole process more-or-less instant.)2

 

Balancing your checkbook is easier than ever. You could elect to be nonchalant about it, especially if you happen to have a huge balance in a personal (or business) checking account – but a carefree attitude might leave you poorer and more pinched financially than you want to be. It is best to be thrifty and keep track of your deposits and withdrawals.

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.

Citations.

1 – nerdwallet.com/blog/finance/budgeting-saving-tools/ [3/13/18]

2 – capitalone.com/financial-education/money-basics/balancing-budget/balance-your-checkbook/ [8/28/18]

5 Retirement Concerns Too Often Overlooked

5 Retirement Concerns Too Often Overlooked

Baby boomers entering their “second acts” should think about these matters.

 

Provided by MidAmerica Financial Resources

 

Retirement is undeniably a major life and financial transition. Even so, baby boomers can run the risk of growing nonchalant about some of the financial challenges that retirement poses, for not all are immediately obvious. In looking forward to their “second acts,” boomers may overlook a few matters that a thorough retirement strategy needs to address.

 

RMDs. The Internal Revenue Service directs seniors to withdraw money from qualified retirement accounts after age 70½. This class of accounts includes traditional IRAs and employer-sponsored retirement plans. These drawdowns are officially termed Required Minimum Distributions (RMDs).1

 

Taxes. Speaking of RMDs, the income from an RMD is fully taxable and cannot be rolled over into a Roth IRA. The income is certainly a plus, but it may also send a retiree into a higher income tax bracket for the year.1

 

Retirement does not necessarily imply reduced taxes. While people may earn less in retirement than they once did, many forms of income are taxable: RMDs; investment income and dividends; most pensions; even a portion of Social Security income depending on a taxpayer’s total income and filing status. Of course, once a mortgage is paid off, a retiree loses the chance to take the significant mortgage interest deduction.2

 

Health care costs. Those who retire in reasonably good health may not be inclined to think about health care crises, but they could occur sooner rather than later – and they could be costly. As Forbes notes, five esteemed economists recently published a white paper called The Lifetime Medical Spending of Retirees; their analysis found that between age 70 and death, the average American senior pays $122,000 for medical care, much of it from personal savings. Five percent of this demographic contends with out-of-pocket medical bills exceeding $300,000. Medicines? The “donut hole” in Medicare still exists, and annually, there are retirees who pay thousands of dollars of their own money for needed drugs.3,4

 

Eldercare needs. Those who live longer or face health complications will probably need some long-term care. According to a study from the Department of Health and Human Services, the average American who turned 65 in 2015 could end up paying $138,000 in total long-term care costs. Long-term care insurance is expensive, though, and can be difficult to obtain.5

 

One other end-of-life expense many retirees overlook: funeral and burial costs. Pre-planning to address this expense may help surviving spouses and children.

 

Rising consumer prices. Since 1968, consumer inflation has averaged around 4% a year. Does that sound bearable? At a glance, maybe it does. Over time, however, 4% inflation can really do some damage to purchasing power. In 20 years, continued 4% inflation would make today’s dollar worth $0.46. Retirees would be wise to invest in a way that gives them the potential to keep up with increasing consumer costs.4

 

As part of your preparation for retirement, give these matters some thought. Enjoy the here and now but recognize the potential for these factors to impact your financial future.

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – thebalance.com/required-minimum-distributions-2388780 [6/3/18]

2 – kiplinger.com/slideshow/taxes/T064-S003-how-10-types-of-retirement-income-get-taxed/index.html [3/27/18]

3 – forbes.com/sites/nextavenue/2018/06/28/the-truth-about-health-care-costs-in-retirement/ [6/28/18]

4 – mdmag.com/physicians-money-digest/practice-management/four-big-retirement-threats-and-how-to-protect-yourself [8/2/18]

5 – money.usnews.com/money/personal-finance/saving-and-budgeting/articles/2018-04-13/6-ways-to-pay-for-long-term-care-if-you-cant-afford-insurance [4/13/18]

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