Category Archives: Planning for Your Financial Future & Retirement

5 Points for 5 Years Before You Retire

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Retirement is an exciting prospect for many and choosing how to spend your retirement could likely be based on the planning you do today. For example, have you considered your plans for housing, healthcare, and travel expenses? If you are wondering how to get started, here are five points to consider within five years of your retirement.

  • Estimate your monthly income and allowances. The monthly amount could decline based on a lesser need for extras, but it could also quickly change based on your health or family circumstances, so estimating on the higher side could help. Also, consider readjusting or reallocating your portfolio and evaluating other income-producing and growth investments. And lastly, don’t forget to include any Social Security or Required Minimum Distributions.
  • Where will you live? Have you considered relocating to a state that doesn’t require as many taxes? Many retirees consider downsizing to lower expenses, or plan to move closer to family to help care for grandchildren or loved ones. Overall, there can be many benefits to living closer to family as you age.
  • Consider your debt and taxes. Retiring to a lower income tax bracket is possible. Considering a one-time tax hit, moving from a traditional IRA to a Roth IRA could eventually produce a source of tax-free retirement income. But before you make any decisions, talk with a qualified tax professional to see if this move is right for you. Income and age restrictions may apply.
  • Healthcare costs. Will you apply and be eligible for Medicare and will this cover your present and future needs? It is possible you or a loved one may need long-term care at some point during retirement and this could affect your overall bottom line.
  • What will you do? How do you dream of spending your days? Will you take time to travel and see the world, or would you prefer to keep closer to home and pick up a new hobby? However you see your retirement, it’s important to make sure your finances can support your overall goals.

Planning for retirement involves setting goals and a defined strategy toward those goals. Whatever your plans are, make sure you have made all of the arrangements beforehand so you can live your retirement years as confidently as possible.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings 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.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

Tracking #1-05363549

Budgeting for a Family

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If you’re expecting your first child, congratulations! You’re about to embark on the most rewarding and fulfilling experience of your life.

As you already know, there’s a long list of responsibilities associated with your new title — parent. And financial responsibility takes a backseat to none of those. Raising a child is expensive, after all. The USDA estimates the total expenses for a child’s first 18 years at more than $200,000. So, as you begin planning for your first child, consider these key areas and their associated expenses.

First, there’s healthcare. If you’re covered by an employer’s plan, check to make sure of the options for adding a child. Additionally, if you do have an employer-sponsored plan, consider a medical reimbursement account (MRA) or health savings account (HSA), if either is available. These can pay for items such as deductibles, co-payments, and orthodontics.

If you’re paying for healthcare directly, you can choose a managed care plan, such as an HMO, which offers lower upfront costs than a traditional plan, which may require you to pay at least 20 percent of care costs. However, a PPO plan may provide you with more options as to which providers you can see and whether you need a referral to see a specialist. Whatever route you go – deductibles, co-insurance amounts, co-payments and monthly premiums vary greatly; review the options available to you carefully before making your selection.

Next, there’s childcare. Depending on your adjusted gross income, or AGI, you may be eligible to receive tax benefits as a parent. The Child Tax Credit provides a credit of up to $2,000 for children ages five and under – or $3,000 for children ages six through 17 years old. To qualify, your child must have a Social Security Number before you file your tax return.

Then, insurance. Purchasing disability and life insurance can provide income for your child if your earning capacity is compromised. A financial professional may be able to provide guidance as to the recommended amounts of coverage for each. Check to see if your employer offers these policies, they are often less expensive than those that you purchase independently.

Finally, consider drawing up a will that designates a legal guardian for your child, in the event that you and your spouse die together, or if you’re a single parent and you should die. If you and your spouse die intestate — that is, without a will — and you die together, a court will decide whom to appoint as your child’s guardian. Make sure that the will is written so that it applies to your new baby as well as your future children. By carefully budgeting for your baby, you can help secure the financial futures of both you and your child.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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6 Tips to Financially Plan for a Career Change

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Embarking on a new career path is both exhilarating and daunting, requiring not just a leap of faith – but also financial preparation. Whether you’re venturing into entrepreneurship or transitioning to a field you’ve always been passionate about, the journey ahead demands strategic planning. First Financial is here with several pivotal tips to ensure your financial health remains strong as you pursue your career dreams.

1. Evaluate Your Emergency Fund

An adequate emergency fund is your financial safety net during a career transition. A good rule of thumb is to build your emergency fund to cover 6 to 12 months of living expenses. This fund can provide relief in case the transition takes longer than expected or if unforeseen expenses arise. Review and bolster your savings as soon as possible before your transition, as peace of mind is invaluable when stepping into the unknown. First Financial offers a variety of Savings Account options to help you reach your emergency fund goals and start your next chapter confidently.*

2. Budget for Health Insurance Costs

Health insurance is a critical consideration when leaving an employer-sponsored plan and can become a hefty expense if not planned for properly. Before accepting a new job, be sure to ask about a probationary period. Often new employees will not be able to receive some or all of their benefits until they have been employed for a certain amount of time, commonly 90 days. If this is the case, assess all your available options – including COBRA for temporary continuation of your current plan and options through the Health Insurance Marketplace. Also ensure the pricing can fit into your budget.

3. Life and Disability Insurance Coverage

Don’t overlook life and disability insurance, as losing these benefits can leave you vulnerable. Determine if your current plan allows for portability or if you’ll need to secure alternative coverage to protect against unexpected events. Ensuring continuous coverage is key to safeguarding your family’s financial future during and after your career change. If you find you’ll be left without coverage, First Financial offers options through our TruStage Insurance Program – with competitive rates and your protection in mind.

4. Retirement Savings Considerations

A career change can impact your retirement planning, especially if you’re leaving behind employer-matched contributions. Before making a move, check up on your retirement savings. Options for your existing retirement accounts include leaving the funds with your former employer or rolling them over into a new employer’s plan or an IRA. The First Financial Investment & Retirement Center can help you navigate your transition assistance options.**

5. Conduct a Financial Reality Check

Now is the time to scrutinize your spending, especially on hidden or unnecessary fees that can drain your resources. Regularly review your statements to identify and eliminate these financial leaks. Simplifying your financial obligations by consolidating debt can also free up more funds for your career transition, making it smoother and more manageable.

Small daily expenses often go unnoticed, but can cumulatively have a significant impact on your budget. Keeping a close eye on these can help identify opportunities to save, such as opting for home-cooked meals over dining out. Every dollar saved is one more dollar toward supporting your career change and maintaining financial stability. With First Financial online and mobile banking you can easily access your cards and statements to take a closer look at daily, weekly, and monthly charges easily eliminating unnecessary fees and expenses.

6. Create a Job Transition Budget

Planning for a career change involves more than just anticipating loss of income, it’s about adjusting to a new financial norm. A detailed transition budget will help you navigate this change, ensuring that you can account for all possible expenses and income changes. This foresight will allow you to adjust your lifestyle as needed, minimizing financial stress as you move toward your new career. Easily create a budget for your transition with our home budget calculator. Simply plug in your income, withholding amounts and expenses – and the tool will generate a detailed budget customized to your situation.

Embarking on a career change is a journey that involves financial preparation that can be overwhelming when navigated alone. At First Financial, we offer products and services designed to support you through every stage of your career transition. For more personalized assistance, call 732.312.1500 to schedule an appointment at your local branch today.

*A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. Some restrictions apply, contact the Credit Union for more information.

**Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Begin Investing While Young

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You’re never too young to begin building an investment portfolio. In fact, investing when you’re young can have the potential to produce impactful earnings gains. And that’s because of a simple concept: compounding.

Like a snowball that grows as it rolls down a hill, compounding gives your money the opportunity to grow, continually reinvesting your investment earnings. With compounding, the more you invest – the greater opportunity you have to create long-term value. We’re going to give you some hypothetical examples to illustrate the power of compounding.

  • Let’s say that you invest $1,000 at age 20 and don’t add anything to the principal. You just compound earnings for 50 years until you turn 70. If you take a 7.2% annual rate of return, by age 70, your $1,000 would have grown to $32,000. Not bad.
  • Now let’s say you take the same approach, but delay investing until you’re 30. So that $1,000 has 40 years to grow. And assuming the same annual rate of return of 7.2%, your $1,000 investment will have grown to $16,000. Not nearly as good. In fact, that’s a decrease of 50%.
  • Finally, if you invest $1,000 at age 20 and contribute an additional $83 a month – or $1,000 a year until you turn 70, assuming that same 7.2% annual rate of return, your total savings will reach $465,000. Wow! That’s nearly 15 times the first example, and 30 times the second example.

To be clear, these were hypothetical examples and aren’t representative of any specific situation. They’re just to illustrate the power of compounding. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. So, your results will vary.

There’s a fairly accurate formula called the rule of 72 that can help you estimate how long it would take for compounding to double an investment: Just divide 72 by the annual rate of return. The answer is the approximate number of years it would take to double your investment’s value, assuming a fixed rate of return.

  • As an example, if you earn 9% annually – it would take 72 divided by 9, or 8 years to double the value of your investment. Please note that this formula does not guarantee investment results and is just to give you an approximate idea of how quickly your savings can grow when compounding is at play.

For help putting together an investment strategy that works for you, reach out to one of our financial professionals listed below.

Questions? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

The rule of 72 is a mathematical concept and does not guarantee investment results nor functions as a predictor of how an investment will perform. It is an approximation of the impact of a targeted rate of return. Investments are subject to fluctuating returns and there is no assurance that any investment will double in value.

This material was prepared by LPL Financial, LLC

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Financial Planning and Money Management for Seniors

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Navigating the financial landscape in retirement can be challenging. In the transition to living on a fixed income, understanding how to manage money becomes crucial for maintaining a comfortable lifestyle. First Financial is dedicated to helping those approaching or in retirement, gain the financial literacy and planning needed to fully enjoy it. Here are some key areas of focus for managing finances as a senior.

Creating and Managing a Budget

A budget is essential for anyone looking to manage their finances wisely, especially for seniors. It’s all about understanding where your money is going each month – and First Financial’s online budgeting resources can help. By tracking your spending, you can identify areas where adjustments can be made. This could mean finding more cost-effective insurance options or reducing utility bills. It’s also wise to allocate a portion of your income to savings, preparing you for unexpected expenses without worrying about where you’ll need to take that money from.

Digital Finance Management

The digital era offers convenient solutions for managing money and paying bills. Electronic banking tools such as the First Financial Mobile App and online bill payments can help avoid late fees and reduce the need for physical trips to a branch or the post office.

However, it’s crucial to stay vigilant by regularly checking bill accuracy and keeping online security measures up to date. It’s also important to watch out for digital banking scams, which often target seniors. If you’re unsure about a message you’ve received that appears to be from your bank or something isn’t sitting quite right – trust your instincts, don’t give out any personal information, and call your financial institution directly using the number on the back of your card or from their website.

Earning Additional Income

Retirement doesn’t mean the end of earning potential. Many seniors find joy and additional income in turning hobbies into part-time jobs or consulting in their prior field of expertise. It’s important to consider how this extra income might affect your overall financial plan, including taxes and healthcare costs. Consulting a tax professional can help you navigate these considerations.

Document Organization and Protection

Keeping financial records and personal documents secure yet accessible is important for seniors. It’s advisable to store essential documents in a safe place at home and consider a safe deposit box for irreplaceable items. Digital copies of important documents can also provide an additional layer of security and accessibility.

Enhancing Financial Literacy

The journey to financial literacy involves continuous learning and adaptation. Seniors can benefit from resources provided by federal agencies and consumer protection groups, which offer valuable information on managing finances, understanding banking products, and safeguarding against fraud.

Financial literacy is a vital tool for seniors aiming to live their retirement years to the fullest. By understanding how to budget, manage digital finances, and make informed decisions – senior adults can enjoy peace of mind and financial stability. First Financial is here to support you every step of the way with resources and guidance tailored to your unique needs. For more tips on managing your finances and preventing fraud all year long – subscribe to our blog. If you’d like to speak with a financial advisor in the First Financial Investment & Retirement Center, call 732-312-1534 or visit a branch near you.

Caring for Aging Parents

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The cost of care for the elderly continues to rise. If you have aging parents who need assistance, there are important considerations and resources that can help them grow older gracefully.

First, let’s consider the various living options. Depending on their independence, your parents may be able to continue living in their current home. However, you may need to make safety modifications, which can get expensive. For instance, a first-floor bathroom, grab bars in hallways in bathrooms, and an emergency response system may be necessary.

If they need assistance with meals, Meals on Wheels is free for anyone over 60 years of age.

You might also consider an in-home aide if your parent needs additional personal assistance.

Some families choose to move an aging parent into their own home. If your parent has dementia or other health issues, adult day care can be helpful, as it allows them to socialize with other adults.

If your parents are independent and can care for themselves, they may be eligible to enter a continuing-care retirement community, where they can become eligible for future nursing care, if it becomes necessary. Consider purchasing long-term care insurance, which can help pay for nursing home costs or the cost of an in-home aide.

If your parents need the more comprehensive care provided by a nursing home, research the options extensively. You may need to reserve a space far in advance, as waiting lists are often long at popular facilities.

Just as you consider the various living options for your parents, so too, should you research the financing options for long-term care, which can be a tremendous burden for many adults.

Medicare will only pay the full cost of professional help if a physician certifies that your parent requires nursing care and if the services are provided by a Medicare-certified home health care agency. Even in such a case, Medicare will pay for nursing home care for the short-term only, with benefits restricted to low-income individuals with limited assets.

Tax considerations can help offset some of these costs, as you can claim a federal tax credit up to $3,000 off the cost of in-home care or day care.

No matter your current situation, developing a financial plan can be an important step in providing adequate support for your parents’ future well-being. Consult with a financial professional if you need help reviewing your plan or options.

Questions? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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