Emotions play a big role in our financial lives, and often influence our responses to certain money decisions. Despite our best efforts, it can be challenging to detach from an emotional response when evaluating our finances.

Our emotional connection to money is deeply rooted and often forms at a young age. For example, even if someone acknowledges the importance of saving over spending, their emotional attachment to the joy of spending can hinder them from breaking that pattern, which leads to fewer savings.

Recognizing the impact of emotions on your finances and the origins of your money habits allows you to understand why certain emotions drive your financial choices. Let’s explore where these habits come from and what you can do to rewrite your money script into one that helps you reach your financial goals.

The Money Script

Do you sometimes feel like the discipline to make rational and well-thought-out financial decisions must be too good to be true? Because no matter how hard you try, you just can’t seem to stick to it? Well, I am sure there are others that feel the same way. These feelings are not uncommon and are most likely due to the emotional and psychological baggage we all carry around relating to our money, otherwise known as our money scripts. And, as with most of the baggage we’ve lugged into our adult lives, these scripts usually start forming at a very young age. 

Even though we may not be aware of it, we spend our childhood picking up on how our parents and other significant role models relate to and handle money, and over time, our brains are subconsciously trained to respond in similar ways. If your parents were confident in their ability to make wise investments, you will likely face investing with confidence as well. Contrarily, if you experienced your parents scrounging to get by and often quarreling over expenses, you may experience some pretty strong feelings of guilt when making certain purchases. 

The seeds of money scripts are planted in childhood, watered by observation, and eventually grow to influence your emotional beliefs about finances as an adult. For this reason, it is vital to be intentional and diligent in talking to your kids about money and modeling healthy financial behaviors. It is just as important to take the time to examine yourself and understand your money scripts and how they influence your financial behavior. 

The Negative Side of Money Scripts

To be fair, not all money scripts are bad. Some behaviors we learn plant seeds for beneficial emotions about finances. However, other behaviors, such as money avoidance, focus on financial status, or the idolization and even worship of money, can be flat-out detrimental. Unhealthy emotions and belief patterns can lead to all kinds of financial problems, such as financial infidelity, compulsive buying, pathological gambling, and financial dependence. Certain money scripts have been tied to lower levels of net worth, lower income, and higher amounts of revolving credit. 

Those may sound extreme, but have you ever let panic during a market downturn take your focus off of your long-term investing plan? Have you ever been unable to make a decision because you were paralyzed with worry and anxiety about the future? Have you ever wreaked havoc on your budget for the momentary high of acquiring something you really wanted? All of these behaviors stem from your personal money script.

Money Scripts Can Be Changed

We often think that if we had more money, we wouldn’t have any problems. But we have money problems because of how we approach money, not necessarily because we don’t have enough. This is good news! We might not be able to drastically increase our income, but we can learn to control our attitudes and perceptions. Our money scripts may be ingrained from childhood, but they are not permanent. With a focused and concerted effort, they can be changed. 

The first step you must take in overcoming your money scripts is to identify them. To do this, you must become aware of your emotional responses to common financial situations. Begin to stop and notice your emotional responses to these common experiences:

• Earning money
• Buying things
• Saving for the future
• Budgeting and tracking expenses
• Making financial decisions
• Volatile markets
• Healthy markets
• Meeting with a financial professional
• Thinking about your financial future

How do these things make you feel? Anything that elicits strong emotions warrants further reflection. Keep in mind that negative emotions are not the only ones that can harm your financial life. Some positive emotions, like optimism and self-confidence, can bring about negative results if unwarranted and left unchecked.

How to Manage Emotional Money Decisions

The key to changing your money scripts and developing healthier money habits is learning to control your emotions. You can also build some new, healthy habits that protect you financially and incorporate them into your life. Habits and disciplines such as taking advantage of automatic savings, investing through your bank or employer’s retirement plan, scheduling regular family budget meetings, and enlisting the help of someone reliable to keep you accountable are great places to start. Eventually, you will learn how you respond to emotional triggers and you can then take steps, like mandating a “cooling off” period for yourself, before making any decisions. 

Finally, you need to be willing to forgive yourself when you make mistakes. Leave the past in the past and move forward with the new knowledge you have gained. Choosing to forgive yourself for past mistakes frees you up to be more effective with your new tools. As you begin to collect victories, both big and small, you will likely find it even easier to extend forgiveness.  

A Partner to Keep You on Track

Choosing a financial partner is a decision that requires careful thought, and it’s highly important that you feel confident and comfortable with your advisor. Financial planning is a continuous journey, and I am committed to supporting you at every stage. If you’re ready to explore our services and how we can enhance your financial portfolio, I invite you to schedule a 20-minute introductory call online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at payton@rosemeyermg.com. Let’s determine if I’m the right partner to guide you on your financial path.

About Payton

Payton Simon is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Payton spends his days providing in-depth investment analysis and aiding in the development of customized, comprehensive retirement, tax, and estate planning strategies to help his clients reach their retirement goals. Payton is passionate about doing his best for every client he serves and making sure they don’t have any blind spots or missed opportunities in their financial plan. He strives to do his part to close the financial literacy gap so people can feel confident and empowered about their financial future. Payton has a bachelor’s degree in finance with a minor in accounting from the University of Wisconsin-LaCrosse. Outside of work, Payton is active in his local Catholic parish and incorporates his faith into every aspect of his life. He loves spending time with his family and friends and is a sports enthusiast, playing golf, basketball, and baseball. To learn more about Payton, connect with him on LinkedIn.

Retirement signifies an important and exciting milestone, as you leave the work force and enter into a new rhythm of unlimited free time. When it comes to your finances, the early years of retirement lay the groundwork for your enduring financial well-being. In this article, we share the most common financial planning challenges during the first 10 years of retirement and offer insights on overcoming them so you can experience the retirement lifestyle you’ve earned.

Not Creating a Withdrawal Strategy

Financial planning doesn’t stop once you enter retirement. Capitalize on your wealth by deciding the most tax-efficient way to withdraw funds in your golden years.

Different financial accounts are taxed at different rates. Traditional IRAs and 401(k)s are taxed at the ordinary income tax rate when you withdraw. Roth IRAs and Roth 401(k)s are taxed beforehand, so the money is withdrawn tax-free. Funds in a taxable investment account are taxed at the capital gains tax rate, which is different from your ordinary income tax rate.

As you can see, calculating the best time to pull from each account is enough to give anyone a headache. But the last thing you want is to get hit with a hefty tax bill—which I’ve seen for the vast majority of taxpayers in my experience. A good tax goal is to create a lifetime tax savings plan; rather than just looking at one year, plan how to pay the least amount of taxes over an individual’s lifetime.

Create a withdrawal strategy with the help of a trusted professional who can make sure you’re withdrawing funds at a sustainable rate and that you’re doing it in a tax-efficient way.

Overspending in Retirement

Many people spend their retirement years doing all the things they never got to do when they were working—starting a passion project, remodeling the house, traveling the world, and more.

It’s easy to underestimate the amount of money you’ll spend those first few years when you don’t account for all these “extras.” Overspending, even for a short period, can shave years off the longevity of your assets. My advice? Create a spending plan. Calculate your monthly income given your withdrawal strategy (See #1) and then create a budget. Even if you think you know what you are spending, it’s always good to get another opinion. A cash flow analysis allows us to truly see where the funds are going; a lot of individuals are spending double what they think.

Ignoring Inflation

Another major challenge we see new retirees face is the desire to play it safe in the stock market. This does more harm than good as it leads to inflation risk.

While healthcare expenditures are typically affected less by inflation than other spending categories, from 2021-2022 there was a 4.0% increase in medical care services compared to the historical average inflation rate of 1.23%. What does this mean? Retirees are more likely to feel the effects of inflation due to mandatory expenses, such as healthcare costs.

As tempting as it may be, resist the urge to worry about short-term stock market volatility. With a retirement that could easily last 20 to 30 years, inflation is still the biggest threat to your nest egg. Sit down with a trusted professional who can help you strike a balance between protection and growth. Most of the funds you have invested likely won’t be needed for many years down the road; it’s important to have an investment allocation that is aligned with your cash needs.

Not Having an Emergency Fund

Could you comfortably pay an unexpected, major expense in retirement without jeopardizing your financial future? For most of us, the answer is no. Just as you were taught to have an emergency fund in your formative years, it’s even more critical to have one in your retirement years.

It used to be recommended to have 3 to 6 months of expenses saved up in an easily accessible savings account, but now more professionals are recommending at least 12 to 18 months’ worth. This may sound like a lot, but an emergency fund serves two purposes: it covers unexpected expenses and it provides stability during economic downturns. This means you can optimize your portfolio to beat inflation (#3 on our list) while having a safety net to fall back on.

Creating a Strategy on Your Own

After years of strategic financial planning, your wealth has grown to the point where you are comfortable enough to consider what retirement will look like for you. It’s an important time to think critically about your decisions so you can avoid these common challenges. Partnering with a trusted financial advisor can make all the difference between depleting your retirement fund and making it last a lifetime. We value developing relationships that take stress away from our clients so you can worry less about money and more about how you are going to spend your time!

At Rosemeyer Management Group, we support our clients by guiding them through the complexities of retirement, providing personalized strategies to safeguard your financial well-being. Let us be your partner in creating a stable and long-lasting retirement. Reach out to schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at kaley@rosemeyermg.com.

About Kaley

Kaley Bockhop is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Kaley’s experience in taxes and accounting and her financial planning expertise allows her to help her clients work toward their retirement goals and set themselves up for success. It is Kaley’s goal to partner with her clients to build a customized road map for their finances so they can look forward to a comfortable retirement and decrease financial worry. Kaley is a CPA and a CERTIFIED FINANCIAL PLANNER™ professional. She has a bachelor’s degree in science from the University of Wisconsin-Platteville with a triple major in accounting, agricultural business, and animal science, and a minor in biology. In her free time, Kaley enjoys working on her family’s farm where they raise nationally recognized registered Angus show cattle. She also loves exercising and traveling. To learn more about Kaley, connect with her on LinkedIn.

If you were asked, “How well do you know your financial advisor,” what would you say? While it’s the financial advisor’s job to get to know their clients and establish the relationship, it’s important for the client to feel they can trust their advisor. One of the best ways to do this is to learn more about your financial advisor’s role and why they are passionate about what they do. At Rosemeyer Management Group, our amazing team is vital to our firm’s and our clients’ success. Watch this video to learn more about what they do and what they love about their job.

VIDEO: Get to Know Our Team<

Regan Shipp is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Regan is known for building relationships and looking at the whole picture of her client’s lives to provide personalized, comprehensive wealth management services and advice. She leaves no stone unturned as she integrates investment strategies, risk management strategies, tax planning, retirement planning, and estate planning to design a plan that will help her clients pursue both financial success and freedom throughout their lives. Regan strives to educate her clients so they can feel empowered to take the actions necessary to achieve their goals. Regan is passionate about making a difference in people’s lives and loves journeying with her clients and seeing them reach new levels, surpass goals, and create wealth they might not have known was possible. Regan has a bachelor’s degree in accounting and agricultural business from the University of Wisconsin-Platteville and is a Certified Public Accountant (CPA) and CERTIFIED FINANCIAL PLANNER™ professional.

When she’s not at work, you can often find Regan spending time with her friends and family or out on a run training for a half or full marathon. Regan and her husband, Payton, their son, Lincoln, and their dog, Axel, love the outdoors and look forward to more camping, deer hunting, and beach trips. To learn more about Regan, connect with her on LinkedIn.

It’s happening. Your target retirement age is getting closer and closer. You can see the finish line.

But what happens if you finally reach your retirement milestone only to feel financially overwhelmed?

With these five tips, you can reach the Retirement Red Zone feeling prepared to tackle anything.

1. Miscalculating Your Retirement Needs

If you’ve managed to amass a significant nest egg, you have reason to be proud of yourself! But even if you have a million dollars saved, it may not be enough. If you plan to retire in your early or mid-60s, your retirement savings will need to carry you through 30 years or more. Not to mention, you will encounter additional expenses along the way, such as healthcare costs, home maintenance, and taxes.

The best way to avoid financial anxiety in retirement is to map out various retirement scenarios to see what your savings can handle. We routinely review these scenarios for our clients. Knowledge will empower you, especially in this situation. Once you have an idea of what you’ll need for your unique situation, set up contingency funds to cover the unexpected and find ways to maximize your savings to give yourself a cushion.

2. Healthcare Inflation

If you’ve ever held a hefty medical bill in your hand, you aren’t alone. The United States has one of the highest costs of healthcare in the world. And as you age, you will likely require more healthcare services.

According to the Fidelity Retiree Health Care Cost Estimate, the average couple at age 65 will require $315,000 to cover healthcare costs in retirement. Most people don’t even have that much in their retirement accounts to live on, let alone to cover medical costs. Even with Medicare, there could be significant out-of-pocket expenses and many conditions and treatments that are not covered.

When choosing your health insurance for retirement, make sure you understand all Medicare options and supplements and work with an experienced professional to help you evaluate your options. For example, many people don’t realize that basic Medicare has no cap on out-of-pocket expenses. A supplement is required to achieve a limit on costs. Comprehensive insurance is more expensive but can cap unexpected expenses. If you plan to retire before age 65, be sure to get a pre-Medicare policy in place.

3. An Inadequate Withdrawal Strategy

Just because you’ve worked hard to save for retirement and build up a nest egg doesn’t mean you can rest easy. Once you start tapping into your savings, you need to develop a strategy to withdraw your funds so they last the rest of your life, however long that may be.

Since the historical average return of the stock market is roughly 10% per year, you might assume that you can afford to withdraw that much from your portfolio each year. But in reality, to protect against the uncertainty of the market, you may have to limit your withdrawals to 4% – 5% or less. The market volatility of the last couple of years proves just how risky it is to bank on a 10% return every year. Since there is no simple, one-size-fits-all plan, your withdrawal strategy will need to be tailored to your unique needs, taking various factors into account, such as time horizon, risk tolerance, asset allocation, and unexpected living expenses.

Keep in mind that whatever withdrawal strategy you use, you will still need to consider the tax impact of your plan. Many people forget to plan for this crucial component and end up with less than they needed after taxes were paid. Make sure you are structuring your retirement plan in a tax-efficient way to avoid paying more than you have to during your golden years.

4. Market Downturns

Rising prices of basic goods and services over the last few years has many people in the retirement red zone fearful about how much downside risk their plans can handle. This is a valid concern given the market volatility of the last couple years. Here’s where tried-and-true investing principles come into play.

Diversification is one of the most talked-about investment strategies for a reason: it helps to reduce the risks your investments experience from market volatility. While you can’t eliminate risk from your portfolio entirely, you can cushion the blow if things go south. If you put too much of your money into one stock or even one sector of the economy, you put yourself in danger of losing your retirement savings.

It is important to evaluate your portfolio’s current allocation. You may need to rebalance or diversify your positions. Look at the big picture of all your accounts to ensure you are diversified across the board. It may also be helpful to consider a flexible withdrawal strategy which involves withdrawing less (and spending less) in the years where the market underperforms.

5. Unexpected Death of a Spouse

Losing your spouse is devastating, regardless of when it happens. But losing a spouse during the final years of their career can be dangerous for the surviving spouse’s financial plan. Furthermore, retirement and long-term care costs may increase without a spouse to share costs and provide care. Depending on pension benefits selected, a spouse’s pension may not pay out to the surviving spouse in the event of his or her death. An early death may also decrease the spousal Social Security benefits the surviving spouse receives, leaving him or her with little income.

It’s critical for both spouses to be actively involved in the planning process to avoid a setback if this tragedy occurs. Take the time to consider benefits for the surviving spouse, such as life insurance. Wills, trusts, and beneficiary designations should be reviewed to ensure both spouses are protected financially. You should also create a pension and Social Security strategy to optimize the benefit for the surviving spouse. Examine multiple scenarios and make sure that you are taken care of no matter what happens.

Build a Strong Defense

Unfortunately, life does not always go the way we planned. But by anticipating variables and planning for adverse market conditions, we can come up with strategies and tactics that don’t derail retirement milestones.

We help you manage the wealth you’ve accumulated and create strategies for other retirement income sources as well. If you need a partner to help with your wealth management strategies, schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at payton@rosemeyermg.com.

About Payton

Payton Simon is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Payton spends his days providing in-depth investment analysis and aiding in the development of customized, comprehensive retirement, tax, and estate planning strategies to help his clients reach their retirement goals. Payton is passionate about doing his best for every client he serves and making sure they don’t have any blind spots or missed opportunities in their financial plan. He strives to do his part to close the financial literacy gap so people can feel confident and empowered about their financial future. Payton has a bachelor’s degree in finance with a minor in accounting from the University of Wisconsin-LaCrosse. Outside of work, Payton is active in his local Catholic parish and incorporates his faith into every aspect of his life. He loves spending time with his family and friends and is a sports enthusiast, playing golf, basketball, and baseball. To learn more about Payton, connect with him on LinkedIn.

We live in a world where our attention is demanded at every turn. There are so many decisions to make and tasks to accomplish—and it’s all vying for your undivided focus. Since we can’t focus on everything all at once, we make intentional choices to push some things aside until we can give them the proper attention. The problem is that sometimes we push things aside that might not seem important at the time but are in fact vitally important for your future.

Financial planning can be one of those things. It might seem “boring,” especially if you have plenty of years before retirement. However, if you ignore this critical piece of your life, you might find yourself in trouble down the road. Here are some factors that show why financial planning is more critical now than ever before.

1. You’re Probably Not Saving As Much As You Should

The first reason you shouldn’t put off financial planning is that you’re probably not saving as much as you should. That’s not to say that the savings you do have shouldn’t be celebrated. But no matter the amount you have, you need to be sure it will be enough.

If you plan to retire in your mid-60s, your retirement savings may need to carry you through 30-plus years. Not to mention rising inflation that will decrease the value of your savings over time and the additional expenses you will likely encounter along the way. A study by Vanguard estimated that the median retirement savings of Americans ages 55-64 is $89,716, yet the average retirement cost is nearly $46,000 per year! At that rate, a savings of around $89,000 won’t even last 2 years.

A sound strategy to avoid running out of money in retirement is to work with a financial professional to understand what your savings can handle. Contrary to popular belief, you cannot use a multiple of your annual income to determine how much to save. This is why it’s so crucial to plan ahead. The sooner you understand your need, the more options you will have and the easier your goals will be to accomplish.

2. Healthcare Costs Are on the Rise

If you’ve ever held a hefty medical bill in your hand, you aren’t alone. Healthcare costs in America are among the highest in the world. And as you age, you will likely require more healthcare services. According to the Fidelity Retiree Health Care Cost Estimate, the average couple at age 65 will need about $315,000 saved to cover healthcare costs in retirement. Most people don’t even have that much in their retirement accounts to live on, let alone cover medical costs.

Given the events of the past few years and continuing inflation, it’s more important than ever to start preparing for the ever-increasing cost of care. The longer you wait, the less options you’ll have. Working with an experienced professional can help you evaluate your options and build a long-term plan for healthcare.

3. Tax Strategies Take Multiple Years to Implement

Another reason not to put off financial planning is that if you don’t start early, you’ll miss out on several tax strategies that take years to implement, including:

Tax-Advantaged Retirement Savings

If you’re in a high tax bracket, being able to save for retirement with pre-tax dollars is a great advantage because pre-tax contributions reduce your taxable income and ultimately reduce the amount of taxes you owe. This strategy could save you thousands of dollars in taxes each year. The earlier you start, the more you’ll save over the course of your career.

Roth Conversions

Roth conversions help to increase your retirement savings and decrease your long-term tax liability by transferring funds from a pre-tax retirement vehicle (traditional IRA) to an after-tax account (Roth IRA). This allows your money to grow tax-free for as long as you’d like, and required minimum distributions (RMDs) are avoided as well.

Withdrawal Strategies

When it comes to withdrawing from your retirement accounts, how you take your distributions can make all the difference. Each retirement asset (employer-sponsored accounts, Social Security, traditional IRAs, etc.) has different tax characteristics. Creating a withdrawal strategy can help lower your tax burden by structuring withdrawals from each income source in a tax-efficient way.

To properly implement these strategies and more, a long-term understanding of your full financial picture is required. Putting off financial planning can leave you stuck with a huge tax bill that could have been avoided.

4. Take Advantage of Compound Interest

Just as saving early allows you to take advantage of massive tax savings over time, there is a compound effect that occurs with the money that is invested as well. The money contributed to your retirement account each year can grow exponentially over time, but the key part of that equation is time.

A single penny that doubles every day for a month may not seem like much on the surface, especially when compared to $1 million up front. But by the time the 30th day rolls around, you will have over $5 million in pennies. This same concept can be applied to your retirement account, but because retirement investments are at the mercy of the highs and lows of the stock market, it will take more than 30 days to see that kind of growth.

If you wait to invest, you may be missing out on growth year after year, and the resulting loss of earnings can be substantial. Not to mention the potential for loss when you try to invest yourself without the proper advice and guidance of a professional.

5. Financial Planning Can Alleviate Stress

Do you feel 100% confident about the myriad of financial choices you make day in and day out? Have you encountered more complexity as your assets have grown? Partnering with a financial professional can help alleviate the stress and anxiety that comes from trying to figure out your finances.

Think about all the time you spend worrying over finances and whether you are saving enough money. Are those thoughts preventing you from making great memories and actually living your life? For many, the answer is yes. But it doesn’t have to be that way.

Financial planning can help alleviate the stress that comes from not knowing where you stand or how to achieve your goals. It can provide clarity by defining a path from point A to point B and allowing you to get the most out of your life along the way.

Get Started Today

Financial planning is not just a tool to organize your future, it is a vital factor for making your hopes and dreams become a reality. Working with a qualified professional can help you turn those dreams into tangible steps that connect with your values.

At Rosemeyer Management Group, we strive to be our clients’ trusted advisor in all things financial and help them face the future with confidence. Don’t leave the most important things in life to chance. Schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at carter@rosemeyermg.com.

About Carter

Carter Klaas is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Carter focuses on the people behind the dollars and cents, forging long-lasting relationships with his clients. Using clear, measurable financial goals, Carter works to bring financial confidence to those he calls clients through education, intentional planning, and a strong relationship built on mutual trust. By planning comprehensively with investment strategies, risk management strategies, retirement planning, tax planning, and estate planning, Carter makes sure all the pieces of a person’s financial “puzzle” fit and work together for their goals. He is dedicated to personalized planning because he realizes that the wide-ranging experiences and emotions revolving around money demand a custom-fit plan. Carter has a bachelor’s degree in personal finance and financial planning from the University of Wisconsin-Madison.

When he’s not at work, Carter enjoys spending time with his wife, Natalie, and their Goldendoodle puppy, Willow. You’ll find them taking walks, drinking wine, bike rides, and being near the lake. To learn more about Carter, connect with him on LinkedIn.

People often struggle with the relationship between their money and their values. Some see money as a necessary evil to get through life, while others feel that having more money will buy them happiness. Though money can’t actually purchase happiness, there is a strong connection between the things we value in life and how we use our money.

Do your spending habits align with your priorities? Do your future plans match how you are purposefully using your money right now? These are just a few questions that can help you connect the dots between your money and your values. At Rosemeyer Management Group, we are passionate about helping people discover their personal values and then apply them to their financial decisions. Here are some quick ideas to get that process started.

Identify Your True Values

Start by separating your values into two categories: the values you were taught, and the values that truly make you happy. There may be some overlap between the two, but the goal is to find out if there is a difference between the values you think you have and the values that are truly meaningful in your life.

For example, you may have been taught to work hard and pour your soul into a corporate job that pays well, but maybe it’s not bringing you any personal satisfaction. In reality, you might find more fulfillment from a nonprofit job that pays less but whose mission and good work you believe in. To start this process, psychologist Jim Taylor recommends answering the following three questions:

• What do you choose to do in your life on a daily basis?
• What activities are you passionate about that bring you true joy when you participate in them?
• What experiences and people cause you to feel deeply engaged and connected to the world around you?

Digging into these questions can uncover the values you hold that truly fulfill you and bring joy to your life. If you’re constantly unhappy, whether that be from your job, your financial behaviors, or something else, this is a sign that you may not be living according to your true values.

Understand Your Money Mindset

You also need to take stock of your money mindset. Your money mindset has been cultivated from your life experience. You may have learned good financial habits from your parents. You may have even learned bad financial habits if you watched your parents fail financially. Whatever your experiences have been with personal finances, they are the key to understanding why you behave the way you do around financial matters.

Understanding your money mindset is important because it allows you to grow intentionally. Identifying a toxic or substandard financial mindset is the first step to changing that mindset. By knowing what you want to change, you’re in more control over how and when you change it.

Be Honest With Yourself

Here’s the hard part. You need to be honest with yourself about the alignment of your values and your money mindset. It’s tough to be honest with ourselves. It takes hard work. But it’s been said throughout history that self-reflection is one of life’s most difficult yet rewarding endeavors. (Socrates’ famous statement comes to mind: “The unexamined life is not worth living.”)

Reflecting and being honest with yourself about the disconnects you’ve identified will help you get on the right path to healthier behaviors and goals. If this process leads to greater fulfillment and an easier time reaching your realistic financial goals, it will all be worth it.

Sync Your Ideal Life With Your Lived Life

After all this reflection, your ideal life probably looks a bit different from your day-to-day life, your reality. To reach that ideal lifestyle, you must sync your “living life” with the values you identified that actually make you happy. Remember that these are the values that connect you to the activities, experiences, and people which bring you the most fulfillment.

Only then will you be able to create financial goals that truly reflect your values. When financial goals are connected to your values, your finances become the tool that allows you to reach the real goal, rather than being the end goal in and of itself. From this vantage point, you’re ready to experience long-lasting happiness.

Does Your Advisor Value Your Values?

The last key to values-based finances is to find someone to help you that connects with and cares about your values too. If you have an advisor that doesn’t see and respect what you value, you’ll probably have a hard time accepting their advice. It might take some time to find the right person to partner with, but once you find someone that puts the things you are most passionate about first, you’ll notice a huge difference.

At Rosemeyer Management Group, our mission is to help you define your goals and values and then create a plan that works for your present situation and every step toward your future. Schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at regan@rosemeyermg.com.

About Regan

Regan Shipp is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Regan is known for building relationships and looking at the whole picture of her clients’ lives to provide personalized, comprehensive wealth management services and advice. She leaves no stone unturned as she integrates investment strategies, risk management strategies, tax planning, retirement planning, and estate planning to design a plan that will help her clients pursue both financial success and freedom throughout their lives. Regan strives to educate her clients so they can feel empowered to take the actions necessary to achieve their goals. Regan is passionate about making a difference in people’s lives and loves journeying with her clients and seeing them reach new levels, surpass goals, and create wealth they might not have known was possible. Regan has a bachelor’s degree in accounting and agricultural business from the University of Wisconsin-Platteville and is a Certified Public Accountant (CPA) and CERTIFIED FINANCIAL PLANNER™ professional.

With uncertainty in the financial markets and banking world, it might make sense to keep cash safe by letting it sit idle. While keeping cash readily available provides a sense of security, it’s important to recognize that holding on to excess funds can lead to missed opportunities for growth and potential erosion of purchasing power.

Let’s look into the concept of idle cash and explore the hidden costs associated with letting your money remain stagnant. By understanding the potential drawbacks, you can make informed decisions about how to optimize your cash holdings and keep your money working for you.

Origins of Idle Cash

Idle cash can build up in a variety of ways. Young professionals earning more money than they are used to can let cash pile up in their savings because they don’t know how to make it work for them. Experienced investors may not even realize they have idle cash sitting around from dividend payouts that aren’t automatically reinvested. Cash from passive revenue streams, such as rental properties, may not be integrated into your investment portfolio and could be actively dragging down your return potential.

Regardless of where the cash is coming from, having too much of it idle in your portfolio is not a wise financial strategy. There is no right number and it is different for every person and family, but we believe one should have a cash contingency target to keep in reserves based on your unique circumstance. Other than this backup cash, the amount of idle money in your portfolio should be limited, with additional funds being productively put to work.

Stay on Top of Your Accounts

Do you know how much idle cash you’re carrying? If you own mutual funds, you may consider the money you put into the funds as being invested, but did you know that these funds usually keep about 5% of the portfolio in cash and cash equivalents? Evaluate your portfolio as soon as possible, because the excess cash sitting in your savings is losing the fight against inflation.

Inflation has increased costs, and the value and purchasing power of $100 today is very different from that of 30 years ago. Even with rising interest rates, idle cash is still not earning nearly enough to effectively combat inflation and holding on to excess cash for the long term is effectively minimizing the potential upside of your hard work. What can you do with the extra cash? How do you reinvest it so you maximize its return?

A Better Alternative

The Rosemeyer Management Group team members strive to find the best way to put your money to work and align your investments with your current needs and future goals. Whether you’re saving for your child’s education, strengthening your retirement accounts, or planning to purchase a new home, we want to see your investments reach their potential.

It’s important to understand there are more efficient ways to handle cash than simply stockpiling it in a checking or savings account. If you need liquidity but still want to put your cash to work, consider investing in short-term securities. These types of investments can be liquidated in less than a year but earn better returns than money collecting dust in your savings account.

Municipal bonds, real estate, and savings bonds are all excellent long-term investment options if you’re in a position to limit access to your funds for an extended period of time. These types of investments require commitment but can be lucrative if held until maturity.

How We Can Help

Recognizing the potential loss of holding on to idle cash and taking steps to optimize your cash holdings helps you maximize your financial potential and make your money work harder for you. Whether it’s investing, exploring high-yield savings accounts, or diversifying your portfolio, there are various strategies available to minimize the impact of idle cash and increase your financial gains.

If you’re ready to explore your options, we at Rosemeyer Management Group would love to talk. Schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at: carter@rosemeyermg.com.

About Carter

Carter Klaas is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Carter focuses on the people behind the dollars and cents, forging long-lasting relationships with his clients. Using clear, measurable financial goals, Carter works to bring financial confidence to those he calls clients through education, intentional planning, and a strong relationship built on mutual trust. By planning comprehensively with investment strategies, risk management strategies, retirement planning, tax planning, and estate planning, Carter makes sure all the pieces of a person’s financial “puzzle” fit and work together for their goals. He is dedicated to personalized planning because he realizes that the wide-ranging experiences and emotions revolving around money demand a custom-fit plan. Carter has a bachelor’s degree in personal finance and financial planning from the University of Wisconsin-Madison.
When he’s not at work, Carter enjoys spending time with his wife, Natalie, and their Goldendoodle puppy, Willow. You’ll find them taking walks, drinking wine, bike rides, and being near the lake. To learn more about Carter, connect with him on LinkedIn.

Picture this: You have only one shot to impart a single financial lesson to your children, grandchildren, or anyone dear to you. What would it be? Would it be about saving, investing, or budgeting? The truth is, there are countless essential money lessons that everyone should learn, but if you could only teach one, what would it be? In this article, I’ll share what I believe is the most impactful financial lesson that could change yours and your loved ones’ lives.

Take Emotions Out of Your Financial Plan

Emotions can play a significant role in how we manage our finances, which can often cause us to make impulsive decisions that end up hurting our long-term financial goals. For example, many people panic during market downturns and sell their investments at a loss, only to miss out on potential gains when the market rebounds. On the other hand, some people may become overconfident during bull markets and take on too much risk, leaving them vulnerable to significant losses when the market eventually corrects.

One way to take emotions out of your financial plan is by automating your savings and investments. Setting up automatic contributions to your retirement accounts and investment portfolios takes the decision-making process out of the equation. This can help you avoid the temptation to react to short-term market movements and remain focused on your long-term goals. It can also help you develop good financial habits and create a consistent pattern of saving that can benefit you for years to come.

You can also consider developing a disciplined and consistent approach to managing your money. This means creating a well-thought-out financial plan that takes into account your goals, risk tolerance, and time horizon. It involves sticking to your plan even when the market gets volatile or when you’re faced with unexpected financial challenges. By doing so, you’ll be less likely to make rash decisions that can hurt your financial well-being, and more likely to reach your long-term financial goals.

Stay the Course

Investing in the stock market can be an emotional roller coaster, with ups and downs that can cause even the most experienced investors to second-guess their decisions. But staying the course and not getting swayed by the latest tech stock or panicking during market volatility can be crucial to experiencing long-term financial success.

To stay focused on your financial plan, it’s important to keep your attention on the long term and not get distracted by short-term market noise. Avoid making impulsive investment decisions based on fear or anxiety; instead, rely on a consistent investment approach.

This means diversifying your portfolio across different asset classes and industries, rebalancing regularly to stay aligned with your goals, and avoiding trying to time the market, which is a notoriously difficult task even for the most experienced investors. By staying committed to your investment plan, you’ll be better positioned to weather short-term market volatility and reach your financial goals.

Partner With a Professional

Because emotions can cloud your judgment and lead to poor financial decisions, it’s essential to develop a solid financial plan and stick to it through market ups and downs. Working with a financial advisor can help you stay on track and avoid the impulsive decisions that are based in fear or anxiety.

At Rosemeyer Management Group, we recognize that investing is a long-term game, and work to support you toward a well-thought-out strategy. Don’t let your emotions derail your financial goals. Take a step back, review your plan, and stay the course. To discuss our offerings for your family or business, schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at payton@rosemeyermg.com.

About Payton

Payton Simon is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Payton spends his days providing in-depth investment analysis and aiding in the development of customized, comprehensive retirement, tax, and estate planning strategies to help his clients reach their retirement goals. Payton is passionate about doing his best for every client he serves and making sure they don’t have any blind spots or missed opportunities in their financial plan. He strives to do his part to close the financial literacy gap so people can feel confident and empowered about their financial future. Payton has a bachelor’s degree in finance with a minor in accounting from the University of Wisconsin-LaCrosse. Outside of work, Payton is active in his local Catholic parish and incorporates his faith into every aspect of his life. He loves spending time with his family and friends and is a sports enthusiast, playing golf, basketball, and baseball. To learn more about Payton, connect with him on LinkedIn.

It’s no secret that inflation and recession are dominating the news cycle, and many people are worried about how it can affect their retirement savings. With everyday costs increasing, it can be difficult to stay afloat when living on a fixed income. But that doesn’t mean your retirement has to suffer. In this article, we’ll explore 5 steps you can take to shield your retirement savings and keep inflation from ruining your golden years. Read on to learn more about how you can safeguard your future and enjoy a stress-free retirement.

Why Is Inflation a Threat?

Inflation is the general rise in the price of goods and services over time. It is a normal part of a growing economy, but over the past year, it has become a major obstacle for those who are nearing retirement or have already retired.

The Consumer Price Index (CPI), which is a common measure of inflation, ended the year with an annual inflation rate of 6.5%, still quite a bit higher than the average 2% yearly inflation numbers we’ve grown accustomed to in prior years. And the inflation rate went up another 0.5% in January, which is higher than what experts had estimated.

As the cost of goods rise, many retirees are left with a fixed amount of income for the rest of their lives. Too much of an increase in cost can quickly price retirees out of the comfortable retirement they worked so hard to build.

What Can You Do to Safeguard Your Savings?

Though inflation has continued to rear its head, thankfully there are steps you can take to minimize the impact.

1. Reassess Your Budget

The first step in overcoming inflation is to understand its impact on your overall financial plan. The unfortunate fact is that most people have unlimited wants with only limited resources. Inflation exacerbates this issue by making every dollar you earn worth less than it was worth the day before. So, a good way to cope with a high-inflation environment is to reassess your budget and make adjustments where you can.

For retirees, this might mean cutting back on discretionary expenses such as traveling, recreation, or going out to eat. You could even reassess your living situation and downsize to a smaller home or condo if it makes sense for your overall financial plan.

Reassessing your budget is an especially useful tactic when the market is in a downturn. The more you can avoid withdrawing from your portfolio to pay for everyday expenses, the better off you’ll be in the long run.

If you are aware of upcoming costs that could place strain on your finances, you can plan ahead and make cuts to other areas of spending in order to compensate. Even if you don’t expect your lifestyle to change all that much, taking a look at your budget and reassessing your spending is never a bad idea.

2. Borrow Sooner Rather Than Later

It may seem counterintuitive to take out a loan during a high-inflation environment, but inflation is actually good for borrowers. Because it causes the value of your money to decline over time, funds borrowed today will likely be paid back with money that is worth less than it was when it was originally borrowed.

This isn’t to say you should start excessively borrowing money for things you don’t need. Rather, if you know you have a large purchase coming up, like buying a home or a vehicle, borrowing sooner rather than later can enable you to get more value out of the money you’re going to spend anyway.

3. Diversify Your Income

Retirees often have several sources of income, but they are usually relatively fixed in amount. If your expenses are greater than these income sources, you may be forced to draw from your investment assets. An effective way to avoid, or reduce, portfolio withdrawals is to diversify your income. Not only could this improve your portfolio longevity and provide you with more flexibility in retirement, but it can also help minimize the impact of inflation.

Diversified income streams act in much the same way that diversified investments do. They allow for less demand on any single income source so you have the flexibility to handle increased costs or unforeseen events without depleting your portfolio reserves. There are many ways to diversify your income, including:

• Invest in real estate. Owning rental properties is a great way to earn passive income without dipping into your retirement savings.
• Continue to earn active income. You could also pursue a passion, become a freelancer, or work for a nonprofit. You might earn less than what you’re making now, but these options may provide flexibility and a form of income diversification that could keep your retirement savings safe from inflation.
• Use dividend-paying stocks. Often considered an annuity-like cash stream, dividend-paying stocks give company earnings to investors, typically once a quarter. The top dividend-paying stocks even raise their payouts over time. This not only gives you an income stream, but you can also reinvest the dividends to pursue more growth.

4. Invest in the Stock Market

Investing in the stock market is one of the best ways to outpace inflation because, historically, the rate of return of the market tends to exceed the rate at which inflation is increasing. This is because the stock market tends to rise over the long term, driven by economic growth, technological innovation, and other factors. As the stock market rises, the value of your investments can grow at a faster rate than inflation, helping you stay ahead of rising prices.

Additionally, some stocks pay dividends, which can provide a regular income stream that may keep pace with inflation. Before you dive right into investing in the market, it’s important to keep in mind that this strategy comes with risks. It’s essential to do your research and make informed decisions based on your financial goals and risk tolerance.

5. Put Idle Cash to Work

You may think that the best way to ride out the uncertainty storm is to stockpile loads of cash in the bank. While this does keep it safe from volatility, it does nothing to protect you from inflation. Each day your funds sit idle, inflation could eat away at your purchasing power. This issue can be minimized by making sure even your reserve funds are earning a competitive interest rate.

For instance, high-yield savings accounts are currently paying upwards of 4% interest. While this is still a far cry from the 6.5% inflation rate, it is much better than the 0% interest you would earn from most checking accounts.

There are other options that can improve your interest rate while still keeping your funds relatively safe, including money market accounts, certificates of deposit, and short-term Treasury bills. No matter which option you choose, managing your excess cash with inflation in mind is the best way to improve your portfolio longevity and safeguard your retirement.

Is Inflation Threatening Your Retirement?

If you’re concerned about your retirement savings due to current inflation and market conditions, don’t worry; Rosemeyer Management Group can help. Our team of professionals can provide a tailored plan to help safeguard your retirement from inflation and market volatility. Reach out to me at regan@rosemeyermg.com or schedule an introductory appointment online to take the first step toward your ideal retirement.

About Regan

Regan Shipp is an investment advisor representative at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. Regan is known for building relationships and looking at the whole picture of her clients’ lives to provide personalized, comprehensive wealth management services and advice. She leaves no stone unturned as she integrates investment strategies, risk management strategies, tax planning, retirement planning, and estate planning to design a plan that will help her clients pursue both financial success and freedom throughout their lives. Regan strives to educate her clients so they can feel empowered to take the actions necessary to achieve their goals. Regan is passionate about making a difference in people’s lives and loves journeying with her clients and seeing them reach new levels, surpass goals, and create wealth they might not have known was possible. Regan has a bachelor’s degree in accounting and agricultural business from the University of Wisconsin-Platteville and is a Certified Public Accountant (CPA) and CERTIFIED FINANCIAL PLANNER™ professional.

When she’s not at work, you can often find Regan spending time with her friends and family or out on a run training for a half or full marathon. Regan and her husband, Payton, their son, Lincoln, and their dog, Axel, love the outdoors and look forward to more camping, deer hunting, and beach trips. To learn more about Regan, connect with her on LinkedIn.

Banks play a vital role in the economy, providing individuals and businesses with access to cash, credit, and other financial services. Despite their importance, however, banks can fail. And when they do, the effects often cause panic in the wider economic environment.

This past week, two major players in the banking industry, Silicon Valley Bank and Signature Bank, collapsed after they had trouble raising capital to meet the demand for the withdrawal of depositors’ funds. While there are several reasons why experts believe these failures are not part of a more significant economic crisis, everyday investors are still understandably worried. These were the second and third largest bank failures in U.S. history, behind only the collapse of Washington Mutual in 2008.

Thankfully, there are safeguards in place that make it highly unlikely that clients will lose their entire life savings, even in the event of widespread banking failures. In this article, we explore why banks fail, what insurance protections are in place, and the safety of your savings.

Why Do Banks Fail?

Banks can fail for several reasons, including undercapitalization, liquidity issues, safety and soundness concerns, and fraud.

• Undercapitalization occurs when a bank has insufficient capital reserves to cover ordinary business expenses or meet regulatory requirements, which leaves it vulnerable to financial shocks. For instance, a bank that has issues generating cash flow or accessing financing in the form of debt or equity may find itself undercapitalized.
• Liquidity issues arise when a bank lacks sufficient cash or liquid assets to meet its obligations, which can happen when a large number of depositors withdraw their funds all at once.
• Safety and soundness concerns occur when a bank engages in risky lending practices, such as offering subprime loans or investing in volatile assets. This was a big issue during the 2008 financial crisis when several major banks failed due to their investments in subprime mortgages.
• Fraudulent activities, such as embezzlement or insider trading, can cause significant financial losses for a bank and erode depositor confidence.

Banks that fail to manage these risks effectively may become insolvent and ultimately fail, jeopardizing the stability of the financial system and the broader economy.

What Happened With SVB & Signature?

SVB and Signature Bank both failed due to liquidity issues stemming from what’s known as a bank run. A bank run occurs when a large number of depositors withdraw their funds from a bank over a very short period of time (usually days). Because banks invest the cash deposited with them, a high demand for withdrawals can force the banks to sell off investments at a poor market price in order to meet the liquidity need. Consistently selling assets at a substantial loss can exacerbate liquidity issues and quickly cause a bank to become insolvent.

Silicon Valley Bank almost exclusively served tech start-ups and venture capital-backed clients, which were particularly hard-hit during the economic volatility of 2022. As financing started to dry up for tech companies and venture capitalists couldn’t come up with additional funding, clients began withdrawing funds from their accounts at SVB to meet the operating expenses for their businesses. SVB was forced to sell billions of dollars’ worth of long-term Treasury bonds (initially bought when rates were near zero) at a massive loss to raise capital. This spooked other depositors, many of whom had accounts well above the FDIC-insured limits, and caused them to withdraw their money at an unsustainable rate. SVB could not meet their deposit requests and attempts to raise capital or sell the assets to a healthier bank were unsuccessful. The FDIC quickly stepped in as receiver and took over operations to prevent further damage.

A similar story unfolded at Signature Bank, which served mostly crypto investors. Similar to the depositors at SVB, many of the accounts held at Signature Bank were well above the FDIC-insured limits. Spooked by the failure of SVB, depositors at Signature Bank withdrew over $10 billion on Friday, March 10th. By Sunday, March 12th, the bank was taken over by the FDIC to protect the stability of the U.S. banking system.

What to Expect From Other Banks

While the effects of the SVB and Signature Bank failures are hard to predict, the FDIC has reacted swiftly to prevent further damage. Regulators have invoked a “systemic risk exception” which allows the government to reimburse uninsured depositors. The Fed has also set up an emergency lending program to provide funding to eligible banks at risk of bank runs.

So far, small and midsize banks are at the most risk since they tend to focus on niche clientele who are more susceptible to industry-specific risks. Shares of regional bank stocks took a beating on Monday, March 13th, as investors tried to process the news of SVB and Signature Bank. First Republic Bank was down over 60%. Larger banks, including Wells Fargo, Bank of America, and JPMorgan were less affected, falling just 7%, 3%, and 1%, respectively.

What to Know About FDIC & SIPC Insurance

Despite the uncertainty surrounding the health of the overall banking system, there are safeguards in place to protect depositors and investors from losing their hard-earned savings.

Both the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SIPC) provide insurance to preserve your assets.

FDIC Insurance

The FDIC is an independent U.S. government agency that was established in 1933 to insure bank deposits. The FDIC insures deposits up to $250,000 per depositor, per account ownership category, per bank. This coverage includes checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs) issued by FDIC-insured banks.

SIPC Insurance

SIPC is a non-profit organization established by Congress in 1970 to protect investors against losses due to broker-dealer failures. SIPC provides up to $500,000 in insurance per customer for cash and securities held by a broker-dealer. This coverage includes stocks, bonds, CDs, and mutual funds held in a brokerage account.

It’s important to note that SIPC insurance does not protect against losses due to market fluctuations, but only in the event of broker-dealer insolvency or fraud. SIPC insurance also does not cover investment losses incurred by the customer, nor does it cover non-securities such as commodity futures contracts or currency.

How to Safeguard Your Savings

Not all banks and broker-dealers are FDIC or SIPC insured, so be sure to double-check the status of your accounts and consider relocating your funds if your bank or brokerage is uninsured. Additionally, not all account types are eligible for FDIC insurance. Stocks, bonds, and mutual funds are account types that are not eligible for FDIC coverage, and commodity futures and currency contracts are not eligible for SIPC insurance.

Additionally, both FDIC and SIPC insurance have limits to their coverage. The FDIC insures up to $250,000 per depositor, per account ownership category, per bank, while SIPC insurance provides up to $500,000 in coverage per customer. Keep in mind that joint accounts are considered a separate ownership category, which means that each account holder is insured up to $250,000 under the FDIC program.

If you have accounts with multiple banks or broker-dealers, make sure your deposits and securities are spread out in a way that maximizes your insurance coverage. Remember to regularly review your account balances and adjust your accounts as necessary to ensure you are within the coverage limits. By knowing the coverage limits and eligibility requirements, you can make informed decisions when choosing where to deposit your money or invest your securities. For example, Charles Schwab offers SIPC insurance up to $500,000 but also contracts with Lloyd’s of London for excess SIPC insurance up to $600 million.

How We Can Help

If you’re worried about the recent bank failures and how they might impact your finances, don’t hesitate to reach out to us for guidance. Our team can help you understand your options and develop a plan to protect your assets, minimize your risk, and provide advice on FDIC and SIPC insurance. Schedule an introductory appointment online or by calling us at 608-348-2274. For any questions, feel free to reach out to me at: andrew@rosemeyermg.com.

About Andrew

Andrew Tranel is co-owner and chief investment officer at Rosemeyer Management Group, an SEC Registered Investment Advisor based in Platteville, WI. With 10 years of experience, Andrew specializes in providing retirement planning, tax planning, estate planning, and insurance needs for his retiree and pre-retiree clients with the goal of helping them develop a road map to financial freedom. He is known for his expertise in helping people make empowered and educated decisions about their retirement so they can confidently navigate the pre-retirement challenges they face. Andrew has a bachelor’s degree in finance and sport management from Loras College and is a CERTIFIED FINANCIAL PLANNER™ professional. When he’s not working, you can find Andrew spending time with his wife, Kimberlee, their children, Steven, Elliott, Weston, and Amelia, and their beloved boxer, Bella. He also enjoys hunting, golfing, playing basketball and softball, and traveling. To learn more about Andrew, connect with him on LinkedIn.

Provided by Andrew Tranel