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Tax planning can transform your finances. Think about it—taxes follow you wherever you go. You can find them while browsing in the grocery store, buried in your portfolio, coming out of your paycheck, or even just living in your house. Taxes impact nearly every aspect of your life and being conscious of that presence in your financial plan can save you thousands of dollars each year. A strong tax planning strategy can save you money on retirement withdrawals, keep your investments efficient, help you give more to charity, maximize your estate, and put more money in your pocket. Our team at Covenant Wealth is passionate about the role tax planning plays in our client’s financial and personal lives. Today, we are going to dive into the top four reasons we believe that financial advisors should do tax planning. 1. Your advisor has a comprehensive view and access to your financial life Most people think about taxes as both beginning and ending on April 15, but that is far from the full story. Preparing your taxes is different than planning for your taxes. Think about it like this: tax preparation is like the final exam and tax planning is all the studying and work you do to ready yourself for the test. One month of studying likely won’t yield the same results as 11 months of studying. The more time you dedicate to a subject, the more intentional and prepared you will be. Tax preparation gathers all your information and creates an accurate return for any given tax year. While a vital part of your financial life, it isn’t the same as cultivating intentional tax strategies and implementing them throughout the year to proactively lower your tax bill. Tax planning allows us to plan and execute crucial efficiency strategies on your tax return both now and in the future. Through tax planning, we can guide clients to make smart choices that have long-term financial impacts both on the current and future tax returns, like devising a tax-efficient withdrawal strategy for retirees. This strategy takes your cash flow, income channels, lifestyle needs, and more into consideration and helps you draw money from the right accounts at the right time to minimize your tax liability. 2. It can drastically improve your investment strategy Tax planning can radically enhance your investment approach, making your investments work for you in tax-conscious ways. Below are a few examples: Tax-loss harvesting Asset location Tax-efficient withdrawal strategies Let’s take a look at how these elements can influence an investment plan. Tax-loss harvesting allows you to realize a loss while keeping your portfolio fully invested. Recognizing a loss is good for tax purposes because it can offset any capital gains in the same tax year or up to $3,000 in other income. This strategy also creates an opportunity to rebalance a portfolio back to your target allocation while still minimizing taxes. Asset location is all about making investment portfolios tax-efficient. It’s the process of determining the tax-efficiency of each security (stocks, bonds, ETFs, etc.) and which account (brokerage account, Roth IRA, Traditional IRA, 401(k)) would be best to hold each investment. Certain investments work better in a tax-advantaged retirement account, whereas others function better in a brokerage account. This strategy is about minimizing potential taxable income generated by the investments in a given year. Retirement income planning is a crucial component of your overall strategy, and determining the right withdrawal strategy for you is a significant part of that conversation. In the accumulation phase, our team works to balance your investments in different tax buckets, such as tax-free Roth IRA, tax-deferred Traditional IRA or 401(k), and taxable brokerage accounts to enhance diversification in retirement. Once you hit the distribution phase in retirement, we strategically manage your taxable income so as not to push you into a higher tax bracket while still maintaining flexibility for the future. Say, for example, you have a sizable amount in your traditional IRA. You might not want to delay your distributions until 72 because it would result in annual required minimum distributions (RMDs) that significantly outweigh your income need and force excess taxable income. This strategy is all about tax maintenance and ensuring your money works as efficiently as possible in your golden years. 3. Proactive tax planning saves you money There are several ways that tax planning can save you money. By taking advantage of available opportunities, you won’t be surprised by your tax return each April. Here are a few ways that our team at Covenant Wealth Advisors implements tax planning into our client’s financial plans: Invest in low-cost and tax-efficient index funds that garner minimal capital gains and promote a long-term holding strategy. Also, monitor capital gains recognized throughout the year and take advantage of tax-loss harvesting. Maintain appropriate tax credits like the Affordable Care Act, health insurance premiums, and ensure that a client’s modified adjusted gross income remains below the required thresholds for these. Blend charitable giving goals and tax-efficient donation strategies. This could be with a donor-advised fund (DAF), which enables you to remove highly appreciated assets from your portfolio without paying capital gains and potentially deducting the contribution. Another strategy is a qualified charitable distribution (QCD), which allows donations directly from a Traditional IRA to a qualified charity. Many people use QCDs as a way to lower their taxable income by donating all or a portion of their RMD. There are several considerations with QCDs like you must be 70 ½ and you can only do this transaction from a Traditional IRA (including SEP & SIMPLE IRAs), not a 401(k) or 403(b). It is also best suited for taxpayers who are no longer itemizing to gain the biggest tax benefit. Run projections to ensure sufficient tax withholdings and estimated payments to avoid being caught off guard with an extra tax bill in April. Take advantage of years with low taxable income to initiate Roth conversions . This increases the bounty of the tax-free bucket, which is incredibly helpful in retirement. For example, the CARES Act suspended RMDs for 2020, which presented an opportunity for those who didn’t need the income from their Traditional IRA to instead convert to a Roth IRA. Maximize after-tax funding strategies like backdoor Roth IRA and even after-tax contributions to 401(k) should your plan permit. This again helps to build up the tax-free bucket, especially if your income is over the threshold to contribute directly to a Roth IRA. 4. Tax planning boosts wealth accumulation The more money you save in taxes, the more you can reinvest in yourself and your future goals. How can you do this? Here are a few suggestions. Prioritize funding Roth accounts early in your career when your taxable income is lower. Convert Traditional IRA dollars to Roth dollars in low taxable income years. You will need to pay taxes on the conversion, but it will likely be at a lower rate. Avoid unnecessary capital gains. An example in your investment plan would be to steer clear of actively managed mutual funds in a taxable brokerage account. Why? The high turnover causes undue capital gain distributions, therefore increasing your tax liability. Make the most of QCDs for charitable giving purposes. As you can see, tax planning is a complex and comprehensive process. Your specific strategy should be unique to you and your plan. Everyone has different financial needs and visions for the future, and we seek to help you maximize your financial plan to set yourself up for success both now and in the future. How can you be sure our team can help you achieve your financial goals? All of our advisors hold the CFP designation and one member also has a CPA license. These accreditations combined with years of experience and passion put us in a unique position to help clients set up their taxes in efficient ways. We also invest heavily in technology, which enables us to effectively deliver on all the strategies we discussed today. Ready for more tax advice? Check out our free resource which details everything you need to know about your taxes in 2020. Is it time for you to revamp your tax planning strategy? Set up an appointment with our team today. We can’t wait to help keep your money working for you. Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Registration of an investment advisor does not imply a certain level of skill or training.

When you think about how to invest in retirement , what comes to mind? Chances are, it’s something related to how to invest so you don’t run out of money. If so, you're not the only one who feels this way. Get your Retirement Checklist of over 30 things that you need to think about for your retirement. In a 2020 investor survey by Dimensional Fund Advisors, 11,236 investors were asked to state their greatest fear about personal finances. On average, 49% of investors said that not having enough money to live comfortably in retirement was their number one financial concern! Unfortunately, many people don’t know how to invest in retirement even though they may have significant investable assets. Before we dive into how to invest, it’s essential to identify the obstacles you face. Here are three significant obstacles we often encounter when helping clients plan for retirement: Investor behavior gap – Poor investment behavior causes many investors and professional money managers to underperform market returns. Sequence of return risk – Even more important than the returns you receive, the order in which you recieve those returns can mean the difference between maintaining financial security in retirement and running out of money. Income taxes – High taxes and inefficient tax management can destroy your hard earned savings. Let’s take a look at each obstacle to help you understand what’s at stake before you learn how to invest in retirement. Investor Behavior Gap in Retirement Dalbar, a leading financial research firm, released its latest report on investor behavior back in 2019 and the findings, though not surprising, do not bode well for future retirees. The study showed that the average investor underperformed the market—by a considerable amount. For example, in 2018, the S&P 500 lost -4.38% vs. the average stock market investor’s return of -9.42% for the year . This means that investors unperformed the market by 5.04%! The 2019 study results weren’t an anomaly, unfortunately. If you want to know how to invest in retirement, it’s important to know that the odds of achieving good long term performance are stacked against you. Over the 20-year period ending December 31st, 2018, the S&P 500 had an annualized return of 5.62%, while the average stock investor’s account balance gained just 3.88% per year , a significant gap. There are a variety of reasons for investor performance lag, but poor investor behavior tops the list. The study found that investors hung onto their stock and bond positions for just under four years before selling them for another investment. This frequent trading, or what we call turnover, can ruin the potential for long-term growth. So much for long-term investing! Additionally, many investors in retirement gave into “panic selling,” pulling money out of an investment at the worst possible time because market commentators stoked their fears. Lack of diversification also contributed to poor returns. It’s not just individual investors who underperformed the market—even professional money managers fail to meet their benchmarks despite charging high fees for their services. Each year, the S&P Dow Jones Indices release an annual report card showing how various funds and fund managers performed against their respective index. In 2020, 47% of small company value fund managers underperformed their benchmark, as did 63% of large company stock mutual funds. According to Dimensional Fund Advisors, over the last 10 years, only 21% of equity mutual funds across all investment categories underperformed their index benchmark! But, investment performance isn’t the only obstacle when it comes to knowing how to invest in retirement. Sequence of Return Risk Investors face an entirely different set of challenges when it’s time to turn their growth portfolio into an income portfolio in retirement. Few investors have ever heard the term “ sequence-of-returns risk ,” or simply “sequence risk,” but it can have a significant impact on your ability to take sustainable income withdrawals from your retirement portfolio. Imagine two couples, the Washingtons and Lincolns, as outlined in the chart below. Both have identical account balances of $2 million at age 60 , both wish to withdrawal $50,000 per year from their portfolio, and both receive an average return of 4.28% per year starting at age 60. However, let’s assume that each couple receives their returns in the opposite sequence of the other as shown below in our sequence of return chart. Example 1: The Washington Family Mr. and Mrs. Washington begin retirement during a bear market, defined as a period when the stock market declines more than 20%. At the time of their first income withdrawal of $50,000, the portfolio is actually generating negative returns. As a result, they have to spend over 7% of the portfolio value in year one just to meet their income needs in retirement. Unfortunately, poor returns continue and don’t rebound until halfway through their retirement. The result: The Washingtons run out of money by the time they turn 81! Example 2: The Lincoln Family The Lincoln family, on the other hand, entered retirement in an upward trending bull market. When they take their first withdrawal of $50,000 in retirement, it represents less than 2% of the portfolio value. The Lincolns continue to have high returns in the early years and don’t face severe downturns in the market until later in retirement. The result: The Lincolns end up with $3.8 million by the time they are 88 years old and never run out of money in retirement. But remember, their average return was the exact same as the Washington family . The financial consequences of retiring in a bear market are twofold: Due to market declines in the early years, the Washingtons have far less money in their portfolio in the early years. The Washingtons must withdrawal a bigger percentage of their portfolio just to meet their fixed expenses in retirement. That’s sequence risk in a nutshell, and it’s an issue everyone must consider when planning how to invest in retirement at age 55, 60, 65, or older. The good news is that sequence of return risk can be mitigated with the right portfolio strategy. Tax Implications of Investing in Retirement Many investors either don’t understand or fail to consider the tax implications of their investment choices when it comes to investing in retirement. For example, a study by Vitali Kalesnik and Trevor Schuesler entitled: “ Is Your Alpha Enough to Cover Its Taxes? A Quarter-Century Retrospective. ” The authors conclude that the average actively managed mutual fund in their study lost 2.4% of their return per year to taxes! Another study by Vanguard revealed that investors can potentially improve their after-tax investment returns by up to 0.75% per year by implementing just one tax strategy, called asset location. Ignoring taxes when investing in retirement has many implications, including: Taxes can reduce the income and earnings available for reinvestment. This hurts your ability to compound your investment portfolio at a faster rate over time. Taxes can reduce the amount of money you have available to fund your goals in retirement. Unnecessary realization of capital gains. High capital gains can boost you into a higher tax bracket in retirement unnecessarily. Any investor who wants to know how to invest in retirement must understand the tax implications of their investment decisions. Otherwise, you risk paying Uncle Sam more and having less money to fund your retirement goals . While learning how to invest in retirement may feel like rocket science for some – fortunately, it isn’t impossible with the right advice. Here’s how to invest in retirement condensed into 7 steps: 1. Identify Your Risk Tolerance How much risk is too much? That’s a significant question you need to ask when it comes to knowing how to invest in retirement. Since 1973, the S&P 500 has posted an average annualized return of over 11% . But, stocks have historically experienced massive declines of 50% or more in periods of economic uncertainty. To help assess how much volatility you can tolerate with your investments, we recommend that you take a risk assessment quiz. For example, here is an example of a risk tolerance quiz we created for use with our own clients. The results are generated from a series of questions designed to better understand investor preferences and tendencies when it comes to earning money and losing money. A proper risk assessment will help you determine your willingness to lose some or all of an investment in exchange for higher potential returns. We've found that individuals generally differ in the amount of risk they feel comfortable taking. You may embrace uncertainty, while others may tend to avoid it at all cost. If you’d like help understanding your own risk tolerance, just contact us . While not guaranteed, for long-term investors who are well-diversified, corrections and downturns shouldn’t be cause for panic because the market has historically always rebounded over time. Case in point: The S&P 500 lost 37% in the financial crisis of 2008; today, it is up tremendously from its low point in March 2009. Long-term investors can weather market storms. 2. Choose Your Investment Approach Knowing how to invest in retirement requires an investment strategy that is verifiable and defendable. It's also important to understand your retirement investment options. Having an investment philosophy will help guide your decisions during turbulent markets. As a result, you may become a more disciplined investor. At the least, we recommend that you ask yourself several questions to help guide your investment thinking in retirement: Does your investment approach stand up to academic scrutiny? Does your investment approach work in U.S. and Non U.S. markets? Does the cost of implementing your approach outweigh the benefits? Has your approach been tested across hundreds of time frames? Formulating your investment approach can be a challenge. To help, here is a short video explaining our investment principles at Covenant Wealth Advisors. While there are literally thousands of different investment strategies to choose, most of them can be divided into two approaches: Active investment management Passive investment management So, what’s the difference? Active Investment Management in Retirement Active money managers try to outperform the market by buying what they believe to be “good" investments and avoiding the “bad” ones. This is done by attempting to forecast the direction of stock or bond markets or by timing the market. "Market timing" is the concept of trying to get in and out of the market at the “right” time. Examples of active investment managers: Franklin Templeton Investments Pimco American Funds T. Rowe Price Dodge and Cox Passive Investment Management Passive investment managers don’t try to beat the market. Instead, their goal is to capture the market’s returns. Instead of attempting to outperform the market, they focus on letting markets work for them. They seek to increase diversification and focus on keeping costs low to achieve higher potential returns. Passive managers can also be more tax-efficient than their active counterparts. Examples of generally passive investment managers: Dimensional Fund Advisors Vanguard Blackrock While the idea of active investment management can be appealing, stock-picking is a bit of a gamble; even the most experienced investors underperform the market long-term and can end up increasing risk at the same time. So, should you choose active investment management or passive investment management? To answer this question, you can start by looking at the evidence. As it turns out, passive investment managers have historically provided far better results. As illustrated in the chart below, you’ll notice that only 21% of actively managed U.S stock mutual funds outperformed their index benchmark from 2010-2019. While a few active managers were successful, the odds don’t look favorable for active management. Source: Dimensional Index mutual funds and exchange-traded funds can be a better choice for most investors. These types of investments are passively managed, which keeps fees low, especially compared to actively managed mutual funds. Exchange-traded funds (ETFs) are another excellent low-cost option for retirement investing. ETFs can also track an indexing or passively managed approach, but they trade like stocks on the exchange. You can track a variety of asset classes including stocks, bonds, and commodities with both index funds and ETFs to keep your portfolio in balance and your expenses low. The point is that investing in passively managed index funds or ETFs may improve your probability of success in retirement. 3. Choose Where to Put Your Retirement Money Now that you understand your tolerance for risk and have an investment philosophy to guide you, you'll need to design your asset allocation plan. Your asset allocation in retirement is simply the right mix of stocks and bonds for you and your family. Remember, it’s crucial to take into account all of your savings and investment accounts when thinking about the allocation that is right for you, and not just your "retirement" accounts. Many investors end up making a big mistake by keeping too much money in cash. While this can feel safe in the short-term, too much cash can slow down the growth of your total savings. Lower returns may result in running out of money in retirement. Let’s break down asset allocation in retirement a bit further. How should you divide your retirement savings between stocks and bonds? Generally speaking, how much you invest in stocks and bonds should be dependent on two questions: How much return do you need to fund your retirement goals? How much could your investment portfolio value fall before you decide to sell and go to cash? In the chart below, we outline seven hypothetical portfolios with differing percentages of stocks and bonds. Which portfolio in the chart above would make you most comfortable? Notice that average historical returns increase as the percentage of stocks increases within the portfolio. While higher returns can be favorable, you’ll also notice that portfolios with a higher percentage of stock also experience steeper declines when stock markets drop. The right portfolio mix of stocks and bonds will depend on your own ability to tolerate market declines and your need to take risk in the first place. Your risk assessment should help guide your thinking. Some people have a meltdown when an investment loses 5%; others are comfortable with a 20% or 30% temporary decline. Once you’ve established the right mix of stocks and bonds, you’re ready to select the appropriate asset classes for your retirement portfolio. Asset classes are simply a distinct group of stocks or bonds that have similar characteristics. For example, U.S. Large Caps are companies based in the United States that represent the largest companies available for investment. U.S vs International Stocks Diversifying your retirement portfolio across both international and U.S. stocks may help manage the ups and downs of your portfolio value over time. As the leader of the free world, America is a great country to live in, but over the past several decades, the United States is rarely the best performing stock market in the world. In the chart below, we rank the performance of stock markets in 46 countries across the world over the past 10 years through 2017. Ten years ago, almost no one would have predicted that emerging countries like Thailand, the Philippines, and Denmark would do so well. Fifteen to twenty years from now, poorly performing countries of the past may very well be the best-performing countries going forward. Many investors fear diversifying overseas because we tend to distrust investments that aren't geographically close. This behavioral phenomenon is called "home bias." However, you may be surprised by the number of household brands and companies that are located outside of the United States. The truth is, nobody knows the future. Not even Jim Cramer of CNBC! Investing is really about ownership in the future revenue of a company. No matter what country's stock market you invest in, there will always be entrepreneurs with great ideas working hard to build a company that can implement those ideas. By diversifying your investment portfolio across many countries, you may better position yourself to capture the potential returns when and where they occur. Proper diversification is a key element of knowing how to invest in retirement. Keep in mind that international stocks can be riskier than U.S. stocks, due to currency and political risks, among others. This is why it is so important to carefully decide how to diversify your portfolio between U.S. and international companies. A great financial advisor should be able to help. Small and Value Companies Vs. Large and Growth Companies In retirement, every penny of added return can matter. But, it can be challenging to increase expected returns by forecasting or trying to predict the stock market. Moreover, nobody wants to take a risk that you’re not rewarded for over time. So, how can you invest in retirement to increase expected returns in your retirement portfolio? All investing involves taking on some risk. After all, risk and return are related when it comes to investing. In a well-diversified portfolio, the more risk you take on in your portfolio, the higher your expected return potential. The opposite is also true. When you reduce risk in your portfolio, your expected returns are lower. Academic research has shown that stocks from different kinds of companies have different expected returns. For example, in the chart below, you’ll see that small company and value company stocks have higher expected returns — and greater risks — than growth company and large company stocks. As an investor, you should consider how much of these risks you are willing to take. Value stocks are usually associated with corporations that have experienced slower earnings growth or sales or have recently experienced business difficulties, causing their stock prices to fall. Value stocks have higher expected returns due to this uncertainty. Small companies are defined as those with a market capitalization of $300 million to $2 billion. Small company stocks may be subject to a higher degree of market risk than the securities of larger companies because they may have fewer sources of revenue and are less liquid. Academic research has shown that tilting the stock portion of investment portfolios toward value and small companies may increase your expected return. This strategy, known as factor investing, has been shown to reduce the risk of running out of money in retirement. Fixed-Income Investments in Retirement Don’t forget to add fixed-income elements to your portfolio. In retirement, it's paramount to offset stock risk with the safety and liquidity of bond investments. Doing so may reduce the sequence of return risk and provide a reliable source for income during market downturns. Fixed income in your portfolio can resemble shock absorbers on a car. While the return from fixed income may not be exciting, you’ll be glad you had the added cushion when, not if, the next stock market collapse occurs. But, not all fixed income investments are the same. While all investments entail risk, some of the safest investments for retirement can include: Short-term government bonds or bond funds Short-term and high-quality corporate bonds FDIC insured CDs and savings accounts Investing in a broadly diversified bucket of safe investments for retirement may reduce your risk exposure when you need it most. 4. Design Your Tax Plan In Retirement While stock markets can’t be controlled, taxes are something you can control. Every sound investment plan needs to incorporate a tax plan, too. Proper tax planning can give you more control over your tax bracket in retirement. Optimizing your investments from a tax standpoint can also help reduce your taxable income and increase your after-tax returns. That can translate into more money in retirement. There are three primary “tax buckets” when it comes to your savings and investments. Each bucket has different tax treatments. Taxation of income withdrawals by investment vehicle Taxed Forever Bucket (or tax-deferred) The "taxed forever bucket" includes investment vehicles that are funded with pre-tax dollars. The money grows tax-deferred and is fully taxed upon receipt of the income. This means that you will be required to pay federal and state income taxes on this income at the highest marginal tax rate for which you qualify, once withdrawals begin. What’s included in the taxed forever bucket? Up to 85% of your social security income Pensions 401 (k) 403b (k) Traditional or rollover IRA SEP or SIMPLE IRA The taxed forever bucket may lower the taxes you pay on the front end. However, the IRS wants to get paid, which is why you’ll pay taxes upon withdrawal. Unfortunately, many investors end up with most of their money in the taxed forever bucket. This is a mistake that can be avoided. Never Taxed Bucket (or tax-free) The never taxed bucket includes investment vehicles that are funded with after-tax dollars, grow tax-free, and provide tax-free income in retirement. Because your guaranteed income sources (Social Security and pensions, for example) are taxable, you should aim to build your never taxed bucket to help reduce the taxation of your income in retirement. What’s included in the never taxed bucket? Roth IRA Health Savings Account (HSA) Municipal Bond Interest Investment earnings and withdrawals from a Roth IRA are tax-exempt, but your contributions are not tax-deductible. If you believe your federal and state tax rate will be the same or higher in retirement, you may consider maximizing contributions to your Roth IRA before you retire. Withdrawals from a health savings account, or HSA, are also tax exempt. Individuals can contribute up to $3,600 a year, or $7,200 a year for families in 2021, to an HSA to cover health care expenses. There’s no minimum mandatory distribution for HSA funds, and you can leave them in your account indefinitely. Tax-Advantaged Bucket (or taxable) Don’t overlook the tax advantages of an individual brokerage account When investing in retirement. Although interest, dividend, and capital gains income distributed to your account are taxed during the year in which they’re realized, there are still some essential tax strategies to reduce tax and maximize the assets you transition to heirs in the future. Here are several planning strategies and tax benefits to the tax-advantaged bucket, which includes individual brokerage and revocable trust accounts: No required minimum distributions . There are no required minimum withdrawals, so you don’t have to withdrawal the money unless you want to. Step-up in cost basis. You get a step-up in cost basis upon your death. This means your heirs will continue to love you forever because they likely won’t owe taxes on their inheritance. Tax-efficient investments. You can invest in tax-efficient index funds or exchange-traded funds (ETFs) to help reduce taxable distributions on your earnings. Liquidity for large purchases . The tax-advantaged bucket is a great source to help fund large purchases without increasing your taxable income. Tax-loss harvesting . You can use losses in your brokerage account to offset capital gains . If you have a poorly performing stock or fund in your account, you can sell it and use the loss to reduce any capital gains tax liability you might incur. Tax Strategies for Income in Retirement To maximize your tax-free income in retirement, consider strategies to convert assets from your “Taxed Forever” bucket to your “Never Taxed” or “Tax-Advantaged” bucket. If you need help with these strategies, just contact us . Just remember, how you diversify across these tax buckets can impact how you invest for retirement. 5. Rebalance Your Portfolio Have you ever heard of the investing idea of “buy low, sell high”? While great in concept, few investors actually know when markets are high or when they are low. That’s where portfolio rebalancing can help. It’s important to rebalance your portfolio at least once a year to keep your portfolio in proportion to your ideal percentage of stocks and bonds. If left untouched, your portfolio can become more aggressive over time. Rebalancing can also help ensure that your portfolio remains aligned with your risk tolerance. Example 1: Portfolio Rebalancing Let’s assume that a proper portfolio for you is 50% stocks and 50% bonds. If left untouched, your investments may shift to 75% stocks and 25% bonds due to stocks growing faster than bonds over time. A proper rebalancing strategy may sell off your excess stock holdings and replenish your bond investments to bring your portfolio back to the correct proportions. While not guaranteed, portfolio rebalancing has historically been shown to manage risk in retirement better. Improved risk management may positively impact the ability to create sustainable income in retirement. 6. Manage Your Emotions The most successful retirement investors don’t even attempt to time the market. For most people, it’s merely a waste of time and money that doesn’t do a thing to increase returns. Investing can be an emotional roller coaster. Our brains are hard-wired to make irrational decisions about money at precisely the wrong time. Even the most astute investors can “buy high” and “sell low" instead of "buying low" and "selling high." Stock markets are predisposed to sharp and erratic movements, which can influence investors to sell at the wrong time. For example, during a bull market, investors often rush into the market because they feel “elated” and buy at the peak. Ultimately, this kind of emotional, short-term behavior can have detrimental consequences, including dramatic portfolio underperformance. 7. Establish Your Income Plan Have you ever heard of the 4% rule in retirement? It’s a well-known study on retirement income distribution strategies published in a 1998 paper entitled: Retirement Savings: Choosing a Withdrawal Rate that is Sustainable . In short, the study concluded that a portfolio with at least 50% in stocks could sustain a 4% income distribution for 30 years, accounting for inflation. For example, if you have $1 million, the 4% rule says that you can take $40,000 as income in year one and increase that amount by the rate of inflation every year. Unfortunately, the study did not account for investment expenses and our current low yield environment. Experts now say that even lower withdrawal rates may be more prudent. Once you determine how much money you’ll need from your portfolio monthly, now you’ll need to assess your income strategy. Total return vs. Yield for Income There are two primary approaches to generating income for retirement: Yield and Total Return. The “Yield” school prioritizes income-generating investments over portfolio growth and requires a sizable amount of capital to be successful. With a Yield portfolio, you’re sacrificing overall returns in favor of guaranteed income from instruments such as bonds and Treasuries. The problems with a yield approach to income are: No adjustment for inflation. May increase your risk by focusing on higher risk investments. May increase your taxation. The Total Return approach is more balanced, focusing on asset growth and fixed income investing. With Total Return investing, you develop a diversified portfolio of growth and value stocks, you can draw down during retirement—all while hedging your risk with “safer” fixed income-generating assets that protect your principal. The Total Return approach has several advantages over the Yield approach, chief among them that your money continues to grow even in retirement, extending the life of your savings. The Total Return approach can also give you more control over taxation and risk. That’s important because life spans are increasing at a dramatic pace, adding about three years per generation. A man who is 65 years old today can expect to live to age 83 , while a 65-year-old woman today has a life expectancy of 87. While no investment approach is perfect, the Total Return approach is better suited for longevity—your investments have a higher potential for growth even as you draw them down for income during retirement. Determine the right income withdrawal strategy in retirement know how to invest in retirement isn’t just about growth of your assets. The order in which you withdraw your income in retirement matters just as much. Traditional thinking says to withdraw retirement income first from taxable accounts, then tax-deferred accounts, and finally tax-free accounts such as Roth IRAs or HSAs. However, we find in practice that traditional thinking is often wrong when it comes to knowing how to invest in retirement. Sometimes it can be better to draw your income equally from all of your accounts, while other times it actually makes sense to draw from your tax-deferred accounts first. Our independent custodian, Fidelity, provides a helpful overview of tax savvy withdrawal strategies here. In short, be sure to consider the appropriate withdrawal strategy for you. If you’re unsure, contact a fee-only financial advisor who can help. Conclusion You've worked hard for your money. That‘s why it’s so important to know how to invest in retirement. But, when you retire, you need to change how you think about investing in retirement to preserve your wealth long-term. Understanding this research-based and tested framework for how to invest in retirement may seem straightforward, but implementing and fine-tuning your plan can be hard. You know what you want to do but aren’t quite sure about the steps to get there. A fee-only , Certified Financial Planner professional may be your best defense against potentially catastrophic mistakes in your retirement plan. Whether you need advice on comprehensive financial planning , investment management , retirement income projections —or all three—professional advice from someone who understands your needs and shares your values is a great first step. Periodic check-ups will keep you on track so you can be confident in your retirement plan. So, if you’re still having trouble figuring out how to invest for retirement or you simply just don’t have the time or confidence, contact us. If you liked this post, please share it with your friends and on social media. Get in Touch With Us Mark Fonville, CFP® Mark has over 18 years of experience helping individuals and families invest and plan for retirement. He is a CERTIFIED FINANCIAL PLANNER™ and President of Covenant Wealth Advisors . Schedule a free intro call with Mark Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like accounting, tax or legal advice, you should consult with your own accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Registration of an investment advisor does not imply a certain level of skill or training.

Imagine this: You're sitting on a sun-drenched patio, sipping your morning coffee, and enjoying your well-earned retirement. Suddenly, an unexpected medical bill arrives in the mail. Instead of panic, you feel a sense of calm wash over you. Why? Because you've mastered the art of using a Health Savings Account (HSA) for retirement. In today's world of rising healthcare costs and economic uncertainty, planning for a secure retirement has never been more crucial. One often overlooked tool in the retirement planning arsenal is the Health Savings Account. This powerful financial instrument can be a game-changer for those looking to maximize their retirement savings while minimizing their tax burden. Even with our free retirement cheat sheets , knowing how to use an HSA for retirement is hard. Here's what you need to know. Key Takeaways HSAs offer triple tax advantages: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Using an HSA as a long-term investment vehicle can significantly boost your retirement savings. HSAs can be used to pay for a wide range of medical expenses in retirement, including Medicare premiums. Proper HSA strategy can lead to substantial tax savings and increased financial flexibility in retirement. HSAs have no required minimum distributions , allowing for continued tax-free growth throughout retirement. Table of Contents What is an HSA? The Power of an HSA in Retirement Planning Maximizing Your HSA Benefits Real-World Application: Meet John and Lisa Frequently Asked Questions Conclusion What is an HSA? A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals cover medical expenses. However, when used strategically, it can become a powerful tool for retirement planning. Scott Hurt, CFP®, CPA at Covenant Wealth Advisors in Richmond, VA, explains, "An HSA is like a secret weapon in retirement planning. It's the only account that offers triple tax advantages, making it an incredibly efficient way to save for both healthcare costs and retirement." The Triple Tax Advantage Tax-deductible contributions : Money you put into an HSA reduces your taxable income for the year. Tax-free growth : Any interest or investment gains in your HSA grow tax-free. Tax-free withdrawals : When used for qualified medical expenses, withdrawals from your HSA are completely tax-free. HSA Eligibility and Contribution Limits To be eligible for an HSA, you must be enrolled in a High Deductible Health Plan (HDHP). For 2024, the IRS defines an HDHP as a plan with a minimum deductible of $1,600 for individuals or $3,200 for families. Contribution limits for 2024 are: $4,150 for individuals $8,300 for families An additional $1,000 catch-up contribution for those 55 and older It's important to note that once you enroll in Medicare (typically at age 65), you can no longer contribute to an HSA. However, you can continue to use the funds in your account for eligible expenses. The Power of an HSA in Retirement Planning Many people make the mistake of using their HSA as a short-term savings account for current medical expenses. While this approach can provide some benefits, it misses out on the true power of an HSA as a retirement planning tool. The Long-Term Investment Approach Instead of spending your HSA funds each year, consider treating your HSA like a retirement account. By investing your HSA funds in a diversified portfolio of mutual funds or ETFs, you can potentially grow your balance significantly over time. Let's look at a hypothetical example: Sarah, age 35, starts maxing out her HSA contributions each year ($3,850 in 2023, adjusted for 2% inflation in future years). She invests these funds in a diversified portfolio earning an average annual return of 7%. By the time she reaches age 65, her HSA could potentially grow to over $400,000, all of which can be used tax-free for medical expenses in retirement. Bridging the Gap to Medicare One of the most challenging aspects of early retirement is managing healthcare costs before Medicare eligibility at age 65. An HSA can be a valuable tool in bridging this gap. Adam Smith, CFP® at Covenant Wealth Advisors in Reston, VA, says: "For those considering early retirement, an HSA can be a lifeline. It allows you to set aside tax-advantaged funds specifically for healthcare costs, giving you more flexibility in your retirement planning." Maximizing Your HSA Benefits To get the most out of your HSA for retirement, consider these strategies: Max out your contributions : If possible, contribute the maximum amount allowed each year to take full advantage of the tax benefits. Invest for the long term : Don't let your HSA funds sit idle in a low-interest savings account. Invest them in a diversified portfolio for potential long-term growth. Pay medical expenses out of pocket : If you can afford to, pay for current medical expenses out of pocket and let your HSA balance grow. You can always reimburse yourself later, even years down the line. Keep your receipts : Save all receipts for medical expenses you pay out of pocket. You can use these to reimburse yourself tax-free from your HSA at any time in the future. Use it for Medicare premiums : In retirement, you can use your HSA to pay for Medicare Part B, Part D, and Medicare Advantage premiums tax-free. Estate planning : If your spouse is the beneficiary of your HSA, they can inherit it as their own HSA, maintaining all tax advantages. For non-spouse beneficiaries, the account becomes fully taxable upon your death, so consider this in your estate planning. HSA Savings, Withdrawals, and Taxation: Meet John and Lisa John and Lisa, both 55, have been diligently saving for retirement. They've maxed out their 401(k)s and Roth IRAs, but they're concerned about potential healthcare costs in retirement. Their financial advisor suggests they start maximizing their HSA contributions as an additional retirement savings strategy. Over the next ten years, John and Lisa contribute the family maximum plus catch-up contributions to their HSA, investing the funds in a diversified portfolio. By the time they retire at 65, their HSA has grown to over $150,000. In retirement, John and Lisa use their HSA to pay for: Medicare premiums Long-term care insurance premiums Other qualified expenses such as prescription medications and dental work not covered by Medicare By using their HSA for these expenses, they're able to preserve their other retirement accounts, potentially reducing their overall tax burden in retirement. However, if John and Lisa withdrawal HSA savings for non medical expenses in retirement before age 65, they will incur a 20% tax penalty plus income tax on the amount withdrawn . After age 65, withdrawals for non medical expenses would incur income tax only. Frequently Asked Questions Q: Can I use my HSA for non-medical expenses in retirement? Yes, after age 65, you can use your HSA for non-medical expenses without penalty. However, you'll pay ordinary income tax on these withdrawals, similar to a traditional IRA. Q: What happens to my HSA if I switch jobs? Your HSA is yours to keep, regardless of job changes. You can continue to use the funds for qualified medical expenses, even if you're no longer enrolled in an HDHP. Q: Can I contribute to an HSA if I'm on Medicare? No, once you enroll in Medicare, you can no longer contribute to an HSA. However, you can continue to use your existing HSA funds for qualified medical expenses. Q: Is an HSA better than a Flexible Spending Account (FSA)? For most people, an HSA offers more flexibility and long-term benefits than an FSA. HSA funds roll over year to year and can be invested, while FSA funds typically must be used within the plan year. Q: Can I have both an HSA and a 401(k)? Yes, you can contribute to both an HSA and a 401(k). In fact, maximizing both can be an excellent strategy for comprehensive retirement planning. See How Our Financial Advisors Can Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... Conclusion Using an HSA for retirement is a powerful strategy that combines the immediate benefits of tax-deductible contributions with the long-term advantages of tax-free growth and withdrawals. By treating your HSA as a long-term investment vehicle rather than a short-term savings account, you can potentially accumulate a significant sum to cover healthcare costs in retirement. Remember, healthcare is likely to be one of your largest expenses in retirement. An HSA provides a tax-efficient way to prepare for these costs while offering flexibility and potential growth. As with any financial strategy, it's important to consider your individual circumstances and consult with a financial advisor to determine the best approach for your unique situation. Do you want to retire without running out of money? Contact us today for a free retirement assessment to see how we can help you. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors  and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER™ professional with the assistance of AI. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

We are proud to announce that Covenant Wealth Advisors has been recognized as one of America's Top Financial Advisory Firms by Newsweek for 2025 . Even more remarkable, we are one of only two firms in Virginia to receive their 5-star rating. This recognition isn't just an accolade – it's a testament to the extraordinary dedication, expertise, and genuine care that our team brings to work every day. To our incredible colleagues and advisors: your commitment to serving our clients with integrity, wisdom, and compassion continues to inspire me. You've turned our mission of helping families achieve their financial dreams into a reality. To our valued clients: thank you for your trust and partnership. This recognition ultimately reflects the relationships we've built together and the impact we've been privileged to make in your lives. While awards are wonderful acknowledgments, our true measure of success remains unchanged – helping our clients navigate their financial journeys with clarity, confidence and peace of mind. Here's to continuing this mission together. Disclosure: METHODOLOGY from Newsweek: "Plant-A Insights Group and Newsweek have partnered to identify America's Top Financial Advisory Firms 2025. We analyzed over 15,000 Financial advisories registered with the SEC, and then applied the following methodology to identify the best of the best. We began by shortlisting firms with more than $20 million assets under management (AUM), a minimum of 3 wealth advisors, at least 5 individual clients, and at least two years of SEC registration. Firms were also screened for clean disciplinary records and availability of portfolio management services to individual investors. These shortlisted firms were then analyzed and scored based on the following factors: • Asset Performance: Growth in assets under management indicates both financial performance and the health of a firm's client base, the cornerstones of advisory excellence. We include both short-term (Sept 2024 vs Sept 2023) and long-term (CAGR Sept 2019 to Sept 2024) measures of asset growth in our scoring model. • Client Performance: Great advisories retain their clients and attract new ones. We again include both short and long-term measures of client base growth/shrinkage for short term (Sept 2024 vs Sept 2023) and long term (CAGR Sept 2019 to Sept 2024). • Adviser Expertise and Client Ratio: We include measures that capture the credentialed expertise of each firm as well as their client-to-adviser ratio. • Breadth of service offerings: Great firms offer a bundle of related services for their investors. We considered the number of other wealth advisory services in our scoring model, such as financial planning services and pension consulting services. • Conflicts of interests: The best advisories work to prevent conflicts of interest; firms with conflicts of interests are penalized in the scoring model. We calculate a score for each firm. The top 750 Financial Advisory Firms have been recognized as America's Top Financial Advisory Firms 2025. The performance of firms not included in the ranking is not disputed. DISCLAIMER Rankings Placement Placement in the Rankings (defined below) is a positive recognition based on research of publicly available data sources from the time period in question. Newsweek and Plant-A Insights make no claim to the completeness of the firms examined. Intellectual Property Rights All content within the rankings ("Rankings") is the exclusive property of Plant-A Insights Group LLC ("Plant-A"). This work, including all data, analyses, and derived rankings, is copyrighted under United States and international copyright laws. Unauthorized use, including but not limited to the publication, reproduction, modification, distribution, transmission, or display of any material without the prior written consent of Plant-A, is strictly prohibited. Nature of the Rankings The Rankings are prepared by Plant-A and reflect an editorial content piece, based on secondary market research. This includes publicly available data and specific data provided directly to Plant-A. These Rankings are published in conjunction with Newsweek and should be viewed as an editorial work, not as definitive financial or business guidance. The ranking only includes firms that qualify according to the criteria described in this document. Data Accuracy and Periodicity The Rankings are generated from Investment Adviser Information Reports data sourced from SEC for the month of September 2024. They are inherently a reflection of historical data and may not include subsequent developments, unforeseen events, or additional data not covered during the research period. The results of this ranking should not be used as sole source of information for future deliberation. The information provides through this list should rather be considered in conjunction with other available information about the financial advisory firm. The quality of financial advisory firms that are not included in the ranking is not disputed. No Endorsement or Quality Assurance Plant-A does not endorse nor validate the business practices or the standing of the ranked companies. The inclusion or exclusion of any company in the Rankings should not be used as a basis for Financial, business, or other decisions. All decisions based on any information presented in the Rankings should be made in conjunction with other available information and independent advice. Disclaimer of Liability Plant-A, its subsidiaries, and their respective officers, directors, employees, and agents (collectively, the "Plant-A Parties") disclaim all liability and responsibility for any errors or omissions in the Rankings or for any actions taken based on the contents of this publication. Neither Plant-A nor Newsweek guarantees the completeness or accuracy of the information contained in the Rankings. By accessing, using, or relying upon the Rankings, you waive all claims and have no recourse against Plant-A Parties for any alleged or actual infringements of any rights of any party, including privacy rights, proprietary rights, intellectual property rights, rights of publicity, rights of credit for material or ideas, or any other rights, including the right to approval of uses such as copy that may be deemed to be distorted, derogatory, or offensive. This disclaimer is intended to be as broad and inclusive as permitted under the law. If any portion hereof is held invalid or unenforceable, the remainder of the disclaimer shall nonetheless remain in full force and effect. This disclaimer constitutes the entire agreement between you and Plant-A regarding the use of the Rankings."

What is a fee-only financial advisor anyhow? Advisor compensation and fee-only financial planning can be a confusing topic. These days, it feels like every advisor website touts the fact that they have your best interest at heart. Get your Retirement Checklist of over 30 things that you need to think about for your retirement. To further complicate things, there are advisors who call themselves fee-only, and others who classify themselves as fee-based. It’s becoming harder and harder to know who’s who, and what different fee structures mean for you - the one who’s depending on their advice to lead a successful financial future. What Does Fee-Only Mean? Fee-only financial planners are only compensated by the fees their clients pay. Other advisors who aren’t fee-only could be compensated by: Commission from investment sales Commission from insurance product sales Commission just to recommend a specific investment (annuity, fund, etc.), or insurance product Commission from stock trades Fee-only advisors are generally compensated by : Percentage of assets under management (AUM) Flat-fee (typically a monthly or quarterly retainer, or up-front cost for a financial plan) Hourly rates That’s a long way of saying that fee-based or commissioned advisors can get paid by companies to sell you a product where fee-only advisors are only paid by you to provide you advice. These investment and insurance decisions are often what you’re basing your entire financial future on, and there’s no guarantee that advisors who receive a commission are always acting as a fiduciary when they recommend that you purchase a particular financial product. That’s a nerve-wracking thought. At Covenant Wealth Advisors, we have a fee-only financial planning and investment management firm. We don’t receive commissions from selling financial products or making specific recommendations. We believe this is in our client’s best interest, which is one reason we founded Covenant Wealth Advisors in the first place. What Other Fee Structures Are There? There are three different fee structures that financial advisors typically stick to: Fee-only Fee-based Commission Advisor Fee Models including the potential types of compensation that could be received through each. This is where things can get a little bit confusing if you’re interviewing a variety of financial advisors. Fee-only and fee-based advisors aren’t paid in the same way. Fee-only advisors are only compensated by the fees their clients pay them. Fee-based advisors are paid by the fees their clients pay them, but can also receive some commissions. Commission advisors are paid a commission only based on the sales they make. Understanding Conflicts of Interest All of this isn’t to say that fee-based or commission advisors are sharks who are out to steal your money and sell you financial products you don’t need. However, to understand why fee-based advisors may not always be acting as a fiduciary (even if they’re fantastic people with good intentions), we need to take a second to go over conflicts of interest in the financial planning profession. It’s obvious that a fee-based or commission financial planner has a few conflicts of interest that are important for you to fully understand. If they’re making financial recommendations but are getting paid more for selling one product over another, they are financially incentivized to recommend a product that will earn them more money – which may not necessarily be the same product that will be best for your particular financial situation. Even if they have good intentions as a fee-based advisor, when push comes to shove, they still have a vested interest in using the investments and financial products that they get paid to recommend. In our opinion, that’s too big a risk to take! The Fiduciary Standard As fee-only advisors, we always abide by the fiduciary standard. This means that we’re legally obligated to act in your best interest at all times. The fiduciary standard is borne out of the Investment Advisers Act of 1940, which is promulgated by the SEC. The rule very specifically states that advisors who abide by the fiduciary standard must always put their client’s best interest ahead of their own, in every situation. When you’re interviewing advisors, you want to ensure that they’re adhering to the fiduciary standard, and that means finding an advisor who reduces conflicts of interest, discloses conflicts of interest if and when they arise, and who is paid only by you. Why Does It Matter? At Covenant Wealth Advisors, we want to always put your best interests first. That’s why we’re fee-only and abide by the fiduciary standard. We want our clients to know that any recommendations we make are rooted in a desire to help them live their best financial future. We also encourage you to seek out other fee-only advisors if you’re currently interviewing to find someone who’s an ideal fit for you. Certain organizations, like NAPFA and Fee Only Network , require that advisors who participate in membership are fee-only. Searching for advisors through these networks can help you to find a fee-only advisor who can be the right fit for your financial needs. Have questions? Reach out ! We’d love to walk you through our fee structure, and what it means to be a fee-only financial planning practice. Get in Touch With Us Mark Fonville, CFP® Mark has over 18 years of experience helping individuals and families invest and plan for retirement. He is a CERTIFIED FINANCIAL PLANNER™ and President of Covenant Wealth Advisors . Schedule a free intro call with Mark Disclosure: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice. Registration of an investment advisor does not imply a certain level of skill or training.

President Trump’s inauguration marks a significant political shift amid market and economic uncertainty. The stock market had rallied as much as 5.3% with dividends in the month following the November election, before giving up about half of those gains at the start of the year. As President Trump begins his second term, both Wall Street and Main Street are wondering what the next four years may bring. Investors face a complex environment in 2025 with steady economic growth balanced against fewer Fed rate cuts and high valuations. This is one reason investors could be more sensitive to growth policies than in the past. So, while the president has already signed dozens of executive orders, many of the new administration’s policy details are still uncertain and much could change in the coming weeks. However, key areas will certainly include taxes, fiscal spending, trade, energy, and immigration – all of which could impact the economy. Below, we explore seven areas that could affect investors: 1. The Tax Cuts and Jobs Act will likely be extended With a new Trump administration and Republican control of Congress, it is likely that much of the Tax Cuts and Jobs Act will be extended beyond its 2025 expiration. The political details of how this makes its way through Congress are still being debated, but this means that tax rates will likely remain low for individuals and businesses. This includes a highest marginal rate of 37%, corporate tax rates of 21% or lower, a higher estate tax exemption, and more. While taxes have a direct impact on households and companies, they do not always have a straightforward effect on the overall economy and stock market. Tax rates represent just one element affecting economic growth, with numerous exemptions and provisions available to lower effective rates. Current tax levels remain below historical averages. Given increasing national debt levels, prudent individuals should consider the potential for future rate increases in their long-term planning. 2. The U.S. will likely continue running a deficit Many economists and investors expect the federal debt to continue to grow. Tax cuts and other policies only worsen annual deficits. In 2024, the government spent $6.75 trillion resulting in a funding gap of $1.83 trillion, ballooning the national debt to over $36 trillion. Neither party has made serious efforts to rein in the deficit in recent years, especially as the country has dealt with various crises such as the pandemic and inflation. That said, President Trump has established the Department of Government Efficiency (DOGE), a non-governmental agency tasked with identifying unnecessary spending from the federal government. While many Americans would prefer the government to operate with a balanced budget (the last ones were in the late 1990s), it is unclear whether Washington or DOGE will be successful. 3. New tariffs could have a real economic impact It’s important to remember that political rhetoric can differ from actual policies. Nowhere is this potentially more relevant than with trade. President Trump spoke on many occasions about his plans to impose a 10-20% tariff on all imported goods along with an additional 60% tariff on Chinese goods. More recently, he has discussed 25% tariffs on Canada and Mexico, saying on inauguration day that he will enact them on February 1. He also plans to establish an External Revenue Service to manage this tariff income. During his first term, the Trump administration did in fact raise tariffs for many trading partners. This led to negotiations and trade deals including the United States-Mexico-Canada Agreement (USMCA) and the “Phase One” agreement with China. Many of these tariffs were then continued under President Biden. The U.S. currently has the largest trade deficit in the world. As of November 2024, the U.S. imported $78.2 billion more than it exported. This is not necessarily a bad thing – it reflects the strength of the U.S. dollar and healthy consumer demand among Americans. However, this does mean that the country is effectively borrowing from the rest of the world. Tariffs are a minimal source of government revenue, making up less than 2% of federal receipts each year. Many also worry that tariffs could contribute to inflationary pressures by raising the cost of imported goods entering the domestic market. From a political perspective, these concerns must be weighed against protecting sensitive intellectual property and preserving domestic manufacturing jobs. 4. Energy policy will promote drilling Another key component of Trump’s agenda is the focus on energy security and dominance. He has already declared a national energy emergency and will create a National Energy Council to expand drilling in places like Alaska. According to the U.S. Energy Information Administration, the U.S. has produced more crude oil than any nation at any time for the past six years. The U.S. is also the world’s biggest gas producer and exporter of liquefied natural gas. Oil and gas drilling is naturally politically controversial. The Biden administration recently banned drilling in parts of the Pacific and Atlantic Oceans, the Northern Bering Sea, and part of the Gulf of Mexico. Some of these bans have already been reversed, and Trump’s Interior Secretary has already vowed to reverse the rest. For markets, greater energy supply could mean more stable prices, especially as geopolitical conflicts continue to rage around the world. Energy prices are also a primary driver of overall inflation. Recent increases in oil and gasoline prices have pushed headline inflation higher than the Fed would like. 5. Immigration will affect the job market Politicians and the news typically focus on undocumented immigrants, especially with Trump’s immediate declaration of a national emergency on the southern border. However, immigration policy changes could impact legal immigrants as well, especially highly skilled workers. A reduction in immigration could have implications for the labor market, particularly in areas where worker shortages are already a concern. There is disagreement within the Republican party over visas for skilled foreign workers, and the H1B visa program which enables companies to sponsor these workers has been a particular point of contention. Recent jobs data show that there are still 1.2 million more job openings than unemployed individuals, so immigration policy could have a significant impact on the economy in the coming years. 6. The Trump trade has taken a pause President Trump’s election victory in November led to a rally in many assets associated with the “Trump trade.” This refers to investments that benefit from the expected policies of the new administration, including lower individual and corporate taxes, tariffs, lighter regulation, and deficit spending in areas such as infrastructure. This propelled markets for a time after the 2016 election as well. Other assets, including cryptocurrencies and artificial intelligence-related stocks, have also benefited. President Trump has named an “AI and crypto czar” who is expected to boost adoption of these technologies. This is one reason the price of Bitcoin has rallied above $100,000 since the election. Despite investor enthusiasm, the stock market never moves up in a straight line, and this was also true during the first Trump administration. Investors should continue to stay balanced to benefit from both current market conditions and to protect their portfolios during periods of volatility. 7. The economy has grown under both parties When it comes to markets and the economy, presidents tend to receive too much credit and blame. History shows that economic growth and market rallies have occurred across both parties. This is because who occupies the White House is often less important than the decades-long business and market cycles that happen to be taking place. So, while good policies do matter and can drive productivity and growth, there are many underlying factors that impact investors more than which party happens to be controlling Washington D.C. The bottom line? Over the next four years, investors will be focused on the new administration’s policies and their effects on the economy and markets. For investors, it’s important to put politics aside to stay balanced and focus on long-term goals. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosures:   Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER ™ professional  with the assistance of AI.  No  advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

Covenant Wealth Advisors is not affiliated with Dominion Energy Your Dominion Energy retirement benefits package may provide immense value, especially to advance your financial goals like retirement . To make the most of your Dominion benefits , you have to know what is offered in the first place. If you don’t, you may be leaving a lot of value on the table. Let’s take a closer look at your benefits at Dominion. See How Our Financial Advisors Can Help You Plan for Retirement Retirement Planning  - unlock retirement strategies and optimize your cash flows. Investment Management  - our team designs, builds, and manages custom portfolios tied to your life. Tax Planning  - Creative tax strategies, Roth conversions, RMDs, charitable giving and more... Breaking Down Your 401(k) Your Dominion 401(k) plan has some key features related to your investment choices , contribution options, and matching contributions. Investments Although your Dominion 401(k) doesn’t have a stable value option, it does offer a good mix of low-cost index funds that you can use to build a portfolio that is right for you, in such a way that you can earn the return you need without assuming too much risk. Dominion 401(k) Contributions You can choose to save 2%-50% of your pay up to the IRS annual limit of $23,500 for 2025 ($31,000 in 2025 if you are 50 or over) on a pre-tax basis, which is standard for any 401(k). Unfortunately, your Dominion 401(k) does not currently have a Roth 401(k) option. Beyond pre-tax contributions, your plan also allows you to save on an after-tax basis. That’s a benefit that not every plan provides, and not everyone understands. This extra benefit has the potential to be a huge advantage to you. Here’s how it works. In addition to standard pre-tax contributions, your plan permits you to contribute up to 20% of your income (not to exceed total 401(k) contributions of $70,000 per 2025 IRS Guidelines) on an after-tax basis. While you can not deduct these contributions from this year’s taxes, the earnings still grow tax-deferred. This system is a valuable option that enables you to save and accumulate significantly more for retirement. Saving on an after-tax basis provides a unique tax and retirement planning opportunity, and whether to use it depends on several factors like your income, how much you save, and other income sources you’ll have in retirement (Social Security, pension, etc.). Build Tax Free Income with an In-Service Distribution Rollover Everyone wants tax-free income in retirement. For many Americans, this can be achieved by contributing to a Roth IRA. Unfortunately, Dominion executives and high income earners make too much money to qualify for a Roth. So, what can you do? Little known to Dominion employees, the company offers a plan feature that is rare to find in the 401(k) plan world . Known loosely as a "Mega Back-door Roth IRA", the Dominion Energy 401(k) offers the ability to sidestep traditional Roth IRA contribution limitations. By taking the after-tax contribution feature one step further, Dominion employees have the ability to complete an in-service distribution rollover from the 401(k) plan into a Roth IRA and Traditional IRA. This can be completed at any age, up to two times a year! If you are under the age of 59 ½, you are limited to moving only the after-tax contributions and the attributed gains. Once you are over 59 1/2 you are allowed to move all contribution sources including pre-tax contributions. The main benefit here is the ability to move the after-tax dollars into a Roth IRA and thus receive tax-free growth. The mega back-door Roth IRA strategy is available regardless of your income level. Keep in mind that the gains from the after-tax dollars will have to be placed in a Traditional IRA to continue to receive tax-deferred growth. Also note that not placing the in-service distribution funds into another retirement account (e.g. Traditional IRA & Roth IRA) could result in the distribution being taxable. Matching Contributions Dominion matches your 401(k) contributions based on a specified formula depending on when you were hired, and how long you have been with the company. Below are the specifics on their match policy. If you were hired before 1/1/2008, with fewer than 20 years of service, the match is 50% on each dollar up to 6% of compensation (not to exceed 3%). If you were hired before 1/1/2008, with at least 20 years of service, the match is 67% on each dollar up to 6% of compensation (not to exceed 4%). If you were hired on or after 1/1/2008, then the match is tiered as follows: Fewer than 5 years – 100% match on the first 4% of compensation. At least 5, but fewer than 15 years – 100% match on the first 5% of compensation. At least 15, but fewer than 25 years – 100% match on the first 6% of compensation. 25 or more years – 100% match on the first 7% of compensation. All matching contributions follow a 3-year cliff vesting. That means if you leave Dominion before completing three full years of service, then Dominion will recoup all matching contributions. However, once you’ve completed three years, you get to keep any earned matching contributions. Taking full advantage of the employer match is an excellent way to bolster your retirement savings. Even if you can’t max out your 401k each year, be sure you are putting in enough to qualify for the match. It is free money, after all. When you are ready to retire, you'll want to evaluate if it makes sense to rollover your Dominion 401(k) to an IRA. Download our free 401(k) rollover guide to help you get started. Understanding Your Dominion Energy Pension Plan With Dominion, you may qualify for a pension plan that provides you with a fixed monthly payment in retirement. The big preparation factor here is deciding whether to take the Supplemental Retirement Annuity as a monthly payout or roll over the balance to your IRA. Below are a few things to consider as you weigh the pros and cons of each choice. Benefits of an annuity Should you choose an annuity, you have a few options: Single life Joint and survivor Period-Certain The monthly payout can be taken for your own life, or also include your spouse. A single-life benefit provides the highest monthly payments, but doesn’t protect your spouse or dependent should something happen to you. If you choose the spousal benefit option, you can elect to transfer 100% of your monthly benefit or a smaller amount, usually 50%. The percentage refers to the monthly check your spouse would receive should you pass away . The higher the spousal benefit percentage, the lower the monthly payout. So a 100% joint and survivor option would mean a smaller monthly payment than 50%, for example. The tradeoff is less income, but more protection for your spouse. Remember, don’t make this decision in a vacuum. It’s essential to consider this option in light of your other sources of income, tax planning, life insurance, income needs, and lifestyle considerations. Cost of Living Adjustment Be mindful that your monthly pension payout will not increase with inflation each year the way Social Security does, meaning the purchasing power of your payout will not keep up with the rising costs of goods over time. You need to account for that in your retirement income plan. This factor makes an IRA rollover more attractive. By investing your money, you have the opportunity to surpass inflation and make more money in the long-run. But, as you know, investments come with their own set of risks. Take a look at your other retirement income channels as well as your tax situation to determine which option is best for you. Level Income Option With a level income option, you are eligible for a higher payout if you retire before receiving Social Security. This provision is especially helpful if you retire before full retirement age, but don't want to permanently reduce your Social Security benefit by taking it early . If you choose this option, your pension will be higher until you reach full retirement age and start to collect your Social Security benefits, and then it will decrease accordingly. Insurance Dominion provides you with several insurance benefits including health, long-term disability, and life insurance. HSA Your Dominion health insurance plan includes an option for a Health Savings Account. An HSA is an exceptional way to save for health-related expenses and reduce your tax bill. Think of an HSA like an IRA for health expenses, with significant tax benefits. You receive a deduction for contributions and can invest the money for long-term growth, while also allowing for tax-free withdrawals to pay for things like health insurance deductibles, copays, and other out-of-pocket expenses. Dominion will contribute $4,500 for the employee only, and an extra $1,000 for family coverage. The HSA employer contributions is a great Dominion benefit not offered through many other Virginia employers. Long-Term Disability Dominion provides a standard long-term disability benefit that will replace 50% of your base pay if you miss work for an extended period. You have the option to elect for extra coverage above this amount, but you will pay a monthly premium for this extra coverage. Life Insurance Under this policy, you can receive up to 1x your base pay covered by Dominion Energy. You can get up to 4x your base pay without a medical screening if you choose to, and up to 10x your base pay with medical screening. You will pay a monthly premium for this extra coverage beyond 1x your base pay. See How Our Financial Advisors Can Help You Plan for Retirement Retirement Planning  - unlock retirement strategies and optimize your cash flows. Investment Management  - our team designs, builds, and manages custom portfolios tied to your life. Tax Planning  - Creative tax strategies, Roth conversions, RMDs, charitable giving and more... The bottom line Dominion offers powerful benefits to employees and with it, many choices to make. Consider each decision in the context of your total retirement plan and how all your benefit choices relate to each other. Are you making the most of your benefits package to help build financial security for retirement? Set up an appointment to learn how we can help you create a plan for retirement. We have experience helping Dominion Energy employees maximize their benefits, build wealth, and enjoy life without the stress of money. Schedule free retirement consultation Covenant Wealth Advisors is not affiliated with Dominion. Please call Dominion directly for help regarding your retirement benefits. About the author: Scott Hurt, CFP®, CPA Senior Financial Advisor Scott is a Financial Advisor for Covenant Wealth Advisors , a CERTIFIED FINANCIAL PLANNER™ practitioner and a Certified Public Accountant (CPA). He has over 17 years of experience in the financial services industry in the areas of financial planning, tax planning, and investment management. Schedule your free retirement assessment today   Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Covenant Wealth Advisors is not affiliated with Dominion. While the information provided in the blog post is believed to have been accurate at the time of posting, it's possible that Dominion benefits have changed since the writing of this post. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like accounting, tax or legal advice, you should consult with your own accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Information contained in this article were retrieved from sources that are deemed to be reliable. Registration of an investment advisor does not imply a certain level of skill or training.

Imagine sitting at your desk, reviewing your retirement portfolio that you've carefully built over decades. Despite having over $1 million in assets, you can't shake that nagging question: "Am I really ready for retirement?" If this sounds familiar, you're in good company. A recent Harvard Business Review study revealed that 28% of investors surveyed experience depression and significant anxiety about their retirement  readiness – and it's not just about the numbers. Here's the thing: retirement planning  for high-net-worth individuals isn't just a matter of having "enough" saved. It's about orchestrating a symphony of investment strategies, tax planning, healthcare considerations, and lifestyle choices. Think of it like planning an extended vacation – except this one could last 30 years or more! Download Now: 15 Free Cheat Sheets to Help You Navigate the Biggest Questions in Retirement You need to consider everything from which accounts to tap first (hello, tax efficiency!) to how you'll maintain your lifestyle while preserving your legacy for future generations. Whether you're five years from retirement or already enjoying your post-career life, asking the right questions now can make all the difference between a retirement that's merely comfortable and one that's truly fulfilling. We've compiled 25 critical questions that our high-net-worth clients consistently find valuable in their retirement planning journey. Need additional help with your retirement planning? Be sure to download our free retirement cheat sheets to potentially help you save money, reduce taxes, and optimize your portfolio for retirement. Key Takeaways: Retirement Planning Questions Think of retirement planning like building your dream house – you need a solid foundation (investments), good insulation ( tax strategy ), and proper protection (healthcare planning) Smart tax planning isn't just for your working years – it's actually more critical in retirement Your retirement strategy  should be as unique as your fingerprint, reflecting your personal goals and lifestyle Don't let market swings keep you up at night – a well-designed portfolio can help you sleep better Healthcare planning isn't just about Medicare – it's about protecting the wealth you've worked so hard to build Investment and Portfolio Questions 1. Is my portfolio properly diversified for retirement? Let’s be honest – many successful professionals end up with a lot of eggs in one basket. Maybe it’s company stock from years of equity compensation, or perhaps it’s that real estate investment that’s done really well. But here’s the reality check: retirement isn’t the time for concentration risk. Think of diversification like a well-balanced meal – you need different types of nutrients (or in this case, investments) to stay healthy within your investment portfolio . 💡 Pro Tip: Ever notice how some investments zig while others zag? That’s exactly what we’re looking for! Check how your investments work together during different market conditions – it’s like having both an umbrella and sunscreen in your bag. If all of your investments are going up (or down) at the same time, you are likely doing something wrong. 2. What's my optimal asset allocation given my risk tolerance? Remember that feeling in your stomach during the last market downturn? That's your real risk tolerance talking! Your asset allocation, or your mix of stocks, bonds, cash, and other assets should help you sleep at night while still keeping pace with inflation. It's like adjusting the thermostat – you want it just right for your comfort level. 3. How will Required Minimum Distributions (RMDs) impact my investment strategy? Think of RMDs as Uncle Sam’s way of saying, “Hey, remember that tax break you got years ago? Time to pay up!” Withdrawals from tax-deferred accounts, such as 401(k)s and traditional IRAs, are taxed as ordinary income. As your 72nd birthday approaches (that’s the magic RMD age), you’ll need a game plan. “I often see clients caught off guard by their first RMD,” notes Scott Hurt, CFP®, CPA at Covenant Wealth Advisors in Richmond, VA. “It’s like getting an unexpected dinner guest – you need to prepare for it!” Tax Planning Questions to ask 4. How can I optimize my tax strategy in retirement? Think of tax planning in retirement  like playing chess – each move matters! Having different types of accounts (traditional IRAs, Roth IRAs, and regular investment accounts) gives you the flexibility to pull from different “tax buckets” based on your needs. It’s like having multiple faucets to control your water flow – you can adjust based on the situation. For personalized tax advice, consider consulting a CERTIFIED FINANCIAL PLANNER™ (CFP®) who specializes in tax planning in retirement. 5. Should I consider Roth conversions? Here's a fun way to think about Roth conversions: it's like paying your taxes during a sale. If you're in a lower tax bracket  now than you expect to be later (maybe because you're between careers or recently retired), converting some traditional IRA money to a Roth could be smart. It's like buying your favorite wine when it's on discount! 💡 Pro Tip: Don't try to convert everything at once – it's like eating an entire cake in one sitting (not recommended!). Consider spacing out your conversions over several years to keep your tax bill manageable. 6. How will state taxes affect my retirement planning? Location, location, location! It's not just a real estate mantra. Where you plant your retirement flag can have a huge impact on your tax bill. Some states roll out the red carpet for retirees with tax breaks, while others... not so much. We help clients run the numbers on different scenarios – think of it as comparison shopping for your tax home. Income Planning Questions to Ask 7. What's my optimal retirement income withdrawal strategy? Creating retirement income is like conducting an orchestra – you want all your instruments (income sources) playing in harmony to ensure a steady annual income. Which accounts you tap first and the order of your withdrawals matters a great deal. “We help our clients develop what we call a ‘retirement paycheck’,” explains Matt Brennan, CFP® at Covenant Wealth Advisors in Reston, VA. “It’s about making your investments sing together to create reliable, tax-efficient income.” 8. How should Social Security fit into your income plan? Think of Social Security as the backup singer in your retirement band – it might not be the lead, but it plays an important supporting role. Reaching full retirement age  allows you to earn more without reducing your benefits, which is crucial for maximizing your monthly payouts. The timing of when you start taking benefits can make a difference of hundreds of thousands of dollars over your lifetime. It’s like choosing when to cash in a winning lottery ticket – timing matters! 9. Should I consider annuities as part of my retirement strategy? Let's talk about everyone's favorite dinner party topic – annuities! (Just kidding, but stick with me here.) Think of annuities like hiring a retirement "employer" who promises to send you a paycheck no matter how long you live. They can be useful tools for some situations, but like that fancy kitchen gadget you bought last year, you need to be sure you'll actually use what you're paying for. We've seen plenty of bad annuities and they aren't for everyone. But, they can be great in certain situations. It just depends. Healthcare and Insurance Planning Questions to ask 10. How should I plan for healthcare costs in retirement? Remember when a doctor’s visit cost you a $20 copay and that was it? Those were the days! Healthcare in retirement is more like a complex puzzle with pieces called Medicare Parts A, B, D, and don’t forget those Medigap policies! Planning for healthcare costs, including purchasing health insurance, is like saving for a second house – it’s a significant expense that deserves its own strategy. 💡 Pro Tip: Think of an HSA as a “healthcare piggy bank” with tax superpowers . If you can contribute now, your future self will thank you with triple tax advantages! 11. What role should long-term care insurance play in my plan? Nobody likes to think about needing help with daily activities, but it’s like buying travel insurance for your retirement journey – you hope you won’t need it, but you’ll be glad to have it if you do. Consider your options: Traditional long-term care insurance (the classic approach) Hybrid policies (getting something back even if you don’t need care) Self-insurance (if your nest egg is large enough) Additionally, it's crucial to plan for purchasing health insurance to cover long-term care costs, especially since employer-sponsored plans may not be available and Medicare eligibility starts at age 65. Estate and Legacy Questions to Ask 12. How can I minimize estate taxes? Estate planning isn’t just for the British aristocracy anymore! If you’ve built substantial wealth, managing your financial resources effectively can prevent Uncle Sam from becoming your primary heir – unless you plan ahead. Think of estate planning like playing chess – you need to think several moves ahead and position your pieces (assets) strategically. 13. What's the best way to transfer wealth to the next generation? Remember teaching your kids to ride a bike? Transferring wealth requires similar patience and careful guidance in managing financial resources. Consider these strategies: Annual gifting (like giving your kids a financial “allowance”) 529 plans (because education is the gift that keeps on giving) Trust structures (think of them as financial “training wheels”) Family limited partnerships (the family business 2.0) 💡 Pro Tip: Family meetings about money don’t have to feel like episodes of Succession. Regular, open discussions can help ensure everyone’s on the same page. Lifestyle and Personal Consideration Questions to Ask 14. How will my spending patterns change in retirement? Spoiler alert: Your spending in retirement probably won’t look like your parent’s retirement budget, as personal finance is highly individualized. Maybe you’ll trade your work wardrobe budget for travel expenses, or your commuting costs for golf club memberships. We help clients create what we like to call a “lifestyle blueprint” – because retirement should be about living, not just existing. 15. Should I downsize or maintain multiple homes? Ah, the great housing debate in personal finance! Should you keep the family home where you can host holiday gatherings, downsize to that trendy condo downtown, or maybe split your time between two locations? Consider: Will you really use that guest room more than twice a year? Does maintaining a large home spark joy or anxiety? Could that home equity be better used elsewhere in your retirement plan? 16. What role should charitable giving play in your retirement plan? Want to make a difference while saving on taxes? (Now that's what we call a win-win!) Charitable giving in retirement can be like having your cake and eating it too. Consider these smart giving strategies: Qualified Charitable Distributions from your IRA (skip the tax bill entirely!) Donor-Advised Funds (think of them as your personal charitable savings account) Charitable Remainder Trusts (the gift that keeps on giving – to you and your favorite causes) 💡 Pro Tip: Time your charitable giving with your RMDs for maximum tax efficiency – it's like getting a bonus tax break! Risk Management Questions to Ask 17. How should I protect against market volatility? Financial challenges, such as market volatility, are like New England weather – if you don’t like it, just wait a minute! But seriously, protecting your nest egg requires more than just crossing your fingers. Consider: Building a “weather-resistant” portfolio with different types of investments Keeping a cash cushion for rocky times (your financial umbrella, if you will) Regular portfolio check-ups (like taking your financial temperature) 18. What insurance coverage should I maintain in retirement? Financial challenges in retirement can be daunting, but having the right insurance coverage is like having a good security system – you hope you’ll never need it, but you’ll sleep better knowing it’s there. Review these key areas: Life insurance (does your coverage match your current needs?) Property protection (because stuff happens) Umbrella liability coverage (for those “just in case” moments) 19. How can I protect against inflation risk? Remember when movies cost a nickel? Okay, maybe not, but you get the point! Inflation is like a stealth tax that can slowly eat away at your purchasing power. Think of protecting against inflation  like planting a garden – you need different types of investments that can grow along with rising prices. 20. What's my plan for cognitive decline? Let's talk about something nobody wants to talk about – but everyone should. Planning for potential cognitive decline is like creating an instruction manual for your financial life. You need to: Set up a "financial fire drill" with trusted family members Create clear powers of attorney (your financial backup quarterback) Document your wishes while you're sharp as a tack 21. How should I prepare for potential tax law changes? Tax laws change about as often as smartphone models – which is to say, frequently! Building flexibility into your plan is like having an adjustable mortgage rate – but in a good way. We help clients create strategies that can adapt to whatever Congress throws our way. Technology and Communication Questions to Ask 22. What technology should I leverage in retirement? A financial advisor  can help you leverage technology to make retirement life easier. Consider tools for: Tracking expenses (because spreadsheets are so last century) Monitoring investments (without becoming a day trader) Managing healthcare appointments Staying connected with family (grandkid video calls for the win!) 23. How should I communicate my financial plans with family? Think of this as creating your family’s financial user manual with the help of a financial advisor. Clear communication can prevent future headaches and ensure everyone understands your wishes. 24. What's my plan for staying mentally and physically active? Retirement isn't about sitting in a rocking chair (unless that's your thing – no judgment here!). Budget for activities that keep you sharp and healthy: Gym memberships or personal training Educational courses or workshops Travel and exploration Hobbies and social activities 25. How often should I review my retirement plan? Think of your retirement plan like your car – it needs regular maintenance, not just emergency repairs. Schedule check-ups to review: Whether your investments still match your goals If your income plan is working as expected Whether tax law changes affect your strategy If your estate plan still reflects your wishes Want our team to help answer your retirement planning questions? Get Your Free Retirement Roadmap to Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... FAQs Q: When should I start taking Social Security benefits? A: Timing Social Security is like playing poker – you need to know when to hold ‘em and when to fold ‘em! For many high-net-worth folks, waiting until 70 makes sense because of the guaranteed 8% annual increase in benefits. But everyone’s situation is unique. Q: How often should I review my retirement plan? A: Think of your retirement plan like your favorite streaming show – you don’t want to miss any important episodes! We recommend a thorough review at least annually, plus “special episodes” when big life changes happen or markets get especially dramatic. Q: What’s the best way to prepare for market volatility in retirement? A: Remember the old saying about not putting all your eggs in one basket? Well, we like to add that you should also know which eggs you’ll need for breakfast tomorrow! Build a retirement strategy that includes both growth potential and protection for your retirement savings. Conclusion Whew! We’ve covered a lot of ground here, haven’t we? But here’s the thing about retirement plans – it’s not about having all the answers right now. It’s about asking the right questions and building a plan that can grow and adapt with you. At Covenant Wealth Advisors, we’ve helped hundreds of high-net-worth individuals turn these questions into personalized strategies. Whether you’re still in the “gathering information” phase or ready to put rubber to the road, we’re here to help you navigate your retirement journey. Remember, retirement planning isn’t a one-and-done task – it’s more like tending a garden. The more attention you give it, the better it grows. And just like a garden, the best time to start planning was yesterday. The second best time? Today. Would you like our help designing a personalized plan for your retirement? Contact us today for a free retirement assessment. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosures:  Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER ™ professional  with the assistance of AI.  No  advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

As we step into 2025, it’s time to prioritize not just our physical health but our financial fitness as well by setting new year's financial resolutions. After experiencing two years of strong market returns and evolving economic conditions, setting clear financial resolutions can help guide you toward a more secure future. Here are five key financial resolutions to consider for the new year. Download Now: Master List of Retirement and Life Goals [Free Download] Key Takeaways Starting early with investments can significantly impact long-term wealth building through compound returns The shift from pension plans to defined contribution accounts requires more active retirement planning Increased life expectancy means retirement savings need to last longer and continue growing Emergency funds, debt management, and comprehensive financial planning are crucial components of financial stability Regular review and adjustment of financial strategies is essential for long-term financial wellness Here are the detailed resolutions to help you achieve these goals. 1. Start Investing Now to Build Long-Term Wealth There’s a timeless proverb that reminds us: “The best time to plant a tree was 20 years ago. The second best time is now.” This wisdom perfectly applies to investing, where time in the market is one of your most powerful allies. Through the magic of compound returns, even modest investments can grow substantially over decades as returns generate their own returns. Consider this: an investor who begins at age 30 with a $1,000 investment earning 7% annual returns could see their investment grow to $10,677 by retirement. However, waiting just five years reduces that final amount to $7,612. This pattern holds true regardless of whether returns average 3%, 5%, or 10%. However, it's important to remember that investing involves risk, and understanding these risks is crucial for making informed decisions. While market highs might make some hesitant to invest, remember that successful long-term investors are rewarded precisely because staying invested during uncertain times is challenging. Market volatility creates opportunities for disciplined investors to buy at attractive prices, potentially leading to higher future returns. 2. Conduct a Comprehensive Retirement Account Review The retirement landscape has transformed dramatically, shifting from traditional pension plans to defined contribution accounts like 401(k)s and 403(b)s. This evolution means the responsibility for retirement planning now falls primarily on individual workers rather than employers. In 2025, take time to evaluate critical aspects of your retirement strategy , including: Whether you’re maximizing employer matching contributions The tax efficiency of your investment allocations across accounts The appropriate mix of traditional and Roth accounts Your overall contribution rates and investment choices Reviewing the performance and contributions to your individual retirement account (IRA) With uncertainty surrounding the future of Social Security and Medicare, taking control of your retirement planning becomes even more crucial. 3. Plan for a Longer Retirement Horizon One of the most significant financial challenges today is planning for increased longevity. According to Social Security Administration data, today’s 40-year-old men and women are expected to live to 79 and 83 respectively, with one in ten potentially living to 93 and 96 or beyond. This extended lifespan means retirement savings need to last longer and continue growing to combat inflation. A comprehensive retirement strategy should account for: Healthcare costs that typically increase with age The impact of inflation on purchasing power Sustainable withdrawal rates that won’t deplete savings too quickly Investment strategies that balance growth with income needs Ensuring your life insurance policies have updated beneficiary designations to reflect your current intentions 4. Build and Maintain an Emergency Fund Creating a robust emergency fund is crucial in today’s dynamic economic environment. Aim to set aside 3-6 months of living expenses in an easily accessible savings account. If you are a duel income couple, three months should be adequate. However, if you are a single income couple or just and individual, lean toward six months of expenses. Retired? Lean toward having 1-2 years of expenses in cash or cash equivalent instruments. This financial buffer can help you avoid taking on high-interest debt or making premature withdrawals from retirement accounts during unexpected circumstances. Consider setting up automatic transfers to your emergency fund and exploring high-yield savings accounts to ensure your safety net keeps pace with inflation. Remember that your emergency fund should be separate from your regular savings and investment accounts to resist the temptation to use it for non-emergencies. Want our team to help you get on the right financial track this year? Get Your Free Retirement Roadmap to Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... 5. Develop a Debt Reduction Strategy Make 2025 the year you take control of your credit card debt and other financial obligations. Start by categorizing your debts by interest rate and creating a structured repayment plan. This chart shows the household and consumer debt service payments as a percent of disposable personal income. The household debt service is on the left axis and consumer debt service is on the right axis. The dotted blue line denotes the average household debt service percentage. Household debt has increased since 2020 but is not at levels seen during the housing bubble of 2007. Lower interest and mortgage rates could help to keep household debt levels manageable. While making minimum payments on all debts, consider either: The avalanche method: Focusing extra payments on the highest-interest debt first The snowball method: Paying off smaller debts first for psychological wins Additionally, explore opportunities to reduce interest costs through balance transfers or debt consolidation, but be sure to read the fine print and understand any associated fees. FAQs Q: How much should I invest each month to reach my retirement goals? A: The ideal monthly investment amount varies based on your age, retirement goals , and current savings. A common recommendation is to save 15-20% of your gross income for retirement, including any employer matches. However, it's best to consult with a financial advisor to create a personalized plan. Q: Should I prioritize emergency savings or retirement contributions? A: Ideally, you should work on both simultaneously. If your employer offers retirement matching, contribute enough to get the full match while building your emergency fund. This ensures you don't leave "free money" on the table while creating a financial safety net. Q: How do I know if my investment portfolio is properly diversified? A: A well-diversified portfolio typically includes a mix of stocks, bonds, and other assets across different sectors and geographical regions. The specific allocation should align with your risk tolerance, age, and financial goals. Regular portfolio reviews , at least annually, can help ensure your investments remain appropriately diversified. Q: What's the best approach to paying off multiple debts? A: Both the avalanche method (focusing on highest interest debt first) and snowball method (paying off smallest debts first) can be effective. The avalanche method saves more money in interest, while the snowball method provides psychological wins that can help maintain motivation. Choose the method that better aligns with your personal style of money management. Q: How can I protect my retirement savings from inflation? A: Consider diversifying your retirement portfolio to include investments that typically perform well during inflationary periods, such as stocks, Treasury Inflation-Protected Securities (TIPS), and real estate investment trusts (REITs). Regular portfolio rebalancing and adjusting withdrawal rates can also help protect against inflation's impact. Conclusion The start of 2025 presents an ideal opportunity to set meaningful financial resolutions and secure your financial life. Whether you’re just beginning your investment journey, planning for retirement, or working to strengthen your financial foundation, having a clear financial plan makes these goals more achievable. Remember that financial fitness, like physical fitness, requires consistent effort and regular monitoring to achieve lasting results. Want to get on track for your investment and retirement goals? Contact us for a free assessment. About the author: Megan Waters, CFP® Financial Advisor Megan Waters is a CERTIFIED FINANCIAL PLANNER™ professional and Financial Advisor at Covenant Wealth Advisors . Megan has over 14 years of experience in the financial services industry. Raised in Williamsburg, VA, Megan graduated from the Honors College at the College of Charleston with a BS in Economics and a minor in Environmental Studies. Disclosures:  Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER ™ professional  with the assistance of AI.  No  advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

For many Americans approaching retirement, the path to financial security can feel like navigating a complex maze. Even with substantial savings, making the wrong moves could jeopardize the retirement lifestyle you've worked so hard to achieve. Making serious retirement missteps can have an exponential impact - the bigger your nest egg, the more costly the biggest retirement mistakes can become. Free Download: Get 15 Free Retirement Checklists, Workflows, and Cheat Sheets [New for 2025] As a team of financial advisors who have guided hundreds of clients through retirement planning, we've witnessed firsthand how certain mistakes can significantly impact your financial future. Before you keep reading, be sure to download our free retirement cheat sheets to potentially help you potentially avoid massive mistakes. Here's what you need to know about the biggest retirement mistakes. Key Takeaways Proper tax diversification across retirement accounts can help minimize your tax burden in retirement Investment allocation should align with your specific retirement goals, not generic age-based rules Having a comprehensive retirement income plan is crucial for maintaining your lifestyle Healthcare costs, including long-term care, need dedicated planning Regular portfolio rebalancing and tax-loss harvesting can optimize your retirement savings Avoid overly aggressive return assumptions on your retirement portfolio The 10 Biggest Retirement Mistakes to Avoid 1. Underestimating Your Retirement Needs Meet Sarah and John, both 62, who thought their $2 million portfolio would easily sustain their desired $160,000 annual retirement lifestyle. They didn't account for inflation, healthcare costs, or the potential impact of market downturns early in retirement . "One of the most common mistakes I see is people underestimating their retirement spending needs," says Scott Hurt, CPA, CFP®  at Covenant Wealth Advisors. "When we analyze a client's current lifestyle and factor in inflation and healthcare costs, the actual number needed for a comfortable retirement is often higher than their initial estimate." The reality is that retirement spending isn't static, but rather follows distinct phases. During the "Go-Go" years of early retirement, many retirees spend more on travel, hobbies, and leisure activities. This typically transitions into the "Slow-Go" years of mid-retirement, where spending moderates and focuses more on routine activities. Finally, the "No-Go" years of late retirement often see lower activity costs but potentially higher healthcare expenses. Consider inflation's impact on your long-term plans. At just 3% annual inflation, $100,000 of today's expenses will require $180,611 in 20 years to maintain the same purchasing power. This means your retirement portfolio needs to grow not just to provide income, but to preserve your buying power over time. To avoid this mistake, create a detailed retirement budget  that includes both essential and discretionary expenses. Factor in periodic large expenses like vehicle replacements and home maintenance, and use conservative inflation estimates in your planning - typically 2-3% for general expenses and 5-6% for healthcare costs. Most importantly, build in a buffer for unexpected expenses and market volatility. 2. Ignoring Tax Diversification Many high-net-worth individuals make the costly mistake of having most of their retirement savings in tax-deferred accounts like 401(k)s and traditional IRAs. Consider Michael, a former executive who accumulated $3 million in his 401(k). When Required Minimum Distributions (RMDs) kicked in at 73, he was forced to withdraw more than he needed, pushing him into a higher tax bracket and increasing his Medicare premiums. Tax diversification involves strategically positioning your assets across three types of accounts. Tax-deferred accounts like traditional IRAs and 401(k)s are taxed at withdrawal. Tax-free accounts , such as Roth IRAs, incur no tax on qualified withdrawals. Taxable accounts , like brokerage accounts, are subject to capital gains taxes. This diversification provides flexibility to manage your tax bracket in retirement and helps reduce the impact of RMDs. One effective strategy is implementing Roth conversion  ladders during lower-income years. This approach, combined with tax-loss harvesting in taxable accounts and strategic timing of Social Security benefits, can significantly reduce your overall tax burden in retirement. For those in high tax brackets, municipal bonds can provide tax-free income while maintaining portfolio diversification. 3. Improper Asset Allocation "Your investment allocation should be based on your specific income needs and risk tolerance, not just your age," explains Adam Smith, CFP® at Covenant Wealth Advisors . "We've seen clients following the old '100 minus your age' rule for stock allocation, which often doesn't align with their actual retirement goals and risk capacity." A different approach involves income tiering, where investments are matched to specific time horizons. Short-term needs (1-3 years) are covered by cash and short-term bonds Medium-term needs (4-10 years) utilize a balanced mix of stocks and bonds. Long-term needs (10+ years) can be met with more growth-oriented investments. Many retirees make the mistake of over-concentrating in "safe" investments like bonds, potentially sacrificing long-term growth. Others maintain too aggressive a portfolio near retirement or fail to account for pension and Social Security as part of their "bond" allocation. The key is finding the right balance that aligns with your specific goals and risk tolerance while maintaining adequate diversification across asset classes, sectors, and geographies. 4. Neglecting Healthcare Planning Healthcare costs represent one of the largest expenses in retirement . According to Fidelity's latest research, an average 65-year-old couple retiring today might need approximately $315,000 saved for healthcare expenses in retirement. This substantial figure often catches retirees off guard, particularly those who assume Medicare will cover all their healthcare needs. Understanding Medicare coverage is crucial for effective healthcare planning. Medicare Part A covers hospital insurance, but comes with deductibles and coverage limits that need to be factored into your planning. Part B handles medical insurance, requiring careful premium planning and understanding of coverage gaps. Part D addresses prescription drug coverage, with various plans offering different levels of coverage for medications. One of the most significant decisions retirees face is choosing between Medicare Advantage and Medigap supplemental coverage. Each option has distinct benefits and drawbacks that need to be evaluated based on your specific health needs and financial situation. For example, Medicare Advantage plans often offer additional benefits like dental and vision coverage, but may restrict you to specific provider networks. Long-term care represents another critical aspect of healthcare planning that many retirees overlook. Traditional long-term care insurance, hybrid life insurance/long-term care policies, and self-funding strategies each offer different approaches to addressing this potential need. The choice between these options depends on factors like your health history, family longevity, and overall financial resources. 5. Poor Social Security Timing Social Security timing  can impact your retirement income by hundreds of thousands of dollars over your lifetime. While you can begin taking benefits at age 62, your monthly benefit amount increases significantly for each year you delay up to age 70. This decision requires careful analysis of your specific situation rather than following general rules of thumb. For married couples, the timing decision becomes even more complex. Coordination of benefits between spouses can maximize lifetime income, particularly when considering survivor benefits. A higher-earning spouse might choose to delay benefits until age 70 to maximize the survivor benefit for their partner, while the lower-earning spouse claims earlier to provide income during the delay period. Life expectancy plays a crucial role in this decision. Family health history, current health status, and lifestyle factors should all influence your claiming strategy. In practice, we often see that the break-even point – where delayed benefits overcome the advantage of claiming early – typically occurs in the late 70s or early 80s. However, this analysis should also consider factors like inflation protection and the tax implications of different claiming strategies. 6. Inadequate Risk Management Market volatility can significantly impact your retirement savings, particularly in the early years of retirement. This phenomenon, known as sequence of returns risk , occurs when negative market returns in the early years of retirement, combined with ongoing withdrawals, can permanently impair a portfolio's ability to provide lasting income. Effective risk management starts with understanding your true risk capacity – not just your emotional tolerance for market fluctuations, but your actual ability to withstand market downturns while maintaining your lifestyle. This may involve creating a dynamic asset allocation strategy that adjusts based on market conditions and your changing needs. Protection strategies might include maintaining adequate cash reserves to cover several years of expenses, reducing the need to sell investments during market downturns. Some retirees benefit from incorporating guaranteed income sources through carefully selected annuity products, while others might use options strategies or structured products for downside protection. Regular portfolio stress testing can help ensure your risk management strategy remains effective . This involves modeling how your portfolio might perform under various market scenarios and adjusting your approach accordingly. Working with a financial advisor can help develop and maintain these strategies while avoiding emotional decision-making during market volatility. Free Download: Get 15 Free Retirement Checklists, Workflows, and Cheat Sheets [New for 2025] 7. Overlooking Estate Planning Estate planning extends far beyond creating a simple will. A comprehensive estate plan integrates seamlessly with your retirement strategy while protecting your assets and ensuring your legacy wishes are fulfilled. This becomes particularly important for high-net-worth individuals who need to consider estate tax implications and complex family dynamics. Modern estate planning must address both traditional and digital assets. While many retirees focus on distributing physical property and financial accounts, digital assets like cryptocurrency, online accounts, and digital businesses require specific handling instructions. Additionally, the rise of social media has created new considerations for managing your digital legacy. Advanced planning techniques like grantor trusts, family limited partnerships, and charitable giving strategies can help reduce estate tax exposure while accomplishing your legacy goals. Regular reviews of beneficiary designations, powers of attorney, and healthcare directives ensure your plan remains aligned with your wishes and compliant with changing laws. 8. Not Planning for Long-term Care The reality of long-term care needs is stark: according to the U.S. Department of Health and Human Services, someone turning 65 today has a 70% chance of needing long-term care services . Despite these statistics, many retirees lack a concrete plan for addressing this potential need. Traditional long-term care insurance policies have evolved significantly in recent years. New hybrid policies combining life insurance or annuity benefits with long-term care coverage offer more flexibility and benefit guarantees than older standalone policies. However, these policies need to be carefully evaluated in the context of your overall financial plan and premium-paying capacity. Self-funding long-term care may require substantial assets and careful planning. We often recommend a self-funding approach with our clients at Covenant Wealth Advisors. This strategy might involve setting aside specific investments, maintaining home equity as a funding source, or creating a dedicated long-term care savings account. Understanding the limitations of Medicare coverage for long-term care and the requirements for Medicaid eligibility is crucial for developing a comprehensive care funding strategy. 9. Failing to Regularly Review and Adjust A retirement plan is not a static document but a living strategy that requires regular updates and adjustments. Market conditions, tax laws, family circumstances, and personal goals all evolve over time, necessitating periodic reviews and modifications to your retirement strategy. Annual or semi-annual reviews should encompass more than just investment performance. Changes in tax laws can create new planning opportunities or challenges. Insurance coverage needs may shift as your circumstances change. Estate planning documents might need updating to reflect new family situations or asset holdings. Technology and financial products continue to evolve, potentially offering new solutions for retirement challenges. Staying informed about these developments through regular meetings with your financial advisor can help ensure your retirement plan takes advantage of appropriate new opportunities while avoiding unnecessary risks. 10. Using Overly Aggressive Return Projections Many retirees fall into the trap of using unrealistic investment return projections when planning for retirement. Historical market returns can be misleading, particularly when looking at specific periods like the bull market of the 2010s. Using overly optimistic return assumptions can create a dangerous illusion of financial security and lead to poor decision-making about savings rates, withdrawal strategies, and risk management. For example, consider David and Linda, who built their retirement plan assuming their portfolio would generate consistent 10% annual returns based on the S&P 500's historical average. This led them to believe they could safely withdraw 6% of their portfolio annually while maintaining their principal. However, they failed to account for periods of market underperformance and inflation. A more prudent approach involves using conservative return projections that account for various market environments. Monte Carlo simulations , which model thousands of potential market scenarios, can provide a more realistic picture of potential outcomes. These simulations often suggest using more conservative return assumptions - perhaps 4-6% for diversified portfolios - when planning for retirement. The sequence of returns also plays a crucial role. Even if your portfolio averages 8% returns over 20 years, experiencing poor returns in the early years of retirement while taking withdrawals can permanently impair your portfolio's ability to recover. This is why using conservative return projections becomes even more critical as you approach and enter retirement. 11. DIY Retirement Planning While managing your own investments might seem cost-effective, the complexity of retirement planning often requires professional expertise. This is particularly true for those with substantial assets over $1 million or complex tax situations. The interconnected nature of investment management , tax planning , estate planning , and risk management demands a coordinated approach that can be difficult to achieve on your own. Professional advisors at Covenant Wealth Advisors bring not just expertise but also objective perspective to your retirement planning. We can help prevent emotional decision-making during market volatility and provide valuable perspective based on experience with numerous client situations. For example, while you might face a particular retirement decision once in your lifetime, an experienced advisor has likely helped hundreds of clients navigate similar situations. The value of professional advice often extends beyond investment returns. Tax-efficient withdrawal strategies, estate planning techniques, and risk management approaches have the potential to add significant value to your retirement plan. A fiduciary advisor who puts your interests first can help coordinate these various aspects of retirement planning while providing accountability and regular review of your progress toward your goals. While DIY financial planning can be a good start, we’ve encountered countless mistakes that could have been avoided had the individual reached out for advice. So where do you start? We recommend scheduling a free retirement assessment from our firm. You'll received a personalized plan designed to hit many aspects of your retirement. Get Your Free Retirement Roadmap to Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... FAQs Q: How much do I really need to save for retirement? A: While there's no one-size-fits-all answer, many retirees need between 70-100% of their pre-retirement income to maintain their lifestyle. A couple planning to spend $100,000 annually (beyond social security, pensions, and other sources of income) in retirement may consider aiming for a portfolio of $2.5-3 million, assuming a conservative 4% withdrawal rate. However, your specific number depends on many complex factors and your withdrawal rate may vary drastically depending upon: Your desired retirement lifestyle and location Expected healthcare costs and insurance premiums Debt obligations and mortgage status Expected Social Security and pension income Legacy goals and charitable giving plans Inflation expectations over your retirement horizon Life expectancy Q: When should I start taking Social Security benefits? A: While you can claim benefits as early as age 62, each year you delay until age 70 increases your benefit by approximately 8%. Your optimal claiming age depends on several key considerations: Your health status and family longevity history Whether you're married and your spouse's claiming strategy Your other sources of retirement income Current employment status and earnings Tax implications of different claiming ages A married couple with significant age or income differences might benefit from a strategic claiming approach where one spouse claims early while the other delays to maximize lifetime benefits. However, we have seen that timing strategies can differ significantly depending upon your situation. That's why it's so important to get advice from an pro. Q: How can I minimize taxes in retirement? A: Tax efficiency in retirement requires a multi-faceted approach. Here are key strategies to consider: Strategically withdraw from different account types (tax-deferred, Roth, and taxable) to manage your tax bracket Implement Roth conversions during lower-income years before Required Minimum Distributions begin Use tax-loss harvesting to offset capital gains and up to $3,000 of ordinary income Consider municipal bonds for tax-free income in taxable accounts Time your charitable giving, potentially using Qualified Charitable Distributions from IRAs Manage your Modified Adjusted Gross Income (MAGI) to minimize Medicare premiums Conclusion Avoiding these 11 biggest retirement mistakes requires careful planning and regular monitoring. While the challenges might seem daunting, working with experienced financial professionals can help you navigate these potential pitfalls and create a more secure retirement future. If you would like me or my team to just do your retirement planning for you, click here. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement without the stress of money. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosures:  Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER ™ professional  with the assistance of AI.  No  advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

If you’re pondering how to tithe in retirement, you’re facing the unique challenge of reconciling a cherished spiritual practice with a new chapter in your life; retirement. This article offers tangible steps to sustain your tithing commitments while navigating fixed incomes, potential tax benefits, and life adjustments post-career. Discover methods tailored to your retirement income sources and learn strategies to give thoughtfully without compromising your financial security. Download Now: Can I Do a Qualified Charitable Distribution [Free Guide To Maximize My Giving] And, be sure to download our free guide to help you determine if you can do a qualified charitable distribution. Key Takeaways Tithing in retirement is a personal and complex process that goes beyond fulfilling religious duties, involving considerations of how to sustain contributions and maintain a sense of community and purpose in one’s faith. Retirees must navigate the complexity of calculating tithes from diverse income sources like Social Security, pensions, annuities, and investment gains, often requiring tailored calculations to accurately reflect income without retithing on the same earnings. Tax strategies such as Qualified Charitable Distributions and utilizing tax deductions for charitable giving, as well as consulting with financial advisors, can increase tax efficiency and optimize tithing in retirement. Finding the right giving strategy can be hard. A financial advisor at our firm, Covenant Wealth Advisors, can help. Request a free retirement plan to help you navigate charitable giving in retirement and other important factors to help you make smart decisions with your money. Understanding Tithing in Retirement Tithing in retirement goes beyond fulfilling a religious obligation. It encompasses: Living openhandedly Collaborating with God’s work Sustaining your contribution to your faith community Evolving from active workers to mentors and supporters Discovering fresh ways to contribute to church activities Maintaining a sense of community and purpose Demonstrating faithful giving that makes an impact Living generously, as guided by your faith. Retirees should consider their personal principles when deciding on the method of tithing. Some may prioritize simplicity, while others may focus on the discernment of tithing on growth versus principal. There isn’t a one-size-fits-all approach, but the essential act of giving remains the same. Calculating Tithe on Various Retirement Income Sources Calculating tithe in retirement can be a complex task, especially given the variety of income sources. From Social Security to pensions and annuities, from investment portfolios to capital gains, each income source requires a different method of calculation. We will now explore some common methods to compute tithes on these diverse streams of retirement income, including lifetime fixed income sources and those from a retirement income stream, such as an investment account. Social Security Income In terms of Social Security benefits , retirees have various options for their tithe calculation. They could consider the total amount of Social Security benefits received post-retirement, not accounting for the contributions made during their employment years or the income from their employer’s pension plan pays. This method is straightforward, but it may not reflect the true amount of income that the retiree is receiving. As an alternative, retirees can base their tithing calculation on their gross income during their earning years. This involves taking into account the 6.2% of their income that workers contribute to Social Security up to an annually determined earnings threshold. This method may be more complex but provides a more accurate reflection of the retiree’s income for tithing purposes. Pensions and Annuities Pension payments present another unique challenge for calculating tithes in retirement. A key consideration is whether to include the entire amount or only the growth portion, especially for those pensions where there was a return of principal that correlates to contributions made during working years. This decision is crucial to avoid retithing on the same income. With annuities, a similar dilemma arises. Retirees can calculate their tithe based on the entire payment received or just on the earnings segment, if the payment comprises both a return of principal and earnings. These considerations highlight the complexity of tithing on retirement income but also underscore the importance of accurately reflecting one’s income in tithing calculations. Investment Portfolio and Capital Gains Investment gains and earnings from brokerage accounts also factor into the tithing equation for many retirees. Deciding whether to tithe on distributed earnings alone or include undistributed, potentially tax-free income is a decision each retiree must make for their investment accounts. Dividends, interest, and capital gains that are reported on the tax return are components that retirees can choose to tithe on. Interestingly, donating appreciated stock is a tax-efficient method for tithing. Churches or charities can sell these assets without paying capital gains tax, which would be levied on the retiree if they sold the asset themselves. This method not only allows retirees to tithe but also provides significant tax advantages. Tax Implications and Strategies for Tithing in Retirement Navigating the tax landscape while tithing in retirement can be challenging. Many retirees are unaware of the tax implications and strategies that can make their tithing more tax-efficient. Gaining insight into the retirement income sources feature allows retirees to optimize their contributions to retirement accounts while reducing their federal and state taxes liability, ultimately increasing their after-tax income by learning how to pay payroll taxes efficiently. Qualified Charitable Distributions One such tax-efficient strategy is making Qualified Charitable Distributions (QCDs) directly from an IRA. For IRA owners aged 70½ or over, they can transfer up to $100,000 tax-free directly to a charity each year. For couples, each spouse can exclude up to $100,000 in QCDs, potentially totaling $200,000 per year. Download Now: Can I Do a Qualified Charitable Distribution [Free Guide To Maximize My Giving] QCDs help reduce taxable income for retirees as they are not counted as taxable income when paid directly to an eligible charity. They can also satisfy Required Minimum Distributions (RMDs) for those 72 and older, without increasing their taxable income. To execute a QCD, IRA owners need to liaise with their IRA trustee, like a financial advisor or custodian, to guarantee the transaction is correctly carried out. Tax Deductions for Charitable Giving Another strategy for tax-efficient tithing is leveraging tax deductions for charitable giving. Donor-Advised Funds (DAFs) allow retirees to contribute low cost basis stock and immediately receive a full tax deduction, with the option to distribute donations to charities incrementally. This strategy not only provides immediate tax benefits but also gives retirees the flexibility to allocate funds to charities over multiple years, making use of their tax withheld money. The stacking method also provides a tax advantage by concentrating charitable contributions into certain years. By exceeding the standard deduction limit and itemizing in these years, retirees can reap greater tax benefits. This method requires a careful balance of tithes and tax savings but can be a powerful tool for supporting cherished causes while minimizing tax liability. Consultation with Financial Advisors Retirees can benefit from consulting with a financial advisor as it could uncover tax-deductible expenses linked to charitable giving that they might have otherwise overlooked. At Covenant Wealth Advisors , we can provide advice on the most tax-efficient methods of tithing in retirement, helping you navigate the complex landscape of retirement income and taxes. Utilizing the services of a financial advisor helps ensure that retirees can maximize their tithes and minimize their tax liability simultaneously, while managing their brokerage investment accounts efficiently. Adapting Your Tithe Based on Life Changes Life in retirement can be unpredictable. From reduced income to unexpected expenses like healthcare costs, life changes can affect a retiree’s financial situation and their ability to tithe. Adjusting tithing amounts or frequency may be necessary for some retirees with reduced income compared to their working years. Conversely, some retirees might be encouraged by their substantial retirement savings to give more generously than when they had a regular income. Flexibility is paramount in navigating these changes. When it’s challenging to make ends meet, tithing solely on the growth portion of their income might be a more viable approach. Above all, the heart posture towards giving is crucial. Retirees should aim for a willingness to sacrifice for the sake of the gospel, which might mean changing how they give. Balancing Tithing with Other Financial Priorities Balancing the act of tithing with the need to save for retirement is a critical aspect of Biblical stewardship. Biblical teachings stress the importance of using resources wisely, implying the need for a balance between generosity and saving. A suggested method for achieving this balance is to match the percentage of income given to tithing with the percentage saved for retirement, adjusting both percentages as finances fluctuate. To aid in this balancing act, retirees can consider tax-saving strategies, such as gifting to charitably inclined adult children. This strategy can yield tax benefits and simultaneously support charitable causes. With a careful balance of giving and saving, retirees can support their faith community while ensuring their financial stability. Faith-Based Approach to Tithing in Retirement Tithing in retirement is more than a financial decision—it’s a faith-based commitment. Believers are encouraged to repurpose their retirement years for God’s purposes, seeking the guidance of the Holy Spirit for how to live and give effectively in retirement. Biblical teachings underline the importance of generosity and stewardship, advising believers to balance providing for themselves and their families with the desire to give and to use their resources for eternal purposes. The primary focus of tithing in retirement should be on the individual’s heart and intention to give cheerfully, reflecting their faith, rather than strictly on percentages and calculations. It’s about demonstrating faith through financial stewardship, about giving not out of obligation, but out of gratitude and commitment to one’s faith. Get a Free Retirement Roadmap to Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... Summary Tithing in retirement is a testament of faith and a continuation of commitment to one’s beliefs. It is both a personal decision and a spiritual practice, reflecting an individual’s heart and intention to give cheerfully. As we navigate the complexities of retirement income and taxes, remember that the primary focus of tithing is not the percentages and calculations, but the generosity of spirit that it represents. Let’s continue to live openhandedly, collaborate with God’s work, and contribute to our faith community, even in our golden years. Frequently Asked Questions Do you pay tithes on 401k withdrawal? You should pay tithing on the earnings when you withdraw funds from your 401(k), not the original deposited amount, assuming taxes and tithes have already been paid on the principal amount. Can I tithe my time instead of money? Yes, you can tithe your time by serving others, but it's also important to put your faith in God by tithing money, as 100% of our money belongs to Him and He asks for 10% back. What is considered income for tithing? The considered income for tithing is your taxable income. The key is to give 10% of your income with a generous heart. What is the correct way to pay tithes? The correct way to pay tithes is by giving 10% of any money you make, including bonuses or gifts, through cash, check, stocks, or bonds. This ensures the fulfillment of the tithe obligation in a flexible manner. What is the traditional tithe percentage recommended by many churches? Many churches recommend a traditional tithe percentage of 10%. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors  and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosure: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

An inheritance is a meaningful financial gift. That being said, it can often be unexpected, and some people may struggle to make the most of their newfound wealth. Should you pay off debt? Save it all for retirement? Help out a friend or relative? Splurge on something fancy? Download Now: 35 Major Issues To Consider With Our Sudden Wealth Checklist [Free Report] Before you read too much further, here's a powerful cheat sheet on thirty-five key considerations you should consider with sudden wealth . It's the same checklist we actually use with clients who receive an inheritance. But even with all of that information, decision fatigue can quickly set in, leaving people with no clue what to do next. That's where we come in. A financial advisor at Covenant Wealth Advisors can help you create plan for your inheritance. Request a free retirement assessment today to help you make the best use of your inheritance to and through retirement. Here are some ideas of what you can do to set yourself up for the future with your new inheritance. You Don't Have To Take Action Right Away An inheritance is almost always connected with loss, which can add to the complexity of the situation. If you find yourself in such circumstances, take some time to process the event and your feelings before touching the money. Don’t rush to any decisions or put pressure on yourself to act. Emotions, especially intense grief, can cloud decision-making and overpower what would otherwise be rational and logical thoughts leading to poor outcomes. There's no benefit to rushing the decision. The money will still be there when you aren’t reeling from the loss. The Inheritance Should Support Your Financial Goals As you start to think about the steps you’ll take, remember that money has a purpose. Your loved one left you this gift to help you financially. Rather than thinking about the money itself, take time to consider your values, goals , and priorities (financial or otherwise) and how an inheritance could help you accomplish those things. This will help you frame your decision properly with a focus on the outcome. Some examples of goals you may want to use this money for include retiring the way you want, paying off your debt, or purchasing a new home. Here is a master list of goals to help generate more ideas on what’s possible. Spend some time in thought, then meet with your advisor to review your options and identify the most appropriate course of action and map out a plan to implement it. Know What You Inherited Something else to consider is that not all inheritances are created equal. Knowing what you inherited will help you and your advisor create a plan specific to the type of assets you were given. Let's review some common inheritance vehicles and the key considerations of each type. Cash : This has the most flexibility. There are generally no tax consequences or valuations to consider. Investment account: These include retirement accounts like 401ks and IRAs, but could also be standard taxable brokerage accounts. This type of inheritance can be tricky because you need to consider how the money is invested, as well as the tax consequences of selling investments or pulling money out of the account. In the case of retirement accounts, you also need to plan for the required distribution timeline specific to inherited accounts. Real Estate : Real estate can be handled in a number of different ways. For example, if it’s your family home. you may not think of it as an investment at all. Rental property may not have the same sentimental value. Depending on what you inherit and your situation you may either want to live in the house, rent it out, or sell it. There are different tax and financial implications with each of these scenarios. Personal possessions : This can be anything from a car to jewelry, to an heirloom that has been in the family for generations. As with real estate, you may or may not personally value them, and will have to consider whether you’ll keep or sell them. A Quick Note On Estate And Inheritance Taxes Many people consider tax laws to be somewhat complicated or confusing, and perhaps even more so in the case of an inheritance. To be clear, you are not taxed for the simple act of receiving an inheritance of $1 million. That’s true at both the federal level and in the state of Virginia. There can be a federal estate tax (For example, Virginia doesn’t have a state-level estate tax but other states do), but that will be handled before you receive an inheritance. So, while you aren’t taxed for receiving an inheritance, you may be taxed after the fact depending on what you do with it. That’s partly why it’s so important to plan ahead before you start making decisions. You don’t want to watch the value of your inheritance erode from taxes that you could have avoided or reduced. Here’s a common example to show you what we mean. Assume you inherit an IRA. You won’t owe any taxes for receiving it. However, you will owe income taxes on any distributions you take. Inherited IRA rules generally require that you take the money out of the account within ten years… so do you take it out all at once? Spread it out over ten years? Wait the full ten years and then take it all out in the tenth year? Your decision will make a big difference in the amount of money you will owe in taxes. Download Now: 35 Major Issues To Consider With Our Sudden Wealth Checklist [Free Report] You Inherited $1 Million In Cash: A Case Study Let’s take a look at a 50-year-old couple - Dan and Darla. Dan's father passed, leaving them to be the beneficiaries of a $1 million life insurance policy. Since their largest goal is funding retirement, they decided to invest 40% of the insurance payout into a balanced portfolio of stocks and bonds for a long-term horizon of 10+ years. This increases their progress and may even help them reach their goal more quickly. Next, they kept 20% in less aggressive investments and strengthened their cash reserves so that their short to medium-term goals are less affected by any potential volatility over the next 5-7 years, reducing their overall risk. Giving is important to Dan and Darla, so they plan to donate anywhere between 5-10% of their inheritance to charity or help support other family members who may have specific needs like home repairs, caring for a newborn, or sending children to college. Recognizing that they don’t have to save everything, they decided to spend about 10% on an international trip they’ve always hoped to do someday and renovate their home to a more modern kitchen and appliances. For now, they’ll wait to decide on what to do with the rest of their inheritance. This gives them a little more time and flexibility to make sure they are really putting it toward the best use. Get Your Free Retirement Roadmap to Help You Retire With Confidence Retirement Planning  - Optimize your income and create a roadmap for a secure retirement. Investment Management  - Personalized investing to grow and protect your wealth. Tax Planning  - Identify tax strategies including Roth conversions, RMD management, charitable giving and more... Planning Ahead The case study we included is just one example of how you might allocate an inheritance . Lastly, don’t forget to account for taxes and dedicate a percentage toward paying them. Whether you’re reading this because you recently received an inheritance, or because you believe you may receive one in the future, you’ll want to get started on devising a plan for it. Do you need help make the most of your inheritance? Click here to schedule a free consultation with me today. About the author: Mark Fonville, CFP® CEO and Senior Financial Advisor Mark is the CEO of Covenant Wealth Advisors  and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule your free retirement assessment today   Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Registration of an investment advisor does not imply a certain level of skill or training.