Outlook 2025: Pragmatic Optimism

Happy New Year! The fresh start of a new year creates a desire to set new intentions and goals and presents a wonderful opportunity to reflect on the previous year’s achievements. That’s just what the LPL Financial Research team has done in their recent publication: “Outlook 2025: Pragmatic Optimism.”

Here are some highlights:

• The economy defied expectations in 2024
• Stocks continued their strong performance in 2024 while the bond market was lackluster again
• The research team remains cautiously optimistic because no market environment is ever permanent
• The economy will likely downshift throughout 2025 as consumer spending begins to moderate, however the investment environment should prove favorable to investors

Click here to read the entire Outlook 2025: Pragmatic Optimism.

Avoid These 6 Common Retirement Mistakes

Accumulation is the name of the game when it comes to saving for retirement. After spending most (if not all) of your working years saving toward this goal, you surely want to avoid any mistakes that could compromise it! Finding a balance of living comfortably and enjoying the money you’ve saved for retirement, while making that money last is a challenge to say the least.

Here’s a list of six common mistakes to avoid:

1. Underestimating Expenses: creating a budget is always a daunting task, but it's incredibly important when planning for retirement. After establishing your budget to cover your necessities, don't forget to include things such as: vacations you plan to take, the costs of hobbies (fees, equipment, etc.), dining out, home improvement projects, etc.
2. Not Diversifying Investments: it’s important to adjust your asset allocation to fit your income needs as they change throughout the years.^{1, 2}
3. Not Understanding Tax Implications: before withdrawing money from your accounts make sure you understand all the tax ramifications and rules for each account type. This information will then guide you in taking withdrawals in the most efficient way.
4. Failing to Optimize Social Security Benefits: timing is everything when it comes to Social Security! Claiming before you reach full retirement age can permanently reduce your payments while delaying can significantly increase your monthly payment. Don’t forget to take into account how these payments will be taxed from year to year.
5. Ignoring Health Care & Long-Term Care Costs: few people realize that Medicare does not cover all your health care costs after you retire, so it’s important to have a plan in place for any out-of-pocket expenses that may arise and add up quickly. Health Savings Accounts (HSAs), long-term care insurance, or insurance with a long-term care rider are ideal for these types of situations but work best went implemented early. ³ (For more info on HSAs, click here to read our HSA focused newsletter from December.)
6. Underestimating Longevity & Inflation: countless retirees underestimate how long they will actually live, and fail to accurately financially plan for those 'extra' years. Many financial advisors recommend keeping growth-oriented investments in your portfolio as you age to combat inflation.

Click here to read the full article, “Six Missteps to Avoid as You Transition to Retirement,” and as always, the SFS staff is here to help you avoid these costly mistakes! Call us if you have any questions or concerns: (518) 584-2555.

New Retirement "Magic Number"

“I’ll need $1 million to retire comfortably.” Yeah, right… that’s so 2020! Today it’s $1.46 Million!

According to a recent study, Americans’ new “magic number” for retirement savings has jumped 53% from the $951,000 target amount that they reported in 2020.

Here are the amounts different generations currently believe they need to retire:

• Gen Z (1997-2012): > $1.6 million
• Millennials (1981-1996): > $1.6 million
• Gen X (1965-1980): $1.56 million
• Boomers (1946-1964): $990,000

The study found that only half of Boomers and Gen Xers believe they will be financially prepared when they retire.

Here are the ages when different generations started saving for retirement, and when they plan to retire:

• Gen Z (1997-2012): 22 / 60
• Millennials (1981-1996): 27 / 64
• Gen X (1965-1980): 31 / 67
• Boomers (1946-1964): 37 / 72

The study also revealed that 30% of Millennials and Gen Zs believe they’ll live to 100 years old, whereas only 22% of Gen Xers, and 21% of Boomers believe they’ll live to 100.

Where do you fall in this American average based on your age? Feel like you’re falling behind and need guidance? Click here to read the full article, “$1.46 Million: New ‘Magic Number’ for a Comfortable Retirement,” and as always, feel free to give us a call and discuss! (518) 584-2555

Snow Much Fun!

It’s a winter wonderland out there! If you haven’t flown south for the winter to avoid the snow and cold, it’s time to get out there and enjoy it! Saratoga Springs, the capital district, and the Adirondacks offer a plethora of fun outdoor activities during the winter: ice skating, skiing and riding, sledding, tubing, ice bars, and more!

Here are just a few you might want to check out:

• Snowshoe Adventures with Goats! at Into The Woods Farm: offered 7 days a week from 9-5 with advanced notice
• Paella Demonstration Class at Boca Bistro: 1/7/25 at 6:00
• Pizza Masterclass at Forno Bistro: 1/25 at 12:00
• Ice Bars:
• Funky Ice Fest at Adirondack Brewery: 1/24, 1/25, 1/31 & 2/1
• Polar Ice Bar at Fort William Henry Hotel: 1/24, 1/25 & 1/26
• Glacier Ice Bar at The Sagamore Resort: 1/24, 1/25, 1/31 & 2/1

Click here to view the full list of events happening this month in Saratoga.