Mastering Tax Season: Top 5 Tips for a Smooth Filing Process

Tax season is upon us, and while it may not be everyone’s favorite time of the year, being well-prepared can make the process much smoother. To help you navigate the complexities of tax filing, here are our top 5 tax season tips:

1. Download Your Tax Documents Online

In the digital age, many financial institutions issue tax documents exclusively online, skipping the traditional postal route. As you gear up for tax season, ensure that you’ve received a tax form from every expected institution. Log in to your online accounts and download the necessary documents. Stay proactive and make sure nothing slips through the cracks.

2. Gather Documents Early 

Most tax documents are available by mid-February, so start gathering them early. This proactive approach gives you ample time to review the information, identify any discrepancies, and seek clarification from the issuing institution if necessary. Being ahead of the game can significantly reduce stress as the filing deadline approaches.

3. Embrace E-File and Direct Deposit

E-filing and direct deposit have become the preferred methods for both filing returns and receiving or paying tax refunds. The IRS can be sluggish when it comes to processing paper mail, leading to delays in refunds or acknowledgments. Save time and expedite the process by opting for electronic filing and direct deposit for a more efficient and secure experience.

4. Keep Copies for Seven Years 

Once your tax return is filed, keep copies of your tax returns and all supporting documents for a minimum of seven years. This ensures that you have a comprehensive record of your financial history in case of audits, inquiries, or future financial planning. 

5. Review Previous Returns

Look out for specific items such as Capital Loss Carryforwards and Form 8606 (IRA Basis). If you’ve changed tax preparers or tax software in recent years, there’s a chance that crucial information may have been overlooked. Rectify any discrepancies and ensure that your current return reflects the most accurate and up-to-date financial information

By incorporating these top 5 tax season tips into your filing routine, you’ll not only streamline the process, but also gain confidence in the accuracy of your returns. So, gear up, gather those documents, and tackle tax season with ease! 

Emily Balmages, CFP®

Director of Financial Planning, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

You May Know Your Love Language, but What’s Your Money Script?

Quality Time. Acts of Service. Words of Affirmation. Physical touch. You may know your primary love language, an unofficial classification of the different ways people express and receive love. But have you heard of Money Scripts®?

Money scripts®, a term first coined by financial psychologist Brad Klotz, are the often-unconscious ideas and attitudes we have about money. They are:

  • Learned in childhood
  • Passed down through generations 
  • Only partial truths
  • Responsible for many financial outcomes 

For many people, discovering and exploring their money script® is a valuable step toward improving their financial well-being. Plus, the more you understand your own attitude toward money, the better you are able to explore how your beliefs and assumptions impact your relationships with others. No one money script® is good or bad; the important thing is to understand your primary script and manage it in a healthy way. 

Read on to discover your primary money script® and explore some ideas for how you can work with it to develop a healthy approach to managing your finances. 

#1: Money Avoidance

People with this money script may view money as inherently evil or negative, and they may go to great lengths to avoid discussions about finances. You might be a money avoider if you’ve thought things like:

  • Rich people are greedy.
  • I feel guilty about having money.
  • People with less money usually have better character than wealthy people.
  • Money stresses me out, and I’d rather just not think about it.

Unhealthy Money Avoidance:

When not addressed, people with this money script may ignore financial statements, overspend, or enable others financially. 

Healthy Money Avoidance:

Work to pay attention to money at least at a high-level; you don’t have to monitor every penny, but general budgeting and having a financial plan can go a long way in helping you reach your future goals. 

#2: Money Focus/Worship

Is money on your mind 24/7? Does money seem like the ultimate key to happiness? If so, you may be “worshiping” money without even realizing it. This might be your money script if you’ve had thoughts like:

  • I could never have enough money.
  • If I buy this, I will be happy (i.e, “retail therapy”).
  • My problems would all go away if I just made a little more money. 
  • My family will understand if I put in extra hours so I can bring home more money.

Unhealthy Money Focus:

The higher people score on Money Focus, the more likely they are to have low net worth or credit card debt. If you find yourself constantly spending in search of happiness, it might be time to make some changes. 

Healthy Money Focus:

Our society puts money on a pedestal. Still, it’s important to recognize that money does not equal happiness. Work on flexing your gratitude muscle, perhaps by keeping a gratitude journal. Make time for activities and people you love. And when you feel the impulse to make a purchase, ask yourself, do I really need this item, or am I just buying it for the sake of buying something?

#3: Money Status

This money script is similar to #2, but instead of equating money to happiness, a Money Status mentality links money and self-worth. People with this money script view themselves as more “worthy” when they have a lot of money. They may be at risk of overspending and buying flashy, expensive items to prove their status. 

You might have a “Money Status” money script if you’ve thought things like:

  • This shirt/Apple Watch/car/purse is worth the splurge, because it’s “on brand” for me.
  • I like gambling – it helps me make more money to support my lifestyle.
  • It’s acceptable to hide purchases from my partner; they wouldn’t understand why I need these things.

Unhealthy Money Status:

In an unhealthy state, people with this money script are at risk for excessive spending, gambling, and financial dependency on others. They may have been raised in a socioeconomic class that prioritized appearances, and might carry that unconscious mindset into their adult lives.

Healthy Money Status:

The key is balance. If you want to treat yourself sometimes, that’s acceptable, but not at the expense of hiding things from your partner or spending money you don’t have. Work on addressing the reasons behind your need to spend, and talk about your spending strategies with your partner.

#4: Money Vigilance

On paper, these are the “gold star” money script students. Still, too much of an extreme is never healthy, and it’s possible to be too vigilant. You might have a “Money Vigilance” money script if you’ve thought things like:

  • If you can’t buy it in cash, don’t buy it.
  • Hard work equals financial reward.
  • You can never save enough for a rainy day.
  • I’d rather save for a rainy day and my future than spend money on experiences now.

Unhealthy Money Vigilance:

When people are too focused and anxious about their finances, it can keep them from enjoying their present lives. While this money script can emphasize frugality and saving, it can also lead to excessive stress and anxiety that could have been alleviated by financial planning and management.

Healthy Money Vigilance:

Set aside a piece of your budget that is for using now on fun purchases. It’s great to save for the future, but spending on some things you can enjoy now will go a long way in helping you feel a sense of enjoyment and gratitude. Work with a trusted advisor or partner to set a specific time to think about and discuss finances, and focus on living in the moment.

By now, you probably have a sense for your own money script. Discuss it with your partner, and talk about what’s similar or different to the way you view money. You might be making assumptions about the other person’s viewpoint without even realizing it, and understanding each other can go a long way in helping you make decisions about money together in the future. Plus, it can be a fun bonding experience over a date night if you approach it with a lighthearted attitude! Let us know your results [in the comments/on our Facebook page/etc.?].

WSWA

Warren Street Wealth Advisors

Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Do I Have Enough to Sell My Business?

As a business owner, you’ve spent your life’s work growing your business, taking care of employees, managing your product or service, and looking after your people. Now, you may be getting to a point where your spouse tells you you work too much. Or perhaps you’re watching the clock more than you used to, counting down the minutes until you can head home and unplug from your “boss” responsibilities.

Whatever your reasoning, if you’re starting to ask questions like, “Do I have enough to sell?” and “Will that be enough?” then it’s time to focus on you for a change.

Why Business Owners Need Specialized Financial Planning

Business owners face a unique set of financial challenges and opportunities. Whether you are a small business owner or running a large corporation, the following considerations are critical:

  • Maximizing tax efficiency
  • Choosing the most appropriate retirement account type
  • Evaluating your retirement account options
  • Managing 401(k) and pension investments
  • Considering a defined benefit plan, i.e., “pension”
  • Aligning company benefits offerings with company goals

Our team specializes in helping business owners handle these and other issues while they’re still working. During those years, we help you work through proper planning techniques to diversify your assets, reduce risk, optimize your taxes, and offer competitive benefits. All of these steps help streamline and strengthen your business at the time — but they also set you up for a successful transition into retirement or your next business opportunity.

When you do get to the point of exiting, we help you bring all of this planning together into one critical decision: whether or not you have what you need to move on from your business and into your ideal retirement, whatever that looks like for you. 

Creating a Dream Retirement

At Warren Street, we’ve helped many business owner clients over the years answer the “Do I have enough to sell?” question and develop their exit strategies accordingly. 

If you choose to work with us during your own exit process, we’ll play a key role on your professional team alongside your attorney. While your attorney looks after the legal structure of the deal, we’ll handle related asset management and tax mitigation. For example, if you’re involved in an all-cash sale with multiple payments coming in the next few years, we will discuss tax deferral opportunities to add into your transition plan. Or, if you’re struggling with a go/no-go decision, we’ll conduct scenario planning to help you make an informed choice based on your current financial situation, projected future state, and personal goals.

No matter where you are in the exit planning process, we can help evaluate your current assets, investments, estate planning, and legacy goals, so you can make a clear and confident decision on what next steps are right for you.

If this sounds like you and you’re a current Warren Street client, please mention your interest to your Lead Advisor! Or, if you’re not a client but are interested in learning how we can help, schedule a complimentary introductory call with us. We hope to hear from you and look forward to exploring how we can make your post-exit dreams a reality.

Cary Facer

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

3 Financial Best Practices for Year-End 2023

Scan the financial headlines these days, and you’ll see plenty of potential action items vying for your year-end attention. Some may be particular to 2023. Others are timeless traditions. Here are our three favorite items worth tending to as 2024 approaches… plus a thoughtful reflection on how to make the most of the remaining year.  

1. Bolster Your Cash Reserves

With some high yield savings options currently offering ~5%+ annual interest rates, your fallow cash is finally able to earn a nice little bit while it sits. Sweet! Two thoughts here: 

Mind Where You’ve Stashed Your Cash: If your cash savings is still sitting in low- or no-interest accounts, consider taking advantage of the attractive rates available in other options. If you’re unsure where to start, we can help you figure out whether a high yield savings account, a CD, or treasury bonds may make sense for you. Your cash savings typically includes money you intend to spend within the next year or two, as well as your emergency, “rainy day” reserves.

Put Your Cash in Context: While current rates across many accounts are appealing, don’t let this distract you from your greater investment goals. Even at today’s higher rates, your cash reserves are eventually expected to lose their spending power in the face of inflation. Today’s rates don’t eliminate this issue … remember, inflation is also on the high side, so that 5% isn’t as amazing as it may seem. Once you have your cash stashed in those high-interest savings accounts, you’re likely better off allocating your remaining assets into your investment portfolio—and leaving the dollars there for pursuing your long game.  

2. Polish Your Portfolio

While we don’t advocate using your investment reserves to chase money market rates, there are still plenty of other actions you can take to maintain a tidy portfolio mix. For this, it’s prudent to perform an annual review of how your investments are growing. Year-end is as good a milestone as any for this activity. For example, you can: 

Rebalance: In 2023, year-to-date stock returns may warrant rebalancing back to plan, especially if you can do so within your tax-sheltered accounts. If you are an existing Warren Street client, this is already being handled on your behalf.

Relocate: With your annual earnings coming into focus, you may wish to shift some of your investments from taxable to tax-sheltered accounts, such as traditional or Roth IRAs, HSAs, and 529 College Savings Plans. For many of these, you have until next April 15, 2024 to make your 2023 contributions. But you don’t have to wait if the assets are available today, and it otherwise makes tax-wise sense. 

Redirect: Year-end can also be a great time to redirect excess wealth toward personal or charitable giving. Whether directly or through a Donor Advised Fund, you can donate highly appreciated investments out of your taxable accounts and into worthy causes. You stand to reduce current and future taxes, and your recipients get to put the assets to work right away. 

3. Minimize Your Taxes

Speaking of taxes, there are always plenty of ways to manage your current and lifetime tax burdens—especially as your financial numbers and various tax-related deadlines come into focus toward year-end. For example:

RMDs and QCDs: Retirees and IRA inheritors should continue making any obligatory Required Minimum Distributions (RMDs) out of their IRAs and similar tax-sheltered accounts. With the 2022 Secure Act 2.0, the penalty for missing an RMD will no longer exceed 25% of any underpayment, rather than the former 50%. But even 25% is a painful penalty if you miss the December 31 deadline. If you’re charitably inclined, you may prefer to make a year-end Qualified Charitable Distribution (QCD), to offset or potentially eliminate your RMD burden. 

Harvesting Losses … and Gains: Depending on market conditions and your own portfolio, there may still be opportunities to perform some tax-loss harvesting in 2023, to offset current or future taxable gains from your account. As long as long-term capital gains rates remain in the relatively low range of 0%–20%, tax-gain harvesting might be of interest as well. Work with your tax-planning team to determine what makes sense for you. If you are an existing Warren Street client, we will automatically tax loss harvest for you.

How else can we help you tend to your 2023 plans and till the soil for 2024? Please be in touch for additional ideas and best-practice advice. 

Cary Facer

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

It’s Open Enrollment Season: Here’s How to Optimize Your Benefits

Open enrollment season is upon us, with most plans allowing individuals and families to make changes to their 2024 benefit enrollments this fall. Now is the best time to make sure you are optimizing your benefits.

  1. Consider Your Health Insurance OptionsWhen was the last time you reviewed your health insurance options? A lot can happen in a year, and each life change may mean your current health care plan may no longer be the best option. Whether you are on employer coverage, exchange coverage, or Medicare, we can help you review your options. 

Pro tip: If your medical plan allows it, consider utilizing a health care tax-advantaged account like an Health Savings Account (HSA) or Flexible Spending Account (FSA).

  1. Explore All Available BenefitsMany employer and retiree plans offer additional benefits beyond traditional health care options. Exploring these alternative benefits to see if any are applicable to your situation can save you time and money. Don’t forget about vision, dental, life, disability, excess liability and any other unique insurance being offered to you. This will ensure you are taking full advantage of the benefits available to you.

Pro tip: Employer-sponsored life and disability insurance can be cost effective and easy to obtain compared to buying your own private policies. 

If you are looking for guidance, Warren Street is available to assist in interpreting your health care and benefits package information as part of the 2024 open enrollment season. Let us know how we can help!

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Probate: 3 Easy Ways to Avoid it

Probate is the court process used to determine who gets an inheritance. In the eyes of a financial planner, it is a court process that most clients should try to avoid for many reasons. The probate process is time-consuming, usually lasting about a year depending on how backed up the courts are. The expense for probate is very high, which includes thousands of dollars going towards attorney and court fees. Probate is also a public court event in which potential heirs can object to the ruling pretty easily, causing privacy concerns and more attorney costs. While probate can have its time and place, there are some simple ways to avoid probate. 

Let’s take a look at three easy steps you can take now to keep your loved ones from having to deal with probate.

  1. Primary Beneficiary Designations – If a 401(k) account or life insurance policy lists a primary beneficiary, the account avoids probate and passes directly to the listed beneficiary. For brokerage accounts this is usually referred to as a Transfer-On-Death (TOD) account, and for bank accounts this is referred to as a Payable-On-Death account.
  1. Contingent Beneficiary Designations – Setting a contingent beneficiary is also an easy way to help avoid probate. The contingent beneficiary is the person(s) next in line to inherit if the primary beneficiary has already passed away at the time of the account holder’s passing. 
  1. Retitle Your Automobile & House – Don’t forget about your car and home! If your vehicle or house are listed in your name alone, they would turn into probate assets at the time of your passing. Some states have introduced TOD car and house titling as a way to avoid needing probate if the owner passes away. Also, you and your spouse should consider owning the car and house jointly with rights of survivorship, as another way to avoid probate.

These planning points provided today are just some of the easy actions you can do yourself.  There are more ways to avoid probate, but they get a little more complex and depend on your personal situation. 

With legal matters like this, it is always a good idea to start working with an estate planning attorney, as well as with a financial advisor. Work with a Warren Street Wealth Advisor today to get your personalized financial plan and more guidance on estate planning.

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

3 Ways to Apply the 80/20 Rule to Your Financial Pursuits

Ever heard of the 80/20 rule? It suggests 80% of an outcome is often the result of just 20% of the effort you put into it. 

Often, by prioritizing the 20% of your efforts that make the biggest splash, you can reduce excess commotion. In that spirit, here are 3 financial best practices that pack a lot of value per “pound” of effort. 

1. Investing: Be There, and Stay There

You could do far worse than invest, according to a sentiment attributed to Woody Allen

“80% of success is showing up.”

Going back to 1926 and after adjusting for inflation, U.S. stocks have delivered about 7.3% annualized returns to investors who have simply been there, earning what the markets have to offer over the long haul. Those who instead fixate on dodging in and out of hot and cold markets are expected to reduce, rather than improve their end returns. That’s because, when markets recover from a downturn, they often more than make up for the stumble quickly, dramatically, and without warning. Instead of chasing trends, simply stay invested over time.  

2. Portfolio Management: Use Asset Allocation, and Don’t Monkey With the Mix

Asset allocation is about investing in appropriate percentages of security types, or asset classes, based on their risk/return “personality.” For example, given your financial goals and risk tolerances, what ratio of stocks versus bonds should you hold?

Both practical and academic analyses have found that asset allocation is responsible for a great deal of the return variability across and among different portfolios. So, to build an efficient portfolio, we advise paying the most attention to your overall asset allocation, rather than fussing over particular securities. Luckily, if you’re a client of ours we’ve already taken care of this for you. 

3. Financial Planning: Do It, But Don’t Overdo It

Also in 80/20 rule fashion, an ounce of financial planning can alleviate pounds of doubt. Planning connects your resources with your values and priorities. It’s your touchstone when uncertainty eats away at your resolve. And it guides how and why you’re investing to begin with. 

Here’s some good, 80/20 news: Your plan need not be elaborate or time-consuming to be effective. In The One-Page Financial Plan, author Carl Richards describes: 

“Your one-page plan simply represents the three to four things that are the most important to you: some action items that need to get done along with a reminder of why you’re doing them.”

If you’d like to do more, great. But even a one-page plan will give you a huge head start. Write it down, as Richards describes. When in doubt, read what you’ve written. Is it still “you”? If so, your work is done; stick to plan. If not, consider what’s changed, and update your plan accordingly. I

Building Lifetime Wealth, 80/20 Style

Properly applied, the 80/20 rule can help minimize the time and energy you have to put into maximizing your financial well-being. Whether you’re saving for retirement, funding your kids’ college education, preparing for a wealth transfer, applying for insurance, or otherwise managing your hard-earned wealth, we can help you identify and execute these and other actions that matter the most, so you can get back to the rest of your life. 

Ready to put the 80/20 Rule in action for yourself? Give us a call today.

Cary Facer

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

It’s Time to Revisit Your Student Loans

Last week, the Supreme Court voted against the White House Administration’s plan to eliminate up to $10,000 of student loans for non-Pell grant recipients and up to $20,000 of loans for Pell grant recipients. This news comes just as the three-year pause on student loans is coming to an end, with loan interest accruing again in September and payments beginning in October. 

The Administration plans to propose other types of aid to borrowers, such as reducing the income-driven repayment plan from 10% to 5% of disposable income and not reporting missed payments to credit rating agencies for 12 months. Still, the timeline on these proposals could take months to get approved — so it looks like it is time to prepare for paying back your student loans.

At Warren Street Wealth Advisors, we want you to take the necessary actions to feel confident about your next steps. Start with the considerations below, and feel free to reach out to your financial advisor with any questions.

1. Update your information on studentaid.gov.

Check that  your current contact and billing information are up-to-date with the Education Department on studentaid.gov. If you’ve moved, for example, the Education Department will need your updated address to contact you with loan status updates.

2. Determine how much outstanding student loan debt you have.

Work with your loan provider to see how much student loan debt you have remaining and how much the monthly payments will be. Once you know how much to expect each month, it will be easier to manage your spending.  

3. Factor student loan payments back into your budget.

Whether you use software to help analyze your budget or the back of an envelope to do your calculations, it is time to add up all of your expenses and compare them to your take-home pay. This will let you know if you will be running a surplus, breakeven or deficit each month going forward.

4. Explore income-driven options.

If you determine you might be at a monthly deficit with student loan payments, an income-driven repayment plan could be an option for you. However, while this option could help your monthly budget, it usually involves you paying more interest in the long-term and extends your payments well past the 10 year standard repayment plan.

5. Shore up your emergency fund.

It’s always a good idea to count your liquid cash savings, especially in a time like this. Having a three to six month emergency fund to fall back on will be important if you have a student loan bill you need to pay again. Now is a good time to start an emergency fund if you don’t have one. 

These are some of the most important steps to ensure you make payments on time and know what to expect in the near future when it comes to your debt management. Please reach out if you’d like to discuss these planning points with a Warren Street advisor!

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Meet the Team: Bryan Cassick

You may have noticed there’s a fresh face around Warren Street — our newest Lead Advisor, Bryan Cassick! Bryan is based in Albany, New York but serves clients around the country.

We’re thrilled to introduce Bryan and hope this interview gives you a chance to get to know him. Please join us in extending a warm welcome! 

Q: In your role as Lead Advisor, how do you assist Warren Street’s clients?

A: I assist people with their financial plan for life. I’m focused on helping clients with the decisions they have to make and how I can support them. Then, I partner with them in tackling those big financial decisions together.

Q: What impact do you hope to make at Warren Street?

A: I hope to have a lasting partnership with all my clients. I want to be more than just a financial advisor; I want to be a partner who helps individuals not only with their finances but also with the feel-good aspects. Whether it’s planning for retirement or buying a new car, I want to assist them in all aspects of their personal and family planning. I strive to be the partner who helps them navigate these decisions and create a solid plan.

Q: How does Warren Street align with your personal values?

A: That’s one of the reasons why I’m here — I need to be a part of something I believe in. My personal values revolve around treating others as I would want to be treated myself. Warren Street stands on the principle of being a fiduciary, which means always prioritizing the best interests of clients. It’s something I easily believe in and align with. 

Q: Who or what motivates you?

A: This one is a little emotional to think about, but my family motivates me. Whether it’s my wife waking up for 5 a.m. gym classes or my brother running a 50-mile race for his “enjoyment,” I am fortunate to be surrounded by highly driven individuals, and their drive rubs off on me. While I may not participate in a 50-mile race or early morning gym classes, I aim to contribute to this successful atmosphere by supporting my family, whether it’s doing the lawn or other household chores. If I can help motivate my clients like my family motivates me, we’re looking at a bright future. 

Q: What do you enjoy doing outside of work?

A: I love having fun and relaxing with friends and family. Most Thursday nights, you’ll find me jamming in the basement with my friends (I play the ukulele and bass and sing). In fact, we were having a jam sesh the morning of my wedding — up until I realized it was time to get ready, 10 minutes before the photographer came! When I’m not jamming with the guys, I’m likely vacationing with my wife and daughter. I love having fun outside of work, but in the time I’ve spent so far with the Warren Street team, I have a feeling I’ll be having a lot of fun at work, too! 

Q: What are three fun facts about you?

A: First, I was born and raised in Upstate New York, specifically the Capital District. Albany and the surrounding area have been my home my whole life, so I guess you can call me a townie! I’ve stayed right where my family is and even went to school here at UAlbany, the University of Albany. 

Second, I love the National Parks of America. A year ago, my wife and I hiked to the top of Yosemite Falls in California, which happens to be the highest waterfall in North America.

Third, my favorite movie is Forrest Gump. It’s Americana at its finest, tells some history of the country, and is a fun, feel-good movie. 

Q: Anything else to add?

A: I care deeply about my clients. Whether it’s managing their investments or assisting with various aspects of their financial plan, such as double-checking their insurance or estate planning, I want to ensure they feel secure and worry-free about their finances. I want them to know that “Bryan’s got their back” and that they can trust me to put together a solid plan for them.

We’re always growing the team here at Warren Street, and our Meet the Team series gives us a chance to introduce our people publicly. If you missed the last Meet the Team post, click here to get to know JB, our rockstar Client Service Associate!

Veronica Cabral

Director of Operations & Chief Compliance Officer, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Why We Believe Social Security Will Endure

In planning for retirement, one topic is often top of mind: whether or not Social Security will still be around when we retire.

As we covered in a related post, When Should You Take Your Social Security, most of us have been paying into the program our entire working life. We’re counting on receiving some of that money back in retirement. 

But then there are those headlines, warning us that the Social Security trust fund is set to run dry around 2034. 

Does this mean you should grab what you can, as soon as you’re able? Let’s explain why we agree with Social Security specialist Mary Beth Franklin, who suggests the following: 

“While there may be good reasons to file for reduced Social Security benefits early, claiming Social Security prematurely out of fear is a bit like selling stocks in a down market: All you’ve guaranteed is that you’ve locked in a loss. And if future benefit cuts did materialize, the benefits of those who claimed as soon as possible would be reduced even further.” 

— Mary Beth Franklin, InvestmentNews

Still, Social Security Will Likely Change 

While we don’t expect Social Security to go bust, we do expect it will need to change in the years ahead. As its trustees have reported:

“Social Security is not sustainable over the long term at current benefit and tax rates … [and] trust fund reserves will be depleted by 2034.”

But let’s unpack this statement. First, “depleted” does not mean the Social Security Administration is going to turn out the lights and go home. It means it could run out of trust fund reserves by then, which are used to top off the total amount spent on Social Security benefits. There are still payroll taxes and other sources to cover more than 77% of the program’s payouts. So, worst case, if we did nothing but wait for the reserves to run out, we’d be forced to make hard choices about an approximate 23% shortfall starting around 2034.  

Admittedly, Social Security is between a rock and a hard place. Nobody wants to lose benefits they’ve been counting on or spend significantly more to maintain the status quo. But if we don’t do something to shore up the program’s reserves, our options will likely only worsen. 

In this context, the political will to reform Social Security seems strong, and bipartisan. As Buckingham Strategic Partners retirement planning specialist Jeffrey Levine has observed

“My gut sense is that practically no politician in America would ultimately be happy having to explain to voters why they let Social Security collapse on their watch … That’s not a great message to have to bring to voters, especially older voters who show up at the polls in the greatest numbers.”

As members of Congress wrangle over the “best” (or least abhorrent) solutions for their constituents, they have been submitting proposals behind the scenes, and the Social Security Administration has been weighing in on the estimated effect for each. 

Time will tell which proposals become legislated action, but the range of possibilities essentially falls into two broad categories: We can pay more in, or we can take less out. Most likely, we’ll need to do a bit of both. 

Possible Ways to Pay More In

To name a few ways to replenish Social Security’s reserves, Congress could: 

  1. Raise the cap on wages subject to Social Security tax: As of 2023, earnings beyond $160,200 per year are not subject to Social Security tax. There’s been talk of increasing this cap, eliminating it entirely, or reinstating it for income beyond certain high-water marks.
  1. Increase the Social Security tax rate for some or all workers: Currently, employers and employees each pay in 6.2% of their wages, for a total 12.4% up to the aforementioned wage cap. (This does not include an additional Medicare tax, which is not subject to the wage cap.) As cited in a September 2022 University of Maryland School of Public Policy report, “73% (Republicans 70%, Democrats 78%) favored increasing the payroll tax from 6.2 to 6.5%.” 
  1. Increase the tax on Social Security payouts, and direct those funds back into the program: Currently, if your “combined income” exceeds $44,000 on a joint return ($34,000 on an individual return), up to 85% of your Social Security benefit is taxable, as described here. Anything is possible, but taxing retirees more heavily seems less politically palatable than some of the other options. 
  1. Identify new funding sources: For example, one recent bipartisan proposal would establish a dedicated “sovereign-wealth fund,” seeded with government loans. Presumably, it would be structured like an endowment fund, with an investment time horizon of forever. In theory, its returns could augment more conservatively invested Social Security trust fund reserves. Other proposals have explored a range of potential new taxes aimed at filling the gap. 

Options for Taking Less Out

We could also cut back on Social Security spending. Some of the possibilities here include:

  1. Reducing benefits: Payouts could be cut across the board, or current bipartisan conversations seem focused on curtailing wealthier retirees’ benefits. 
  1. Extending the full retirement age: There are proposals to extend the full retirement age for everyone, or at least for younger workers. This would effectively reduce lifetime payouts received, no matter when you start drawing benefits. 
  1. Tinkering with COLAs: There are also bipartisan conversations about replacing the benchmark used to calculate the Cost-of-Living Adjustment (COLA), which might lower these annual adjustments in some years. 

These are just a few of the possibilities. Some would impact everyone. Others are aimed at higher earners and/or more affluent Americans. It’s anybody’s guess which proposals make it through the political gamut, or what form they will take if they do. 

Should You Take Your Social Security Early? 

So, given the uncertainties of the day, should you start drawing benefits sooner than you otherwise would? An objective risk/reward analysis helps guide the way. 

Many investors feel “safer” taking their Social Security as soon as possible, to avoid losing what seems like a bird in the hand. However, the appeal of this approach is often fueled by deep-seated loss aversion. Academic insights suggest we dislike the thought of losing money about twice as much as we enjoy the prospect of receiving more of it. Thus, we tend to cringe more over a potential loss of promised benefits than we factor in the substantial rewards we stand to gain by waiting. Put another way: 

You’re not reducing your financial risks by taking Social Security early. You’re only changing which risks you’re taking. In exchange for an earlier and more assured payout, you’re also accepting a permanent, cumulative cut to your ongoing benefits. 

If this still seems like a fair trade-off, consider that Social Security is one of the few sources of retirement income ideally structured to offset three of retirement’s greatest risks: 

  1. Life expectancy risk: In an annuity-like fashion, Social Security is structured to continue paying out, no matter how long you and your spouse live. 
  2. Inflation risk: The payouts are adjusted annually to keep pace with inflation. 
  3. Market risk: Even in bear markets, Social Security keeps paying, with no drop in benefits.  

In short, if you are willing and able to wait a few extra years to receive a permanently higher payout, you can expect to better manage all three of these very real retirement risks over time. 

This is not to say everyone should wait until their Full Retirement Age or longer to start taking Social Security. When is the best time for you and your spouse to start drawing benefits? Rather than hinging the decision on uncontrollable unknowns, we recommend using your personal circumstances as your greatest guide. Consider the retirement risks that most directly apply to you and yours, and chart your course accordingly. 

But you don’t have to go it alone. Please be in touch if we can assist you with your Social Security planning, or with any other questions you may have as you prepare for your ideal retirement.

Emily Balmages, CFP®

Director of Financial Planning, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.