Latest news with #ChristopherStroup
Yahoo
2 days ago
- Business
- Yahoo
The Best $250 You Can Spend on Retirement Planning Before the End of 2025
Do you feel like you're grappling in the dark when it comes to retirement planning but aren't sure where to turn or if you should spend money to get those plans in order? If you have even a few hundred dollars, there are a few ways you can use that money to make a significant difference in your retirement goals. Be Aware: Read Next: Christopher Stroup, a CFP and owner of Silicon Beach Financial, offered tips on the best $250 or less you can spend on your retirement planning before this year is up to feel confident in where you're going. An Hour With a Fiduciary Advisor If you only have a couple hundred dollars to spend, Stroup recommended you spend it on a one-time planning session with a fiduciary advisor who specializes in retirement planning. 'A targeted session can identify overlooked tax strategies, prioritize savings vehicles and help avoid costly missteps,' he explained. Even just a single hour of personalized advice can provide more clarity than weeks of online research, especially for entrepreneurs or tech professionals navigating equity, cash flow and multiple income sources, he said. 'Look for advisors who offer project-based or hourly services and focus on tax strategy, Social Security and withdrawal planning,' he said. You should come away from a one-time session 'with clarity, not a sales pitch.' Learn More: A Social Security Timing Analysis Another great way to spend a few hundred dollars is to get a Social Security timing analysis, Stroup said. 'For under $250, you can model break-even ages, spousal benefits and the impact of delaying benefits.' This analysis is important because this single decision can mean tens of thousands more over your lifetime, especially for dual-income households or individuals with uneven earnings histories, Stroup explained. Strategic Tax Planning If you feel you have more questions for a fiduciary advisor than can be summed up in an hour, consider focusing the session around strategic tax planning, Stroup urged. This can help you avoid future Medicare surcharges, minimize required minimum withdrawal (RMD) taxes and better time Roth conversions. 'A well-timed projection can reveal opportunities that disappear at retirement or when tax brackets shift. Spending a few hundred now can prevent five-figure tax mistakes later.' Invest In Planning Tools, but Be Cautious For a low annual cost, tools like Boldin's retirement planning tool allow users to stress-test income scenarios, Social Security timing, Roth conversions and healthcare costs, Stroup said. Retirement planning tools that map out your income, expenses and drawdown strategy can be useful. They can also help you understand your 'burn rate' and how to sequence withdrawals to prevent common missteps that derail early retirement plans. However, Stroup warned that the simpler, more DIY tools can make it too easy to 'underestimate taxes on withdrawals, mistime Social Security or hold too much in cash or high-fee funds.' Thus, a small investment in expert guidance or advanced planning software can flag these risks early before they compound over decades. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on The Best $250 You Can Spend on Retirement Planning Before the End of 2025 Sign in to access your portfolio
Yahoo
14-07-2025
- Business
- Yahoo
7 Common Tax Planning Mistakes To Fix Before 2026, According to a CFP
Let's be honest: Tax planning isn't exactly fun (nor is paying taxes). But ignoring it could mean parting with money you didn't have to. Find Out: Read Next: If you're making one of these seven common tax planning mistakes — and many people are — you could face higher tax bills or missed opportunities come 2026. Christopher Stroup, a CFP and founder of Silicon Beach Financial, explained what to watch out for and how to get ahead of the curve. Tax planning should be 'proactive, not reactive,' Stroup insisted. 'When you wait until March, most of the best opportunities are already gone.' In fact, even sooner than that, as by year-end many strategies are off the table, especially for equity compensation (non-cash pay, such as stock), retirement savings and charitable giving, Stroup said. 'Last-minute tax planning tends to be reactive, rushed and sloppy. Real tax savings require time to coordinate across your income, goals and entity structure.' By waiting until the end of the year, you could be failing to coordinate with your financial goals at best or missing important deadlines and subjecting yourself to higher tax or penalty fees. Learn More: Another common mistake is neglecting to track your cost basis, especially for stocks, crypto or equity compensation, Stroup said. Your cost basis is essentially what you originally paid for an investment, including commissions or fees. It's easy to lose records over time he said, but if you don't have documentation to prove it, you could be taxed as if the entire sale was profit — even if you only made a modest gain or none at all. If you experienced a job change during the year but fail to account for it in your withholding — the amount of taxes you pay — this could cause problems, Stroup said. 'A second job or dual-income household might bump you into a higher bracket. If you don't update your W-4 or check your withholding early, you might face an unexpected tax bill and possibly a penalty.' If you earn income that must be reported on a 1099, either as a business owner or freelancer/contractor, you're expected to pay estimated quarterly taxes. 'Many freelancers forget to account for self-employment tax, which can add 15.3% to their liability,' Stroup said. Unfortunately, if you underpay your estimated taxes, the IRS may charge penalties, even if you're due a refund later, Stroup warned. 'Accurate quarterly payments protect cash flow and avoid year-end sticker shock,' he said. For eligible taxpayers, some credits can reduce your tax bill 'dollar for dollar,' Stroup said, but many people assume they don't qualify without even checking. A few of these credits include: Saver's credit (for low- to moderate-income retirement savers) QBI deduction (for self-employed and pass-through business owners) Health savings account contributions Education credits like the lifetime learning credit Recently President Donald Trump signed the 'One Big Beautiful Bill' (BBB) into law, which maintains many of the tax cuts from the Tax Cuts and Jobs Act of 2017 and adds other tax changes. It's important to plan for how this will impact next year's taxes, especially as some of the provisions are retroactive to 2025. 'Start modeling different scenarios now. Look at whether Roth conversions, income acceleration or trust updates make sense under current rules,' Stroup said. The 2026 sunset could bring higher income, estate and capital gains taxes. Early action lets you use today's lower rates strategically. When your financial life gets more complex than a W-2 and a 1099-INT, it's time to bring in the professionals, Stroup said. If you're dealing with equity comp, restricted stock units (RSUs), multiple income streams, business ownership and/or changing tax law, these all signal it's time to partner with someone who can go beyond filing and focus on building after-tax wealth. More From GOBankingRates Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on 7 Common Tax Planning Mistakes To Fix Before 2026, According to a CFP
Yahoo
11-07-2025
- Business
- Yahoo
Here's the Best $200 Retirees Can Spend To Get Their Finances on Track
Retirees are often on a fixed income that may be significantly less than their working days. Without proper planning, finances can spiral out of control, causing chaos and long-term hardship in retirement. Spending a couple of hundred dollars upfront can help retirees create a solid budget and develop a deeper understanding of their financial situation. Up Next: Try This: According to Christopher L. Stroup, MBA, EA, CFP, founder and president of Silicon Beach Financial, here are some of the best things retirees can spend $200 on to get their finances on track. Many retirees are unaware of how taxes can affect their wealth. The wrong type of retirement account could cost a substantial amount of money. Stroup suggested retirees look for a tax professional to help ensure money is saved wherever possible. 'You can spend $200 on a tax consultation with a CPA or an enrolled agent to better understand tax strategies that could save you money in retirement,' he said. Stroup emphasized the importance of this, particularly for individuals with 'complex retirement income sources (like Social Security, pensions and 401(k) withdrawals) or investments that might require advanced tax planning.' He added that some services can help you plan for making tax-efficient withdrawals in retirement. Be Aware: People often underestimate how much healthcare will cost as they age. According to The Federal Long Term Care Insurance Program, the average cost for a semi-private room in a nursing home is $100,740 per year. It is projected to increase to $159,372 over the next 20 years. 'Long-term care can be one of the largest expenses retirees face,' Stroup said. 'A $200 consultation with a specialist in long-term care insurance can help you assess your need for coverage, explore policies and learn about the best options for your financial situation. Many retirees underestimate the importance of this, but it's crucial for long-term financial planning.' Retirees who want a wealth of information can look into local seminars and workshops offered by financial professionals. Retirees can get a broad overview from experienced experts for a minimal amount of money. 'Attending a live or virtual seminar focused on retirement planning can be a great investment. Many financial institutions, credit unions or independent planners offer low-cost workshops to help you understand the nuances of Social Security, Medicare, estate planning and tax-efficient retirement withdrawal strategies,' he said. 'These can be valuable for building confidence as you approach retirement.' For some retirees, $200 is a significant investment. Luckily, there are several more affordable options available that can still help seniors with their finances. Stroup said that for $100, retirees hoping to focus on budgeting and saving can invest in a financial planning software subscription, while those overwhelmed with debt can consider credit counseling services. Finally, all retirees may want to take an online course to become more financially literate or meet with a Certified Financial Planner to get their affairs in order. More From GOBankingRates The New Retirement Problem Boomers Are Facing This article originally appeared on Here's the Best $200 Retirees Can Spend To Get Their Finances on Track Sign in to access your portfolio
CBS News
07-07-2025
- Business
- CBS News
1-year vs. 5-year CD: Which CD term do experts recommend now?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. The choice of a 1-year CD or a 5-year CD will come down to a series of personal considerations now. GYRO PHOTOGRAPHY/amanaimagesRF Certificate of deposit (CD) account interest rates remain attractive in mid-2025, with top CDs offering yields between 4.00% and 4.40%. The Federal Reserve kept its benchmark interest rate frozen at its June meeting, keeping it at a range of 4.25% to 4.50%. Fed officials still project two rate cuts by year-end, but uncertainty is high as they weigh a variety of economic concerns against the need for economic growth. This environment has created a dilemma for savers who are torn between locking in today's rates for five years or keeping their options open with shorter one-year terms. To help you navigate this decision, we consulted three financial experts to find out which CD term is smarter now. Below, we'll detail what they want you to know. Start by seeing how high a CD interest rate you could qualify for here. 1-year vs. 5-year CD: Which CD term do experts recommend now? "We're generally leaning toward 1-year CDs right now," says Christopher L. Stroup, a certified financial planner and president of Silicon Beach Financial. "With rate cuts likely in the next 12 to 18 months, shorter terms offer flexibility and let [you] reassess when rates shift," he says. When weighing your options, though, don't focus only on current rates. "Today's shorter-term rates can be higher than longer-term rates … [making them] more tempting," Mark Sanchioni, chief banking officer at Ridgewood Savings Bank, points out. "[But] when that term is over, [you] may be disappointed with [your] renewal rate options." Sometimes, it can work out in your favor to take a slightly lower rate for a longer term. Both experts agree that the right CD choice depends on your timeline, risk tolerance and financial goals. When it would (and wouldn't) make sense to choose a 1-year CD now "A 1-year CD would be appropriate [if you need] access to [your] funds within the next year," says Rick Wilcox, head of retail product management and development at PNC. Industry professionals say that 1-year CDs make sense in these scenarios: You're saving for a house down payment or a wedding in the next 12 to 18 months. You're a business owner building cash reserves for a product launch or equipment purchases. You want to park an emergency fund and earn a predictable return but may need to withdraw soon. Short-term CDs work especially well for entrepreneurs and business owners. Stroup mentions an early-stage founder who had $250,000 in reserve before a funding round. "We chose a 1-year CD to earn interest while keeping cash accessible," he says. A 1-year CD becomes less attractive if you don't need the money for several years, though. "[You'd] risk reinvestment uncertainty when rates drop and miss out on locking in current yields," Stroup explains. Compare your top 1-year CD account offers here now. When it would (and wouldn't) make sense to choose a 5-year CD now "A 5-year CD would be appropriate [if you don't] have an immediate need for the funds, feel interest rates may decline over this period and/or desire safety and security," says Wilcox. Financial advisors say that 5-year CDs make sense if you find yourself in one these scenarios now: You're within 10 years of retirement and want guaranteed income without market risk. You recently received a windfall (e.g., a business sale or inheritance) and want to preserve your capital. You're building a CD ladder A longer-term CD choice often benefits seniors seeking steady income. "[I worked with] a retired aerospace engineer with no near-term liquidity needs," Stroup recalls. "[He] used a 5-year CD ladder to lock in predictable, penalty-free income for the next five years." A 5-year CD may not be the best choice if you anticipate needing funds before maturity. "[Anyone] considering [this] must be certain they will [not] need to access those funds over the next five years," Sanchioni emphasizes. Early withdrawal penalties can amount to two years of interest or more, eroding a substantial portion of your returns. This option also backfires if you expect CD interest rates to climb steadily. You'd miss out on higher yields by staying locked into today's rates for half a decade. The bottom line "A CD should be part of a broader strategy, not a standalone decision," Stroup stresses. Many savers are hedging their bets in today's unpredictable rate environment. Sanchioni notes that more clients are using a "Three Buckets" approach — keeping some money immediately accessible, some in short-term CDs and some locked up long-term. Taking this route can help you come out ahead no matter how rates move. Regardless of the approach you take, though, experts recommend aligning your CD term with your actual cash flow needs rather than timing the market.
CBS News
23-06-2025
- Business
- CBS News
How much debt is too much for a home equity loan? Experts weigh in
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Before borrowing money from their home, owners should first examine their debt homeowners are considering home equity loans in 2025 as interest rates have settled around 8.23%. While that's still above the rates of recent years, it beats paying over 20% on credit cards or an average of 12.47% on personal loans. With household debt at high levels, tapping home equity is tempting — but it's not always wise. This raises a critical question: When does your existing debt load make a home equity loan too risky or impossible? We asked three industry professionals to share their insights. Below, they explore the signs you may be overextending and offer advice on how to set yourself up for successful home equity borrowing. Start by seeing how much home equity you could borrow here. How much debt is too much for a home equity loan? There's no single formula for figuring out how much debt is too much for home equity borrowing. However, experts, including Christopher L. Stroup, a certified financial planner and president of Silicon Beach Financial, warn that attractive rates can lure borrowers into taking on excessive debt. "At a certain point, [more] debt could tip the balance between manageable and unsustainable, especially if your income or home value shifts," he cautions. When considering a home equity loan or a home equity line of credit (HELOC), experts recommend examining your entire financial picture — not only the interest rate. The following indicators may hint that a home equity loan is too risky or untenable: High debt-to-income (DTI) ratio Most home lenders want to see your debt-to-income (DTI) ratio at 36% or lower. "[But] some will go up to 43% if you have a high credit score, strong down payment and stable employment," says Pahmela Foxley, vice president of mortgage lending at Wasatch Peaks Credit Union. According to Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, a DTI ratio above 43% is a big red flag. "If you're spending nearly half your income on debt already, adding a home equity loan payment could strain your budget to the breaking point," he explains. Keeping the ratio below 36% will allow you more flexibility should surprise expenses arise. Check your home equity loan qualifications here now. Low credit score "A credit score below 680, especially under 620, screams risk to lenders," says Glick. It may point to past debt management challenges that have not been addressed or resolved. Beyond making approval harder, Stroup points out that a low credit score will drive up your interest rate. If your score is below 620, improve it before applying for a home equity loan. Pay down credit card balances and make all payments on time for several months to qualify for better rates. Low home equity Lenders often ask for at least 20% equity in your home. "If you've got less — say only 10% — a market dip could leave you underwater, owing more than your home's worth," Glick explains. If you're close to the 20% threshold, consider building more equity before applying. In the meantime, paying more toward your principal can help shrink your mortgage balance faster. You may also complete strategic home upgrades to increase your property's value. Unstable income "If your income fluctuates [a lot] or you've recently changed jobs, lenders get wary," Glick warns. Stroup agrees, noting that red flags include job hopping, recent career pivots or highly seasonal earnings. "Even a high income doesn't mean stability if it's unpredictable," he emphasizes. W-2 employees with steady salaries have the easiest path to approval, while self-employed borrowers or commission workers face more scrutiny. If your income varies by more than 20% month-to-month, establish consistency for at least two years before considering a home equity loan. Lack of an emergency fund "Lacking an emergency fund signals you're borrowing from a place of financial fragility," Stroup says. Since home equity loans put your house at risk, you need a cash cushion in case of job loss or medical emergencies. Experts advise saving at least three to six months of living expenses before taking out a home equity loan. And if you're self-employed, you should aim even higher. "Six to 12 months is recommended," notes Foxley. The bottom line Taking out a home equity loan can be smart, but it requires honest self-assessment. First, ask yourself: "What's my backup plan if circumstances change?" Glick suggests assessing your full debt picture and planning for the worst-case scenario before borrowing. If you're not ready yet, focus on improving your financial position. Pay down high-interest debt, build your emergency fund and boost your credit score. Strengthening these fundamentals now could save you from putting your home in jeopardy.
