Planning · February 10, 2022

5 Steps to Kickstart Your Financial Plan

Brandie Fintchre

Senior VP, Premier Relationship Banker Program Manager

Dan Thomason

Senior VP, Financial Consultant II

5 Steps to Kickstart Your Annual Financial Plan webinar replay

Amy: Hello, everyone, and welcome to the First Citizens Wealth Management Webinar 5 Steps to Kickstart Your Financial Plan. I'm Amy Thomas, a Delivery Specialist with First Citizens Bank. While everyone is logging in, I wanted to share a couple of housekeeping items with you.

First, this webinar is being recorded, and a replay will be sent to you following the conference. Secondly, this webinar is interactive. You'll have the opportunity to ask questions. We received a number of questions during our registration process, but if you have a question during today's call, please use the Q&A or chat feature to submit your question on the right hand side of your screen. All questions are confidential and only visible to myself and the panelists. I do want to remind you that we try to keep our discussion broad. If you have a specific question about your financial plan or we don't get to answer your question during today's webinar, please reach out to your First Citizens partner.

As a reminder, the information you're about to hear are the opinions of First Citizens Bank and are for educational purposes only. If you have any concerns regarding this information, we ask that you reach out to your First Citizens Relationship Manager. Today, we're joined by Brandie Fintchre and Dan Thomason. Brandie leads our Premier Banking Team, which is our licensed associate stationed in our branches, available to assist clients with their banking needs, as well as starting a financial plan. Premier Bankers help with a wide array of financial needs, including banking and credit management, asset titling, as well as education and family support. As their coach, Brandie helps to ensure that our Premier Bankers have the resources and tools that they need to help keep you on track.

Also with us today is Dan Thomason. Dan is a Financial Consultant with our First Citizens Investor Services Group. Dan serves the North Carolina Triangle Area, providing holistic service centered around financial planning, investing, retirement and transferring wealth. Dan often partners with our Premier Bankers for more nuanced investment planning needs. The partnership between our Financial Consultants and our Premier Bankers helps bring confidence and peace of mind for your financial decisions. I want to thank Brandie and Dan for being with us today, and Brandie, you are going to kick us off, so I'll turn it over to you.

Brandie: Well, fantastic, thank you, Amy, and good afternoon to everyone. It's certainly a pleasure for my colleague Dan Thomason and I to provide this audience with a few ways to stay proactive with your finances near the start of the year. As we think about our finances, it's really important to note that proactivity is certainly key. So as we begin our conversation, let's note that many of the suggestions we provide today should be considered throughout the year, not just at the start of a given year. As inflation continues to erode our purchasing power and as the threat of rising taxes and interest rates appear to be on the horizon, maintaining a proactive stance to grow and protect your wealth is increasingly important. So today, we plan to discuss foundational elements of creating a personal financial strategy for success in 2022 and beyond. So let's dive in.

So what's the first step we should all take to gain and maintain control of our finances in the new year? Well, this is the time of year when everyone makes New Year's resolutions, whether it's to lose 10 pounds from indulging in holiday meals, planning that special trip now that COVID restrictions are easing or finally getting serious about your estate plan. Resolutions are only as effective as they can be if you're truly resolved to achieve the goal. Working with a team of financial professionals can help you stay focused on your priorities. As we work with clients, we always start with understanding who they care about and what they want to accomplish in their life with their money. We then help clients like you understand how your financial resources can be used to accomplish those life goals through intentional planning. In this way, we become resolved to help you achieve those goals. Whether they're short term in nature, intermediate or long term. According to research by Dr. Gail Matthews of Dominican University of California, an individual has a 42% chance of achieving goals if they are written down. So our first recommendation to clients is to write down your life goals, whether those goals are for yourself, your family or for your legacy. And revisit those goals at least annually with your team of professionals to include your banker, your financial advisor, and your CPA. And certainly, if applicable, your personal trainer to stay on track to achieve life goals. And as life happens, your goals may adjust. And when they do, the proactive guidance you can receive from experts can help you stay confident about your decisions and be in more control of your life.

Dan: Brandie, let's start with a few basics of routine Financial Management. For our next second Step to Kickstart your Financial Plan, let's talk about cash flow. When it comes to managing cash flow, what are the basic building blocks that we should be implementing today to build wealth for the future?

Brandie: Well, Dan, that's a very important question and one that tends to be overlooked when it comes to financial planning. Knowing where your money is going is so pivotal to stay on track to meet your goals. Creating a cash flow plan or a budget is an essential second step in staying in control of your finances. According to NerdWallet, in 2021 less than half of Americans live by a budget, but more than half carry credit card balances month over month, with an average interest rate of 16%. It may sound very elementary, but even our more affluent clients should have a budget to plan ahead for taxes, to account for rising costs, including rising health care costs, to direct money to certain goals and to reserve funds for emergencies and current lifestyle needs. Maintaining at least three to six months of living expenses in emergency reserves is a rule of thumb, and if you currently don't have this amount of cash on hand, the use of a line of credit as a temporary bridge until your cash reserves are adequate to serve as the first emergency source of funding is crucially important to use. There are many different budget tools to help you see your finances clearly. Our Manage My Money tool that's provided by First Citizens is available to clients and keeps you in the driver's seat to see your money and to see where it's going and to redirect it when necessary. One of the biggest threats to managing cash flow is high interest debt. Now is an opportune time to review your outstanding debts, taking advantage of low interest rates now before the Fed increases rates starting next month. We speak often about the difference between good and bad debt, credit cards, store cards, car loans and to some degree, high balance student loans should be considered bad debt. They deprive you of directing your personal cash flow toward wealth building investments and business ventures. Mortgage debt, on the other hand, can be considered good debt if the mortgage payments remain at or below 28% of your gross annual income as a rule of thumb.

But Dan, one of the best ways to protect your accounts from fraud exposure is to safeguard your financial information. Use passwords that are not easily decoded and different passwords for different websites. Storing passwords in a safe place, whether that's a password specific phone app, a fireproof safe or a locked cabinet are also important steps to consider. Using privacy settings on your smartphones, blocking your credit reports from being accessed or pulled without your consent and checking your credit reports annually on websites like help reduce the risk that someone can access your information and your money. The use of credit cards also can be a good fraud prevention tool as well as any unauthorized use can be reported without liability to the owner if done within 30 days of the transaction. And be careful about the funds you hold in demand deposit accounts like checking accounts. Shift any excess amounts of cash to a savings or money market account so that your stores of cash aren't readily accessible if your account information is stolen. And we encourage you to place text alerts on your accounts so if there is a purchase that is above a certain transaction amount, or if the account balance falls below a certain amount, you can receive an immediate text alert so that you can take immediate action. So maintaining a monthly cash flow plan, refinancing high interest debt to lock in low interest rates, safeguarding account balances and password information, and checking your credit reports annually are practical steps to managing your day to day cash flow. Now, Dan, let's move to our third step, which is to ensure that your portfolio aligns with your financial goals and risk tolerance as prices increase and the threat of rising taxes looms on the horizon. What strategies would you suggest that clients consider early in the year to stay on the path to achieving their long term goals?

Dan: Great question, and thank you, Brandie. It's great to be here today. Let me start by saying we are not tax professionals. Please be sure to work with your tax professional in your community to discuss whether implementing these options are right for you. When it comes to mitigating inflation risk and taking advantage of growth opportunity, I would always recommend maximizing your tax deferred and tax free savings vehicles. This can both allow greater amounts put toward savings while sheltering assets from annual taxation of income and capital gains. When it comes to these areas, we recommend maximizing your 401(k), 403(b) plans, as well as traditional or Roth IRA contributions. Now, keep in mind the maximum for your 401(k) and 403(b) for those under 50 is now $2,500, an increase of $1000 from 2021, and for those over 50 is $27,000. Our IRA contribution limits still remain at $6,000 for those under 50 and $7,000 for those over 50 years of age. An additional opportunity and still available is to take advantage of the backdoor Roth opportunities for those higher income earners who would typically not be able to contribute to the Roth IRA. This represents a great opportunity and one that's still available. Further, health savings accounts and flexible spending accounts offer a great saving solution. Remember your annual maximum for your HSA plan as an individual is $3,650 and $7,300 for those families. FSA plans have a maximum contribution of $2,850 and still available as a great opportunity. Another tax saving strategy is through charitable gifting, including gifting of highly appreciated securities. And some folks can also leverage the tax savings opportunities, such as the benefits of programs as the earned income tax credit as well as the American Opportunity Credit and the Lifetime Learning Credit. Now, when it comes to inflation, forging a reflective financial planning analysis, incorporating a thorough understanding of plan needs and objectives is essential. With this understanding, one can in turn align savings appropriately to fund those goals with shorter term needs more conservatively invested, while longer term needs can be invested to pursue greater growth and offset inflation.

Brandie: That's great guidance, Dan. Are there any specific strategies that people in different life stages should prioritize, like individuals that are just getting started? Individuals that are nearing retirement or perhaps individuals who are already retired?

Dan: Absolutely for younger investors, priorities may be building retirement savings, risk management areas such as life and disability insurance, as well as college savings for any children. For those in the pre-retirement phase of 50 to 65, we traditionally want to ensure retirement savings opportunities are maximized. This period is typically the highest wage earning years, and capitalizing on tax savings becomes very important. In some cases, savings increases following mortgage reduction, as well as child rearing expenses eroding. Risk management areas during this phase, such as long term care insurance, should be addressed while health status remains eligible. For those over 65 and over priority areas to are proper income planning, asset protection, including estate planning, addressing how to pay potential long term care costs are equally important.

Brandie: I couldn't agree more. Dan, can you remind everyone of the steps that they need to take before the upcoming tax deadline to include retirement plan contribution limits for specific qualified accounts?

Dan: Absolutely this is a great time to ensure you're maximizing your IRA and/or workplace retirement plans. Remember that increase in 2022 has gone up, so be sure to address that in your plan. I also ensure and recommend ensuring that any employer matching is maximized, which may require adjusting your 401(k) contributions for annual bonuses typically paid early in the year. In addition, you want to review your HSA plan contributions to make sure these are being maximized. And again, you have until April 15 to make your IRA and Roth IRA contributions for 2021. Now, Brandie, creating and growing wealth is important, but a financial plan can help us prepare for unexpected and protect who and what is most valuable to us. The fourth step to stay on track with your financial plan is to protect your wealth with the right kinds of insurance through the life cycle. Brandie, when it comes to protection planning, what are some key considerations that clients should consider in mind without delay?

Brandie: Dan, this is a subject that I'm very passionate about. If COVID-19 has taught us anything, it's that the unimaginable can and will occur. One of the main reasons that it's important to have a financial plan is to protect your lifestyle, your financial resources and your legacy from things that could derail it. Rising health care costs, health care costs related to the pandemic, the disability of a primary earner in the household or a job loss are all events that should be taken into account as part of your financial strategy. So what are some of the practical ways to prepare for the unexpected? Well, our first suggestion is to care for your family's welfare by securing cost effective life insurance. Not only does life insurance provide a tax free death benefit to heirs, but life insurance can be used to reduce financial stress on loved ones while passing on a legacy that can last for generations. If you've not done what's called an efficiency review to ensure that you're paying a competitive premium for the coverage you should have outside of your employer's coverage, we strongly encourage you to do so. People are living longer, and as a result, actuarial tables for nonsmokers may provide more affordable premiums for the same level of coverage. And if your current life insurance coverage outside of group term life coverage from your employer would not pay off current outstanding debt to include contingent liabilities on even business debts, provide a stream of income to help surviving heirs maintain their lifestyle and provide for future goals like college funding for kids, now is a great time to perform what's called a stress test while updating your estate plan as well. Don't put off this important step. We see clients delay updates to their estate plan and then their heirs are the ones who must contend with the complexities and pressures that remain. Consult your First Citizens Relationship Manager for guidance. We have internal and community partners who can help you create an airtight estate planning strategy.

Now, we don't just want to plan for the death of a loved one. We want to make sure that when life happens, that you aren't physically or if you aren't physically able to care for yourself due to a disability or long term care event that your income and long term savings are not compromised as a result. So let's focus on pre-retirees for a moment. Individuals who are typically between the age of 35 and 55. Protecting your income due to a long term disability should be a huge priority for these individuals. According to a New York Times article, an individual has an 80% likelihood of becoming disabled during their working years, so individuals should review the current long term disability coverage provided by their employer. And we find it a best practice to have coverage to replace 60% or more of your income, ideally after tax. So be sure to elect this coverage with your employer. And if your employer does not provide that level of coverage, please consult your First Citizens Relationship Manager to provide options. Your income is your largest wealth building tool, and the sooner you protect that income or perhaps a number of income streams, the more peace of mind you'll have about your financial stability. For individuals who are nearing retirement, typically individuals who are between the age of 55 and 65, the rising cost of long term care is something to plan for in advance. So again, let's put that into perspective. According to the 2018 US Department of Health and Human services, an individual who reaches the age of 65 has a 70% likelihood of needing some form of long term care, whether that care is home based through an assisted living facility or a nursing home. The cost of long term care is growing at a rate of between 4.5 and 5% a year. And in many cities where we have First Citizens branches, the annual cost of long term care ranges from 50 or sorry, $65,000 to $95,000 a year. Because the average need for long term care spans between 3 and 4 years, the future cost of long term care can siphon hundreds of thousands of from your retirement accounts before accounting for taxes paid on retirement withdrawals. If planned for in advance during your working years, there are affordable long term care options available that can protect your retirement nest egg, the nest egg you've been saving into for decades from depletion.

Now we have planning tools available to help you estimate the future cost of care and policies that can provide the care you're looking for as you age. We help clients plan for that 70% likelihood as a way to protect their wealth and transfer that wealth to intended heirs. Now, Dan, what if I'm not healthy enough to qualify for policies like life insurance and long term care? Are there other ways I can protect myself and my family? Absolutely this raises a couple of different areas of focus, namely starting with a savings plan to adequately cover any outstanding debts that liquid assets could not pay is a beneficial strategy to replace the long term care cost and income needs for any dependents. Beyond these savings, it is important to develop an asset protection solutions within your estate planning. This includes powers of attorney, medical directives along with Will and trust areas. In addition, trust areas can provide creditor protection and allow assets to be sheltered from Medicaid. Now, it's never too late to dot the I's and cross the T's. We spend our lives building and protecting it for the future. But when life happens, we want to ensure that wealth passes to the next generation. For our fifth and final step on the path to financial wellness, let's focus on ensuring your wealth transfers according to your intentions. Brandie what are the essential documents that everyone should have in place to ensure that their intentions are honored regarding wealth transfer?

Brandie: Well, Dan, first of all, let me mention that we're not licensed attorneys and cannot provide you with any legal guidance. Please work with a licensed estate planning attorney to determine the appropriate route for transferring your wealth. We do partner with attorneys to assist in this part of the planning process. In fact, there are four estate planning documents that clients should include in their estate plan, regardless of their level of wealth, whether they're married or single, have children or not, or have a portfolio of rental property or investments. These documents are essential components of a quality estate plan. So first and foremost, the most common estate planning document is the will. And while a will is a primary document in your overall estate plan that should be updated as your family dynamic and your wealth changes, there are other documents that should have a place or that should be in place to safeguard your interests and your family's financial wellness. Of course, a will designates how assets and property are distributed at death and identifies parties involved in settling your estate. But we recommend clients to exercise care in selecting fiduciaries. Your executor, the person who is legally responsible for settling your estate and guardians for minor children, the selection of executors or guardians should not be done haphazardly. Be sure to consider whether those individuals have the skill, the time, the willingness to serve in these capacities should something happen to you and also ensure that those individuals are aware of this assignment well in advance of a potential life event.

Trust can also help you protect and transfer your assets. For example, a revocable living trust is a legal arrangement whereby you transfer ownership of assets to that trust. It's administered by a trustee that you assign, and the proceeds go to beneficiaries that you designate. The trust is private. It allows you to avoid the delays and expenses of probate and can even be useful if you become incapacitated. Now, we've already discussed the benefits of having life insurance to cover expenses and leave a tax free benefit to heirs. But there are also important ancillary documents you should have in place to care for your health and well-being if you're unable to do so. Powers of attorney are legal documents that allow parties that again, you choose, to make decisions regarding your property, your health care and other personal issues. You select Financial and medical agents to make decisions for you when you're unable to do so. It's our belief that every adult, regardless of wealth level, should have a health care power of attorney so that someone that you trust can make medical decisions for you when you're unable to do so. And a durable power of attorney is also an essential document needed so that someone can handle your financial affairs if you're unable to do so. And since not all assets passed by way of a will, we recommend that you also confirm that you have named specific people to be beneficiaries of assets that pass by way of a contract like life insurance policies, deposit accounts and investment accounts.

At First Citizens, we certainly provide guidance where needed, but again, a reputable estate planning attorney should be a part of the advisory team. Now, Dan, when it comes to making charitable donations as a part of an estate or gifting plan, what can clients do now that will be advantageous to themselves and beneficiaries as a part of their overall financial plan?

Dan: Well, Brandie, I find this starts with proper documentation and understanding of the assets intended for charitable gifting. This can include designation of a name charity as your beneficiary or ownership within a trust. Please remember beneficiaries can be named not only on investment accounts and retirement accounts, but also on bank based checking and savings accounts. Additionally, taking advantage of qualified charitable distributions, or QCD, directing charitable donations from required minimum distributions can allow greater tax advantages. Gifting during lifetime can be done from highly appreciated securities. However, making this last in the order is a best practice to preserve the step up in cost basis for beneficiaries.

Brandie: Well, Dan, we've discussed a variety of topics during today's session, from goal setting to budgeting to investment in retirement planning and an inflationary economy to protection planning and estate planning. These concepts encompass only a handful of the common financial needs that we discuss with clients during planning sessions. We hope that the information was useful to you as you meet with your advisory partners. Our commitment is to help you make sound financial decisions early and to help you stay on track to meet goals while growing and protecting your wealth. So at this time, I'd like to pass the call back to Amy Thomas to see if we have any questions from our attendees. Amy, back to you.

Amy: Thank you, Brandie, and thank you, Dan, for sharing all of that information. I know it's so helpful for me as an individual that is making life choices and planning life out. So I appreciate it. I want to thank you both again, and I want to remind everyone that we are taking questions. If you would like to submit it in the chat feature or the Q&A feature on the right hand side of your screen. We do try to keep our discussion broad and I would encourage everyone as Brandie and Dan have also done, to speak with your financial planner or financial advisor to work on anything specific in your financial plan. Brandie, one thing I know as a takeaway for me today is that there's so much in a financial plan to do with balance, and a person has submitted a question asking about the balance between the right amount of insurance coverage if you're also trying to pay down some debt and possibly have an employer group policy already, what's the right amount of life insurance coverage and long term care and disability insurance coverage?

Brandie: That's a great question, and I certainly appreciate the priority of trying to create balance because all of our budgets are somewhat fixed and it's important to allocate your cash flow accordingly. So again, I want to stress step number two in our discussion having a cash flow plan or a budget to help you direct where your money is going. That's certainly a first step here. But when it comes to finding affordable insurance coverages, we can certainly help. Having affordable life insurance coverage outside of your employer is something that we recommend to all of our clients for one very important reason. Should you become disabled and unable to maintain your employment, group term life coverage that you have with your employer to protect your families, it goes away. Alright. You want to make sure that you have enough life insurance coverage to cover things like burial expenses, estimated college costs for your children to pay off outstanding debt obligations and to provide a stream of income that can help your family maintain their lifestyle. And you want to have that kind of life insurance coverage separate from your group term life insurance. We can help you determine that optimal coverage for your family and develop that income replacement plan as well through disability insurance, if your employer does not offer an adequate amount, and I would say that individuals that are between or that are less than the age of 55 should really focus on protection planning related to life insurance and disability. But if you are above the age of 55, long term care in health care planning becomes an essential part of your protection strategy, and there are lots of different options for providing that health care reserve again to plan for that 70% likelihood. And we can wrap that protection plan or incorporate it into your overall financial plan with effective budgeting recommendations. Now, when it comes to paying off your debt. Again, I would advise you to connect with your First Citizens Relationship Manager to discuss current mortgage rates and the options to refinance high interest debt. This can put hundreds, if not thousands, of dollars back into your budget that you can apply towards savings and protection goals, and now is the time to have those really important conversations. So, Amy, I hope that answers the question from the individual who asked.

Amy: Thank you, Brandie. Dan, this one is, I think, a great question for you when it comes to market advisers, we often hear don't panic. And this person is asking, is there a time to panic? And you might be on mute.

Dan: There we go. You know, in my experience, this panic that we speak of usually stems from expectations not being properly selected from the get go with a clear vision of financial and lifestyle goals being reflected in the investment policy. Having a logical basis for financial and investment decisions can certainly foster confidence and help dampen those emotionally charged panic moments. This is a key fundamental of how we serve families, and ultimately our goal is to remove emotion from those equations to the extent that we can and help folks look at their lives in an objective way. And make the best decisions possible.

Amy: Thank you, Dan. We also received a number of questions around how to get involved with cryptocurrency, and I want to remind everyone that last month we had a Cryptocurrency 101 Webinar and that replay is available at so if you have a question about that, I direct you to our website to watch that replay. A lot of great information there. Brandie, I've got a question here about where the best place is to hold emergency cash that we talked about during our discussion today. Well, I wish I could say that rates were phenomenally high. And even though the Fed is going to be increasing rates probably a few times this year, it's going to take a while before bank deposit rates follow that trend. But I would say that as a reminder, our emergency funds, your emergency reserve is not intended to be the place where you're going to get the best rate of return. However, you want to make sure that your emergency cash is placed in an account that is easily accessible, where you're going to get a few pennies or dollars of interest. Those accounts tend to be savings accounts and money market accounts. If you do happen to have at least $1000 or more that you have placed in an emergency fund or that you have reserved for emergencies, I would certainly recommend that you look for a money market savings account to hold your three to six months worth of expenses, and once you've eclipsed that three to six months of expenses, also consider having additional reserves on the side for any sinking funds. Funds that you're going to be using within the next two to three or four years to meet an intermediate goal, like putting a down payment on a house or purchasing a vehicle. You want to make sure that those are in very liquid accounts, accounts where you can easily access without worrying about market volatility, potential capital gains or having to sell securities.

Amy: Thank you, Brandie. Dan, this person is asking about, we talked a lot today about transferring wealth, this person is asking about recommendations around incorporating generational wealth transfer into a financial plan. Oh, Dan, we got you on mute again.

Dan: That's a great question. You know, I'll approach it, I think there's two ways to look at that, and that could be either as the beneficiary of that generational wealth or as the benefactor of that generational wealth. To address the former there, when we think about how that wealth is being passed to those that we serve and how best to incorporate that in their financial plan, it starts simply with a firm understanding of what those assets and resources are, how those assets and resources will be provided, whether that is as a single sums or as an income distribution over time. And so certainly it's a wonderful blessing to have and to be able to incorporate that in the plan is a wonderful thing. But again, going back to documenting that and having a firm understanding of that. Now, the other side of that, being the benefactor of that generational wealth, I think that really boils down in the world that I work to two different ways of looking at it is that generational wealth, something that a family or an individual wants to set aside day one and that the resources they don't incorporate into their spending plans overall and have that they're set aside. The second, and what I see quite a bit as well is whatever's left. And so understanding that can lead to generational wealth. But my goal in that and helping families to identify what's left can then help them make better decisions to be more deliberate on the front end and it not be a consequence. So if that helps, that's how I would summarize incorporating generational wealth into any financial plan.

Amy: Thank you Dan. Let's stick with you. We got a question around a person who has a pension through their employer. The person's asking should they also include their 401(k) option to help supplement that pension plan in their retirement planning?

Dan: Great question. You know, I think that this is a broader topic, really and speaks to the changing dynamics of the workplace over the last, Jiminy Christmas, 60 to 80 years, where historically we knew pension plans were really the sole saving source for the worker. That has certainly changed now by virtue of, you know, largely stemming from life expectancies, which is a wonderful reason. It does put greater pressure on us as the worker, as the individual to save for our own futures and not rely on the employer plan or the pension that we think of. So to answer simply, yes, absolutely. If you can afford to save into that 401(k) plan, we strongly encourage you to do that if they offer that if your employer offer such a plan, in many cases you're incentivized through matching contributions, which only accentuates that endorsement. Taking that further, you know, I think one of the things that's important is putting too much reliance on that pension plan can be of hazard. Remember, those are funds set aside by your employer for your benefit. They're not yours yet. And so something happens to that employer, provided they have pension Benefit Guarantee Corporation coverage. There is a level of insurance that pension will pass on to that worker. But again, typically not at the full amount. So helping to mitigate or offset that risk is equally important in making those contributions and saving on your own. So absolutely, make sure you take advantage of those opportunities.

Amy: So, Dan, in your experience, what is the most underutilized savings vehicles that are available to folks?

Dan: Yeah, it's a great question, I think. I think largely of a few. And one we just touched on, and that is maximizing 401(k) contributions. We oftentimes see that employees are willing to contribute what the employer matches, which typically is not the maximum that one can contribute, and thereby they're forced into a position of either not saving or saving through taxable manners or other tax deferred vehicles, which may not be as advantageous for them. So I would certainly say your workplace retirement plan is one of those underserved. I also feel the HSA plan is an underserved savings vehicle or health savings accounts. The benefit to these structures in most cases, is as you build that balance up, you have the opportunity to invest those funds. Not many places are we able to invest funds in a tax deferred and ultimately tax free based on use vehicle. And so taking advantage of HSA plans and if you have the capacity to pay those out of pocket expenses from cash savings rather than using your HSA, you're certainly going to benefit from that. Ultimately, longer term, having those resources in the HSA to be able to combat the effects of health care costs later are a big advantage. Ultimately, you can transfer that to your IRA or later at 65 or over and then be able to use that as an income source. So certainly another one that I think of. Third, I think about the backdoor Roth opportunity that continues to exist for high income earners more than ever. Taking advantage of tax deferred and ultimately tax free savings is a huge windfall. And so taking advantage of those as well as something that I see as being underserved in our population.

Amy: Thank you so much, Dan. Brandie, let's flip back to you as we wrap things up today. We talked about the 5 Steps to Kickstart your Financial Plan, so folks are on the line and heard something that they need to get straightened out in their financial plan as they start moving over, what is the best way for them to get started? What would you recommend as their next step?

Brandie: Well, if you're getting started with a formulation of a financial plan, the very first step is really the first step that we talked about as we started today's webinar. It is to clearly define or to redefine your goals, and those goals can be short, intermediate or long term. But to be very specific about what it is that you want to achieve and the timelines in which you want to achieve those goals. So I'll give you an example. Every, client that I've ever met has had a goal of retiring. Even if you love what you do, you want to plan for that time when you may not be able to work and you want to have a nest egg there just in case, but a retirement goal should be specific. So retiring as an example, at age 65, with approximately 70% of your income, with plans to travel and spend time with your family and focus on other passions, that is a clearly defined goal. Being able to contribute 50% to your children's college education and for that education to be most likely in an in-state school is another clearly defined goal, with stated timelines based on when your children will likely plan to transition to college or be college age. So the first step is to clearly define your goals with stated timelines, and then we can create a financial roadmap to get you to a place where you're achieving each of those milestones and wrapping a protection strategy around that plan with the right types of life insurance and estate planning. So I hope that that's helpful. Amy, I believe that you're on mute.

Amy: Leave it to the producer to leave yourself on mute. Dan, Brandie, thank you so much for your thoughts and answering questions today. We'll go ahead and wrap things up. I want to thank everyone for being on the webinar today. If your question wasn't answered, please reach out to your First Citizens partner. I want to invite everyone to our next Making Sense Webinar, which is our monthly market update series hosted by our Chief Investment Officer, Brent Ciliano and Director of Market and Economic Research Phillip Neuhart. The next webinar is Wednesday, February 23 at noon, and you'll be able to register for that market update when we send you the replay for this webinar that we're on right now. You can find information on all of our webinars at, along with a lot of other resources that we think you'll find helpful. On behalf of all of us here at First Citizens, I want to thank you for trusting us to bring you information to help you with your financial decisions. Your trust in us is not something that we ever take for granted. We hope you have a great rest of the week, and we look forward to seeing you on our next webinar. Thanks, everyone.

Key Takeaways

The five steps to kickstart your annual financial plan require planning, application and partnership.

  1. Write down your life goals. Whether your goals are for yourself, your family, or your children, taking the time to write them down may help you stay on track.
  2. Stay in control of your finances. From managing debt to monthly budgets, make sure your plan includes useful tools and best practices.
  3. Make sure your portfolio aligns with your goals and risk tolerance. Consider strategies to start today that may help achieve longer-term goals.
  4. Protect what you've earned. Make sure you have the right risk managing strategies in place to help avoid mishaps.
  5. Leave an impactful legacy. Make sure you have a plan in place to ensure that your transfer intentions are honored when the time comes.

A few financial insights for your life

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