One Wealth

To Roth or not to Roth – this is a question that we often hear from clients who participate in their employer sponsored 401K or 403B plans (or if not covered by an employer sponsored plan, which is rare, then a traditional or Roth IRA). Often these plans offer a Roth option in addition to the traditional tax-deductible salary deferral. For the most part, the answer to this question hinges on one variable – do you believe your tax bracket will be higher now or in retirement? Roth contributions have no immediate tax benefit whereas traditional contributions are income tax deductible.

Financial Planning is a process, and at it’s core, one that is ongoing. At One Wealth Advisors, our aim is to develop financial plans for clients with the notion that the plan becomes the baseline for decision making moving forward. However, financial plans, more often than not, evolve into something that look vastly different – 5, 10 even 20 years down the road. Circumstances change – careers change, income rises, we get older, children are born, grow up, go to college etc., etc. Hence, that baseline financial plan should reflect those dynamics, embodying what we like to call a “living – breathing” document. And much like our “living-breathing” bodies, the plan should be given a regular “check-up”.

A survey conducted last year found that money remains the top source of stress for Americans, regardless of income. Understandably, a combination of recent events such as high inflation, supply chain issues, and geo-political uncertainty have aggravated this feeling. One effective way to react to stressors, is to focus on the elements that are in our control and create a plan of action for them. While we cannot control inflation and global uncertainty, we can manage the ways in which we spend and save.

A healthy relationship requires accountability, so why would we treat our relationship with money any differently, and why does the topic of money create anxiety in relationships?

The answer to these questions likely come from issues stemming from our childhood, or other life events. Financial advice can help remedy these issues, but we first need to learn about the history of our relationship with money.

We dedicate the month of January to the broad topic of financial planning and I have the pleasure of writing the 2023 inaugural Thought of the Week. Last week, as I was mulling over what to write about, I came across an article in the Wall Street Journal that reminded me of the now 85-year running Harvard Study of Adult Development.