Insights
Just because you’re in the 22% tax bracket doesn’t mean all of your income is taxed at 22%.
Only the income above that bracket’s threshold is taxed at that rate. The dollars below it are still taxed at the lower brackets.
This is how a marginal tax system works, and it’s one of the most misunderstood parts of taxes. It also changes how you should think about raises, bonuses, and tax planning in general.
See thrivent.com/social for more information. Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
Small business owners in the thick of growth often assume saving for retirement just isn’t doable.
Many I speak with ask about a 401(k), only to get discouraged when they learn it can cost thousands of dollars per year in administrative fees. What many don’t realize is that there are other retirement plan options that allow you to:
- Offer an employer match
- Reduce your taxable income
- Get a plan up and running with minimal complexity
One of my favorites for growing businesses is the SIMPLE IRA.
A SIMPLE IRA can be a great stepping stone for business owners who want to start diverting some earnings toward retirement but aren’t quite ready for the cost and complexity of a full 401(k).
Here are a few key benefits:
• No cost to establish the plan
• Employer contributions are tax‑deductible
• Employees can start saving right away
If you’re a business owner who’s been putting retirement planning on the back burner, this might be a great place to start.
Learn more here:
https://www.thrivent.com/insights/retirement-planning/how-a-simple-ira-works see thrivent.com/social for more information
Short term disability is helpful, but its importance may fade when you have a strong financial plan in place. Why? Short-term disability is intended to replace your income for the first few months of a disability. However, if you have a fully implemented financial plan, your plan's emergency fund may be able to fulfill this income gap rather than rely on your short-term disability coverage.
But what if that disability lasts longer than 6 months?
That’s where long-term disability insurance becomes essential. It ensures your income continues so you can pay medical expenses, keep saving for the future, and avoid the financial devastation that often leads to bankruptcy.
With 1 in 4 individuals experiencing a long-term disability event (per the Social Security Administration), this is one of the most overlooked areas in financial planning.
https://www.ssa.gov/pubs/EN-05-10029.pdf
See thrivent.com/social for more information.
Just because you're in the 22% tax bracket doesn’t mean all your income is taxed at 22%. Only a portion is starting at 10%, then 12%, and so on. Your effective tax rate is the average tax paid per dollar earned.
Misunderstanding this can lead to costly mistakes when choosing between Traditional vs. Roth contributions, Roth conversions, and other tax strategies. Know your brackets, and make smarter moves.
See thrivent.com/social for more information.
If you have the SAVE student loan repayment plan, there is an important change going into effect today.
All loans under the SAVE plan have been in forbearance, and interest has not been accumulating. Starting August 1st, this will flip, and interest will be added on to your loans. Note that payments are not going to be required if you make no changes.
For people going for Public Service Loan Forgivenesss, your strategy from here will look a lot different than someone who is just trying to pay it off efficiently. But now is the time to take action.
See thrivent.com/social for more information.
People often tell me they plan to pay off their mortgage in retirement by pulling from their retirement accounts. But that can be a costly mistake.
If you have $150,000 left on your mortgage, you'll need to withdraw significantly more to cover the taxes. Especially if it's coming from a pre-tax account like a 401(k) or traditional IRA. Combine that with your regular living expenses, and you could push yourself into a much higher tax bracket than expected.
There are more tax-efficient ways to approach this goal. Planning ahead can save you a lot in taxes and help your money go further in retirement.
See thrivent.com/social for more information.
Having money in a non-retirement investment account doesn’t mean you have an emergency fund.
If you're someone who likes to optimize every dollar, it can feel like you're missing out by keeping cash on the sidelines. But after years of working with clients, I've seen this play out over and over: when things go wrong, they usually don't happen one at a time.
Consider maintaining some of your cash in a high-yield savings account, which can offer flexibility and heighten financial confidence.
See thrivent.com/social for more information.
If you're a small business owner, you have more retirement savings options than almost anyone else. Strategically lowering your tax bill through the right plan can have a big impact on your overall financial picture.
From simple, low-cost options like SEP and SIMPLE IRAs to Solo 401(k)s with contribution limits up to $70,000, there’s a strategy that can fit your business and goals.
Every business is unique- figuring out the right plan is the first step.
See thrivent.com/social for more information.
Just because you’re approved for a mortgage doesn’t mean you can afford it. If your monthly housing costs are keeping you from saving for the future, you might have too much house.
A good rule of thumb: Keep your principal, interest, taxes, and insurance under 25% of your gross income.
That way, your home fits into your life- not the other way around.
See thrivent.com/social for more information.
If you have an IRA, you need to check how it’s invested.
A Vanguard study found that 28% of people who rolled over retirement accounts had them sitting in cash—even a year later. Most assume the money is automatically invested, but that’s not always the case.
Here’s how costly that can be:
A 30-year-old with a $50,000 IRA
If invested properly at 8% annually: $739,000 at age 65
If left in cash earning 3%: $141,000 at age 65
That’s nearly a $600,000 difference just from one oversight.
Hypothetical example is for illustrative purposes. May not be representative of actual results. Past performance is not necessarily indicative of future results. See https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/sticky-ira-cash-trap.html and thrivent.com/social for more information.
Studies show that market losses feel about 2.5x more painful than gains feel good.
It's easy to focus on those losses, especially when markets get choppy like they have been recently. But short-term volatility is a feature of investing, not a flaw.
Rather than reacting based on fear or gut instinct, it’s almost always better to zoom out and stick to your long-term plan.
See thrivent.com/social for more information.
Here’s how much just one year of maxing out a Roth IRA could grow based on your age:
Age 20: ~$223,000
Age 25: ~$152,000
Age 35: ~$70,000
Age 45: ~$32,000
Age 55: ~$15,000
A single year of investing can have a huge long-term impact. Consistent contributions and starting early are great indicators of success!
Assumptions:
$7,000 contribution (2024 max for those under 50)
8% average annual return
Grows until age 65
See thrivent.com/social for more information. Hypothetical example is for illustrative purposes. May not be representative of actual results.
With markets down 8%+ over the last month, I’ve heard, 'I need to move to cash/gold' and 'this time is different.'
Market corrections aren’t an "if"—they're a "when." They are a normal part of investing, but time and time again, those who stay the course come out ahead. Selling during downturns often locks in losses and makes it harder to recover.
Instead of fearing volatility, view it as an opportunity. Market declines allow you to buy quality investments at a discount, setting yourself up for long-term growth. The key is having a plan and sticking to it.
See thrivent.com/social for more information.
Everyone who goes to graduate school and takes on significant debt needs a clear payoff plan. Far too often, we see people making little progress even after 10+ years of payments—costing them tens of thousands in unnecessary interest.
Having a plan from the start helps you:
✔️ Keep lifestyle inflation in check as your income grows
✔️ Gain financial clarity knowing exactly when your debt will be gone
✔️ Free up future cash flow to invest and build wealth
If you’re not sure where to start, now is the time to put a strategy in place!
See thrivent .com/social for more information.
As businesses grow, owners often start thinking about retirement savings—not just for themselves, but for their employees too. While a 401(k) is the most common option, it’s easy to assume it’s always the best fit.
However, for many small businesses, other retirement plans might be more cost-effective, easier to manage, or better aligned with your goals. Options like SEP IRAs or SIMPLE IRAs can offer great benefits without the administrative complexity of a traditional 401(k).
Choosing the right plan depends on a few key factors:
- The size of your team and the mix of full-time vs. part-time employees
- Your company’s available cash flow
- Your long-term business and retirement goals
If you’re unsure which option is right for your business, I’d be happy to help you sort through the details.
See thrivent .com/social for more information.
Is one of your goals this year to start saving for your child’s college education?
If you’re in Illinois, opening a 529 plan is a great way to get started—and the state even offers $50 in seed money just for opening an account!
Starting early not only allows for the most potential growth, but the 529 plan also offers flexibility. If the funds aren’t used for education, they can now be rolled into a Roth IRA for your child’s future.
It’s a simple and effective way to invest in your child’s future.
https://brightstart.com/firststeps/ See thrivent .com/social for more information
Sometimes, people attempt good financial strategies but execute them incorrectly, which can lead to costly mistakes. Recently, I saw a case where someone unintentionally paid an extra $20,000 in taxes while trying to be more tax-efficient. They didn’t realize that converting their entire IRA to a Roth IRA in one year would trigger a large tax bill and push them into a higher tax bracket.
Tax planning is complex, and it’s easy to overlook details that can have a big impact. If you're considering strategies like this, it’s always worth getting guidance beforehand to avoid surprises. A little planning can go a long way in protecting your finances.
See thrivent .com/social for more information.
I often hear from people who try to save money by cutting small expenses each month—making coffee at home, eating out less, skipping the extra guac at Chipotle. While these little changes can add up, the real impact often comes from being intentional with the big financial decisions.
Making sure your mortgage, rent, or car payment fits comfortably within your budget has a much bigger effect—and requires less daily effort—than constantly pinching pennies. Focus on aligning those major expenses, and you’ll find your financial foundation is a lot stronger.