Insights
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.
If you have money sitting in a money market mutual fund or high-yield savings account, this one's for you. With interest rates expected to drop, those returns will likely decrease too.
Ask yourself—Is this money for a short-term goal, or something further down the road? If it’s for a mid or long-term goal, now is the perfect time to reassess where it’s invested.
See thrivent .com/social for more information.
Even if you don’t see your kids attending college, a 529 plan is still worth considering. Traditionally, 529 plans have been the go-to savings tool for college due to their tax benefits. The catch for many people has been the fear of taxes and penalties if the funds weren’t used for education.
But starting this year, there’s more flexibility. You can now roll up to $35,000 from a 529 plan into your child’s Roth IRA. This opens up a huge opportunity—envision 60 years of tax-free growth!
It’s a game-changer for a lot of families. If you're hesitant about a 529 because of potential penalties, this new option offers an alternative path to saving and investing for your child's future. For this to happen, the 529 needs to be opened for 15 years prior to this strategy so it's good to start early.
Note that all rules for Roth IRAs still exist including income limitations, maximum contributions etc. See thrivent .com/social for more information.
For those nearing, or in retirement, it can feel safer to keep your money in cash or cash-like investments. The largest risk with that strategy is inflation and outliving your money.
If your investments aren’t growing enough to outpace inflation, you will need more money to maintain the same lifestyle. For example, if inflation averages 3%, what costs $50,000 today will cost over $67,000 in 10 years. This is why some growth-focused assets are often beneficial in your retirement portfolio.
A well-diversified retirement plan will help protect your long-term purchasing power and keep you on track to maintain your lifestyle, without unnecessary risk. Be sure that your retirement plan can handle rising costs, while still giving you financial confidence.
See thrivent .com/social for more information. While diversification can help reduce market risk, it does not eliminate it. Diversification does not assure a profit or protect against loss in a declining market.