Full-Scope FAQs

55% of Americans believe they will have to work past age 65

43% think there is a possibility they will outlive their retirement savings

This is largely due to the issues of procrastination, and the baseless confidence in simply working as an employee somehow effortlessly securing retirement: through employer structured benefits and the social security we’re all required to pay into from the day we enter the workforce. 

We’ve already determined that most of the U.S. population is living paycheck to paycheck— the overwhelming suffocation of financial stress on a day-to-day basis leaves many feeling powerless and trapped in their circumstances and so they procrastinate on their financial planning. Others simply don’t want to look deeper into another rabbit-hole riddled with additional stresses. And the remainder are confident that their careers and life-long work will simply ensure their eventual retirement needs— because that’s what it’s set-up to do, right? Wrong.

Until you look at the data and really review where you currently stand in comparison, and consider against the potential costs of your future retirement— you are gambling with the most vulnerable period of your life.

The sad fact is that social security benefits are very modest— on average, less than 42% of what a minimum wage full-time worker makes annually today. In June 2020, the average Social Security benefit was $1514/mth (3). The qualifiable retirement age to begin receiving social security benefits has already risen to 66 (set to rise again to 67) and the social security rate is expected to slip for those in the next round of retirement—reducing the current salary replacement rate from 42%, down to 35%. Social security is meant to be a supplement to an individual’s retirement savings, not the foundation; and the changes happening now, and already in motion for the future, is restructuring for Americans to retire even later in life and at smaller income replacement rate than it offers today…top it off with history’s guarantee for inflation and increased living costs, and it paints a painful picture for our country’s future retirees.

“Oh, but my IRA or 401k will make up the difference?” Possibly. When was the last time you looked to confirm this assumption? The majority of our Nation’s workforce has no idea what is in their employer-provided retirement accounts, nor have they estimated what the expected cost of their retirement life-period will be, to confirm they are positioned and prepared for the possibilities. It’s a gamble, and the odds are not in your favor. Without a plan, you are leaving it to chance— and chance doesn’t tend to prioritize your priorities.

Only an average of 18% of retirees have been able to maintain their pre-retirement standard of living. Everyone else faces a complete redesigning of life as they’ve known it— drastically reducing spending, selling and downsizing their home, moving in with family, or moving to a new area all together for lower living-costs…a lot of change and stress at an age when familiar comfort, care, and relaxed enjoyment of life should be a basic expectation, not a luxury. A lifetime of hard work is supposed to promise that— it is earned. But unfortunately, the responsibility of ensuring that future, ultimately, falls on each individual.

The faster you acknowledge and face this reality, and design a plan that supports the retirement experience you would like to enjoy— the sooner you can actively work toward it in simple ways that offer big results. Conversely, the later you start, the harder it becomes, and the more substantial your plans activities will need to be—but it is always better to get started today (no matter your age) than it will be tomorrow.

When you think about Accounting and Bookkeeping, you automatically think “Oh, for business”. However, when you really get down to the nitty gritty of these services, their core functions are to track cash flow (money going in, and money going out) and budgeting (the process of minimizing expenditures and delegating excess toward a series of priority-driven goals. Businesses utilize accounting and bookkeeping for several really beneficial reasons; of course, along with ensuring compliance with regulations, but overall, it’s to ensure business activities are resulting in a profit that can fund continued support and growth. 

Individuals can, and have, benefited immensely by applying these techniques to their day-to-day life. A simple budget offers some insight; taking it a few steps further to really understand: what frivolous things you have a tendency to spend on, what expenses could be reduced with a source change, what percentage of your income is delegated to financial growth, whether those activities are producing a maximized ROI. Accounting for your cash flows, reviewing and analyzing the data, finding ways to increase income (from both working (“operations”) & investments, understanding the return on both functions, adjusting when opportunities to further increase your returns and accumulate other income streams of income present themselves.  Repeat. Treating your personal finances as though you’re a business will benefit your financial health substantially— especially in determining things like income allocation to retirement savings and the return on the activity.

Frigate Financial can assist you with that process.

For 2020 and 2022, there's a $6,000 limit on taxable contributions to retirement plans. Those aged 50 or over can contribute another $1,000. The IRS treats your contribution to a traditional IRA as a reduction to your taxable income by that amount and, as a result, reduces the amount you owe in taxes.

If you put money into a bank savings account, you’d pay taxes on any interest earned every year; effectively reducing the actual interest earned, and increasing your tax liability as it grows. With a tax-deferred 401(k), you save taxes on the earnings of your contributions.

Using a tax-deferred 401(k) does not mean it escapes the application of taxes indefinitely. You would pay when you withdraw earnings and contributions.

However, as a retiree, your income often drops, possibly placing you into a lower tax bracket than you had pre-retirement. Therefore, strategically timing money to be taken from a tax-deferred 401(k) during retirement years, reduces the amount of tax you’ll have to pay, and maximizes the actual return on interest gained. 

It’s important to note that your specific situation considered along with your retirement goals, ultimately determines what retirement savings strategy with offer the biggest ROI.

The Savers Credit gives a special tax break to low- and moderate-income taxpayers who are saving for retirement. But only 12% of American workers with annual household incomes of less than $50,000 are taking advantage of this entitlement! Why? Because they don’t know about it!

This is just a small sampling of how Taxes mingle within retirement savings and retirement itself! Are you, or your tax preparer, maximizing your tax entitlements, minimizing your taxable income, and strategizing tax plans to align with the present and future in the efforts to maximize the return on your retirement savings and all your financial goals? If these two services aren’t communicating, probably not! 

Unless you plan to live off the grid, your credit scores and reports are always going to be an important factor throughout every stage of your life. The point of financing is to be able to maintain a steady cash flow when a large cost is incurred. The point of your scoring, is to let lenders know the risk in lending you money to finance your needs. Which is why a low scored individuals have a hard time getting financing when they need it most…or they get hit with higher interest rates. Credit is “prove-yourself-first, receive-trust-and-rewards-after” kind of animal. 

So during your accumulation of retirement savings, a high score will minimize all of your interest expenses, therefore allowing you to have more cash within your budget to stream into your retirement savings efforts. 

We all know to expect some decline in physical health as we age— more doctor’s visits, more vulnerable to injury and illness… the costs can add up. In retirement, this increase in expenses can be more easily managed with financing as a tool to spread out the cost without straining your retirement income. You will also benefit with a high score for the usual big expenses you might face…you might want to move, you might want to buy a smaller home to manage, you may need a new car, you might require a spot at a continuing care retirement community (Yes! Most will evaluate a prospective resident's credit profile before approving)— the point is, your credit score will forever be one of the biggest assets you have in managing and maintaining your financial health; keep it soaring at every stage. 

This doesn’t seem so bad until we look at the data— the average household owes $16,883 in credit debt and pays $1292 in interest costs each year (1).  Credit is a “love-hate” long-term relationship. It can be used as a strategic tool to finance wealth-building purchases (ie. Real Estate Investment; as mentioned above), but it can also lead you to a nasty and deep downward-spiral into a debt-hole ten-times harder to refill than it was to dig. 

Accounting for, tracking, budgeting, and managing your finances helps you to build a better score and profile…you’re not going to take on more credit debt than you’re able to comfortably afford when you’re conscious and deliberate with your budget….especially when you see the amount of money that is practically burned with unnecessary interest costs over time. 

Taxes do not directly affect your credit score, but not paying taxes you owe can definitely swing around and do some damage. The IRS can place liens against your home or garnish wages to cover unpaid tax. If there’s a lien on your home, you can’t sell, refinance, or use the property as an asset to back other financial products. A lien holder could also file for foreclosure on the home to recoup the owed amount. A foreclosure will definitely hurt your credit score. The garnishing of wages will reduce your income which will likely put you in a bind to pay your monthly liabilities, and this too will hurt your credit score. 

Our credit repair and building service can help you understand your current scoring and come up with a simple plan to repair and grow it as quickly as possible, while avoiding typical mistakes made within the process that ends up hurting more than helping, and focusing its progress in line with your needs and goals. Our service is one of the most affordable available in the industry; prioritizing your financial health from beginning to end. 

Homeowner: $255,000

Renter: $6,300

Net Worth is a helpful tool to enhance your financial health. Having assets, allows you to borrow (finance) against those assets and pay for high price or cost items— and likely at a lower rate than you could finance it directly. 

For example, say you wanted to buy a new car for $40,000.00 An auto-lender might offer to finance the purchase with a down payment (about $2k) at 7% APR

In comparison to a credit card with a 14% APR, this seems like a good deal. But with a good credit score, you could qualify for a HELOC (Home Equity Line of Credit) that could offer an even lower rate of 3% (depending on market rates) With substantial stocks, a lender might be willing to finance at an even lower APR with those assets to back the loan amount. 

The point is, Net Worth presents a variety of competitive opportunities to handle unexpected, or expected, large purchases or payments; without having to dip into your savings— which will potentially cost you substantially more in taxes or in loss of future gains, than the cost of interest to finance. 

Seeing the trend here? Net worth, Mortgage (HELCO), finance (credit score), tax costs, accounting to maximize the reduction of extra costs….they need to communicate to maximize your financial health’s potential. 

The tax code is long, longer than all of William Shakespeare’s written play scripts combined. It’s complex and constantly changing— making it increasingly difficult for filers to navigate efficiently each year— which is why professional filing services are sought out by the majority of filers each year. 

But not all servicing is created equal. With all the factors requiring consideration— in the effort to minimize taxable income, and maximize entitlements—to obtain the best possible outcome within your unique needs and situation…it takes more than a quick shuffling of provided documents and plugging in a few numbers into a tax software to push those objectives to their fullest capabilities. 

 We are blown away at how often deduction, credit, and/or benefit opportunities are overlooked…hundreds to thousands of dollars an individual was entitled to, but they, or their preparer simply missed, or didn’t realize they qualified to claim, it. An amended tax return must be submitted within three years of the original filing date— and limited to two years in the case of an individual attempting to claim their refund, after failing to file. 

Mortgage interest, property taxes, Energy efficiency upgrades and renovations, and other property-purchase-related items all plan a role in your tax liabilities and entitlements. 

Tax return funds can be used to delegate toward your credit debts, and thus assists in reducing your future interest costs and/or your credit usage/balance— which increases your credit score. 

Technology has really hit impulsive buyers with some hard lessons in the last year. And it’s completely understandable….between the relentless advertising of “quick-quotes” for “record-low rates”; COVID-imprisonment to our homes that started to feel very small and undesirable as its walls encased the stir-crazy madness within; it being easier than ever to commit to a loan and property all from the comfort of your preferred lounging space; and mixed with the frenzy of buyers snatching up every available listed property at a rate that would make anyone feel like they’re missing out on an incredible opportunity!— and you’ve got the perfect storm for massive, impulsive and emotion-driven home purchases (and refinance).

Now the dust is settling, and recent borrowers are seeing the costs of their rush, in the forms of: unconsidered additional expenses, opportunities for lower rates or other loan product options, and financial strain resulting from miscalculations of actual affordability or lack of budgeting at all. 

Had they accounted for the true costs, considered increasing their credit score (by as little as 40-60 points) to qualify for a lower interest rate bracket, saved a little more to put down, compared their options and aligned decisions with their financial needs and goals, waited to find a lower priced home, etc.— it would have greatly reduced the risk of buyer’s remorse. 

Making large purchases with a full scope understanding of how it aligns with your financial plan and goals results in a purposeful purchase a borrower can be confident in throughout the process, and after…try not to get wrapped up in emotional purchases driven by a markets frenzy, it rarely offers a beneficial result. 

Planning, preparation, and patience is what makes a great Angler; and it shows when they weigh-in their trophy catch and walk out with a winner’s check. 
If you haven’t tied it all together yet, our Full Scope services tie into it all from beginning to end. We can help you define your financial goals and map them out to a goal-led-plan

We can help you manage your personal “accounting and bookkeeping” so you can manage your budget as efficiently as a business would; a motivating tool to stick to a budget driven by conscious financial decisions that support your goals toward financial success, more efficiently. When you need to obtain purchase, refinance, or home equity financing, we can help you find the product that is exactly right for you and your goals. We can help you manage your credit repairs and building to ensure a maximized credit-worthy profile that saves you: more money with reduced interest costs; more freedom to comfortably manage your finances; with more options for when you need them most. When it’s time to file taxes, you can confidently count on us to dive deep into every available consideration that might factor into reducing your taxable income and maximize your entitlements— so you don’t miss out just because the tax code can be a complicated maze. 

Low Credit Scoring is not set up to help the financially strained! It limits your financial health’s potential growth. Interest costs, down payments, and even services and products such as car insurance— all cost you more with a low score and bog-down your cash flows that can be dedicated toward your needs and goals.

Another 18% have fair credit, a score of between 580 and 669.

Only 1.2% of Americans have a perfect 850 credit score.

Credit Scores matter. They’re important. And yet, the algorithms used to create these credit-worthiness report cards still elude a large portion of the population. Those with fantastic credit scores reap the benefits in their ability to obtain financing, as needed, from an ocean of lenders, and at insanely competitive rates— when you compare a poor, or even fair, credit consumer against a very high credit scored consumer, making the same large purchases in a year…there’s a massive difference in savings in interest and out of pocket costs to the consumer with a superior credit score; we’re talking thousands of dollars. Over a lifetime…it can be an accumulation amounting to hundreds of thousands. 

Ok ok…so these are not fun facts. But they help to create a clear understanding of what led us to providing financial services that include full-scope services. 

Those who have achieved a “zen” financial positioning tend to have three things in common: 1.) They plan every aspect of their financial health, 2.) They Shop around, and 3.) They are frugal. 
No, not frugal in the sense that they do not buy expensive things, they do, but they are very selective about what they dedicate their money to, and the way in which they do it. They are strategically mindful about their finances because they have done the planning to know and understand the undeniable benefits of being this type of consumer.  The best way to achieving any goal is to have a clear plan to follow, and to establish that plan with balance. How do you accomplish balance? By considering all factors. To really consider all factors, you need services that communicate.  

How can you know which retirement savings program offers you the most savings in minimal taxation and maximized gain retention? You have to know what programs are available to your current position, have a reasonable idea where it will be in the future, know the tax brackets you’ll fall into at each of your life stages, the tax implications of each plan when you deposit and when you pull…and the list goes on. 

How could you know if there is a simple way to boost your credit scores, and that the raise could push you into a reduced interest-rate bracket when considering property loan products? Saving you thousands in interest costs.

How could you know that the property purchase loan you obtained in a year, or a change in your income, or a variety of other factors that are updated in the tax code, qualifies you for a new opportunity to reduce your taxable income or offers a credit? Or even more importantly how those changes might negatively affect them so you can adjust to prepare? How can you know all of your entitlements, or how a financial decision you make will affect your taxes?

How could you know the most effective way to dispute negative items on your credit report, or that disputing more than five items at a time will likely get all requests rejected for assumed frivolity? 

It’s extremely difficult to be able to research it all on your own in a efficient and effective manner. You have a life. You likely work full time or simply want to dedicate your time to things that you enjoy. That’s why there are so many professionals in the financial service industry— and each has a specialty, or two, or three; to complete the tasks for you faster, effectively, and in accordance with the many legal legislations that regulate them. But if they do not communicate…if the places they intermingle are not factored and considered…you are missing out on opportunities that maximize and enhance your financial health’s potential to really soar. 

And that is what Frigate Financial’s Full-Scope Service does…it helps your Financial Health soar with customized services that communicate and align with your unique needs and goals, now and into the future.