Vision Capital Management Financial Advisor Portland Oregon

Vision Capital Management has been providing clients financial planning and investment management services since 1999. Visit our site to find out more.

Year-End Financial Planning Checklist

As the year draws to a close, we would like to highlight two key activities we’re undertaking on behalf of our clients and provide reminders on other best practices for year-end.

  1. Tax-Loss Harvesting

    Our investment team actively monitors portfolios for tax-loss harvesting opportunities. This involves selling securities at a loss to offset capital gains, while simultaneously reinvesting in a way that remains aligned with your long-term goals and risk tolerance. We also manage cost basis considerations to support overall tax efficiency.

  2. Required Minimum Distributions (RMDs)

    Clients age 73 or older are legally required to take annual Required Minimum Distributions (RMDs) from tax-deferred retirement accounts, such as traditional IRAs and 401(k)s. Vision Capital will assist in coordinating these distributions through your Fidelity or Schwab account as needed.  If you have an inherited IRA, Required Minimum Distributions (RMDs) may still be required, regardless of your age, depending on the terms of the inheritance and current IRS regulations.  If you hold an inherited IRA or have any questions regarding your RMD obligations, please contact your client relationship manager for guidance.

Additionally, the following items can help clients get organized and ready to welcome in the new year.

  • Maximize Retirement Contributions

    Even if you can’t contribute the full annual limit, increasing contributions before year-end can significantly enhance long-term retirement savings. If eligible, consider making “catch-up contributions,” which vary in amount depending on the type of retirement account.

  • Optimize Charitable Giving

    To receive a 2025 tax deduction, charitable donations must be completed by December 31. We recommend acting early, as nonprofits can be overwhelmed during the final weeks of the year. Additional strategies to consider include bunching donations into a single year for greater impact, donating highly appreciated long-term assets, or making qualified charitable distributions (QCDs) directly from an IRA.

  • Evaluate Income Tax Withholding

    Now is a good time to reassess your withholding elections to make sure they still match up with your current income level and tax situation heading into the new year.

  • Assess Medicare Coverage

    We recommend reading the Annual Notice of Change (ANOC) document, which details changes to costs and coverage. If you have experienced significant changes with your health, are seeing new providers, or have new prescriptions, it may be worthwhile to move to a new plan during open enrollment, which takes place from October 15 to December 7.

  • Contribute to Your Health Savings Account

    Health Savings Accounts (HSAs) carry the unspent funds over to the next year. If you are able, it is advantageous to maximize your contribution to your HSA for a triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical costs.

  • Use Flexible Spending Accounts (FSAs)

    Flexible spending funds are generally subject to a “use it or lose it” rule. Depending on your plan, unused balances may expire at year-end. Eligible purchases include new contacts or glasses, prescriptions, appointment copays, and over-the-counter items such as first aid supplies, sunscreen, and cold and flu remedies.

  • Review Estate Planning Documents

    Outdated beneficiary designations are unfortunately common and can lead to unintended consequences. Take the time to review and update your beneficiary forms to ensure they accurately reflect your current wishes and circumstances.

If you have any questions about the topics outlined above, please don’t hesitate to reach out. We are here to support your financial goals with thoughtful, proactive guidance.

Americans Relying on Retirement Funds for Rainy Day Savings

 

In the most recent installment of Vanguard’s “How America Saves” annual report, data suggested that Americans are participating in retirement savings accounts at record-high levels, mostly due to the adoption of automated enrollment and access to employer-sponsored plans. However, the concerning trend that caught the attention of financial advisors was the marked increase in consumers withdrawing funds from their retirement accounts in order to pay for emergencies. In pre-pandemic days, the rate of hardship withdrawals was approximately 2%, but Vanguard reported the most recent rate to be 4.8% in 2024, with the reasons including avoiding evictions and home foreclosures, medical expenses, and tuition costs.

We have outlined strategies below that will ensure you have a strong savings cushion and will avoid dipping into retirement funds earlier than necessary.

1. Create a Realistic Budget

A solid budget is the foundation of financial stability. Follow these steps to establish a budget that works for you:

  • Track Your Expenses: Monitor your income and spending to understand where your money goes. Use budgeting apps or spreadsheets to keep track.
  • Prioritize Essentials: Allocate funds for necessities such as housing, utilities, food, and healthcare before spending on non-essentials.
  • Set Spending Limits: Avoid overspending by setting monthly limits on discretionary expenses like entertainment and dining out.
  • Use the 50/30/20 Rule: This budgeting method suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment.

2. Build an Emergency Fund

An emergency fund is a crucial financial safety net that prevents you from withdrawing from retirement savings in times of crisis.

  • Set a Savings Goal: Aim for three to six months’ worth of living expenses in an easily accessible account.
  • Automate Savings: Set up automatic transfers to your emergency fund each month to ensure consistency.
  • Use Windfalls Wisely: Direct tax refunds, bonuses, or unexpected earnings into your emergency savings instead of splurging.

3. Reduce Debt and Interest Payments

High-interest debt can quickly erode your finances, making it tempting to withdraw from retirement funds. Reduce your debt burden by:

  • Paying Off High-Interest Debt First: Focus on credit card balances and personal loans that carry high interest rates.
  • Consolidating Debt: Consider a lower-interest personal loan or balance transfer to reduce interest payments.
  • Avoiding Unnecessary Debt: Limit borrowing for non-essential expenses and prioritize living within your means.

4. Maximize Savings Opportunities

Building wealth outside of retirement accounts ensures financial flexibility.

  • Open a High-Yield Savings Account: Earn more interest on your savings by choosing an account with a competitive rate.
  • Invest in a Taxable Brokerage Account: Grow your wealth through diversified investments that do not require early withdrawals from retirement funds.
  • Contribute to an HSA or FSA: If eligible, these accounts help cover medical expenses without dipping into long-term savings.

5. Plan for Major Expenses in Advance

Unexpected expenses often force individuals to withdraw from their retirement savings. Prepare for large costs with these strategies:

  • Set Up a Sinking Fund: Save a small amount each month for anticipated expenses like home repairs, vacations, or car replacements.
  • Review Insurance Coverage: Ensure you have adequate health, auto, and home insurance to avoid large out-of-pocket expenses.
  • Anticipate Future Financial Needs: Consider upcoming life events, such as college tuition or home purchases, and start saving early.

6. Stay Committed to Your Financial Goals

Protecting your retirement savings requires long-term commitment and discipline.

  • Review Your Budget Regularly: Adjust your budget as needed to align with changes in income and expenses.
  • Set Clear Savings Milestones: Track your progress and celebrate small financial wins along the way.
  • Resist Temptation: Avoid withdrawing from retirement accounts by reminding yourself of the long-term benefits of financial security.

By implementing these budgeting and saving strategies, you can build a strong financial foundation and safeguard your retirement funds. Staying disciplined with your money today will ensure a more comfortable and stress-free future.

 

 

Sources:

  1. Horwich, Jeff, “Amid a Resilient Economy, Many Americans Aren’t Ready for a ‘Rainy Day,’” Federal Reserve Bank of Minneapolis, May 31, 2024.
  2. Martinez, Amethyst, “Vanguard Sees More 401(k) Hardship Withdrawals. That May Not Be a Bad Thing,” Barron’s, June 26, 2024.
  3. Tergesen, Anne, “The 401(k) Has Become America’s Rainy-Day Fund,” The Wall Street Journal, March 5, 2025.
  4. Vanguard, “Press Release: Vanguard Announces Record Retirement Savings Rates Among American Workers,” June 2024.

 

Cleaning and Organizing … the Swedish Way

There are many organizational methods for reducing our clutter and making our spaces more efficient, tidy, and serene. There is the “One-Touch Method” which bucks procrastination in favor of putting things away immediately after use, and the “Neat Method” which employs various color-coded containers and labeling for sorting and display. The KonMari method from Japan instructs organizers to ask themselves if their items still spark joy in them, and if not, to release the belongings with gratitude. And, yet another approach has risen in popularity, this time from Sweden, known as “döstädning,” or the translated “death cleaning,” which seeks to reduce clutter and stress from an aging person’s home and life.

While it may sound severe, the idea of döstädning is actually a very thoughtful and respectful exercise for both the individual and their loved ones. Contrary to KonMari, which centers on the individual’s attachment to their possessions, this approach asks how family and survivors will feel about the items left behind after a loved one’s death. Margareta Magnussen, author of “The Gentle Art of Swedish Death Cleaning,” explains how employing döstädning can streamline an individual’s space and create a peaceful environment in which they can focus on what matters to them at that stage of life. The process of sorting and gifting belongings and communicating with family and friends about what they would like to have can often bring loved ones closer together, and may minimize the future burden on family members, allowing them to focus on grieving rather than a large clean-out project.

For those interested in the process of döstädning, professionals recommend the following:

  1. Tell your family about this process you are undertaking, what you hope to get out of the experience and ask them what items they would like to inherit from you.
  2. Start with your clothing and closets, sorting through what does and does not fit and what can be donated to charity.
  3. Declutter furniture, décor, and household items by room and then size, gifting functional pieces to family and friends and donating the rest.
  4. Address digital information and share details for important vendors such as your bank and insurance provider to your next of kin.
  5. Take stock of valuable jewelry and heirlooms and communicate with your insurance provider regarding appropriate coverage. Next, give some thought to who you will leave these items to and make those wishes apparent in your documents.
  6. Gather your paperwork and leave clear instructions regarding your will, advance health directive, power of attorney and any other related documents to your intended survivors.

While it may seem like a big undertaking, döstädning can give practitioners the chance to find memory and meaning in their possessions, as well as a sense of lightness and contentment when they let them go.

To connect with a client relationship manager, email info@vcmi.net.

Cybersecurity: Staying Safe in a Digital World

October is cybersecurity month and it is always a good idea to review best practices and stay up-to-date with current trends and schemes. Below we share cybersecurity tips and reminders for your online activity in an effort to mitigate vulnerabilities and avoid security threats.

As always, if you have any questions, please contact your client relationship manager.

1. Unsolicited phone calls – A primary red flag for cybercrime is when an individual receives an unsolicited call from a scammer pretending to be an associate of a legitimate business or organization asks for sensitive information such as that person’s log in information and password, etc. Remember, your bank, custodian or other financial institution will never contact you and ask for these details. If you receive a phone call that you think is fraudulent, hang up and call the main number for the organization and explain your experience.

2. Urgency and fear tactics – Bad actors can be convincing and when they increase the fear and threats they can manipulate individuals into releasing sensitive information, linking bank accounts and/or transferring money remotely. If you feel you are being targeted, pause and look at the facts as you know them and then reach out to your financial client relationship manager or a law enforcement agency if necessary.

3. Strong passwords – Create unique passwords with different combinations of letters, numbers and upper- and lower-case letters and special characters. Avoid using common and easily guessed information such as your child’s name or your birthdate. Additionally, steer away from reusing the same password for multiple websites as that increases the probability it will be hacked.

4. Update devices and software – When you receive a notice from your operating system, your web browser or the applications you use regarding a planned update, be sure to accept the update and participate. These revisions and upgrades often address security patches, software glitches and other vulnerabilities. It is important to keep your systems current which will reduce unintended access to fraudulent users.

5. Two-factor authentication – Two-factor authentication is the method of requiring two separate forms of identification to verify a user’s identity. For example, if you are logging on to your bank account from your laptop, you will then receive a text message from the bank that verifies you are in fact your self and then properly logs you in. Two-factor authentication is a simple way to protect your information and thwart bad actors from accessing data. We recommend using two-factor authentication whenever possible, particularly for financial accounts, health records, government agencies and other sensitive information.

6. Stay alert and use your best judgment – The most advanced tool we have to fight cybercrime is our existence as humans and our inherent intuition. Perhaps the email you received shows a company logo that looks outdated or fuzzy. Maybe the sender of the email has an email address that looks similar to an official address but appears to have a misspelling. Or, maybe the phone call you received tipped you off because of the terse manner of the agent speaking or the short timeline they gave you to provide information. Whatever the clues, be aware and proceed with due caution. As the adage goes, when in doubt, don’t act. Reach out to your financial advisor, call your banking institution or contact another trusted person that may help you understand if the request is legitimate, or recognize the intended criminal activity and shut it down.

If you have any questions or concerns, we recommend you reach out to your client relationship manager or email us at info@vcmi.net.

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Private Wealth Advisor
Certified Financial Planner
CFA Institute
Certified Divorce Financial Analyst
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