Step 1: Gather Your Numbers

Start by listing every asset you have: checking and savings accounts, investments, retirement plans, home equity, vehicles, and anything else with real value. Then total your debts, for example student loans, credit cards, auto loans, personal loans, and mortgage balances. Subtract liabilities from assets, and you’ve got your net worth. Don’t stress if the number is smaller than you hoped (or even negative). What matters most is your trend over time.

Step 2: Identify the Biggest Movers

Not all financial accounts are created equal. Some drive your net worth up with little effort — like retirement accounts with employer matching or investments that compound. Others drag it down — high-interest credit cards, personal loans, or cars that depreciate faster than you pay them off. Highlight the top two or three areas that move the needle most, positively or negatively. Improving just those can create a massive shift.

Step 3: Set Your 2026 Target

Think about where you want to be one year from now. Do you want to increase savings, invest more aggressively, or finally wipe out a specific debt? Aim for a realistic and measurable goal such as:
• Increase net worth by $10K–$25K
• Pay off a major debt category
• Boost retirement contributions to 10–15% of income
• Build a 3–6 month emergency fund
Small, consistent changes, like automating transfers into a Roth IRA or rounding up debt payments, can deliver big results by next December.

Step 4: Control Lifestyle Creep

As income rises, it’s tempting to spend more, especially around the holidays. But those upgrades often vanish quickly, while debt sticks around. Before adding new expenses in 2026, match each one with a financial improvement: if you increase streaming or dining out costs, also raise your monthly investment or savings. Keep your future self in the driver’s seat.

Step 5: Track Progress Quarterly

Your net worth isn’t a once-a-year number. Check it every 90 days to stay accountable. This gives you enough time to see meaningful movement without obsessing over market swings. Celebrate improvements and correct anything trending the wrong direction.

The post Your Net Worth Checkup: The 2026 Game Plan appeared first on Strategic Wealth Partners.

As you get closer to retirement, it’s important to understand what your STRS DC account can and cannot do for you, how your options work, and what to think about before you begin drawing from your savings. The earlier you understand these factors, the easier it becomes to build a retirement plan that feels intentional and comfortable.

Your STRS DC Account Is Your Retirement Benefit

With the DC Plan, your retirement benefit is simply the balance you’ve accumulated over time. This includes:

• Your contributions
  • Vested employer contributions
  • Investment returns
  • Any changes in account value as markets rise and fall

Unlike the STRS Defined Benefit (DB) Plan, your account does not include a built-in lifetime monthly payment. Your balance is your benefit, which gives you control. This sounds great, but that also means you are responsible for managing this account in a way that supports your retirement. Understanding your options is especially important as you transition into retirement.

What Happens to Your STRS DC Account When You Retire?

When you retire under STRS Ohio, you have several choices regarding your DC account balance:

1. Roll over your account to an IRA

A rollover allows you to move your balance into an IRA without paying taxes at the time of transfer. Many retirees consider this option because it provides:

1. A wider range of investment options
   b. The ability to coordinate all retirement accounts in one place (ex. a 403b)
   c. More flexibility in designing a retirement income strategy
2. Annuitize part of your balance

STRS allows you to convert some (or all) of your account into a lifetime annuity. This can create predictable monthly income, but annuitization is permanent. If you’re considering this option, it’s important to understand how it fits into your broader retirement picture.

3. Leave your balance in the STRS DC Plan

You can keep your funds in the DC Plan and begin taking withdrawals during retirement. STRS follows standard IRS rules, including required minimum distributions (RMDs) once you reach the applicable age. This option may work if you are comfortable and confident with the investment choices of the STRS plan.

Vesting Rules and Why They Matter

Your own contributions are always yours. Employer contributions, however, follow a vesting schedule.

• If you retire with full vesting, you keep the employer contributions.
  • If you retire before vesting is complete, you may not receive the entire employer portion.

If you’ve changed districts, taken time away from teaching, or are considering retiring earlier than originally planned, it’s helpful to understand where you stand with vesting before making any decisions.

Your Investment Approach Near Retirement Deserves Attention

As retirement approaches, the way your account is invested can have a meaningful impact on your experience.

Some individuals prefer to stay mostly invested in stocks because they value long-term growth. Others feel more comfortable taking steps to reduce investment risk as withdrawals get closer. There isn’t a universally right or wrong approach, what matters is recognizing that market volatility can affect your balance at the time you’ll depend on it most.

A downturn late in your career may influence how much income your account can reasonably support. On the other hand, staying too conservative for too long may limit growth during years when you are still contributing. Awareness and intentionality are key.

Taxes and Required Minimum Distributions (RMDs)

Your STRS DC account is subject to required minimum distributions once you reach the IRS-determined RMD age. These withdrawals are generally taxable and can impact your overall tax bracket in retirement.

If you roll your account into a Traditional IRA, RMDs still apply. If you are considering Roth conversions, it’s important to understand how paying taxes now may affect your long-term plan.

Knowing how RMDs interact with your other retirement income sources, including Social Security, 403(b)s, IRAs, or taxable investments, can help you build a more efficient withdrawal strategy.

How Strategic Wealth Partners May Be Able to Help

As you approach retirement, your STRS balance becomes one of the most important financial tools you have. Understanding your distribution options, tax considerations, and investment choices can help you feel more confident and prepared.

At Strategic Wealth Partners, we help educators build comprehensive retirement income strategies that incorporate their STRS savings along with 403(b)s, IRAs, and other assets. If you want guidance on how to transition from saving to spending, how to align your investments with your goals, or whether a rollover might make sense for your situation, we are here to help.

Book an appointment today to explore how your STRS savings can support the retirement you’ve earned.

The post Navigating STRS Ohio: What Educators Should Know Before Retiring appeared first on Strategic Wealth Partners.

It may be helpful for retirees to understand how option based income strategies, specifically covered calls, may help generate additional income while also potentially reducing overall portfolio volatility.

What Is a Covered Call? (Explained Simply)

A covered call is a specific type of options strategy. An option, in its simplest form, gives the purchaser the option to buy a stock at a predetermined price in the near future.

With covered calls, you are the one selling the option. You already own the shares, and you sell call options on those shares in exchange for an upfront premium, which becomes the income you receive. Think of it as renting out your stock. Someone pays you for the right, not the obligation, to buy your shares at a set price, called the strike price, within a defined window of time.

If the stock stays below the strike price, you keep both your shares and the premium.
If the stock rises above the strike price, the buyer may exercise the option and your shares could be called away. In that case, you still keep the premium and you receive the sales proceeds at the strike price. When your shares are called away, you are effectively locking in a gain from the stock’s appreciation up to that strike price, and the premium becomes an additional bonus for agreeing to sell at that level.

Understanding the Income Component

Investors may receive premiums that often range from 0.5 percent to 1 percent per month, depending on market conditions and the stocks involved. Over a year, this can add roughly 6 to 12 percent of additional income on top of dividends.

For example, let’s say you own 100 shares of a stock trading at 50 dollars. You sell a one month call option with a strike price of 55 dollars and receive a premium of 50 cents per share, 50 dollars total. No matter what happens over the next month, that 50 dollars belongs to you.

Here are the possible outcomes.

Scenario 1: Stock stays below 55 dollars, the most common outcome

• You keep your shares
• You keep the premium
• You can repeat the strategy next month using the same shares

Scenario 2: Stock rises above 55 dollars

• Your shares will most likely be called away
• You still keep the premium
• You gain the appreciation from 50 dollars to 55 dollars
• You miss out on any upside above 55 dollars

This tradeoff, income versus uncapped upside, is the core dynamic retirees need to understand.

Pros of Covered Calls for Retirees

Reliable income stream. Premiums can provide monthly or quarterly cash flow that supplements Social Security, pensions, or bond interest.
Reduced volatility. Premiums help offset small pullbacks in stock price, which may reduce overall portfolio swings.
Complements dividend income. Many retirees use dividends and call premiums together to create a more consistent income profile.

Cons of Covered Calls for Retirees

✘ Shares can be called away. You may lose a stock position you wanted to keep if its price rises above the strike.
✘ Limits upside potential. You trade some growth potential for greater income predictability.
✘ Requires ongoing monitoring. Strike selection, expiration cycles, assignment risk and tax considerations make this more involved than managing a traditional dividend portfolio.

Where Covered Calls Fit on the Retirement Risk Spectrum

Covered calls are generally considered a moderate, income oriented strategy. Because the call option is backed by shares you already own, this approach is typically viewed as less risky than speculative option strategies while still offering meaningful income potential.

How Strategic Wealth Partners Can Help

Managing a covered call strategy on your own can be complex. It requires selecting appropriate strike prices, monitoring market conditions, managing assignment risk, understanding tax implications, and regularly rolling positions as contracts approach expiration. This workload is why many retirees find value in professional oversight.

At Strategic Wealth Partners, we utilize this strategy for clients who understand the approach and may benefit from adding another diversified income stream to their overall retirement plan. It is not the right fit for everyone, but for the right retiree, this approach may increase monthly income, reduce portfolio volatility, and add more predictability to a long term income strategy.

If you are approaching retirement and want to understand whether a covered call strategy could enhance your overall plan, we invite you to schedule a complimentary conversation with our team. Our advisors can walk you through the potential benefits, the tradeoffs, and how a customized income strategy could support your goals.

Book an appointment today to explore whether this strategy is right for you.

The post Best Retirement Income Strategies to Consider Now: How Covered Calls Can Boost Your Cash Flow appeared first on Strategic Wealth Partners.

It’s called sequence of returns risk, and it can quietly undo even the best investment strategy if not properly planned for. Two investors could have the exact same average return, yet one runs out of money years earlier simply because of the timing of those returns.

The sequence problem explained

Here’s a simple way to think about it: imagine two retirees, both starting with $1 million and withdrawing $50,000 per year. Both average a 9% annual return over 25 years—but one experiences negative returns early on, while the other enjoys positive returns in the first few years.

Even though the long-term average return is identical, the first retiree may run out of money nearly a decade earlier. Why? Because those early withdrawals during down markets lock in losses. With fewer shares left to recover when markets rebound, the portfolio never fully regains its footing.

That’s the essence of sequence risk, it’s not just about how much you earn, but when you earn it.

Why it matters so much in retirement

During your working years, volatility often feels temporary. You’re contributing to accounts, buying more shares when prices are lower, and benefiting from dollar-cost averaging.

In retirement, however, the dynamic flips. You’re taking money out instead of putting it in. When markets drop and withdrawals continue, you may be forced to sell investments at lower prices to fund your income needs. That leaves fewer assets in the market to participate in the eventual recovery.

Over time, that can lead portfolio depletion: a gradual erosion of principal that becomes difficult to reverse.

Real-world perspective

History has shown how sequence risk can play out in real life. For instance, Vanguard’s research found that retirees who started drawing income during or just before major downturns faced significantly higher risk of portfolio depletion despite similar long-term return environments. 

Another study by Jackson illustrates this clearly: two hypothetical investors, both retiring with $500,000 and taking 5% withdrawals (inflation-adjusted). The one who began in 2000 ran out of money, while the one who began in 2003 did not despite identical starting portfolios and rules

How retirees can prepare for down-market years

While there’s no way to eliminate sequence-of-returns risk entirely, there are several approaches investors often consider to help reduce its impact.

Know your income shortfall.
Understanding how much you’ll need to withdraw from investments each year, beyond Social Security or pension income, is a critical first step. A clear picture of your shortfall helps determine how much stability and liquidity you may need in your plan.

Maintain income sources that aren’t tied to daily market swings.
During market downturns, retirees who have steady sources of income, such as bond interest, dividends, or structured fixed-income vehicles, can often avoid selling equities at depressed prices. Dividends in particular can act as a buffer during volatile periods, providing ongoing cash flow even when share prices fluctuate.

Consider tools that offer downside protection.
Some investors use certain types of annuities that include caps and floors to help limit downside exposure while participating in part of the market’s upside. These vehicles aren’t right for everyone and come with costs and trade-offs, but they can serve as a hedge when markets are unpredictable.

Build in diversification
Holding a mix of investments with different levels of beta (or sensitivity to market movement) can help smooth returns over time. Assets that respond differently to economic conditions can reduce the impact of sharp declines in any single area.

The bigger picture

Retirement success isn’t just about chasing returns, it’s about managing the order of them. A plan that looks solid on paper can fall short if withdrawals collide with market downturns early on.

That’s why it’s critical to view your retirement strategy as more than just an investment portfolio. Cash flow management, income stability, and diversification all work together to determine how long your assets last.

Sequence-of-returns risk can’t be predicted, but it can be prepared for. With the right structure in place, retirees can navigate volatility with confidence instead of fear.

Plan for the sequence, not just the return

At Strategic Wealth Partners, we help clients build retirement income strategies designed to weather both bull and bear markets. Our team of CFP®, CFA®, and CPA professionals collaborates to create plans that balance opportunity with protection so clients can stay on track no matter what markets are doing.

If you’d like to understand how your portfolio would hold up under different market scenarios, schedule a conversation with our team today.

The post How Withdrawals During Down Markets Can Derail Your Retirement Plan appeared first on Strategic Wealth Partners.

But before we assume the good times are over, it’s worth taking a step back and asking:
what does history tell us about bull markets?

The current bull market: born in late 2022

Although 2022 was a difficult year for most investors (inflation climbing, interest rates
rising, and major indices finishing deep in negative territory) the market began turning a
corner later that year.

According to Morgan Stanley, “the current bull market was born in the fall of 2022.” The
S&P 500 reached its bear-market low that October, and since then it has steadily
recovered, driven by corporate resilience, improved inflation trends, and growing
optimism about innovation-led sectors.

That means, by most definitions, we’re roughly three years into this bull cycle.

The skepticism is nothing new

Skepticism has been a companion to nearly every bull market in history. When markets rebound strongly after a downturn, it’s natural for investors to wonder if the momentum is sustainable or if it’s simply setting up the next correction.

We heard similar doubts in early 2010 following the recovery from the Great Recession, and again in 2013 when the S&P 500 broke its pre-crisis highs. Yet both periods went on to deliver years of compounding growth before the next major downturn.

Investor sentiment often lags behind fundamentals. After a difficult year like 2022, fear tends to linger even as data starts to improve.

What the historical record shows

History offers a useful perspective. Looking back across nearly a century of market data, bull markets have shown remarkable consistency in both duration and magnitude.

• Stifel analyzed market cycles dating back to 1932 and found that the average bull market lasted roughly 4.9 years and produced an average cumulative return of 177.6%.
• Nasdaq, reviewing historical S&P 500 data, found that the average bull market lasted about 1,964 days (roughly five years) and delivered an average total return of 184%. That aligns closely with other long-term studies showing that bull markets tend to persist for several years.

Of course, these are averages, not predictions. Some bull markets have been shorter, others much longer. But the broader takeaway is that rallies like the one we’re currently in often endure for several years, not months.

Context matters

It’s also important to recognize what typically drives a bull market’s longevity. Sustained growth tends to occur when several conditions align: stable inflation, supportive earnings trends, and technological or productivity shifts that expand corporate profitability.

While no two cycles are identical, many of those factors appear in play today. Inflation has cooled from its 2022 highs, consumer spending remains resilient, and innovation in areas like artificial intelligence and energy infrastructure continue to attract capital.

That doesn’t mean volatility disappears, pullbacks are part of every long-term trend, but it does suggest that calling the end of a bull market too early can be costly for investors who let fear override their discipline.

What history doesn’t guarantee

Past performance never guarantees future results, and averages can obscure wide variations. For instance, the 1980s bull run lasted nearly seven years, while others have ended in less than three. Market cycles also respond to policy shifts, geopolitical events, and valuation extremes that can’t be forecasted with precision.

That’s why viewing market history as context, rather than as a prediction, is so important. It helps investors keep perspective during inevitable corrections and prevents overreacting to short-term noise.

The takeaway

If this bull market began in late 2022, history suggests we could still be in the middle innings of the cycle. 

That doesn’t mean this one will follow the same pattern. But it does serve as a reminder that market recoveries often last longer and climb higher than most investors expect in their early stages.

For long-term investors, the lesson isn’t to chase performance or ignore risks, but to keep perspective. Markets move in cycles, and understanding those cycles helps investors make more informed, less emotional decisions along the way.

Want help building a strategy that lasts through every market cycle?

At Strategic Wealth Partners, we help clients stay disciplined and confident no matter where we are in the market cycle. Our team of CFP®, CFA®, and CPA professionals works together to design personalized wealth strategies that balance opportunity with protection.

If you’d like to understand how your portfolio aligns with today’s environment or simply want a second opinion on your investment strategy, schedule a conversation with our team today.

Because while no one can predict when this bull run will end, having a plan that works in every market is what sets confident investors apart.

The post Is This Bull Market Built to Last? What 90 Years of Market History Reveal appeared first on Strategic Wealth Partners.

But as the Tax Cuts and Jobs Act (TCJA) approaches expiration in 2026, high-net-worth retirees may be missing a window of opportunity to lock in historically low tax rates and future-proof their wealth strategy. 

The Clock Is Ticking on Lower Tax Brackets 

The TCJA lowered individual tax rates across the board, but those rates are scheduled to sunset at the end of 2025. Unless Congress acts, the 12%, 22%, and 24% brackets will revert to roughly 15%, 25%, and 28%. 

For retirees with large pre-tax IRA balances, that’s a big deal. Required Minimum Distributions (RMDs) can push taxable income much higher later in life — especially after the age of 73 which leads to higher taxes, Medicare surcharges, and even taxes on Social Security benefits. 

A well-timed Roth conversion now could mean paying 22–24% tax today instead of 28–33% later. 

Why Many Retirees Hesitate (and Why That’s a Mistake) 

Most retirees recoil at the idea of paying extra taxes voluntarily. It feels counterintuitive and emotionally, it is. But Roth conversions are one of the few ways to control your future tax bill instead of being controlled by it. 

Here’s what many overlook: 

• Taxes on future RMDs could exceed the upfront tax cost today. 

• Roth assets grow tax-free forever and aren’t subject to RMDs. 

• Heirs inherit Roth IRAs tax-free, creating a powerful legacy planning tool. 

In short, paying a smaller, known tax bill today may prevent a much larger one tomorrow. 

Who Benefits Most 

Roth conversions make the most sense for retirees who: 

• Are in the 22–24% brackets today but expect higher rates later. 

• Have substantial IRA or 401(k) assets that will force large RMDs. 

• Don’t need all of their retirement income now and can use cash savings to pay the conversion tax. 

• Want to leave tax-efficient inheritances to their children. 

Even partial conversions over several years (known as “Roth conversion ladders”) can help manage taxes strategically while avoiding bracket creep. 

The Bottom Line 

In a world of rising debt, unpredictable fiscal policy, and the scheduled end of today’s low tax regime, Roth conversions are less about timing the market and more about timing the tax code. 

For high-net-worth retirees, the question isn’t “Should I do a Roth conversion?” — it’s “Can I afford not to?” 

Because the truth is, deferring taxes forever doesn’t eliminate them… it just postpones them until they’re likely higher. 

The post Why Retirees Should Stop Fearing Roth Conversions in 2025 appeared first on Strategic Wealth Partners.

While that’s a fair question, it’s one that’s nearly impossible to answer in real time.
History shows that market bubbles are usually only obvious after they’ve burst
(Investopedia). But understanding how bubbles form, how to recognize common
warning signs, and what history tells us can help investors put today’s environment into
context.

What Exactly Is a Bubble?
A financial bubble occurs when the price of an asset, or even an entire market, rises far
beyond what underlying fundamentals would justify (Yale Insights). Simply put, prices
become detached from the real value supporting them, such as earnings, cash flow, or
long-term demand.
At its core, a bubble is sustained by a collective belief that investors buy because prices
are going up, not necessarily because intrinsic value is increasing. As confidence
builds, momentum feeds on itself, often creating a feedback loop of rising prices and
growing speculation.

The Lifecycle of a Bubble
No two bubbles are identical, but many follow a recognizable pattern (Investopedia):
1. Displacement: A new idea, technology, or policy shift captures attention.
2. Boom: More participants enter the market, pushing prices higher.
3. Euphoria: Optimism dominates. “This time is different” becomes a common
refrain.
4. Profit-Taking: Fundamentally focused investors begin reducing exposure.
5. Panic and Decline: Confidence fades, leading to rapid selling and sharp price
drops.

This pattern has appeared repeatedly! From the dot-com surge of the late 1990s and
the housing market of the 2000s.

Warning Signs That Often Appear
While it’s nearly impossible to confirm a bubble as it’s forming, these patterns often
accompany one:

• Extreme valuations: Market prices rise much faster than underlying profits or
  earnings growth.
• Narrative over fundamentals: Attention shifts from measurable results to
  compelling stories about the future.
• Leverage and speculation: Borrowing increases as investors seek to amplify
  returns.
• Herd behavior: More individuals and institutions enter simply because everyone
  else is participating.
• Narrow market leadership: A small group of companies drives a
  disproportionate share of market gains.

None of these signs alone confirm that a bubble exists. But taken together, they can
indicate that optimism may be running ahead of fundamentals.

What Happens When a Bubble Bursts
When confidence breaks, prices often fall faster than they rose. Forced selling, leverage
unwinds, and shifts in market sentiment can cause prices to overshoot to the downside.
Historical examples illustrate this vividly:

• Dot-com Crash: The Nasdaq Composite fell nearly 78% from peak to trough as
  speculative internet stocks collapsed (Federal Reserve Bank).
• Housing Crisis: The S&P 500 fell about 57% from its October 2007 peak to its
  March 2009 trough (Federal Reserve History), and it didn’t surpass its prior
  record closing high again until March of 2023 (Reuters)

Each looked different in magnitude and scope, but the common thread was clear: the
signs seemed most obvious in hindsight.

So, Are We in One Now?
That’s the question dominating headlines and the truth is, no one can say with
certainty. The same enthusiasm that fuels genuine innovation can also drive
speculative excess. The AI revolution is real and transformative, but that doesn’t mean
every company associated with it will succeed.
The goal isn’t to call a top, it’s to understand the behavioral and market forces at play,
and to maintain perspective amid the noise.

Key Takeaway
Bubbles have a way of blending innovation with speculation, optimism with
overconfidence. Recognizing the characteristics that often accompany them rather than
trying to time them can help investors interpret market behavior more thoughtfully.
Whether today’s enthusiasm around AI represents a true bubble or a long-term shift will
only be clear with time. But history offers a reminder: awareness and context are
powerful tools for navigating uncertainty.

Let’s Talk Strategy
If recent market headlines have you wondering how your portfolio fits into the bigger
picture, we here at Strategic Wealth Partners are here to help.

Schedule a conversation with our team to discuss how today’s trends connect to
your long-term goals.

The post Are We in a Stock Market Bubble? What They Are and What to Look For appeared first on Strategic Wealth Partners.

It was simple, elegant, and comforting.
But in 2025? It’s dangerously outdated. 

Where the 4% Rule Came From 

The 4% rule was developed in the 1990s by financial planner William Bengen, based on historical U.S. market data. Back then, bonds paid around 6-7%, inflation was tame, and life expectancy was shorter. Under those conditions, a 50/50 stock-bond portfolio could reliably sustain 30 years of withdrawals. 

But today’s environment looks very different: 

• Bond yields are higher than they were two years ago, but volatility remains high. 

• Inflation has proven sticky and unpredictable. 

• People are living longer, meaning your portfolio may need to last 35–40 years, not 30. 

• And markets are more concentrated. The top 10 S&P 500 stocks now make up over 30% of the index. 

All of that makes a one-size-fits-all withdrawal rate risky. 

Why the Rule Doesn’t Work Anymore 

In a low-rate, high-volatility world, sticking to a flat 4% withdrawal rate can drain savings faster than expected. Inflation alone can erode purchasing power significantly and when you add sequence-of-returns risk (bad market years early in retirement), the math quickly breaks down. 

In fact, a Morningstar study in late 2024 suggested a “safe” withdrawal rate closer to 3.3% for new retirees given current market dynamics. 

That means someone retiring with $1 million should plan for about $33,000 a year, not $40,000, if they want the same confidence that their money lasts. 

What You Can Do Instead 

Rather than relying on a static rule, retirees today need dynamic income planning. That means:
Adjusting withdrawals annually based on market performance.
Separating near-term spending (1–5 years) from long-term growth investments to avoid selling in downturns.
Using guaranteed income tools, like annuities or pensions, to cover essential expenses.
Planning for healthcare inflation, which often rises 5% or more annually. 

Another modern approach is the “guardrails method,” where you set flexible spending bands such as increasing withdrawals when the market performs well, and trimming them slightly when it doesn’t. This approach has been shown to extend portfolio longevity significantly. 

The Bottom Line 

The 4% rule was a great starting point, but retirement planning in 2025 demands more precision, flexibility, and customization.
The new reality: retirement income isn’t a fixed formula; it’s a living strategy. 

If your plan still leans on outdated assumptions, it’s time for a refresh. The difference between 4% and 3.3% may not sound huge, but over 30 years, it could mean the difference between peace of mind and panic. 

The post The 4% Rule Is Broken: Why Retirement Income Needs a Rethink in 2025 appeared first on Strategic Wealth Partners.

This plan gives entrepreneurs, freelancers, and small business owners the ability to make large tax-advantaged contributions, even with no outside employees. Here’s what you need to know for 2025.

Who Qualifies for a Solo 401(k)?

A Solo 401(k), sometimes called a “one-participant 401(k)”, is available if you have no common-law employees. That means you can’t have unrelated full-time staff on payroll, but you can include your spouse if they also work in the business. As long as your spouse earns compensation, they’re eligible to contribute under the same rules, effectively doubling how much the household can save each year [IRS – One-Participant 401(k) Plans].

Contribution Limits for 2025

What makes the Solo 401(k) unique is that you contribute in two ways: first as the “employee” of your own business, and second as the “employer.” In 2025, the employee deferral limit is $23,500, with an additional $7,500 catch-up for those age 50 or older.

On top of that, the employer side allows contributions of up to 25% of compensation. However, there’s an important nuance. If you pay yourself W-2 wages through an S-corp, you can use the full 25%. But if you’re a sole proprietor or partner, the IRS defines “compensation” differently: net earnings reduced by half of your self-employment tax and by the contribution itself. Because this creates a circular calculation, the IRS publishes a rate table in Publication 560, which shows the effective cap works out to about 20% of adjusted net earnings [IRS – Publication 560].

Example: How the 25% Becomes 20% for Sole Proprietorships

Maria is a self-employed consultant with $150,000 in net earnings from her sole proprietorship.

• Employee deferral: She can contribute $23,500 (plus $7,500 if 50+).
• Employer contribution:
  • Self-employment tax = 15.3% × $150,000 = $22,950.
  • Half of that is deductible ($11,475), leaving $138,525 as the adjusted base.
  • Using the IRS rate table, the maximum employer contribution is 20% of $138,525 = $27,705 (not $37,500).

Total for 2025: $23,500 + $27,705 = $51,205 (before catch-up).

If Maria’s spouse also works in the business and earns compensation, they can contribute under the same rules, potentially allowing the household to save well over six figures each year.

Roth Contributions

One of the biggest advantages Solo 401(k)s have over SEP IRAs is the ability to make Roth contributions. Many providers allow you to designate employee deferrals as Roth, meaning you contribute after-tax dollars today and enjoy tax-free withdrawals in retirement. Employer contributions, however, must always go into the pre-tax side.

Deadlines and Paperwork

To set up a Solo 401(k), the plan must generally be adopted by December 31 of the year if you want to make employee deferrals for that year. Under SECURE 2.0, sole proprietors have a special exception: they may adopt a plan by their tax filing deadline (without extensions) for their first plan year.

Once your plan balance exceeds $250,000, you’ll also need to file an annual Form 5500-EZ with the IRS [IRS – One-Participant 401(k) Plans]. While this sounds intimidating, many providers simplify the filing process.

Solo 401(k) vs. SEP IRA

Business owners often compare Solo 401(k)s with SEP IRAs. Both allow significant contributions, but the Solo 401(k) typically offers more flexibility.

The key takeaway: a Solo 401(k) often allows higher contributions at lower income levels, especially when combined with employee deferrals. SEPs, while easier to set up, don’t offer the same Roth flexibility or loan options.

Pros and Cons

The main advantages of a Solo 401(k) are the high contribution limits, Roth deferral potential, and the ability for spouses to join in. On the downside, there’s more paperwork than with IRAs, and if you eventually hire non-family employees, the plan must be converted to a traditional 401(k).

How SWP Helps Business Owners

At Strategic Wealth Partners, we regularly work with entrepreneurs and self-employed professionals who want to maximize their retirement savings. Our role is to clarify the IRS rules, ensure contributions and deductions are calculated correctly, and help maintain a plan that grows with your business.

If you’re self-employed and wondering whether a Solo 401(k) fits your situation, click the link to schedule a 30-minute Zoom with one of our advisors.

The post Solo 401(k)s Explained: A Guide for Self-Employed Business Owners appeared first on Strategic Wealth Partners.

The Case for Paying Cash

Paying cash for a car is simple and straightforward. You own the car outright, which means:

• No monthly payments straining your budget.
• No interest costs eating into your savings.
• Less risk of being “underwater” (owing more than the car is worth) if the vehicle depreciates faster than expected.

Cash buyers also tend to spend more responsibly, since writing a check for $25,000 feels more real than signing up for a five-year loan. If buying in cash doesn’t drain your emergency fund or delay bigger goals (like saving for a house), it’s often the cleaner choice.

The Case for Financing

On the flip side, financing can make sense if you want to preserve liquidity or take advantage of other opportunities. Today’s auto loan rates range widely, but for those with strong credit, rates may be more manageable. Financing allows you to:

• Spread out the cost over time, keeping more cash on hand.
• Build or improve credit history by making consistent, on-time payments.
• Invest your savings instead of tying it all up in a depreciating asset. If you can earn more in the market than your loan’s interest rate, financing can actually leave you ahead.

What’s Different in Today’s Market

The challenge right now is that auto loan rates are higher than they’ve been in over a decade. Many borrowers are seeing rates between 6% and 9%, and loans often stretch to 72 months or more. At those levels, financing isn’t cheap, and stretching repayment for six or seven years increases the risk of paying far more than the car is worth.

On the other hand, car prices remain elevated, and paying cash ties up a significant chunk of liquidity. If you’re saving for a house, retirement, or an emergency fund, draining your cash reserves for a vehicle could backfire.

Striking the Right Balance

For many buyers, the smartest path is a hybrid approach:

• Put down a meaningful amount (10–20%) to reduce the loan size.
• Choose the shortest loan term you can reasonably afford.
• Keep enough cash reserves for emergencies and other goals.

This way, you balance the benefit of preserving liquidity with the discipline of minimizing interest costs.

The Bottom Line

Cars are not investments and they depreciate quickly. The decision to finance or pay cash comes down to your interest rate, savings cushion, and other financial priorities. If financing at today’s rates stretches your budget too thin, lean toward cash. But if preserving liquidity helps you reach bigger goals, financing may be the better call.

The post Should You Finance or Pay Cash for Your Next Car? appeared first on Strategic Wealth Partners.