Greetings!
Hello from Woodward Financial Advisors!

We hope you are well during what has been a long, challenging 2020.

In our final newsletter of the year, we've chosen to share brief reflections from each WFA team member as well as details about a "second opinion" service offered exclusively to clients' friends, family and associates. Additionally, you can read about Social Security cost-of-living adjustments for 2021, tips for traveling safely and economically during the pandemic, all of our available podcasts (with personal finance book recommendations in case you still have someone on your gift list) and WFA press mentions from the past quarter.
2020 Reflections from the WFA Team
Most everyone can agree that 2020 has been a uniquely challenging year. Below, Woodward Financial Advisors team members share brief reflections about the year, including specific things they're thankful for.

  • "I am grateful to be able to work from home during the pandemic when so many others either don’t have that ability or have faced job layoffs or furloughs. I am thankful for the opportunity to see more of my elementary-school-age son and daughter throughout the day since their school is currently via remote learning." - Austin Brown, CFP®

  • "I’ve tried to stop using the phrase 'silver lining' when thinking about 2020, because it’s hard for me to think about good coming out of a time when so many people experienced so much trauma, pain and loss. But I’ve definitely been grateful for the extra time I’ve been able to spend with my children, who turned 12 and 9 this year. They are quickly getting to the age when Mommy and Daddy aren’t superheroes anymore, but there’s still enough little kid in them to be comfortable spending excess amounts of time with us. It’s been amazing watching how resilient they’ve been in the face of stress and uncertainty, and I’ve valued my ability to comfort them when things got to be too much. I’m already regretting the increased pace of life when their extracurricular activities pick back up, because we’ll never have as much time together as we’ve had these past 9 months. Also, I’ve developed into a very modestly better cook (though my children may not agree.)" - Ben Birken, CFP®

  • "In so many ways, 2020 has been a year of loss, and it’s human nature to dwell on what we may have missed out on or no longer have. But one thing 2020 taught us is how many blessings there can be in life, and I’ve been able to witness them in abundance this year. The most important support system in our lives is our families, and it has been special to watch as people step up, help out, or simply show grace to one another in the face of hard times. I’m especially thankful to my team of colleagues at Woodward and how resilient they’ve been in the face of this challenge. They haven’t let fear be their guide, but instead adapted overnight to a brand new home-life filled with health concerns, home-schooling and remote work, all without missing a beat in serving our clients. That’s not to say it has been easy, but I couldn’t be more proud of how my teammates have rallied around a common goal each day. And without our loyal clients, we would have no thriving business in which to participate. I’m ever so grateful for our clients’ understanding and flexibility, enabling our team to adjust our client experience to meet many new demands. The Woodward family consists of many important pieces, each playing a vital role in our collective success, and as I reflect back on this year down the road it will be with much positive imagery." - Jim Miller, CFP® & President  

  • "Things I am grateful for in 2020: making breakfast for my kids and getting them ready to go to school upstairs (since they were remote learning), all the people I saw and things I was able to do in early 2020 before the pandemic arrived, meeting my kids in the kitchen when our work and school breaks coincided, reading more books, and waving to my neighbors (some of whom I had never seen) on the other side of the road as we all took walks around our neighborhood." - Joe Marques, CFP® 

  • "This year, I'm especially grateful for my family, including two daughters who daily help me laugh and find joy in the smallest of things; my husband, Chad, who has been incredibly patient and supportive throughout the year; the opportunity and ability to work and continue to serve our kind, fantastic clients alongside the best colleagues I could ask for; wonderfully supportive neighbors, including one who brings our family a homecooked dinner to enjoy each Monday evening; and last, but not least, many outdoor walks with our hound dog, Noelle." - Maggie Wilkins

  • "Despite it’s challenges, 2020 has also given me some wonderful memories to reflect upon this year. One of the things I am most thankful for, of course, has been joining the Woodward team and making the move to North Carolina. I have certainly learned a lot this year, and I look forward to many more years with Woodward! Although I haven’t had the chance to explore many restaurants or indoor venues in the area, this year has allowed me to participate in many of the outdoor activities that the triangle has to offer. There’s no better partner to explore the outdoors (and work from home) with than my pup, Murphey, who was welcomed home this year." - Megan McManus, CFP® 

  • "2020 was a very challenging year for so many people and for many different reasons. As I look back on this year, it definitely didn’t go 'as planned' and didn’t look anything like I thought it would. But, there are still many things I am grateful for. My pup, Riot, and I were asked to become Adoption Ambassadors with the Petco Foundation, a large national animal welfare non-profit. I also got to spend some much needed time enjoying nature and hiking through the Great Smoky Mountains National Park this fall." - Roni Pflueger, CFP®

  • "Things I am thankful for in 2020: Woodward Financial Advisors – I am grateful to have joined Woodward’s team this year, comprised of wonderfully talented and delightful people. Family time – Although the numerous cancellation of events was disappointing at first, it ultimately resulted in our family assuming a quieter rhythm that fostered the appreciation of time together." - Sean Johnson

  • "If I had to sum up this year in one word, it would be 'lucky.' This might sound ridiculous in a year like 2020, but I have proof: the year started with my wife, Lizzy, and I going to St. Lucia for our honeymoon in the exact week before COVID-19 shut down the country and international travel. A week later, we closed on our new house in Chapel Hill, gaining significant square footage and a home office (which turned out to be fairly useful). As challenging as the year has been, we’ve been fortunate to have found silver linings around every corner, which we know is more than many people can say right now. Given all that’s been going on, we’re very thankful." -Victor Colella, CFP®

If you have a reflection on 2020 you're willing to share, we would enjoy hearing from you.
Second Opinion Analysis: Let Us Help Those You Care About
Why?

Many investors are unsure about how to craft the most optimal investment portfolio in this challenging world. Election ramifications, a worldwide pandemic, frequent tax reforms and continued unknown economic headwinds are just some of the issues that have many investors paralyzed or worried about their portfolio. Just like one might seek a second opinion for an important health related question, having a fresh set of eyes review their investment portfolio may provide peace of mind or uncover improvements that can be made.

Who?

This complimentary analysis is reserved exclusively for Woodward clients’ friends, family members and associates. If you know someone who is uncertain as to whether his or her portfolio “house” is in order or is questioning the quality of the advice she or he is currently receiving, we believe we can help. Once we review the person's portfolio, if things seem to be positioned in-line with our standards, we’ll happily send the individual on his or her way with the peace of mind that he or she is in a good place already. If we uncover any issues, such as a lack of a consistent strategy, diversification issues, unnecessarily high expenses or a failure to incorporate tax planning considerations, we’ll let the person know how we’d recommend she or he do things differently - at no obligation.

Questions Woodward Financial Advisors Can Help Your Friend, Family Member or Associate Answer:

  • Are my investments properly diversified?
  • Am I being sold a product, or am I getting unbiased and unconflicted advice?
  • Is my portfolio properly situated to minimize my taxes?
  • How much am I truly paying in fees for the advice I receive?
  • Am I getting the face-time I deserve from my advisory team?

If there's someone you know that we might be able to help, please encourage that person to reach out to us via our website (click here) or call us at 919-929-2495. We would be happy to talk!
Social Security Cost-of-Living Adjustments
On Tuesday, October 13, 2020, the Social Security Administration released important facts and figures for 2021 - including cost-of-living adjustments (COLA) for retirees and tax changes for the currently employed.

The Good? Benefits Are Increasing

Those receiving Social Security benefits will see a 1.3 percent COLA increase in 2021. This change will impact around 70 million Americans - including 8 million SSI beneficiaries.1  

For the average retiree receiving Social Security benefits in January 2021, this will translate to a roughly $20 increase in monthly benefits - $1,543 up from $1,523. For couples both receiving benefits, the average will increase to $2,596 from $2,563.1  

Of note, this year’s COLA increase is lower than the previous two years - although, of course, a cost-of-living adjustment is never guaranteed in the first place. In 2009, 2010 and 2016, COLA bottomed out at zero percent. And in 2016, the COLA was a mere 0.3 percent - substantially lower than the 2.8 percent increase we saw in 2018.2

The Bad? Taxes Are Increasing Too (For Some)

For those still working, the amount of earnings subject to Social Security tax has increased 3.7 percent from $137,700 in 2020 to a maximum of $142,800 in 2021.1 Employees and their employers will each continue to pay 6.2 percent of applicable earnings toward the 7.65 percent combined Social Security and Medicare rate.1 The 3.7 percent increase in applicable income is only in reference to the Social Security portion of the combined tax rate. Self-employed individuals will still be responsible for paying the full 15.3 percent of the Social Security and Medicare tax rate.1   

For reference, the maximum Social Security tax in 2021 for a high-earning employee would be $8,853.60 - or $17,707.20 total including both the employee and employer’s contribution. This is compared to 2020’s maximum of $8,537.40, or $17,074.80 total.

The Need To Know? Earning Limits For Retirees

For those under the Social Security Administration’s determined full retirement age who are receiving a paycheck while receiving SS benefits should be aware of 2021’s earning limit changes. 

Currently, full retirement age is considered to be 66, if you were born between 1943 and 1954. Below is a chart provided by the SSA in regards to full retirement age:3
Those receiving benefits who have not yet reached full retirement age will be docked $1 in benefits for every $2 earned above $18,960 (or $1,580 per month) in 2021. This is an increase of $720 from 2020's $18,240 per year limit.

It’s important to note that this limit increases somewhat substantially for those who will be reaching full retirement age that year. For 2020, that income limit is $48,600 per year, or $4,050 per month. In 2021, retirees will see that limit increase to $50,520 per year, or $4,210 per month.
Applicable income earned above this amount will be withheld at a rate of $1 dollar for every $3 earned above the limit.

Beginning in the month you reach full retirement age, you will no longer be subject to earning limits.

Keeping track of changes in tax rates and future income is an important part of having a well-established retirement plan. If you’re wondering how these changes will affect your own financial standings, reach out to your financial advisor for more information.


COVID-19 Has Affected Our Travel Plans in 2020. If You’re Still Heading Out of Town Over the Holidays, Follow These 7 Travel Tips:
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Are you considering going on a trip over the holidays? Whether you are just visiting relatives for the weekend or enjoying a new location, traveling during the COVID-19 pandemic is nerve-wracking. But if you have decided to travel, there are a few tips to travel safely while still saving money.


Travel Tip #1: Book Early or Book Late

While travel during the holidays is expensive no matter what, you can sometimes secure a small discount by booking your trip as soon or as late as possible. If you are traveling by plane, the best time to purchase domestic tickets is around three months from the date of travel. Early booking guarantees a seat and (oftentimes) a discount. But travelers who have more flexibility can wait until the last minute for steep discounts. According to the TSA, people have begun to travel more as we move closer to winter. This is compared to a decrease of around two million in travelers since April, compared to last year.1

Travel Tip #2: Be Aware of Additional Costs

More and more airlines are charging baggage fees and eliminating free in-flight food, drinks and entertainment. In fact, the pandemic has nearly eliminated food services on most airlines. Find out what is not included with the price of a ticket and plan accordingly by bringing your own snacks and tablet loaded with the latest binge-worthy shows.

Travel Tip #3: Use Local Coupons and Deal Sites

Many travelers forget to use deal and coupon websites when they travel. It’s good to remember that many of the same money-saving sites you use every day could be used for travel in other states. If you plan on going the tourist route once you arrive at your destination, you can save money by looking into local deals.

Travel Tip #4: Reduce or Eliminate Your Hotel Bill

Paying for accommodations while you are away from home is most likely to be one of your most significant expenses - but it doesn't have to be. The CDC recommends avoiding contact and maintaining social distancing, so going with a hotel is your best option.2 And the recent reduction in travel may have impacted your location, resulting in lower hotel costs. If you’re staying in a location for a longer duration, consider a sublet. This can come with additional savings, especially on food, as you can purchase groceries and eat out less - saving money and reducing interaction with those outside of your household.

Travel Tip #5: Reduce Your Food Costs

Eating on the road is expensive, especially if you are heading to a popular destination. In a tourist area, even a basic meal can cost much more than what you would pay back at home. Save money by preparing as many meals as you can where you are staying or by bringing prepared food on a shorter trip. If you are unable to carry or cook your own food, look online for supermarkets or delis which offer prepared food. This can be significantly less expensive than a typical restaurant. 

Travel Tip #6: Avoid Buying Alcohol

Many states have closed their bars for safety. But if you find a location with open bars, consider saving money and increasing your safety by limiting your alcohol intake or getting drinks to-go (if legal in your area). If you do choose to imbibe, try buying a bottle at the supermarket or liquor store for a much better deal.

Travel Tip #7: Follow COVID-19 Travel Precautions

The CDC provides travel recommendations for those who have to travel during the pandemic.3 When preparing for your trip, remember to bring extra hand sanitizer and masks, since finding proper sanitizing products can be more challenging on the road. Be aware of the infection rates and restrictions of the state you will be traveling to. In addition, avoid touching objects and surfaces that others may use and make sure to wash your hands before touching your eyes and mouth.  

Traveling during the pandemic is challenging, but not impossible. And while you have the added pressure of staying safe, following these money-saving hacks can help keep you within your budget as well.


Find All the "Your Money in 20" Podcast Episodes Below!
In case you're looking for a personal finance-related book to give or dive into this holiday season, check out the two most recent "Your Money in 20" episodes where advisors share some of their favorites.

For those of you who haven’t yet listened, “Your Money in 20” is a podcast produced by our team here at Woodward Financial Advisors. Our goal is to provide useful and applicable advice about topics that are timely and important to your financial lives. Each episode is delivered in a “snackable” format that you can listen to in 20 minutes or less.

We’ve listed below our 12 available episodes as links, so if any topic strikes your fancy, simply click on it to go right to the episode.


If you’re brand new to podcasts, this article is a great resource for how to listen and subscribe, so that you always know when new episodes are available.
WFA Quoted Around the Web:
  • Ben Birken, CFP® provided some suggestions as to topics that folks who are considering moving in together should talk about before doing so, in an article on Bustle on October 1, 2020.
  • Jim Miller, CFP® and president of Woodward Financial Advisors, appeared as a guest on episode 6 of the New Planner Podcast to talk about the firm's flat fee model, working with clients, and bringing on the right team members to grow the firm. The episode was released on October 23, 2020.
  • Just in time for Halloween, Ben Birken, CFP®, shared some humorous thoughts about zombies and life insurance, on The Simple Dollar.
  • Ben Birken, CFP®, contributed several comments to a Bankrate.com article in November, 2020, that discussed why it's important for every adult to get a will.
  • Jim Miller, CFP® helped answer a reader question about Social Security and the earnings income limit at TheStreet.com on November 17, 2020.
  • Financial anxiety is real. Ben Birken, CFP®, shared some tips on how to take some of the stress out of your finances in an article on LegalZoom.
Thank you for reading our December newsletter! Please reach out if there is anything we can do for you.

From all of us, we wish you peace, comfort and joy this holiday season and in the New Year.

Sincerely,
Your Friends at Woodward Financial Advisors
Woodward Financial Advisors
1504 East Franklin Street, Suite 105, Chapel Hill, NC 27514.
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