WD-40 For Your Finances: Our Favorite Insights in a New Year

Is your money stuck where it shouldn’t be? Whether it’s stuck in a low-yield bank account, languishing in the wrong investments, burdened by surprise taxes, or forgotten in a state treasury account, neglected funds can quietly erode your finances. 

Much like WD-40 loosens stuck hinges or lubricates and reduces friction to help mechanisms work smoothly, having the right financial insight can help get your finances "unstuck" and running efficiently. WD-40 doesn’t overhaul a system; it provides a targeted solution, a vital way to alleviate friction and optimize performance—just like many of the financial strategies shared on our Insight Articles page at www.openwindowFS.com/insight.

Start your year on a high note with a few of our favorite insights, listed below. Allow your finances to move more smoothly, address specific challenges, reduce inefficiencies, and unlock pathways to greater financial peace of mind.

Let’s dive in and make this year one of your best yet!

WD-40 is a versatile household product commonly used as a lubricant to help reduce friction and allow parts to move more smoothly.

Unstick Your Cash

Consider the “flypaper effect” as described by Jason Zweig, of The Wall Street Journal. He uses the term to describe how money has a tendency to stick where it lands, even when we had other ideas for where it should end up.

For many, this can happen when receiving a large year-end bonus or when rolling over an employer-sponsored retirement account into a personal IRA. According to research from Vanguard, nearly a third of savers who transferred their retirement account balance into an IRA still had those funds sitting in cash seven years later! 

This lack of inertia can be costly. Vanguard estimates that cash-heavy IRAs cost Americans $172 billion annually in missed growth opportunities.

Take a quick look to make sure your savings have landed where you wanted and aren’t stuck languishing somewhere unintended.

If your cash savings are stuck, free them up and get to where you intended!

Mind Where You’ve Stashed Your Cash: 

Speaking of cash, it’s okay—and in fact, wise—to keep some cash set aside for upcoming expenses and in a “life happens” emergency fund. But even these intended cash accounts are worth a review. In this day and age, cash allocated for month-to-month bills should be the only cash sitting in a zero-interest checking or savings account.

Cash held for use within in the next several months or years is usually better served when held in a money market high-yield savings, or similar FDIC-backed account. There, the money should remain safe and readily accessible while still offering a bit of interest income—especially while interest rates are still relatively high.

Although yields on cash pay more than ever, don't assume your cash savings automatically receive a higher rate.

Below, we can help you weigh your cash bank account options, including the ideal use of checking, savings, and money market accounts for "retirees" and those "not yet retired."

Insight: Is Your Bank Underpaying On Your Savings?

Clean Up Your Investments

There are plenty of actions you can take to maintain a tidy portfolio. For example, you can:

Rebalance: 

Relatively strong 2023 and 2024 stock returns warrant a look at rebalancing back to your pre-planned targets, especially if you can do so within your tax-sheltered accounts.

High-flying, exuberant markets usually offer a rebalancing opportunity— and another challenge, as you must sell some of your high-flying outperformers and rebalance into the lonesome losers. Although this is the definition of selling high and buying low it can feel counterintuitive. But as anyone who rode the dot-com boom of the 2000s or any other high-flying time through its crest can tell you:

It’s a good idea to periodically shift some of your captured returns to safer grounds.

By periodically adjusting your portfolio back to its intended allocation, an action separated from future-looking predictions, over time, investors can seek to sell overperforming assets at high prices and purchase underperforming ones at lower prices.

Insight: How To Buy Low & Sell High

Relocate: 

As your total 2024 annual earnings come into focus, you may wish to shift some of your new contributions from taxable to tax-sheltered accounts, such as from Roth IRA to traditional IRA. This can be done through contributions, conversions, or a bit of both.

By seeking to build your investments across accounts with different tax treatments—such as tax-deferred (e.g., traditional IRA), tax-free (e.g., Roth IRA), and taxable accounts, you can build flexibility with which to manage your tax liabilities both now and in retirement.

How do your savings stack up with the example below?

Ask us to show you where you stand.

By having a diverse mix of account types, you can optimize withdrawals, adjust to changing tax laws, and potentially reduce your lifetime tax burden, all while maintaining financial stability.

Insight: Gold, Silver, & Bronze Medals of Tax Planning

Redirect: 

Year-end can also be a great time to redirect excess wealth toward personal or charitable giving. Whether directly or through a Donor Advised Fund, you can donate highly appreciated investments out of your taxable accounts and into worthy causes. You stand to reduce current and future taxes, and your recipients get to put the assets to work right away or when you see fit.

Insight: The Most Expensive Way To Give? With Your Checkbook.

Enjoy More (Tax) Sunshine

Upcoming tax changes, discussed in part as a tax "Sunset" by Open Window and others as “Taxmageddon” or the “2025 Tax Cliff,” make 2025 a relatively tax-friendly year in which to complete a range of transactions. 

Rather than a sunset of existing laws, it would seem likely that the sun will stay high in the sky. In turn, the party will go on for tax-saving strategies of recent years.

Examples include converting to Roth, harvesting long-term capital gains, taking extra retirement plan withdrawals, exercising taxable stock options, gifting to loved ones, and more.

New Tax Policies

Here are the new tax policies we're watching and what they could mean for the high-earners, diligent savers, and charitable givers with which we work best.

Insight: The Tax Policies We're Watching in a New Trump Administration

Your New Tax Brackets

Do you know your new 2025-year tax brackets and how to make the most of them?

Each year, the IRS reviews and adjusts specific tax provisions for inflation. Below are the latest updates for the 2025 tax year, using Open Window's Rounded Tax Brackets, including common income, dividend, and capital gain tax brackets.

What is your strategy to make the most of your new tax brackets (in 2025 and beyond)?

Higher-income years and lower-income years both provide unique opportunities for strategic moves. Timing your tax strategies during these periods can significantly increase your ability to lower your lifetime tax burden.

Insight: What's My 2025 Tax Bracket?

Your Required Retirement Distributions:

Each year, certain retirees and those who've inherited a retirement account are usually required to make Required Minimum Distributions (RMDs) from their IRAs and similar tax-sheltered accounts.

Typically, RMDs are due by year-end. However, there are new rules that can delay, or even eliminate the need to make an RMD. 

For instance, the age for RMDs will rise to 73 in 2025, but only for those born on or after January 1, 1951, and before January 1, 1960.

For investors looking ahead, the age for RMDs will rise to 75 in 2033, but only for those born on or after January 1, 1960

Delayed distributions are relatively meaningless for many Americans who will distribute funds for living expenses regardless of the mandated age. 

While these delayed distributions provide more time for tax-deferred growth, as well as more flexibility in withdrawal strategies, for those who can afford to wait, a delayed distribution can create potential issues (and, therefore, an opportunity for proactive planning). 

Insight: Delayed Distributions: Opportunity or Future Threat?

Secure Your Finances

In the wake of widespread data breaches and identity theft, protecting and reclaiming your financial assets has never been more important. Here are two simple steps to help secure your finances and recover what’s rightfully yours.

Freeze Your Credit: 

Mid-2024, it was announced that “Hackers may have stolen the Social Security numbers of every American” in a recent data breach. Great...

While you shouldn’t live in fear, it’s wise to assume that your personal data may be accessible online in some form. Here are the proactive steps you can take to reduce the risk of identity theft and other forms of misuse. Chief among those steps is freezing your credit.

Insight: Stolen Social Security Number? Freeze Your Credit ASAP.

Check for Lost Property:

Checking your name for unclaimed property with your state treasurer is a simple way to recover assets you may have forgotten about, such as old bank accounts, uncashed checks, refunds, or insurance payouts. These funds are often turned over to the state when businesses cannot locate the rightful owner. 

To check for lost property, visit the website MissingMoney.com. This website is the official platform managed by the National Association of Unclaimed Property Administrators (NAUPA) and is set up to help you search for unclaimed property across multiple states for free.

Simply input your name and relevant details to see if any lost property is associated with you. If a match is found, the website will help you file a claim or direct you to the appropriate state agency.  

By conducting a quick, free search at MissingMoney.com or your state treasurer's office, you could reclaim money that’s rightfully yours, providing a financial boost with minimal effort. 

Let's Connect

Just as WD-40 is a tool to keep things in motion, regular financial maintenance with time-tested strategies and advice ensures your financial life stays flexible, resilient, and effective.

As you reflect on your finances this year, remember that even small adjustments can have a significant impact over time. Whether it's freeing up stuck cash, optimizing your portfolio, or safeguarding your assets, every step you take brings you closer to the financial confidence and peace of mind you deserve. These actions ensure your financial "gears" turn without unnecessary stress or resistance, enabling smoother progress forward.

Instead of trying to tackle everything at once, why not pick your most applicable insight out of our short list of favorites and ask us to work on it for you?  

At Open Window, we want to change the way you think and feel about your money. We're here to help you untangle the complexities and make confident, informed decisions. Let’s collaborate to ensure your financial future is as bright and smooth as can be for 2025, and beyond. 

Reach out today, and let’s get started. Call (775) 827-0670 today, or schedule a Quick Connection time with us at www.openwindowFS.com/connection.