As National Financial Literacy Month hits its stride, the American Institute of Certified Public Accountants (AICPA) and Finseca are equipping the public with answers to some of the most common questions individuals and families are asking as they seek greater clarity and confidence in their financial lives.
“National Financial Literacy Month represents reinforcing that financial knowledge is a critical life skill. When people understand the ‘why’ behind their decisions, they are far more likely to act with confidence and purpose,” said Cary Sinnett, senior manager, AICPA Personal Financial Planning. “Because CPAs have a unique vantage point when it comes to financial planning, they possess the drive to help the community at large not only grasp what to do, but why it matters.”
“Financial literacy isn’t a once-a-year conversation – it’s the foundation of every great financial plan, and it’s what separates a good one from a great one,” said Marc Cadin, CEO of Finseca. “Our members are on the front lines every day, helping clients cut through all the noise and helping real people build real plans that protect their families, secure their futures and deliver real peace of mind, no matter what life brings – and that is what this month is all about.”
For Individuals & Families:
Where do I start?
Talk through your current financial situation, including income, expenses, debts and savings. Be honest and transparent with yourself and as a family about your financial values, goals and priorities – this builds trust and sets the stage for effective planning. Next share your financial values and priorities. Understanding each other’s perspectives helps you align your financial goals.
And remember, life is unpredictable – be prepared. Always start with an emergency fund to cover 3-6 months of living expenses in case of unexpected events like job loss or medical emergencies. A trusted financial professional can ensure you fully understand all your options and make sure all your needs are met.
Do I have enough money to retire and will it last?
Being “ready” to retire isn’t about hitting a specific savings number – having a large balance is not enough if withdrawals are poorly timed or overly dependent on strong market performance. Start by understanding the lifestyle you expect to have in retirement and whether your income and assets can realistically support it. Retirement lasts decades for many people, so your plan must factor in inflation, longer life expectancy and the reality that investment returns will vary from year to year.
Employ a comprehensive retirement plan that will stress‑test different scenarios. Take into consideration your income sources and your withdrawal strategies, tax efficiency, healthcare and long‑term care costs and how your portfolio behaves during a market downturn. It’s very important to revisit your plan every year or so to ensure things remain on track. When your plan demonstrates that your income can meet your needs across those conditions, you can move into retirement with confidence using financial decisions grounded in analysis, not guesswork.
What moves can I make today to protect and grow my wealth long-term and charitable giving?
In uncertain economic environments, diversification is key and using tools like permanent life insurance can help protect against market volatility. Advisors can stress-test portfolios against potential market and policy changes to ensure clients stay on track.
Clients also benefit from bunching donations into Qualified Charitable Distributions (QCDs) from IRAs or donor-advised funds, reducing taxable income while supporting causes they care about. This strategy pairs well with life insurance for multi-generational giving and legacy planning.
How can I reduce my taxes now and in retirement?
Planning for retirement works best when you intentionally fund three different income streams – pre‑tax accounts like traditional 401(k)s and IRAs, tax‑free Roth accounts, and taxable (non‑qualified) investment accounts. Each serves a distinct tax purpose – pre‑tax accounts offer upfront deductions but taxable withdrawals later, Roth accounts trade taxes today for tax‑free income in retirement, and taxable accounts provide flexible access to cash, potential capital‑gains treatment, and no required minimum distributions. This “tax diversity” helps smooth your lifetime tax burden and prevents being overly dependent on any single account type.
This diversity becomes especially powerful in retirement, when controlling taxable income can help you stay in a lower tax bracket, avoid Medicare surcharges and reduce taxation of Social Security benefits. With multiple income streams, you can strategically choose which account to draw from based on tax law, market conditions and personal needs. The years between retirement and the start of Social Security or required minimum distributions (RMDs) also create a valuable window for Roth conversions at potentially lower tax rates – reducing future RMDs and easing taxes for heirs, especially under the Secure Act’s 10‑year inheritance rules.
Am I invested appropriately given my stage of life?
There is no one‑size‑fits‑all rule when it comes to investing. Each stage of life brings different priorities, financial responsibilities and time horizons, and every household’s situation is unique. Because of these differences, what is appropriate for one individual or family may not be appropriate for another, even if their ages or income levels are similar.
Being appropriately invested means clearly defining your financial goals, prioritizing them and attaching realistic timelines to each one. From there, investments should be structured to support those goals while aligning with your comfort level for risk and market volatility. Think about the many different types of investments (stocks, bonds, money market accounts, businesses, real estate) and how they work together, how liquid they are and how they are taxed. When your investment mix supports your goals, fits your timeline and is coordinated with tax planning, you are likely to have a solid strategy in place. The ongoing task is reviewing and adjusting that strategy as your life circumstances, tax laws and financial priorities evolve.
For Small Business Owners:
How do I stay on top of my financial obligations and avoid costly surprises?
Small business owners often underestimate the complexity of managing cash flow alongside tax and compliance requirements. Advisors can help review projected earnings, establish sound recordkeeping practices and build financial buffers that prevent penalties while maximizing business growth.
From home office costs to vehicle mileage to retirement contributions, be sure to talk with your financial professional about where your money is going—and what it’s doing. This is fundamental to true financial health. Proper recordkeeping and regular financial reviews help business owners make smarter, more confident decisions year-round.
Finding a Trusted Professional
Finding a trusted professional can be a pivotal step in getting your finances on track, bringing clarity, expertise, and accountability to what can otherwise feel overwhelming. This is someone who will learn your story and build a plan that is uniquely yours. To find the right person to help you, clarify your financial goals so you know which professional aligns with your needs. If you don’t have a specific person or company in mind to reach out to, try asking people you know – family, friends, colleagues – who have someone they use and would recommend. Be sure to research any referrals and consider interviewing the person you are interested in using.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
