Terry Nelson's LTM E-Newsletter

Terry Nelson, CFP^®, ChFC^®, CASL

Olmsted Financial Group

3428 Lakeridge Pl. N.W., Suite 120

Rochester, MN 55901

Phone: 507-281-1262

Cell: 507-250-3967

Fax: 507-281-9131

Email: Terry@OlmstedFinancialGroup.com

January/February 2026

The One Big Beautiful Bill Act

As you look back on 2025 and start planning your financial strategies for 2026, here's a brief overview of provisions in the OBBBA that you may want to consider in that planning.

Investing Principles for Pursuing Your Financial Goals

Investing for your future requires a strategic approach grounded in clear objectives and disciplined principles. By understanding and applying key investment concepts—asset allocation*, diversification**, time horizon, and risk tolerance—you can build a robust portfolio to meet your financial aspirations.

Understanding Tariffs

Tariffs are taxes imposed by governments on imported or exported goods, primarily to regulate trade, protect domestic industries, or generate revenue. They play a crucial role in international economics, influencing prices, supply chains, and global relations. There are several key types of tariffs, each designed for specific objectives.

Time to Review Your Withholdings

As 2026 begins, reviewing your tax withholdings is a critical financial step. Withholdings determine how much income tax is deducted from your paycheck, directly impacting your cash flow and tax refund or liability. Life changes—marriage, a new job, or having children—can shift your tax bracket or eligibility for credits, making last year's settings outdated.

Getting Your Finances Back on Track

The holiday season often leaves wallets strained, but 2026 can start with financial recovery.

Understanding Beneficiary Designations

Your will is an important document for passing assets to loved ones when you die, but it doesn't apply to everything. Life insurance proceeds, retirement accounts, annuities and similar accounts pass through beneficiary designations and are not governed by your will.

Building an Emergency Fund

Having an emergency fund is essential to help ensure funds are available when unexpected financial hardships occur. Aim to save 3-6 months' worth of living expenses to provide peace of mind.

Rebalancing for Retirement

As we kickoff a new year, it's important to review the contributions you're making to your retirement plan(s). Consider rebalancing your investments annually to maintain your chosen asset allocation.* It's easy to do simply by contributing less to the investment class that's forging ahead and more to the class that's lagging.

Tools to Help Automate Retirement Investing

Company-sponsored 401(k) plans have undergone significant changes over the years, including matching contributions from your employer and automatic enrollment, rebalancing, and contribution escalators. Even if you don't have these options, you can still model your retirement investing behavior after some of these plan features.

OBBBA and Businesses

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, introduces significant tax and financial changes that reshape the landscape for small business owners. This legislation offers opportunities for growth but also presents challenges, requiring strategic planning to maximize benefits.

Protecting Your Business

If you read this newsletter regularly, you know that we talk about how life insurance can help fund various business agreements and fill out an attractive employee benefits menu. Life, health and disability income insurance play prominent roles, but as a business owner you likely need to insure your company in several other ways. These are some ways businesses protect their financial investment:

Experiencing or Expecting Changes in Life?

From marriage to retirement, life's events will likely alter your life insurance needs. How much life insurance do you need and why do you need it at various times in your life? Let's look at some of life's stages and how life insurance may play a role during these times.

The Importance of Estate Planning

Estate planning is a critical process that ensures your assets are distributed according to your wishes after your passing, while minimizing taxes, legal complications, and family disputes. With rising financial complexities, estate planning is essential for individuals of all wealth levels.

Rethinking the American Dream

With rising market volatility, soaring home prices, and high interest rates, it's no surprise that increasing numbers of people in your position are exploring varied investment opportunities— and finding plenty of reasons to think beyond traditional home ownership.

Include Health Care in Your Wealth Plan

Healthcare costs can be difficult to forecast, and while even routine care is pricey, the costs associated with unexpected health issues can be staggering. Now is the time to be proactive and include healthcare arrangements in your wealth plan or review the provisions you already have in place.

Teach Your Children Well

Teaching children about finances isn't just about numbers and assets; it's about equipping them with the skills they'll need to manage wealth responsibly. To foster a productive learning environment, separate financial education from discussions about assets.

Retiring Early in 2026?

As your retirement date approaches, it's essential to develop a comprehensive strategy that aligns with your personal goals and desired lifestyle. Retirement is not merely a departure from the daily grind; it's an exciting chapter that offers the opportunity to delve into passions, create lasting memories, and build a legacy that reflects your values. To ensure a smooth transition into this new phase, consider the following essential factors.

Roth or Traditional: Considerations for High Earners

The higher your income, the more complicated the options. Generally, deductible IRA and Roth IRA contributions aren't permitted if you have a 401(k)/403(b)/457 retirement savings plan at work.

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