What’s your IRA worth?

What's your IRA Worth?IRA owners often want to invest in assets other than the usual stocks, bonds, cash, and mutual funds. The tax code does allow for IRAs to invest in most anything except for collectibles, life insurance, and S-corporation stock. So what do those “other assets” make your IRA worth?

If you invest $1,000 in a publicly traded stock it’s simple to determine the value of the investment at any time. You can look it up on your computer, smart phone, or tablet. But investing in real estate, promissory notes, a start-up business, a master limited partnership, an LLC, or any other investment option, it’s not easy to determine its investment value. Typically, the IRA custodian carries the investment on its books as the amount you originally invested. The value doesn’t change from year to year.

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Minimizing Financial Risks

Knowledge is priceless

Financial RisksIf you work with a financial advisor, a CPA, and an estate attorney, then your finances and assets are being looked after; right? It’s their responsibility to know everything to protect your money and reduce financial risks; right?

You hired these professionals to consult with you on the best strategies to grow, manage, and protect your assets. This makes you their ‘boss.’ Just like running a business, you need to know what your management team is doing. Regular meetings and frequent communicate keeps everyone up-to-date and refines the processes to protect your interests to achieve your financial goals and retirement funds.

Risks to your IRA

Planning and managing your IRA is essentially about maximizing the opportunities of reaching your financial goals and reducing the risks that can be a life-changer. Risks can appear in all shapes and sizes such as job loss, costly health crises, an unexpected death, and even living longer than expected.

Here are ways to reduce your risks.

Portfolio Threats – Help offset market and economic risks to your IRA portfolio through proper asset allocation, diversification and hedging.

Job Threats – Many people experienced job loss during the last recession. IRA funds are often needed to cover living expenses. Help offset costs and withdrawing from your IRA by setting aside enough emergency cash to cover expenses until employment is secured. There are financial consequences to withdrawing from an IRA if you have not reached the age of 59 ½.

Health Threats – By having health care disability and long-term care insurance in place, you can dramatically reduce your risk of having to use your IRA assets.

Legacy Threats – Offset the risk that your death will leave your family without adequate income or that your heirs will not inherit what you intended by planning with sufficient life insurance.

Tax Threats – The risk that your estate will owe more than necessary when you die in estate and income taxes is offset through strategic estate and tax planning.

As you can see, there are a lot of factors to consider as you determine your long-term financial goals. What are the best ways to achieve your financial goals, manage your assets, and how to protect them? You owe it to yourself and your loved ones to seek the advice of financial experts. Remember; just keep your finger on the pulse and keep communication lines open for regular reviews of your accounts.

Wealth advisory value proposition

Advising on the client’s best interest

Scott Smith, CIMA®
One of the rewarding aspects of being an advisor is getting the opportunity to partner with clients and help them make good financial decisions throughout the various stages of their lives. Perhaps more than most other professions, our business is personal because it concentrates on the unique goals and challenges of each client and creates a long-term plan that brings them closer to their destination. The Wealth advisory value proposition we bring to the table as a fiduciary is directly correlated to the depth and breadth of each client relationship.

“…being a client’s trusted confidant in all respects where money and life intersect is a great responsibility we assume with diligence and care.”

Advisory Value Proposition

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What Do Real Advisors Do?

Carl’s blog post highlights the value of having a buffer zone between client emotions and their money.  One of an advisors primary duties is to be that buffer zone that assists clients in removing their emotions from the decision making process.  The cost of our mistakes pale in comparison to the fees paid for advice.  Removing behavioral-oriented mistakes is a big part of a sound investment process geared toward meeting client specific outcomes.

Scott Smith
C&J Wealth Advisors

What Do Real Advisors Do?

Last week, The Economist published a story about the costs around mutual funds and how much investors benefit from picking low-cost options. The article said many good things, but then I got to this paragraph about paying for advice.

“Good advice is certainly worth something: many American investors in pension plans have devoted a big proportion of their portfolios to cash (a low long-term return) or to their employer’s shares (too risky). The ability to avoid such mistakes is worth a one-off fee. But an investor should not pay 1% to 1.5% a year to an adviser. Nobody has yet shown that they can correctly and consistently time markets.”

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