The Importance of Financial Certifications

Financial certifications are a commitment to the client’s best interest

Financial certificationsYou’ve decided to get serious about your financial future and want to find a financial advisor to guide your decisions. There’s a lot to consider in creating a comprehensive financial plan.

Pulling all the pieces of your financial life together—budgeting, retirement planning, saving for education, insurance, taxes, and investing—is a challenging endeavor.

Finding credentialed professionals is essential. Many professionals call themselves financial planners and most people think all financial advisors are “certified,” but this isn’t true. Only those that have fulfilled and maintained the requirements of the CFP Board can display the CFP® trademark and call themselves a CERTIFIED FINANCIAL PLANNER™.

Continue reading

Calculating Social Security Benefits

Calculating Social Security Benefits are a function
of three primary factors.

How Many Years Have You Worked?Calculating Social Security Benefits

The Social Security Administration uses 35 years of earning history

▶ If you worked more than 35 years – it uses the highest 35 years of salary

▶ If you worked less than 35 years – it still uses 35 years of salary (the years you didn’t work count as $0) This rule impacts far more women than men.

Why? Many women took significant time away from work to raise one or more of their children. 

Continue reading

10 Things about Using your IRA for Educational Expenses

Using your IRA for educational expensesIt’s back to school time! This means it’s time for school supplies and additional expenses. Are you considering using your IRA to pay that large tuition bill? The rules can be complicated. Here are 10 things you will want to know about using your IRA for educational expenses.

1.  Typically, if you take a taxable distribution from your IRA before you reach age 59 ½, you are subject to a 10% early distribution penalty. The exception to the penalty allows you to take a penalty-free distribution from your IRA if you use the funds for qualified higher education expenses.

Continue reading

6 Key Tips to Follow As You Juggle Your Own Retirement Planning

Juggling retirement planningContributions for Retirement Planning: If you are working, have an employer plan available, and there is an employer match, make sure you are contributing enough to the plan to reach that maximum match level. Don’t forget to make your own IRA or Roth IRA contributions as well. Your participation in the employer plan has no effect on your ability to make those contributions. It could, however, affect the deductibility of your IRA contributions.

Roth IRA Planning: You really want to contribute to a Roth IRA, but (and it’s a big BUT) you exceed the income limits to qualify. You can utilize a strategy called the Back-Door Roth IRA to move funds into a Roth IRA, where they can grow tax-free into retirement.

Don’t forget about Roth conversions for yourself. You can use a strategy called “filling the brackets.” You convert smaller amounts each year to keep yourself from going into a higher tax bracket. When it comes time to do the tax return, maybe some numbers have changed and you converted too much. No problem! You have until October 15 to recharacterize all or part of your Roth conversion. You “undo” it and do not owe income tax on the amount you recharacterize.

Continue reading

To Convert or NOT To Convert – Roth IRA Conversion

What is a Roth IRA conversion?

Roth IRA ConversionA Roth IRA conversion is the process of moving IRA or employer plan assets to a Roth IRA.

1.  When will you need the money? If you have an immediate need for the funds or need them to continue your current standard of living, then a Roth IRA conversion is probably not for you. However, if you have no immediate need for the funds, a Roth IRA conversion is potentially a great way for the funds to grow tax-free over your lifetime.

Continue reading

Sometimes It Pays to Treat Your Kids Unequally

Treat Your Kids UnequallyAs the father of more than one child, I understand the desire to try and treat children as equally as possible. You certainly don’t want one child to think you love him/her any less, or more, than your other children (though children will inevitably feel that way at one time or another), and you want the best for all of your children. But while children may share the same parents, may grow up in the same house and may be raised in the same manner, they are very much like snowflakes. Each one is truly unique. However, when dividing your estate, it may be beneficial to treat your kids unequally.

Continue reading

Choosing the Right Financial Advisor in 5 Easy Steps

Choosing the right financial advisorWhy do you need a financial advisor?

Today’s financial landscape is as complicated as ever.  Choosing the right financial advisor can help you navigate this complexity so that you can make educated, informed decisions on what is best for you and your family.

1.  Ask for references.  Ask your CPA or estate planning attorney.  In many cases, they already have a working relationship with a financial advisor.  You should also consider asking friends and family members for a recommendation if they are in a similar stage of life and financial situation.

Continue reading

Good Companies Don’t Always Make Good Stocks

by Vitaliy Katsenelson, CFA

I was recently going through a new client’s portfolio and found it full of the likes of Coca-Cola, Kimberly-Clark and Campbell Soup — what I call (pseudo) bond Good stockssubstitutes. Each one is a stable and mature company. Your mother-in-law would be proud if you worked for any one of them. They have had a fabulous past; they’ve grown revenues and earnings for decades. They were in their glory days when most baby boomers were coming of age. But the days of growth are in the rearview mirror for these companies — their markets are mature, and the market share of competitors is high. They can innovate all day long, but consumers will not be drinking more fizzy liquids, wearing more diapers or eating more canned soup.

If you were to look at these companies’ financial statements, you’d be seriously under impressed. They paint a stereotypical picture of corporate old age. Their revenues haven’t grown in years and in many cases have declined. Some of them were able to squeeze slightly higher earnings from stagnating revenue through cost-cutting, but that strategy has its limits — you can only squeeze so much water out of rocks (unless someone like 3G Capital takes the company, sells its fleet of corporate jets and starts mercilessly slashing expenses like the private equity firm did at Budweiser and Heinz). These businesses will be around ten years from now, but their profitability probably won’t be very different from its current level (not much higher, but probably not much lower either).

Continue Reading …

The Second Half of the Retirement Game

Are Americans Ready?

The long second half of the retirement game

Second Half of the Retirement Game

  • 69% believe there is at least some chance that they will outlive their savings.
  • 14% think they definitely will!

How to fix this? Save as much as you can as soon as you can – and if it’s getting late in your career, take advantage of the $1,000 IRA catch-up contribution. In 2016, individuals age 50+ can contribute $6,500 to their IRA. Try to move as much money as possible to tax-free territory like Roth IRAs and leverage life insurance.

Continue reading