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To Generate Long Term Success, Create Confidence Though Financial Planning

What does confidence mean to you?

Confidence knowing that you are tax efficiently investing.

For retirement accounts, should you be investing on a post-tax or pre-tax basis? Much of this will depend on what your income is today vs expected income during retirement, but retirement timeline is also a HUGE factor. If you have more years to save, a Roth IRA may make the most sense. Sure you do not get a tax deduction today, but tax free growth is a great benefit as well.

Did you know that in non-retirement accounts, investments have to be held for at least a year to qualify for the more tax friendly long term capital gains rate? Also, your capital losses from investments this account could potentially be used to lower your taxes owed on income (up to $3,000 a year) or can negate other investment gains this account? Nice silver lining in the very least.

Confidence knowing down market days don’t have to keep you down (in fact, they may even make you celebrate).

A fantastic and underutilized tool in investing is dollar cost averaging. This is a systematic investment plan where you invest a set amount monthly, regardless of what the market does. This way, you automatically purchase more shares as prices go down, and purchase fewer shares as markets go up.

One major reason while investors underperform the markets is that they try to “time” the market. Though an investor has to be disciplined to continue to invest through price fluctuations and the process does not protect against losses in a down market, the systematic approach can take the emotion out of investing.

Confidence knowing rainy days are already planned for.

Many people should have two types of portfolios when they invest. One is for rainy days, where this money is easily accessible and conservative so they are not as prone to the major swings of the market. This “rainy day” portion is there when the heater breaks, car engine dies, and somebody loses their job, also known as “when real life happens”.

The more aggressive portfolio will be invested in potentially higher returning opportunities over the long run. The longer timeline can afford us to invest in assets that we believe are greatly discounted today, and even continue to add to take advantage of in volatile times.

Confidence on creating an income stream that fits when YOU need it.

There should be a plan for how much you should take out in retirement. Not only the amount is important, but the question of which account to take it from (Roth vs Traditional) is a real one as well. Expected income and taxes will again play a role in this decision.

Confidence on when to retire.

Planning of social security, health insurance, and the types of retirement plans are vital. Many retirees can start taking social security at age 62 and 63, but that doesn’t mean that they should necessarily, as your SS benefit can increase the longer you defer. Medicare begins at age 65, but there is a process to do this or there can actually be a penalty levied forever. Also, retirement plans each have different rules for penalty free distributions, so having the correct strategy in place before you need the money is very important.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. No strategy can ensure success or protect against loss. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

How Younger Families Fail Their Finances and How You Can Avoid It

As a dad of twin boys and a teenage son, I can attest there is never enough time in the world. There is never enough time to spend with your spouse, kids, job, anything. Definitely, not enough time to properly focus on your financial future. Here is where I see many younger families go wrong with their finances that I don’t want it to happen to you.

1. They are not up to date with tax law changes.

  • The IRS just released that you can now contribute up to $6,000 annually in an IRA and $19,000 in a 401K beginning in 2019. Adjust your monthly contribution to take advantage of this change.
  • The child tax CREDIT now applies for higher earners and also just doubled to $2,000 per child.
  • 529 plans have expanded so that you can use them to pay for private elementary, high school, and college qualified expenses. A 529 education plan can be for you, even if you do not have kids.

2. They do not properly protect their family in case of a tragedy.

  • Extremely important: Have you named guardianship for your kids? If not, do you really want a judge to choose who will raise them?
  • Life insurance: You should at minimum have enough to cover all debt and five years of replacement income for your family. Many other factors to consider here, as well.
  • Should you name your minor children as a beneficiary to investments? If not, a trust?

3. They don’t properly allocate paying bills & saving for retirement/education.

  • There may be tax incentives for you to save for retirement and 529 plans (especially in your state).
  • At any time, you may withdraw contributions from your Roth IRA both tax- and penalty-free. If you withdraw only the amount of your Roth contributions, the distribution is not considered taxable income and is not subject to penalty, regardless of your age or how long it has been in the account. (You can use the contributions if needed for retirement, kid’s education, etc..)
  • Many stay-at-home parents work extremely hard, but do not generate a paycheck. This DOES NOT mean that they cannot have their own retirement plan and contribute to it. This is why they implemented the “spousal contribution” for IRAs.
  • The interest you pay on loans that were once tax deductible may not be any more with the new tax plan. Does this affect you?

4. They incorrectly take from retirement accounts causing irreparable damage.

  • There are special circumstances in Traditional IRAs, such as health care costs exceeding 10% of income, being a first time home buyer (up to $10k), or secondary education costs that can get around that nasty 10% penalty when dealing with IRAs.
  • You can do an “indirect rollover”, where you take money out of your IRA. You have 60 days to pay it back to avoid penalty or taxes. This is a once a year option, as doing twice in a 365 day period can trigger taxes and the penalty.
  • Remember, Roth IRAs can always have the principal distributed without taxes and penalties.

5. They do not invest for the next 50 years.

  • To achieve tax free growth and distributions, consider maxing out your Roth IRA. You will thank me in retirement.
  • Factoring inflation, $1,000,000 in thirty years could equate to about $400,000 today. Saving the million should be the bare minimum, especially if you want to avoid ramen noodles in retirement.
  • Invest in companies that you believe in. When you are ready to invest in stocks, think about where you buy things, how you pay for them, and where they are located.
  • How many different advisors do you want to work with? If your advisor is “older”, do you want to start over when that advisor retires (and probably sells your account to another advisor)?
If interested in hearing more ways to better set up your financial future, visit….

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.


My love/hate relationship with financial planning

It’s not that I don’t think that planning today isn’t extremely crucial for tomorrow’s success. I do, but I dislike how our industry as a whole goes about the process and how much they charge for it.

Trust me; I used to be part of the problem. You get the client’s information, which begins with a painstaking process of accumulating all expenses ranging from utilities to cable, statements of debt, insurance premiums, and so on. It is a gamble to project what the future costs will be, not to mention, whether these will be viable services by then, as well.

Great! Now we have accumulated a ton of information that we will process into only a 30 page report that very specifically guesses cash flows, assumed interest rates, and projected market returns. What could go wrong, right?

What’s more is that this report comes with a cost, and rightfully so, considering the time it takes to put it together by the advisor. Every advisor will charge different rates, but a common industry cost is $1,000 per plan, which may be an annual fee if the client wants ongoing planning. Investment costs are generally separate, as well.

What I believe in

Never lose sight of the big picture. Sure, you need certain data points to lay the foundation today, but not to the detriment of tomorrow’s success. The time and costs incurred by this plan or “guestimate” could much better be spent investing and paying off debt that could put you in a better financial position NOW.

My Process

What is your greatest financial fear? Is it running out of money in retirement, over paying Uncle Sam, or taking care of your family if something happens to you? Let’s start with solving this and work from there.

Solving fears can also intertwine with investment strategies, as I emphasize having two portfolios. One is the more conservative “rainy day” portfolio. This is for the day when the heater goes, car quits, or a corporate downsizing that leaves you without the steady paycheck. Having the appropriate investment AND amount allocated to this portfolio is equally crucial.

The second portfolio is the long term, higher potential returning one. Whether this portfolio is a Roth IRA, Traditional IRA, or non-retirement account will depend on everyone’s own situation.


Most of my financial plans are included in my investment management fee, which ranges from .6%-1.2%, depending on the amount of assets in an account. If a client wants financial planning and a meeting every six months, it is $250 to help cover the time and costs of the semi-annual plan.

Should we work together?

Considering the time and thought spent on each account, it is impossible to work with everyone, but I am looking to partner with the right people. I currently do not have an account minimum, but base more importance on personality compatibility and working with people that are serious about investing for the good life. If you think that we may be a fit, please reach out. Hope to hear from you soon.