Is the a better way?

Blog post #396

How do you make key financial decisions?

Are you up to date on all the issues you need to know?

The world keeps changing at a seemingly faster pace.

Decision making, especially in regards to financial matters, can be complex to begin with. Then factor in the rapid pace of change and it is clear that using a financial advisor, and sometimes a team of advisors, should help you make better and more informed decisions.

Let’s consider some of the financial issues that you may have to deal with during your life and how they have changed over the years.

Saving for Retirement: Decades ago, most workers had pension plans, which provided income for retirement. Now, this type of plan is almost extinct within corporate America, except for some government employees and teachers.

Today, most people are primarily responsible for their own retirement planning. You can save through 401(k) and 403(b) plans, for non-profit organizations, as well as IRAs, Roth IRAs, and Roth 401(k)s. These plans come with many choices. You must decide how much you should save, to fund your retirement. You should consider whether your employer provides a match and whether your contribution maximizes this match.

You need to decide how to invest this money, as your employer does not provide investment advice. Some plans come with many choices, dozens or more than a hundred is not uncommon. Do you coordinate your retirement savings allocation with your other investments? Do you realize that certain asset classes would be best to invest in a tax-deferred account? Do you consider the investment costs of the retirement plan investment choices and how they compare with your other investment choices?

Consulting with us as your financial advisor about how best to save and plan for retirement could be quite valuable, providing you with clarity and useful information.

Saving for college: A few decades ago, when my children were young, we saved money for their college education in what was known as UGMA accounts (Uniform Gift to Minor Accounts). These accounts are subject to Federal and possibly state kiddie taxes, which have become more burdensome in recent years.

Today, most states offer tax-deferred college savings plans called “529 plans.” Using a 529 Plan is more advantageous, as under current tax laws the UGMA accounts would likely incur taxes, whereas a 529 plan may avoid all income taxes.

However, you still must decide which plan to use, and how to invest the money. There are major differences between plans and just using an age-based allocation may not be the best strategy from birth until your child reaches college.

Consulting with us as your financial advisor about college savings strategies could be quite valuable, providing you with clarity and useful information.

 

Other examples of financial issues and topics which have changed dramatically over the past years are….

• Mortgages and home equity loans
• Life insurance
• Long term care insurance
• Estate planning and estate tax laws
• Tax laws, which are constantly changing
• Charitable giving
• Social security distribution planning
• Retirement plan distribution planning

Consulting with us as your financial advisor about these topics could be quite valuable, providing you with clarity and useful information.

Investing: It is obvious that the economy and the investment world is always changing. The rate of change is rapid. It is hard to predict which companies, and therefore their stocks, will succeed or not.

How can you determine which investments to choose? Which investments have the best chance to help meet your short and long term goals? How should you react to news, market predictions and swings in the stock market? How much of your money should be invested in stocks versus safer investments, such as fixed income? How do you decide how much of your money should be invested in the US and how much overseas? How much risk do you need to take? And what are the tax ramifications of all these investment decisions?

Working with us as your financial advisor for your investments can be quite valuable, provide you with clarity and a greater chance of long term investment success.

We feel there is a better way….which is to work closely with a financial advisor, such as our firm, on all the various financial decisions you face during your lifetime. By working with us, these matters can be discussed, analyzed and coordinated in a rational and effective manner.

We look forward to helping you, and others you know, make decisions like these.

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