If I get one question more than any other, it is this one. Whether someone is interviewing a financial advisor or simply trying to figure out what is important to know in their own financial journey, many people simply don't know what's most important to keep an eye on. As I work with those age 50 and over, I would like to help frame your mind on what Certified Financial Planners™ concentrate on with their clients, each and every year.
Interviewing financial advisors for this very vital role in your life can be daunting. Plus, the 21st century brings with it new threats to your finances, so your “toolbox” of questions needs to be updated as well. You are trying to achieve many objectives, such as help to plan for key life events and investing your hard earned assets in the most appropriate way. You not only need assistance in achieving your goals but you want to do so in a fashion that represents who you are. You also want peace of mind and time so you can go off and do the things that are most enjoyable to you, which encompasses the majority of your focus and attention.
In my 20 year plus career here in the Atlanta area, I have noticed a few things about those of us in our 40's and 50's. Whether we saved enough money earlier in life or not, our 40's is a challenging decade to save with kids in college. That's why I have always called the decade of our 50's, the "catch up" decade. It is that mad scramble to make up for lost time and really focus in getting as much into savings as you can to reach retirement, or at least have options. Reaching retirement is exciting, but having enough to maximize your quality of life during retirement is key. You’ve likely heard of a backdoor Roth IRA, but for some looking to maximize their withdrawals in retirement, a mega backdoor Roth IRA may be the way to go.
What is a mega backdoor Roth IRA? Below we’re breaking down what you need to know about this retirement savings strategy.
Former Zappos CEO Died in November Without a Will. Here's Why That Makes Things Extremely Complicated.
Tony Hsieh, former CEO of Zappos, died at 46 due to smoke inhalation from a house fire over the Thanksgiving holiday. Several months prior, Hsieh retired from his position as CEO of Zappos with an estimated net worth of $840 million.1 Since his death, his family has determined he died intestate, meaning he had no will. In response, his family has filed for access to the former CEO’s accounts and assets.2
Earlier this year, “Black Panther” star Chadwick Boseman lost his battle with colon cancer - Boseman also died intestate. His wife has since had to file paperwork in probate court to gain access to his estate, which has an estimated value of about $938,500.3
With a new Commander-in-Chief poised to take office in January, one of the most volatile and polarizing election seasons comes to a close here in Georgia (Senate race still withstanding). Amidst the pandemic, the issue of healthcare has been one of the most important topics on the minds of Georgians and all Americans. As we shift into a new era of leadership, what changes can Americans expect to see when it comes to healthcare?
As we face a “likely" climate where taxes are going to be higher, I wanted to share a couple of optimal planning ideas to avoid - what I call “Tax Torpedoes”. What is a tax torpedo? It’s when your effective rate on certain portions of your income is higher than the statutory tax rate (in essence, the legal tax rate for each bracket of total income).
While every strategy will not be applicable to you, there is at least one idea that regardless of where you are in life, should be considered to potentially reduce your taxes and increase net income.
1. Increase Contributions to Roth IRA Accounts.
At any age (since they removed the age 70 ½ ceiling), Roth IRA contributions and conversions are an optimal tool to potentially reduce future taxes. By paying taxes at a “reasonable” rate up front, you can enjoy tax free growth on earnings for distributions down the road.
This is certainly not an exhaustive list. In my opinion, as a Certified Financial Planner™, you are potentially hurting yourself if you don't share everything we ask for and or need. Your financial advisor is an integral part of your team to help you manage your wealth and grow your future. That said, you may not be sharing with us everything. Whether you are not communicating things because you feel they are unimportant or are a private person who wishes to keep certain information to themselves, not sharing what you need to with your financial advisor could result in problems with your financial future. Below are five things that you should always share with your advisor. Again, not an exhaustive list, but a good start!
When we think of financial health, a few things might come to mind. We may think of our own financial status, our investments, the Dow Jones Industrial Average performance, the stock market as a whole, the economy, the country’s employment status and so on. While some aspects may be interrelated on some level, they are not all one and the same, nor do they all indicate the status of one another.
As an individual nearing 70, you’ve intended to delay your Social Security benefits until the decade comes. But in some cases, there are times when you may need the money sooner than expected. Seemingly in the nick of time, there is an option to receive up to six months of benefits in a lump-sum by initiating your Social Security retirement benefits early. While this is an important option to have, what are the consequences of applying early?
Roy Larsen is a Certified Financial Planner™ practitioner and Fee Only Wealth Manager who resides outside of Atlanta, Georgia.