Each of your accounts is a tool you use to build your overall plan. We believe the tools used should be selected based on the actual job you need it to do. Sounds pretty basic – unfortunately that’s not very common. For example, it is common for a retiree to have a portfolio invested for “growth and income” from which they draw – income. So what if the “growth” part has a bad year? Might that affect your income. We often recommend multiple accounts, each best positioned to do its particular job for you. This takes more time, but achieves better results.
Has your financial advisor reviewed your tax return recently? If not how can they advise you on the tax implications of any investments accounts? How would they know if your “tax exempt” municipal bonds are, in fact, being taxed (they can be!); or if a Roth conversion is in your best interest? Do they project your Required Minimum Distributions at age 70 and help you minimize that tax impact? Subjecting yourself to unnecessary taxation has the same impact as experiencing a loss in the market – actually worst, you can’t recover money sent to the IRS! We owned a tax practice for several years and pay close attention to this area for our clients.
Something as simple as an incorrect beneficiary designation on a retirement account (which is far to common) can ruin the most carefully constructed and sophisticated estate plan. We work closely with estate attorneys and we are fully familiar with Wills, Power of Attorney (Financial & Medical), Revocable Living Trusts, various Irrevocable Trusts and charitable gifting techniques. We can help you understand how these tools might benefit you, however we do not provide legal advice and do encourage working with an attorney who specializes in these areas.
Products designed for protection from calamities are essential to any secure retirement. This might be as simple having an adequate Umbrella Liability policy, as complex as a Second To Die Legacy Life Insurance plan, or a specialized product that provides both Long Term Care benefits and a death benefit. May people don’t realize, Social Security is also an insurance piece. Social Security is a Federal Insurance Program and it is critical to make the best decision for your circumstances.