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Fear, Greed, and Your Portfolio

Finance, in general, has been based on rational and logical theories, and for most part, tends to be somewhat ‘predictable.’  Early financial theories assumed that people behave rationally and predictably, and that outside factors and emotions do not influence people when it comes to making financial decisions.  However, behavioral finance has proven people behave irrationally and differently in the real world.  The human brain has difficulty assessing risk (fear) and possibility (greed), which causes our emotions to affect our decision-making process.  Investors make irrational decisions when it comes to their own investments.  Investors react stronger (it’s painful) to financial loss, than to gain.  This is what has the most impact on our portfolio aside from investment performance.  Fear and greed are such powerful emotions that there is now a Fear & Greed Index that tracks what is driving the stock market today!

In thinking about yourself, do you react to televised market commentary or to ‘Herd Instinct’ causing you invest in something because everyone else is?  When the market declines are you fearful of loss and sell or invest or hold onto an investment in a down market?  Fear and greed can be beneficial to your portfolio or have the opposite effect.

As Warren Buffet said, “Be fearful when others are greedy and greedy when others are fearful.”

Discussing your fears and financial dreams can give both the investor and financial advisor a better understanding of what may cause bad decisions leading to errors that you may not recover from.

Hearing the term ‘greed’ isn’t bad unless it leads to thoughts of confusion, questioning decisions, or changes in behavior similar to ‘gambling’ on an investment.  As an investor, you can have a ‘financial crisis’ by not fully thinking about what you want and how you will react to changes in the markets.  You need to know yourself before you can determine your goals and start to invest.

How much market fluctuation can you tolerate?  Are you comfortable with separating money into different investment options to help fund each goal you have?  Are you comfortable with investment advice and the monitoring of your portfolio?  The best way to harness fear and greed to your benefit is by understanding your investor profile:

Objective Traits– Personal or social traits such as gender, age, income, family, even tax situation

Subjective Attitudes– Part of the emotions and beliefs of the investor.

Balancing Risk vs. Reward– Tolerating more risk in order to have the higher reward or less risk and contentment with a reasonable return.

Area of Focus– Types of investments (ex. Stocks, bonds) and sectors of investments (ex. Technology).

Investment Strategies– Helps to shape the investor profile by the type of investing the investor uses (ex. ethical, growth, indexes)

Valuation Methods– Helps to develop the investor profile through the valuation method (ex. Fundamental analysis, technical analysis, quantitative analysis).

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Is Retirement Really About Numbers?

For some people retirement is all about the numbers; the age you plan to retire, how much money you need, and so forth.  We have built our planning processes in financial services based on numbers and algorithms in financial planning software to help us contrive a number or group of numbers that are uniquely yours.  But is retirement really about numbers?

Numbers give us a baseline to help you financially plan for today and the future.  Your numbers can change throughout your life.  Maybe you’re already retired or are within ten to twenty years of retiring, but one thing is clear; numbers play a role in all aspects of your financial life:

Economic conditions affect your retirement savings.  This includes inflation and the economy.  Inflation determines how much it costs you to live today and how much things will cost when you retire.  The economic conditions that affect your employer decide whether if you will have a job.   Both of these are caveats in financial planning since both are unknown; we can only make assumptions based on today’s information and can’t guarantee anything in the future.  If that leaves you concerned, you’re not alone.  The best option is to plan for the unknown and put yourself in a position that if a job loss happens, it doesn’t wreak havoc on your finances while you’re looking for work.  There’s not much we can do about the economy, but keeping expenses low will help you if prices dramatically rise or if you suddenly are without a job.

The age you retire relates to two things, your health, and your financial resources.  According to the RAND Corporation Center for the Study of Aging, when people are in their late 50’s they start to consider if they should continue working or collect social security as early as possible.  This decision is related to their health, and if they’re economically stressed.  These individuals tend to retire as soon as possible.  Healthy people continue to want to work because of the financial reward of growing their retirement savings and maintaining their current lifestyle.  They start to look forward to other jobs they always wanted to do later in life or advance in the career they’re currently in.

Accumulating retirement savings and developing a spending plan is beneficial at any age.  Accumulating assets is important prior to retirement.  If you don’t have a spending plan during the accumulation stage it may be more difficult for you to save for your retirement.  A spending plan in retirement is important as you will not be able to accumulate assets due to no longer working and be on a limited income.

Retirement uses numbers to plan your financial future.  This is the best way for advisors to give clients something to understand in theory but also show through software, written financial plans, and concrete information.  Retirement really is about numbers when you use them to set realistic goals and stick to them.  Our Las Vegas financial firm is ready to assist you in finding and managing your numbers.

Alternative Investments Las Vegas

Bitcoin, Cannabis, and Other Alternative Investments – Las Vegas, NV

If you’re considering alternative investments this year, you should thoroughly think through the consequences of investing in some of the most popular ones in the media.  Although Bitcoin and the Cannabis business may be on Wall Street’s radar, it’s not necessarily for good reasons.  Both are still considered speculative and are not investable asset classes; they are not categorized as alternative investments in the stock market, and may not ever be.  However, Blockchain technology is something that many financial institutions are investing in due to the security benefits it provides.  Bitcoin doesn’t pay dividends, the tokens have no cash flows, and there is no way to determine demand growth or provide valuation measures.  And then there is cannabis, which still has its hands full with the federal government regardless of states deciding to go rogue on allowing sales to the public.

Cryptocurrency exchanges (such as Bitcoin) have come through technology development, and are virtual, digital (website) exchange that can reside in any country, or countries, and managed by multiple individuals.  Traders have to be ‘verified’ but are not limited to number of times they trade, etc.; as traders in the US market are.  There is no regulation, and no knowledge of who the ‘currency trader’ is.  For this reason, cryptocurrency investing may result in a significant loss of capital, and just like other markets has no guarantee of profit.  Time and technology development will weed out fraudulent cryptocurrency exchanges, but we advise waiting to see how the US financial sector will view cryptocurrency in the coming year.

Last month the State of California legalized the sale of Cannabistwhich has increased Interest in this alternative investment.  The resulting media commentary regarding other states following California may be speculation, but California is being viewed by many Americans as being leader in opening up of cannabis business nationwide.  Regardless if a state allows medical or recreational cannabis sales, one thing is clear; investing in this type of business may just go up in smoke!  Because Cannabis and drug sales are on the ‘naughty list’ for traditional lenders, many dispensaries look to private investors.  There is no regulation or legal process if your lenders default; this business is viewed as illegal at the federal level which is why we caution you on this alternative investment.

Alternative investments may have a place in your portfolio with other types of investments that are meeting a specific need you have.  If you are curious about alternative investments, you are invited to make an appointment to discuss them.  Together we can determine which ones may be a legitimate alternative that meets an investment objective you have.

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Be More Money Savvy in 2018 While Saving for Retirement

Start Saving More NOW!   If you started saving for retirement early, chances are you’ll hit your retirement goal.  If you’re like most Americans, you didn’t start right away and are playing ‘catch-up’! Don’t put off saving later, start now!  If you didn’t start in your 20s, it’s time to start maximizing your savings now because you still have time to make a difference in what you will accumulate.

Don’t Spend More Than You Make.  Overspending, credit card debt, and debt in general, will hamper your saving if you’re putting all of your extra income into paying down debt.  The important thing is to not live beyond your means; easier said than done, right?  Controlling your spending and developing a budget should be a priority for you in 2018.  https://www.fool.com/retirement/2017/12/30/how-to-start-saving-money-in-2018.aspx

Max Out Your Retirement Contributions.  Roth IRA contributions are $5500 if you’re under 50, $6500 if you’re over 50.  In your Pre-Tax retirement accounts, max your contributions at $18,500 and if you’re over 50, $24,500. https://www.cbsnews.com/news/irs-allows-higher-retirement-savings-account-limits-in-2018/

Save Extra Unexpected Money.  Maybe you’ve received a bonus at work or inherited money recently.  Instead of spending it on things you don’t need, or a lavish vacation, save some of it!  And for those of you expecting a tax return, add it to your emergency fund, start or max-fund a Roth IRA, or invest it into another investment.  If you have debt, pay it off using that refund!

Get Your Employer Retirement Account Match.  Make sure you’re putting enough into your retirement plan at work to get the matching dollars from your employer.  If you’re not saving enough to receive a matching contribution from your employer (commonly a 2-4% match), you’re throwing away ‘free money.’ http://money.cnn.com/2018/01/04/retirement/better-retirement-savings/index.html

Take Some Risk.  If you have all of your retirement savings in an interest only account, you will not keep up with inflation in retirement.  Visit with your financial advisor about having some of your portfolios in the stock market, after having an investor profile completed.

Be Aware of Tax Implications.  Part of your retirement savings should be in tax-sheltered accounts.  Discuss account options and tax benefits with your financial advisor and your tax professional so you fully understand how taxes will affect your retirement savings now and when you retire.  If you’re anticipating retiring in the next 1-2 years, this is crucial as many new retirees don’t realize that their tax brackets may change as a result of liquidating too much from their pre-tax retirement accounts the first five years of their retirement.

Monitor Your Investments.  Always meet for a financial review at least yearly to determine if your risk tolerance, fund choices, and timeline until retirement are still on target.  Getting financial help is never a bad investment.  https://www.nytimes.com/2017/12/03/smarter-living/6-ways-to-be-better-at-money-in-2018.html

Let’s set up a time to discuss your financial goals for 2018!

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4 Must-Know Components to Successful Retirement and Healthy Aging

With a one in five chance of living beyond our 90th birthday, planning for a successful retirement and healthy aging should be something we all do.  Retirement is now considered a time to be active where people stay socially connected, continue working in some capacity, and are choosing to be involved in their communities.  Retirement today has changed from what ‘retirement’ meant even fifty years ago.  Retirement use to be the non-active part of one’s life, where you disengaged from your previous lifestyle.

Today,  more and more studies are finding that people in good health have a positive view of retiring and plan for it, while those in poor health don’t think they’ll make it to retirement and don’t save for retirement.  The Transamerica Retirement Study 2017 partnered with AEGON to study the correlation between good health and retirement success. This study identified that financial planning along with staying healthy led to a greater chance of achieving what’s considered a ‘successful retirement’.  Successful retirement and healthy aging has the following components:

Being Ready to Retire.  The individual has the ability to decide when they want to retire from their ‘profession’ and welcomes it once they determine they’re ready.  They feel they have achieved all they want to in their career, and look forward to the next chapter of their life.

Leisure Time and Working.  The retiree balances their schedule of work and leisure and views working as something they choose to do because they enjoy it, not because they have to.  Their work may be a part-time paid position, or volunteering that benefits their community in some way.  Work becomes a leisure time activity for them.

Financial Security.  Because the individual has been saving and planning for retirement, they feel financially secure and don’t stress about running out of money in retirement.  They work with a financial advisor and revise their plan as they age while liquidating their retirement assets.  They have a ‘spending down’ plan and a strategy to offset inflation as they age.

Health.  The plan to have a healthy aging needs to start long before retirement.  Retirees that are enjoying good health in retirement have taken steps along the way; good nutrition, exercise, no smoking or excessive alcohol use, and monitor their health with yearly checkups while maintaining a healthy weight.  Healthy aging includes insuring your assets will not prematurely liquidated through purchasing insurance solutions prior to retirement and during retirement.

Having a successful retirement and healthy aging starts long before you’re considering retirement.  Please contact our Las Vegas Financial Advisory to visit regarding your plans for a successful retirement and healthy aging.

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The New Tax Plan and You

If you’re like some Americans, you may be wondering how the new tax plan is going to affect you.  To say “the new tax plan isn’t going to affect me” may be an incorrect statement; sooner or later the new plan will change something in your financial life.  It doesn’t matter if you’re on ‘one side of the isle or the other’ or in the ‘middle,’ there will be changes.  None of us know how the new tax plan will affect retirement savings plans, personal deductions, your ‘take-home pay,’ or our country’s deficit in the future.  Here are the new tax plan’s features to take into consideration as you plan for your situation:

401(k) Retirement Savings Plans: Future legislation will determine if 401(k) plans remain pre-tax contribution accounts or become more like current day Roth IRA accounts where contributions are after-tax and grow tax-free.  This is being proposed (and will be considered) as a way for the US government to bring in more money to offset the tax cuts in this new tax plan.

Secondly, House Republicans are considering capping the 401(k) worker contribution limit to $2400 per year when it takes effect.

Retirement Pre-Tax Savings Recommendation:  Max out your pre-tax retirement savings contributions for 2017, 2018, and until this change takes effect (if it does).  Regardless, save, Save, SAVE because you should never rely on the government to take care of you and solve your retirement problems.

Mortgage Interest Deduction:  Currently mortgage interest deductions are limited to deducting interest on a $1 million and under loan.  The new tax plan cuts the maximum loan amount in half to a $500,000 and under loans, affecting mortgage holders that live in high-cost housing markets and millennials as they enter home ownership.

Mortgage Interest Deduction Recommendation:  Avoid multiple loans and re-financing as a tax-saving strategy and get that home loan paid off as soon as you can.  Carrying mortgage debt is not a benefit to you and especially not for those with notes over $500,000 with this plan.

Take Home Pay:  With changes to individual tax brackets, the new plan moves from seven to four tax brackets.  There has been a lot of hype on this proposal; savings will be for child-less, single Americans if they itemize their taxes. Some lawmakers believe this will hurt families who have benefitted under the current tax brackets.  The US doesn’t have a flat tax rate; our taxes are calculated on a progressive scale. No one knows if we will have more take-home pay due to this plan, or will ‘pay in’ when we file our taxes.

New Tax Plan Personal Income Tax Recommendations:  Visit your tax professional to determine how the new tax plan will affect you.  Double check to validate you are maximizing your personal with-holdings or are with-holding enough to avoid paying in when you file.  Until this one takes effect, we really don’t know what it will do to paychecks, which is why it is essential to work with a tax professional.

Discussing your financial plan, including taxes, with a financial professional is never a bad idea. We highly recommend it. If you’d like your questions answered, give our Las Vegas financial advisors a call today.

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Filial Laws: Avoid a Financial Crisis for Your Family

If you’re not familiar with Filial Laws, it’s time you take notice of what they are and how these laws can impact your financial future.  A few decades ago, our US welfare system would cover nursing home and medical costs for someone without the financial resources to so.  Back then the children were ‘off the hook’ to pay, and in some cases, beneficiaries still had access to their parent’s assets and avoided surrendering assets for unpaid bills.  Many people today still think that is current policy; it’s not and the likelihood of you paying for your parents or another family member is a real possibility.  Filial laws take into account the situation of the individual as being ‘impoverished’ and don’t always apply to someone who is elderly.

Filial responsibility is ‘A duty owed by an adult child (and siblings) to care for ‘necessities of life’ for their parents.  This means payment of medical bills, nursing home care, and costs to help the individual.  Under filial laws, there is the possibility that the duty can be extended to other family members besides the children.  In other countries, these types of laws have been enforced for generations and are a part of a culture where ‘family takes care of the family’.  As of December 2017, 30 states in the US have Filial Laws. 

Because you’re planning financially for yourself as you age, you also need to consider planning for your parents.  Have a conversation with them regarding long-term care insurance and/or, if they have the resources to pay for care.  This may lead you to the conclusion to cover the costs yourself to avoid being sued.  If you’re a pre-retiree or retired, you need to plan for long-term care in order to avoid passing the bill for your care to your children or grandchildren.

After decades of this law not being enforced, and with the aging population, our society is seeing more people entering the nursing home that either doesn’t have the financial resources or didn’t plan for it. Filial Laws come into play when an individual is already receiving state support, and have a medical bill or nursing home bill they can’t pay, or their cost of care is exceeding their Social Security Benefits, they don’t qualify for Medicaid, and the caregiver (hospital/nursing home) believes that the patient’s child has the money to pay the bill.

As your financial advisor, I recommend discussing your plan to pay for your care or a family member’s care, so your assets are not depleted prematurely due to Filial Laws.

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New Year, New Plan

The Starting of the New Year has many of us making resolutions to make changes in some part of our lives.  Whether it is health or money related, starting the New Year off with a plan feels good!  Even though 80% of New Year’s Resolutions fail by the end of first quarter, having ‘resolutions’ is a positive thing; keeping them helps you change. https://www.nytimes.com/guides/smarterliving/resolution-ideas  These proven steps will help you in your planning process to keep your resolutions, and meet your goals:

  1. Keep it simple.  Make resolutions easy (not complicated) with a simple plan, and take ‘baby steps’ as needed.
  2. Chart it out.  Like a financial plan, write down your resolutions or chart it so you can see your progress.  Secondly, plan a start date and an ending date for your resolution (goal)
  3. Make relevant and realistic resolutions. If you intend to save more, set up automatic savings options out of your paycheck or bank account.  If you plan to exercise each day, start out with a few days a week that may be more realistic for you until your exercise becomes habitual.
  4. Believe you can achieve your goals.  If you intend to reduce your debt this year, believe in yourself and resolve to quit spending.
  5. Share it.  Sharing your resolutions with someone you trust that will keep you on track makes you accountable.  Tell others about your progress, and you’re failures when you fall away from your plan.

If you haven’t drafted your list of 2018 Financial Resolutions, it’s time to get started.  Without goals being met it may be difficult for you achieve long-term financial goals:

1.  Get Out of Debt.  Carrying a balance on your credit cards will cost you in the long run.  The average US household has $8377in credit card debt, and 38% of households carry that debt long-term. 

https://www.cnbc.com/2017/05/17/how-much-the-average-us-family-has-in-credit-card-debt.html

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2.  Follow A Budget.  People that are aware of their spending are aware of how much they need to save for retirement and other financial goals.  Without budgeting you are more likely to ‘splurge spend’ more than you should.    https://www.thebalance.com/reasons-to-budget-money-2385699 

3.  Save and Invest.  An estimated 69% of Americans have less than $1000 in a savings account, and roughly one-third have zero in retirement savings.  If this is you, make it a priority to increase your savings (and have an emergency fund) and retirement savings.  If you are already saving, increase your savings at your financial institution and your retirement savings contributions.  http://www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx

If you need help or have questions regarding your financial goals for 2018, contact our Las Vegas Financial Advisory office for a meeting.  Let’s make 2018 a great financial year!

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What’s New for Retirement Plan Savers in 2018?

The answer to that is not much, but the allowable pre-tax contributions in most traditional retirement plans will see a small increase for 2018.  Here’s what you need to know if you plan to contribute the most you can in 2018 into your pre-tax retirement accounts:

401(k)s, 403(b)s, and most 457 plans will see a $500 allowable increase for those under age 50 to $18,500.  The ‘catch-up’ provision for those older than age 50 will stay the same at $6000 for 2018.  However, if you don’t turn 50 until December 31st, 2018, the IRS will still allow you to make your $6000 extra contribution in 2018 (of course).

Defined Contribution Plan contributions will increase to $55,000.

SEP IRAs and Solo 401(k)s (for the self-employed and business owners) goes up to $1000 to a limit of $55,000 that they can contribute as an employer in 2018.  The contribution amount is a percentage of salary, so make sure you consult your tax professional on the allowable limit for 2018 before you contribute.

SIMPLE IRAs will not have an increase.  The max contribution remains at $12,500 with the catch up provision for those age 50 and older still the same at $3000 per year.

Defined Benefit Plans are for those high-earning corporate self-employed and will have an increase of $5000 to a maximum contribution limit of $220,000 in 2018.

There is a lot of adverse reporting and fear-mongering in the media about what the current administration and Congress may or may not do to pre-tax retirement savings.  Regardless of political drama that may or may not lead to IRS changes affecting savings vehicles, one thing is clear- you need to save for retirement regardless of how it may affect your taxes.  If you would like to discuss your pre-tax retirement accounts, or how drawing down your retirement savings may impact you, please contact our Las Vegas financial advisory office for a meeting.

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Women and Retirement: Overcoming Savings Obstacles – Las Vegas, NV

Women in the US today are better educated and have more opportunities than their mothers and grandmothers.  But even though women have more opportunities than in the past, they face obstacles that can impact their potential for retirement savings.  Lower pay than male counterparts, time off from their career to care for children or another family member, and longevity are all factors affecting a women’s ability to save and have enough to live off of in retirement.

Women are great savers when they are participating in a retirement savings plan such as a 401(k) or similar offering, but the participation rate is less for women than men, and they save 4% less than their male counterparts.  Women (56% of the current working) are more likely to ‘guess’ at their retirement income savings needs and believe that $500,000 is enough in retirement.  Men are less likely to guess as reported in the 2017 Transamerica Center for Retirement Study and reportedly used a financial calculator to arrive at their retirement savings number.

Women participating in the study identified things that they felt would help them to save more, regardless of obstacles; having access to accurate information regarding saving and investing for retirement, greater tax incentives for participating, a financial advisor, and a greater sense of urgency to save.

Interestingly all women, and especially Baby Boomer women, expressed not knowing enough about social security benefits.  Many cited concerns about Social Security not being available to them when they retire and worries over the retirement priorities of the President and Congress.

What can women do to overcome savings obstacles?  Start by taking charge of YOUR financial future:

  1. Start saving and get into the ‘habit’ of saving each month
  2. Participate in a retirement plan at your employer, or another plan type if there isn’t one.
  3. Find an advisor you trust and work with them to develop a financial plan.
  4. Become involved in your family finances, not just trusting someone else to ‘take care of it.’
  5. Get educated about investing for retirement
  6. Have a backup plan; death, divorce, and being unable to work before retirement is a reality check

If you have concerns about the obstacles you may be facing regarding saving for retirement, contact our Las Vegas Financial Advisor office to have a conversation and develop a plan that meets your personal needs.

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Do You Know What You’re Paying For? (Las Vegas, NV)

Much is being said regarding the changes happening in the financial services industry right now.  You may have heard some news stories through the media regarding disclosure, compensation, and fiduciary responsibility.  Those that are already disclosing fees, advisor compensation, and are a fiduciary are already operating on these parameters; those that are not conducting their business in this way are opposing changes to the industry.  Unfortunately, it has left some financial clients confused.

As a client, you have the right to choose the model works best for you when you choose a financial professional to work with.  However, you need to be informed of the differences and should feel comfortable asking questions pertaining to fees on your accounts, how much your financial professional makes from you, and if they operate as a fiduciary.  Here are some key differences that impact what you pay for in working with your financial professional:

A Financial Advisor- Is a fiduciary that has a legal and moral responsibility to take care of your assets and act in your best interest; this is a financial advisor (person) who works for a Registered Investment Advisor firm and holds a Series 65 or 66 license in addition to other licenses.  They are compensated for the advice they give and the management of your assets, based on a percentage of assets under management.

A Registered Representative (Financial Representative) – Is a professional who is compensated based on the products they recommend when you purchase those products or buy or sell shares in your accounts.  They typically work for a broker-dealer or an insurance company and represent the products those two entities sell.  They may or may not offer financial advice and can’t charge for it.  The license they hold that designates them as a representative is a Series 63 in addition to others.

Many financial professionals have numerous securities licenses that allow them to work with specific investment vehicles and may choose to have advanced designations obtained through additional specialized education.  All licensed individuals need to complete continuing education on-going to remain licensed.

When it comes to fees on your account, there is no such thing as a ‘fee-free’ investment.  You will either pay fees upfront when you buy a product or shares or pay fees that are included in the assets under management through your agreement with your financial advisor.  Regardless, there is a way to compare fees of both financial professionals which should be disclosed to you when you decide to do business with that person.  All you need to do is ask so that you know what you’re paying for.  We welcome your questions regarding how we are compensated for working with you.

Contact our Las Vegas Financial Advisory office to learn more.

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Social Security: Will You Get Your Money? (Las Vegas, NV)

If you are currently receiving Social Security retirement benefits and it is a big part of your retirement income, congratulations! You are the second or possibly third generation that has benefited from what was initially an excellent plan for workers in our country.

If you are part of the generation that is 45 to 55 years old today, this benefit will be much different for you. Under current law, people in this generation have had their retirement age estimator benefits changed to keep up with the demand for benefits currently burdening our Social Security system. We have fewer workers paying into the system than earlier generations due to an aging population, lower birthrate, and other economic factors.  Those that are paying into social security now are benefitting those individuals receiving benefits currently; the money is not kept in an account for you for when you retire.  Secondly, social security tax collected now also benefits Medicare recipients.

The Social Security website’s Retirement Estimator is for those who are applying for or receiving benefits. For those who are not in that group, the ssa.gov website page provides the following disclosure and direction to another estimator calculator:

We can’t provide your actual benefit amount until you apply for benefits. And that amount may differ from the estimates provided because:

  • Your earnings may increase or decrease in the future.
  • After you start receiving benefits, they will be adjusted for cost-of-living increases.
  • Your estimated benefits are based on current law. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 77 cents for each dollar of scheduled benefits.
  • Your benefit amount may be affected by military service, railroad employment or pensions earned through work on which you did not pay Social Security tax.

So what can you do regarding your retirement benefits possibly being decreased when you retire? Do not include it as part of your retirement income. Plan to make up the difference through other investment options and account types. If you receive your anticipated Social Security Retirement benefit you will have more retirement income than you planned.

I can provide you with a plan that includes additional options to offset the shortage, which is estimated to be 25% less in the future compared to the generation currently receiving benefit payments. For further information on updates to Social Security, familiarize yourself with the Board of Trustees 2017 Report and the Social Security Administration website.

Retirement Hands Link Financial Advisory

Caregiving: A Decision That May Impact Your Retirement

Many of us have been a caregiver while we were raising children, now some of us are caring for a loved one out of necessity as the older family member is no longer able to care for themselves.  A recent 2017 Transamerica Center for Retirement Studies report indicates that 42% of Generation Xers and 42% of Baby Boomers are caring for a parent, and 57% of Individuals born before 1946 are currently caring for a spouse or loved one.  Care recipients suffer from a wide range of conditions, with half having a permanent one.  The five most common conditions are arthritis, dementia/Alzheimer’s disease, high blood pressure, diabetes, and depression and or anxiety.

Caregivers help with a wide range of duties such as household chores, social and companion needs, health-related and personal care, and managing finances.  Caregivers are also the bridge between Medicare or Medicaid services, and many learn medical and nursing tasks from professionals to better care for their loved one.  If you are caring for an adult family member (other than a spouse), discuss what legal documents are required to represent that individual legally with a professional.

Where does that leave the caregiver in regards to employment and saving for retirement?  The report indicated that half of caregivers are employed with many trying to maintain full time employment.  However, over 76% reported they have had to adjust their hours or are planning to leave their jobs.  Many in the survey expressed that they didn’t consider the financial implications of becoming a caregiver.  If you are a caregiver or think you may become one for an adult family member, this should be a part of your financial planning process.

In the same way that a financial plan recommends reducing debt and saving more for retirement, a financial plan can be done to show working year’s savings and years of no savings and what that may mean for you.  When you become a caregiver, not having to liquidate savings to provide care to someone will make a significant impact on your retirement.

If you think you may have to care for someone and leave your job, having no debt is essential.  Becoming a caregiver is a life-changing decision and remember to plan for yourself.  Your plan should include considering long-term insurance so that when you need care you have the resources to do so.  If you are or may become a caregiver, please contact our Las Vegas Financial Advisory office for a meeting so that we can help you financially plan for this phase of your life.

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Planning to Invest in a Vacation Home Using the IRS 1031 Exchange Rule? – Las Vegas, NV

You may be considering investing in a vacation home as part of your retirement goals or just because you feel it’s a good investment.  With real estate prices back to where they were pre-2008 in most of the US, those looking to add a vacation home to their portfolio are considering buying before prices rise.  The good news is that the favorable home prices are helping the housing market recovery. Before you invest, make sure you know the tax advantages (or disadvantages) a vacation home investment may bring you if you plan to sell a property to fund a vacation home.

Understanding 1031 exchanges can make the difference between paying thousands of dollars in taxes when you sell one piece of property to buy another one, such as a vacation home.  The property must be of ‘like-kind,’ in other words a business or investment property exchanged for another business or investment property.  Because this can be complicated, you consult a tax professional if you are considering a 1031 exchange transaction.  A sale and purchase of this type is a business transaction requiring different Tax ID numbers assigned to each property.  A qualifying exchange allows you to defer capital gains from one property if you buy a comparable property within the federal prescribed time limit.  Additionally, the property sold and the property purchased must be in one of the 50 US states, with territories of the US not included in this provision.

If you are considering a 1031 exchange, be advised that if our US law-makers approve a reduction in personal tax brackets, the additional taxes needed to offset the change may result in the 1031 exchange provision being eliminated at some point which may impact you in the future.  For now, the 1031 tax provision is in place for those that invest in real estate and seek tax benefits on those investments.

For those that purchase a vacation home as an additional property and don’t use the 1031 exchange provision, you still need to do your due diligence on understanding property tax rates for non-residents, vehicle licensing requirements, and other non-resident fees that may impact your vacation home purchase.  If you add a vacation home to your portfolio keep your advisor informed so that he/she can add it to your financial plan and asset information.

If you’d like to discuss this and/or any other investment topic, please contact our Las Vegas Financial Advisory Office

Financial Planning Las Vegas

It’s Time For Fourth Quarter Financial Reviews – Las Vegas, NV

Here we are in the last quarter of 2017!  Reviewing your retirement accounts is essential, but do you realize the benefits of evaluating at the end of the year? Fall tends to be a time many people start thinking about next year and what they want to accomplish.  The benefits of a fourth-quarter review https://www.forbes.com/sites/johnfitzsimons/2017/05/25/a-question-of-balance-how-reviewing-your-investments-can-dramatically-boost-your-returns/#437c7536106d  are many:

Get on Top of Your Taxes- Your tax professional and financial advisor may suggest an extra contribution into pre-tax accounts by the end of this year.  If you didn’t maximize contributions you still have time this quarter to make a one and lower your taxable income.

Make Your Bonus a Bonus- End of year bonuses can be deposited into your retirement account at your request as a pre-tax contribution.  If you receive a bonus with taxes already taken out, consider adding it to your other after-tax retirement accounts.  Fourth quarter is when many companies announce end of year bonuses.  If you didn’t plan on extra money, use it wisely to increase your retirement savings or reduce debt.

Plan for Next Year- Start the New Year strong with a financial plan in place after our review.  You’re now in position to start your plan immediately next year.  People with a written financial plan are more likely to follow and monitor their plan throughout the year.

Review This Year’s Performance- Reviewing fund and stock performance throughout this past year helps to make portfolio changes for next year.  If your choices didn’t perform to our expectations, it’s time to re-evaluate.

Rebalance Yearly- Over the year portfolios may become unbalanced due to changes in the market value of your funds or stocks.  By rebalancing in the fourth quarter of the year, you’re ready to start the New Year with your portfolio reflecting your investment strategy and tolerance to risk.

Give our Las Vegas office a call to set up your end of the year financial review to prepare your portfolio for 2018.

Millennial financial planner las vegas

10 Tips for Millennials (and Anyone) When Selecting a Financial Professional – Las Vegas, NV

If you are a millennial you may feel like you have a target on your back. Local financial advisors, stockbrokers, bank representatives, CPA firms, and online firms constantly solicit you. You have a bewildering number of choices and making the wrong selection decision can undermine the achievement of your financial goals.  Millennials are considered the youngest group of investors and your potential to accumulate retirement assets is greater than someone older than you, based on your timeline for investing as well as being positioned to inherit from Baby Boomers.

Here is a top ten list to assist you when selecting a financial advisor who will influence or control your financial decisions. Always focus on the documentation of information that describes their credentials, ethics, business practices, and services. The ten most important types of information that you want documentation on are:

  1. Full transparency. The advisor must be willing to provide the factual information you need to make the right decision.
  2. Degrees from accredited colleges and universities. There are no minimum education requirements for financial advisors.
  3. Applicable financial service experience. There are no minimum experience requirements for financial advisors.
  4. Industry certifications.  Check online to validate the quality of their certifications.
  5. Compliance record. Avoid advisors who have a history of client complaints.
  6. Fiduciary Status. Fiduciaries are held to the highest ethical standards in the financial service industry.
  7. Method of Compensation. The appropriate to pay for financial knowledge, advice, and services is with a fee.
  8. Expenses. You want full disclosure for every penny of the expense that is deducted from your accounts.
  9. Ongoing services. You need ongoing financial advice and services, not a one-time sales event.
  10. Performance Measurement Reports. You should request monthly or quarterly performance reports that document your results.

Discussing these ten tips should result in your advisor providing you with this information.  If you do not receive the information you request, you may want to reconsider who you choose to work with.  Our firm welcomes questions from our investors and potential investors, and believe that transparency is key to your financial success.

Health savings las vegas

Health Savings Accounts Are the New Retirement Savings Account – Las Vegas, NV

If you aren’t utilizing your health savings account (HSA) at your employer, you’re missing out on a great way to save for retirement health care expenses. HSAs allow you to set aside money to be used to pay for medical expenses now during your working years, and later in retirement.  HSAs allow you to keep the unused money well into retirement.  No longer is HSA money ‘forfeited’ if unused at the end of the calendar year.  The only exception to HSAs is that once you enroll in Medicare, you’re unable to contribute to a health saving account.  Benefits of HSAs include:

  1. Contributions to HSAs are tax-deductible
  2. Contributions receive capital gains, dividends, and interest, which is tax-free
  3. You pay no tax on withdrawals for medical expenses

HSA qualified expenses include co-insurance, dental, vision, prescriptions, insurance plan deductibles, and other expenses not covered by your health insurance.  When you retire, HSAs can be used to cover items that are not covered by Medicare.  If you have questions about what is covered under your HSA plan, and how much you can contribute to your HSA each year, contact your HSA provider.

As you change jobs during your working years, it is possible that your employers may have different health savings account plans.  When you leave an employer the HSA funds left over are yours and can be rolled over into your new employer’s plan.  HSA funds can only be rolled over into your new employer HSA, unlike a 401(K) that can be rolled over into an individual IRA.  As you age, you don’t want to have numerous HSA accounts left at former employers, so start bringing them with you as you change jobs!

Part of financial planning involves planning for expenses in retirement and trying to determine a retirement budget.  With the rising cost of health care, putting aside extra into an HSA plan now to use later in retirement makes sense.  Currently, the cost of Medicare is deducted from beneficiary Social Security payments, and retirees still need to carry supplemental insurance for dental, vision, prescriptions, and many other things that Medicare doesn’t cover.  Start saving now in order to have money in retirement to cover these supplemental insurances you will need to pay for.

If you have any questions regarding HSA accounts or any other employer benefits such as your retirement account, feel free to contact our Las Vegas Financial Advisory office for an appointment.

personal info cyber attacks las vegas

Personal Information Cyber Attacks: What Can You Do? (Las Vegas, NV)

What is a personal information cyber-attack?  A cyber-attack is a type of criminal activity where an individual or an organization target computer information systems, networks, or personal computer devices by various means through ‘hacking’ into the computer infrastructure.  Cyber-attacks are used to collect information that can affect an individual, or other entity such as a business, which leads to identity theft and identity fraud

Identity Theft is when personal information is taken for use by a criminal without permission.  A common theft is the use of a person’s social security number, date of birth, and even personal address.  Identity Fraud is when that information is used to make purchases, gain employment or healthcare, open or modify existing accounts.  All of these are damaging to one’s personal credit and the individual may not be aware of the fraud until being contacted by a creditor.

Although there may no way to prevent a cyber-attack from obtaining your information, there are a few things that may reduce your risk:

  1. Access your credit report and check for errors.  Under Federal Law, you’re entitled to one free credit report per year from one of the main credit reporting agencies which are Experian, Equifax, and TransUnion.  You can log ontowww.freecreditreport.com, which is maintained by Experian, and select that you would like to receive your free report containing information from all three agencies.  The information you receive from all three agencies should match.  If not, you will need to file a dispute with the agency that has the incorrect information.
  2. Close credit card accounts that you are not using.  Leaving accounts open with a zero balance is now considered a risk because of your potential to max out that available credit, or have a cyber thief do it for you.
  3. Pay for on-going credit monitoring.  Alerts are sent to you via text message, email, or you may receive a call from your credit monitoring serve when a new account is being opened, or when there is a change to your credit report.

For more information regarding the safety of your investment portfolio, feel free to contact our Las Vegas Financial Advisory office.

retirement planning las vegas

5 Crucial Factors That Impact Your Retirement

Retirement can be risky business http://www.investopedia.com/articles/retirement/08/post-retirement-risks-outlive-assets.asp  if you don’t consider all the factors that can impact your retirement during your planning process.  Although it’s hard to know what will happen in the future to you or your investments, these are the main things that should be addressed in your retirement portfolio:

#1 Longevity.If boomers live into their 90’s and Gen X-ers live to a hundred, how long will you live? Medical science and healthier life styles will keep driving this number up. Depending on your retirement age, in the future you will spend more time retired than you did working. 

Medical science has impact retirement and will continue to impact how long people may live in an assisted living facility. If the cost of better quality facilities keeps increasing, what will they cost in 2040? For this reason alone you can never have too much money for your retirement years. 

#2 Investment Horizon.  You may have 30 to 40 years until you retire. One of your biggest risks is procrastination. Will you start saving when your children are older or out of college, or are your priorities the big primary residence and a vacation home? You can never get the lost years back which is why retirement planning and saving should start early.  Having the personal discipline to stick to a retirement savings plan will impact your retirement along with your time horizon. 

#3 Performance.  After you achieve critical asset mass, performance is your number one source of new assets. In fact, it may have 3-5 times the impact of savings. A critical question is who produces the performance? Do you make your own investment decisions? Do you invest in a mutual fund family?  Having a financial plan in place and working with a financial professional regularly to monitor performance will greatly impact your retirement assets lasting throughout your life.

#4 Investment Risk.  If you don’t take risk when you are young, when should you? Investors in their 30’s and 40’s should be heavily invested in the stock market. Yes, stocks are riskier than bonds, but stocks also outperform bonds over longer time periods, just not every year. The relationship between stock, bond, and money market performance is based on Capital Market Theory. You can afford to take substantial risk if you have more time to recover from bad year.  However, you need to be comfortable with the risk associated with your portfolio or adjustments need to be made.

#5 Investment Expense. You get what you pay for. There are no ‘free lunches’ when you invest your assets in the securities markets. And, every dollar of expense is one less dollar you have available for reinvestment and your future use. You should watch investment expenses very closely. This expense could add-up to hundreds of thousands of dollars during your life time.

If you would like to visit to discuss all of these retirement risk factors and how they may impact you, contact our office to schedule an appointment or review.

Where to invest las vegas nv

What Should You Invest In? It’s All About YOU! (Las Vegas, NV)

As financial advisors, many times we are asked by clients what they should invest in.  It’s not always an easy answer, because our answer to clients depends on many things.  What you should invest in is personal to YOU, and should take into account your personal situation.

However, one easy answer to ‘what should I invest in’, is to invest in your retirement.  Participate in your company’s retirement plan to the maximum allowed contribution each year.  Once you are on your way to maximizing your 401(K), the next investments you choose are part of a process that takes into account many factors.

Your tolerance to market risk will be determined through your completing a ‘risk tolerance profile’.  Once we determine how you feel about losing value of your investments, and consider your timeline for needing to use your investments for specific purposes, we can start to discuss types of investments that fit your personal situation.  We will also discuss affordability and fees associated with those investments, and the suggested allocation to specific fund sectors.

‘What should I invest in’ is always the beginning to a discussion about ‘You’.  As we work together, periodic meetings should involve rebalancing, reassessing your investments, and discussing your goals and life events.  If you want to know what you should invest in, let’s get together and start the discussion, or revisit what you’re currently invested in.

Estate Planning Las Vegas NV

Estate Planning 101 – Las Vegas, NV

Estate Planning 101

Basic estate planning is something that everyone should do, regardless of your age, marital status, and if you’re a parent or not.  In the US, the statistic is staggering that only 40% have a will or have an estate plan.  Of those that are older Americans, 81% of those age 72 and older, and 58% of ‘Boomers’ have estate planning documents in place.  However, many in this age group have not planned how to leave their estate, which is a common trend in our country.  Estate planning should include the following elements, and a formal estate plan should be drafted by an attorney qualified in this area:

A Will- A will determines where assets will go that don’t have a beneficiary listed.  Common items listed should include your home (if paid off), cars, collections, even household items.  Bank Accounts and even brokerage accounts with no beneficiary listed would be included in your will and estate plan, with the terminology appropriate to these types of assets.

An ‘Executor’ of Your Estate- Commonly this is a relative or friend, but in more complex cases where there are substantial assets, a professional manager may need to be considered.

A Guardian’ for your Minor Children- If you have a young family, your estate plan should include who you would like to care for your children if both parents are deceased.  Without this directive, the state of your residence decides, and your children may be otherwise be placed with someone you wouldn’t prefer.  In cases of a child with special needs, consideration should be addressed and planned for care of the child now, and after age 18 throughout their adulthood.

Medical Power of Attorney- Commonly, spouses list each other as medical power of attorney, but you have the full authority to list anyone you choose.  A Medical Power of Attorney makes medical decisions for you when you’re incapacitated to do so for yourself.

Financial Power of Attorney- This individual, or individuals have the authority to pay your bills, and manage your finances for you, if you are unable to yourself.  This is important because if you require extended medical or nursing care, they pay the bills so you’re able to remain in that facility.  Without planning and having a Financial Power of Attorney named, your assets are seized and liquidated by the state, even if you have the assets to pay.

A Trust Document- Living Trusts allow you to pass assets without going through probate, and allows someone else to handle your financial affairs if you’re unable to.  A trust document names the ‘trustees’, or who the trust benefits, as well as a successor trustee who will take over when the trustees are unable to manage their own affairs or pass away.  This is a key element in estate planning.

Although these elements are the main parts of an estate plan, they may not be all you need depending on your personal situation.  When working with an attorney, tax planning professional, and financial advisor, include all of them in your estate planning process.  This will ensure that your plans are carried out the way that is best for you and how you intended.  If you have any questions regarding getting started on an estate plan, feel free to contact our office to set up a meeting regarding prepping financial documents or obtain referrals for attorneys specializing in estate planning in our area.

insurance services las vegas

Why and When is Insurance Appropriate? – Las Vegas, NV

The Role of Asset of Protection and Your Investments

Protecting your assets is directly tied to protection of everything, including you, through insurance.  Without proper protection your investments and assets can face premature liquidation.  Insurance in its many forms serves to offset risk, whether it’s health insurance, home owners insurance, or any other type of liability protection and income replacement.  This article is not intended to ‘sell’ you the idea of insurance, but outline why and when it’s appropriate.

Many of us know the foundation of insurance is to protect ourselves, and those we love.  The insurance many of us associate with this protection is life, medical and disability, homeowners, and auto insurance to name a few.  But have you ever considered the ‘why’ behind insurance to protect assets?

Because none of us can control getting sick, hurt, having an accident, or experiencing a fire in our home, planning for expenses or loss is a good idea. Without proper insurance, you are more likely to liquidate your assets and even your investments if you don’t have proper insurance coverage in place.  If you haven’t considered the reason to have insurance, or had the discussion with your financial advisor, you may be missing something important in your financial planning process.

Additional reasons to have insurance, besides the ‘protection’ aspect, is for estate transfer, business buy-sell, and other tax planning strategies where insurance may be a solution to help protect asset liquidation.  An example of this is insurance used for estate planning and asset transfer purposes, where insurance benefits offset the taxes that your beneficiaries may have to pay for receiving the proceeds of your estate.

Liability coverage to protect your assets is important, and even more so if you’re a high net worth individual.  If you are, consult an attorney regarding setting up business entities to protect certain assets.  An example of this, would be if you own an airplane for business and want to protect your other assets in case of an accident resulting in multiple injuries or deaths related to your airplane.  Sheltering your other investments by having the ‘airplane’ as a separate business can accomplish this in most situations.

If you’re a business owner, and plan to transfer a business to a family member or key employee, part of the transfer can be paid through insurance proceeds.  To fully understand insurance used for this purpose, or for any tax planning strategy, consulting a tax professional and attorney is recommended.

As your financial advisor, understanding if your insurance coverage is appropriate and enough will be a part of your financial planning process and help me make recommendations for you.  Regardless of where you purchase your insurance, ensuring you have it is one way to protect all of your assets and your investments.

retirement planning las vegas

How Do You Envision Your Retirement Dream? – Las Vegas, NV

Regardless of your age, envisioning your retirement is one way to get started on a plan for what you want to do when you’re able to retire.  If you’re already retired, maybe you’re ready to take on a new challenge and change what you’re currently doing.  If you’re still twenty to forty years away from retiring, what you ‘envision’ now will keep you moving toward your goals.  As you age, you may change your idea of what you envision your retirement dream to be, or you may be forced to change your idea of retirement based on your financial situation.  What retirement dream do you have?

Vacationing is commonly a retirement dream many people have, and traveling will be directly tied to your financial situation and your health.  If you want to travel in retirement, add it into your financial plan and start to increase your savings to have vacation expenses covered.

Do you envision retirement to be a time to have ‘more time’ to do those things you always wanted to do?  Write down things you are looking forward to doing, even if it is more time to relax.  Listing it and looking at your retirement dream, if only on a note, helps you to bring it to reality.

Is starting a new career or becoming an entrepreneur something you want to experience in your lifetime?  Retirement is a time when you can do this, providing you don’t need to rely on the income and you aren’t planning to invest your retirement savings into a new business.

Some retirees decide to seek additional education or take classes on something that interests them.  Art classes, literature experiences, or even educational experiences abroad can enhance your retirement years.

Have you always had an interest in working for a non-profit or volunteering for a cause close to your interests?  Having the time to give time to something meaningful can give you a sense of purpose and help you fulfill a desire to make a difference in the lives of others.  If your retirement dream is to volunteer for others, research opportunities in your area, regardless of your age.

Perhaps you are someone who envisions your retirement dream to be a continuation of working.  Many retirees are finding that they still enjoy working and choose to continue working full time, or at least part time in their profession.  There is no requirement for when you choose to quit working.  If you decide to continue working, consider delaying taking Social Security benefits.  Consult your financial advisor or attend a Social Security meeting to fully understand how continuing working will affect your benefits.

Let’s get started on planning your retirement dream, however you envision it!

Social Security Las Vegas Nevada

Social Security Mayhem – Las Vegas, NV

The annual report from the Trustees of the US Governments two largest entitlement programs (Social Security and Medicare) was released on July 13, 2017.  Not surprising, the report relayed the same information regarding Social Security and Medicare as it did last year; without revision and additional funding, both programs will see cuts in payments to Americans that receive benefits by 2034.  Because both of these programs pay out based on present day FICA tax collection, there are less Americans working now than are supporting current retirees.  The reason for this is twofold; a smaller population (average birth rate in 2016 was 12.4 births per 1000 women per year) can’t support a large aging population (Boomer birth rate in 1950 was 122 per 1000 women) and a job pay rate that hasn’t kept up with inflation resulting in low wages and low FICA tax collection.  Regardless of your political preference, Social Security and Medicare reform is a problem facing every American with no easy solution.

The report indicated that Social Security and Medicare are not predicted to ‘run out’, but that payments will be cut by 23% for those retiring after 2034.  Future generations will not receive payments to the level that current retirees are receiving.  One fallacy that people believe is that when they pay in to FICA, that money is ‘banked’ for them for when they need to access it through Social Security or Medicare.  The FICA taxes collected present day is used for the present day Social Security and Medicare payments benefit retired Americans.

What can you do if you are not a retiree?  Plan to not receive Social Security or Medicare and don’t include any calculations in your financial plan.  Because we do not know the amount of the payment you may receive, or if the mathematical formulation will be changed, view these benefits as something you will not benefit from.  Although you may believe that to be extreme, putting aside more into your other retirement investments may help to offset the shortage from these two benefit sources.

For updates to Social Security and Medicare, visit https://www.ssa.gov/myaccount/ and register for an account.  This is the same account you will use when you sign up for Social Security and Medicare benefits.  If you’re retiring in the next ten years, attend a meeting sponsored by the Social Security Administration regarding benefits.  Using your SSA account, you can also find a sponsored meeting close to where you live where you will have access to a Social Security Administration employee to answer questions you may have.

Contact our Las Vegas Certified Financial Planners if you would like to visit regarding developing a plan to offset Social  Security retirement benefits in your financial plan, or discuss other options for saving for your retirement.

Net Worth Spring Valley NV

Does Your ‘Net Worth’ Matter? – Spring Valley, NV

Many times people compare what they have to that of their peers. This comparison is usually visual; we compare the house, the car, the ‘toys’, etc. But Net Worth is something that is not always visual. Net worth is determined by subtracting liabilities (debt owed) from assets (things that are actually ‘owned’). Net worth is calculated for both individuals and companies and is a true determination of how much someone, or something, is actually worth.

A consistent growth in net worth is an indicator of good financial health. If liabilities grow faster than assets, or the value of assets drop, the indications are pointed toward poor financial health and show a negative net worth. People’s, and a company’s, net worth can fluctuate based on assets decreasing or increasing in value, or acquiring more or paying off debt.

Net worth calculations are something that should be completed at least annually to help you determine if you are moving toward a positive net worth or not. It’s easy to get caught up in ‘stuff’ especially if you are having to finance purchases. Remember that those purchases also lose value over time as they become older. Automobiles, and even homes can lose value based on geographic economic conditions and aging neighborhoods. Your retirement and investment accounts can be affected due to the company’s net worth of the stock valuation, which directly affect your net worth.

Whether you’re trying to become a millionaire before you retire, or simply pay off all your debt, net worth matters because it’s a measuring tool of your progress. Measuring your net worth based on your goals is a way to track how you’re doing.  Bankrate’s net worth calculator is an easy tool for you to monitor your net worth periodically, and even allows you to view a report after you’ve inputted your personal information. Discussing your net worth at your annual investment meeting can be beneficial to you in providing your advisor with the information to help keep you on track with your financial goals. Remember that net worth is always a true indication of financial health.

Questions about your net worth? Contact my Las Vegas Financial Advisory office to schedule a no-cost consultation.

las vegas certified financial planner

Financial Advisor Las Vegas

‘Earnings Season’: What Is It and Why Does It Matter? – Las Vegas, NV

‘Earnings Season’ is a period of time in which publicly traded companies release their quarterly earnings report.  Based on this information, stock prices can fluctuate either up or down depending on the ‘financial health’ of the company during that quarter.  Although not all companies are on the same quarterly reporting schedule, most ‘earnings seasons’ begin one or two weeks after the last month of each quarter.  Look for the majority of public companies to release their earnings reports in early to mid- January, April, July, and October.  All publicly traded companies must release their quarterly earnings report at the end of each quarter through press releases and filing of the report with the SEC (Securities Exchange Commission).

Why does ‘earnings season matter’?  It’s a very busy time in the market as analysts, traders, and investors review the reports and decide if they will keep the company’s shares, or liquidate.  It’s a time when there will be a lot of trading as shares will increase in value or fall as the market reacts to the earnings report data.  This may be a time when you see your retirement accounts increase, or lose value based on the share value of your portfolio’s independent holdings.  This is also when you will see more media coverage of major earnings reports released, or missed expectations. It is all tied to a company’s quarterly earnings report.  Your fund or stock statements reflect the earnings season reporting, and report the value of your shares the last day of trading for the quarter.

Earnings season gives us a look into a company’s individual financial health, and a broader view of the specific industry the company is in.  Because these companies employ millions of Americans, and tie up investment dollars of individual investors, this is a time when financial analysts and traders make decisions on whether to hold or sell off company stock.

Earnings season is a great time to determine if you want to hold or sell off holdings inside your portfolio.  As your advisor, I can also assist with your 401(k) account by analyzing fund performance for each quarter.  Many times short term investors are more affected by the volatility of earnings season than long term investors.   It’s important to remember that your stock related investments are directly tied to company performance during each earnings season.  Contact our Las Vegas Financial Advisory office if you would like to review your portfolio during this earnings season.

Social Media Background

How NOT to React to “Breaking News”

In light of the ‘financial meltdown’, the political issues, the scandals, and ‘fake news’, keeping yourself removed from media as much as possible may be good for you (and your investments). Every day the American public is exposed to multiple stories that may have an effect on them and their decisions. During the financial crisis, the media’s reporting caused wide spread panic as millions of Americans chose to liquidate their accounts out of fear ‘of losing their money’. Unfortunately liquidating in a down market versus waiting for share prices to increase before selling, caused many people to financially hurt themselves.The newest and most popular way Americans choose to get their news is through social media. Social media gives us only a small part of

The newest and most popular way Americans choose to get their news is through social media. Social media gives us only a small part of the information, and many times the information that we see (in the form of news) is paid by the advertiser. We get to participate in social media at no cost, but what we may see and read is being ‘sponsored’ by another source. It is up to us to investigate the validity of the news story and source and consider how ‘expensive’ inaccurate information may be to us if we react to it.When it comes to money and investing, being more diligent on what we choose to react to is our own responsibility. Many stories that we read (or listen to) are non-biased, while many others are biased. Taking the time to consider how your reaction to a media story may affect you is important to your financial health. If you’re concerned about financial decisions related to what’s being reported in the media, have a conversation regarding your investments with a financial advisor.

When it comes to money and investing, being more diligent on what we choose to react to is our own responsibility. Many stories that we read (or listen to) are nonbiased, while many others are biased. Taking the time to consider how your reaction to a media story may affect you is important to your financial health. If you’re concerned about financial decisions related to what’s being reported in the media, have a conversation regarding your investments with a financial advisor.

las vegas financial advisor cosigner student loan

Are You A Co-Signer On A Student Loan? Consider This…

Happy Graduation! Time to Repay Your College Loans

Graduating from college is an exciting time for many, and can signal the start of student loan repayment. If you are a recent graduate, it’s possible you had a co-signer on your student loan. If you are a parent or family member that is a co-signer, there’s no better time than now to formulate a plan with the graduate to pay the loan off quickly. Monthly loan payments are scheduled with minimum payments in order to make the lender money, and cost you more in interest. Here are some tips to help you start your repayment process:

Forget the ‘Grace Period’. Immediately starting to pay the loans will save you interest charges which can add up to hundreds of dollars depending on the amount you borrowed.

Don’t ‘Defer’.  For those that think deferring payments until their income is larger, think again. It’s a fact that student loan debt is still a part of your financial picture and will affect your credit score. If you are considering purchasing a new car or home in the next few years, deferring payments can hinder those plans.

Examine All ‘Consolidation Offers’. There are lending companies that present a better rate, but can lead to complications on paying off your loans, escalating interest rates as the note matures, and refinancing options through another lender impossible. Make sure you read the fine print!

Understand the repayment options and terms. Set a goal for repayment of the loan that is earlier than the payoff date. Save interest and help your credit score by making your payments in full and by the due date since late fees can add up. Contact the lender for any question you have on repaying your loan.

Be Transparent with Your Lender. If you are experiencing problems making payments in full and on time, contact your lender to discuss options that may help you. Student loans are the second largest debt that most Americans will have, besides the mortgage debt of a home.

Even if you have student loans and start a new job, choose to participate in your company retirement plan at the contribution amount required to receive a company match. Making the decision to not save for retirement until you’re debt free may cause you to lose out on employer contributions and delay starting to save for your financial future.

If you have questions about how to most efficiently structure your financial plan, let’s schedule a time to chat.

6 tips for combining families and finances

6 Tips For Combining Families & Finances

With ‘wedding season’ in full swing, chances are you will be attending a wedding that may be a second marriage.  Statistically in the US, one third of weddings are a second marriage for at least one member of the couple (https://www.soundvision.com/article/wedding-statistics-in-the-united-states).  Planning to combine families and finances and discuss openly how it will affect each of you, should take place prior to the big day.  Here are some tips for combining families and finances:

Be Transparent About Personal & Child Rearing Expenses.  Openness and honesty regarding expenses related to your children is a must.  Discuss child support payments, debts, and on-going expenses you are responsible for.  Add child related expenses into your monthly budget and decide if you’re using a joint account to provide for this.

Discuss Long Term Financial Goals.  Discuss goals as a couple, and goals for your children that may involve investing.  Retirement goals should be a priority, but decide what to cover financially for your children.  You may decide as a couple to not provide for college, first cars, etc.; but should honor the wishes of your spouse if they want to provide individually for their child.

Continue Financial Planning.  Keep planning for your retirement and monitor your accounts as if you will be together for the rest of your lives.  However, if you are hesitant to combine financial planning and change to your new spouse’s financial advisor, continue with your advisor and planning on your own.

Consider a Prenuptial Agreement.  Combining assets may not work for everyone, and that’s ok.  Address current assets, future inheritance, and acquiring assets as the marriage continues and how you’d want things divided if the marriage fails.  Consult an attorney on a Prenuptial Agreement and sign prior to your wedding day.

Determine Beneficiary Statuses.  Determine if life insurance beneficiaries will change, or if another policy will be purchased.  Discuss beneficiaries on employer retirement accounts, and any other brokerage accounts that asks for beneficiary information.

Draft a Will.  After your wedding, and especially if children are involved, consider having a will. A will should be written for your beneficiaries for you as an individual, and another will drafted for you as a couple.  Consult an attorney to help you decide how you would like your assets to be divided if you, or both of you pass.

 

If you or a loved one is interested in learning more about how to combine their finances, please have them contact our Las Vegas Financial Advisory. We’re happy to offer a free consultation.

good health and retirement readiness

What’s The Link Between Good Health & Retirement Readiness?

This summer (June 2017), the Sixth Annual AEGON Retirement Readiness Survey was released.  The study took a look at the correlation between good health and being financially ready to retire.  Those with good health and a positive attitude were more likely to save and plan for retirement than their counterparts with poor health and a poor attitude regarding retirement.  Individuals in the study who reported eating a healthy diet and exercising regularly scored higher on the index used in the study, and as having taken steps to save for retirement.  Those that didn’t eat healthy and exercise regularly scored lower in the study and many reported they were not saving for retirement.  This study further suggests that individuals who regularly miss work due to health issues, can reverse retirement readiness outcomes by taking steps to improve their health and attitude, which leads to saving and planning for retirement.

The study references those who are healthy (eat healthy, exercise regularly, limit harmful activities such as drinking and smoking) as being ‘retirement strategists’ since this group is more likely to have a written plan for retirement that they follow.  In addition to healthy habits, they are habitual savers too!

In the 15 countries represented in the survey, all participants viewed retirement income as coming from four sources; employer and employee contribution sources, government sources, personal savings, and continuation of employment in retirement at least part time.  Twenty years ago, most people in similar surveys did not include the fourth source of retirement income and viewed retirement as not working at all.  There is a direct correlation between good health and being able to retire and continue working part time.  As people age and the cost of living increases, it will be important to have enough financial resources to retire, and health can make the difference when it comes to saving and being able to work part time if one chooses.

Are you doing everything you can to financially prepare for retirement? Let’s set up a free consultation to find out!

Tips For Cleaning Up Your Investment Portfolio

Tips For Cleaning Up Your Investment Portfolio

Making the decision to cleanse your portfolio by minimizing holdings, just like you minimize your possessions, can have some positive effects.  When you take the time to examine what you own, you may make the decision that some things need to go.  The same is true when you clean your portfolio.  Call it portfolio cleaning, financial planning, or whatever you choose, but the end goal is the same; to clean out investment holdings that no longer suit your investment strategy.

Having duplicate holdings, investments, or multiple accounts can clutter up the picture of your financial health.  When you take the time to examine everything, it’s easy to create a clutter-free portfolio that is easily managed and brings you closer to your goals.  It’s possible that you have multiple retirement accounts that have been spread among multiple firms, and contain the same funds.  Each of these has fees associated with them.  An easy solution to this problem is to consolidate accounts, and if applicable, the funds as well.

Have your financial advisor do a fund analysis on your portfolio and other investments that may be held outside, such as your company retirement plan.  This can help eliminate repetitive investments that are not part of your investment strategy.  You have minimal fund choices in a company retirement plan, but your advisor can assist you with choosing funds outside that plan that align with your financial goals.

In addition to financial planning, be upfront with your advisor about all of the investments you have even if you work with multiple advisors.  If other investments are ‘kept secret’, you may be contributing to cluttering your portfolio unless you are assigning specific investments for specific purposes to each advisor.  Transparency and openness can make your portfolio cleaning process streamlined and simplified.

Getting a second opinion on your portfolio is never a bad idea, let’s set up an appointment today. Give our Las Vegas Financial Advisory a call or message here.

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Modernizing an Outdated Estate Plan

Free Download:  The Wealth Advisor Volume 11, Issue 6

In This Issue: 

  • What to do with a confusing, old trust.
  • How to know if you have an outdated trust.
  • Quality estate planning is an ongoing process.
  • You are not trapped by old plans, even when they’re “irrevocable.”
African American dad daughter

Teaching Your Child to Save (and Spend)

Teaching Your Child to Save (and Spend)

For those parents that are teaching your children to save, you are providing your children with a priceless lesson.  Those children that are taught to save are more likely to save as adults.  And those that are taught how to save and spend smartly are even more successful!  Much like adults that have a budget, teaching children how to spend their money though a budget is a smart strategy.  Here are a few ideas to get you started to help teach spending strategies to your children:

Explain Debit Cards- Many children think that debit cards have unlimited funds; each time you swipe you get something for ‘free’.  A good way to show this is to allow your child to view your online bank account and show the money being subtracted.  With advances in online banking technology, you can even show the store that deducted the money!

Set Budgets for Purchases- Discuss with your child how much you want to spend on an item; for example new summer swimsuits for the kids.  Have your child select a swimsuit that is within the ‘swimsuit budget’ by looking at price tags.  Budgets can be set for treats, new toys, and as your child ages, even cell phone plans and limits.

Develop Save and Spend Accounts.  Start when your child is young with the simplicity of a ‘piggy bank’ and wallet or purse.  The bank is to save, the wallet or purse is to spend.  Your child will learn that when the spend money is gone, there is no more.  They will also learn to ‘ration’ the money accordingly depending on their ‘wants’.  For example, discuss with them purchasing one toy versus purchasing various smaller items.  Many children view ‘more’ as better than ‘only one’.  As your child grows, the save and spend accounts become savings and checking accounts.

Discuss Credit and Cash Options.  In a world where materialism is all around, teaching your child the benefits and risks of credit is key to their financial success.  If you manage your credit wisely, you can instill the same in your child if you have open discussions with them on your credit.  If you have issues personally with credit, find help for yourself so that you don’t create generational credit problems.  Remember that children learn by example.

Have questions about wealth management strategies? Contact our Las Vegas Financial Advisory today. 

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The Savvy Retirement ‘Spender’

Retirement is a time one should enjoy doing what they want to do, always being aware of their spending.  Because most retirees have a set income, retirement requires a more ‘savvy’ approach to managing the way money is spent.  Some ideas to implement prior to and during your early retirement years can save you thousands during your retirement years:

Downsize to One Car.  Spending less on car insurance, maintenance, and gas adds up quickly.  Paying off your car or paying cash for replacing a car instead of financing is another way to save additional money.

Eat at Home.  Although the temptation may be to eat out daily, the health benefits and food cost savings of not spending on restaurant food, compared to eating at home are significant.  Eating fresh foods such as fruits, vegetables, and lean meats as much as possible can help prevent health issues down the road.  Save dining out as a ‘special occasion’ and be a savvy spender on where you choose to dine.

Eliminate Your Home Phone.  If you have a cell phone, consider eliminating your home phone.  If your phone is ‘bundled’ as part of your cable package, downsize your cable package.  If you’re told that’s not possible to eliminate one service, seek another provider.  With all the competition in services, you will find a solution that meets your requirements.

Downsize Your Home.  Consider moving to a smaller home which will save you on property taxes, and likely decrease your utility costs as well.  If you’re considering a move to another part of the country, investigate what you may spend in retirement on utility costs, home prices, property taxes, food, and medical provider costs before you move.

Plan Tax Strategies.  As you spend down your retirement savings, work with a professional tax advisor to plan the best tax strategies for you and your situation.  You are in control of the way you choose to deplete your retirement savings, to some degree.  Not planning can cost you more in taxes if you don’t understand the best options for depleting assets.

If you would like help on developing a savvy retirement spending budget, contact our Las Vegas Financial Advisory office to have one implemented into your financial plan.  For best results, revisit your financial plan yearly at your annual review.

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Tips to Using a Retirement Calculator

No matter what your age, retirement calculators can be a benefit to you in your retirement planning.  Retirement calculators are easily accessible on the internet through a search, or you may have access to various calculators through your investment custodian(s).  Here are a few tips to keep in mind as you use a retirement calculator:

Tip #1- Retirement Calculators Can’t Totally Predict the Future.  These calculators assume investment rates of return will be consistent, and that inflation rates will be consistent. The best way to use a calculator is to realize that there will be changing circumstances that will change the results, so use one yearly, always changing information to reflect current rates of return and inflation.

Tip #2- Use a Retirement Calculator as a ‘Tool’.  Planning for retirement begins at the beginning of your working career, and calculators can help to show you ways to ‘catch up’ on lost investment time.  Retirement calculators can be a tool to show you all facets of your retirement savings such as personal savings, investments, retirement plans, social security savings, and other assets that may be available as retirement savings (businesses sold for retirement income).

Tip #3- Retirement Calculators Help Illustrate the Concepts of Saving and Investing.  There is no better way to quickly illustrate how your investment may increase in value over time.  Retirement Calculators can help you determine if your monthly contributions are enough, or are too little.  Calculators quickly show you anticipated results to making savings changes now, versus waiting twenty years to see if you saved enough or too little.

Tip #4- Retirement Calculators Show Retirement Savings Options.  If you’re not utilizing all options available to you to save for retirement, many calculators show you what you’re missing.  Input data into each line and if you don’t have that line item in your portfolio, you may be missing out!

Using a retirement calculator will provide results that suggest the amount that will be available to you in retirement if you continue to save.  It’s up to you to continue saving, adjust your plan as needed, use a retirement calculator frequently, and meet with your advisor at least yearly.

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The US Treasury myRA Plan: Is This a Good Idea?

This spring (2017), the US Treasury Department has launched additional TV ads directed at Americans that have no retirement savings plan at work. If you’ve seen the ads and you’re curious what this plan is about, read on!

The myRA plan was started in the fall of 2015, but has seen low numbers in participation by Americans that have no retirement savings plan offered through their employer. The myRA is the US Government’s solution to retirement savings for Americans that are not saving for retirement. Fueled by the US Government’s former administration, supporters of the myRA, assumed Americans are not saving for retirement because they have no retirement savings plan at their employer. The US ranks near the bottom of the list in retirement readiness for developed countries of the 40 countries surveyed http://www.transamericacenter.org/ according to the TransAmerica Center for Retirement Studies 2017 report.

The myRA plan is simply a Roth IRA that is invested in US Treasury Bonds, and varies from a Traditional Roth IRA in that there are no management or surrender fees associated with surrendering the account before the five year IRS timeline. However, the myRA plan is similar to a traditional employer retirement savings plan because the contributions are through payroll deduction. Employers will not contribute to or administer employees’ accounts; they will only facilitate the setup of employees’ payroll direct deposits.

The myRA plan’s maximum annual contribution is $5,500, including any Roth and Traditional IRA contributions. When a myRA account reaches either $15,000 in value or 30 years of age (whichever comes first), it will roll into a private-sector retirement account. The initial investment can be as low as $25, and one can make periodic investments for as little as $5 each pay period. There is no cost to open a new account, and ongoing automatic payroll deductions to fund a myRA can be any amount. The only investment option is the G fund of government securities in the Thrift Savings Plan for Federal and US Military employees. The myRA is open to households making under $191,000 per year.

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Transferring Your ‘Unattended’ Retirement Accounts

The older you get, the greater the chances that you have ‘old’ 401(k) accounts at former employers, or multiple IRAs from retirement plan transfers from leaving multiple jobs.  While transferring the 401(k) s from multiple employers into multiple IRAs was the best way to go, leaving them ‘unattended’ makes them vulnerable to being forgotten by you.  One strategy to help manage them efficiently is to transfer them into one IRA.

Transferring old 401(k)’s and IRAs into one IRA not only saves you money on fees associated with having each account open, it also helps you to manage them when you compile the information from each into your financial plan.  It’s possible that you have multiple accounts invested in the same funds in various 401(k) and IRA accounts.  Leaving them ‘unattended’ creates risks in your portfolio that are not aware of if you’re not actively managing them.

If you are considering a transfer of your unattended accounts, keep in mind the following ways to transfer a 401(k) to an IRA, or an IRA to IRA transfer:

Direct Transfer Custodian to Custodian:  This is the best way to transfer and in some cases the only way to transfer your unattended retirement account(s).  By you not acting as the ‘middle man’ (check coming to you) you are not liable to ensure the money is transferred into your new account within 60 days.  By having the custodian of the old account send the check to the new custodian, you avoid the IRS penalties associated with the 60-day timeline.  Those penalties include taxes and in some cases, the automatic penalty for taking the money out prior to retirement.  

Indirect Transfer:  In this situation, the check comes directly to you and you have 60 days to get that unattended retirement account check to the new fund company, or be subjected to ordinary income tax, plus early-withdrawal penalties (if applicable).  The IRS limits the number of times an indirect transfer can occur to one time per calendar year (https://www.irs.gov/retirement-plans/ira-one-rollover-per-year-rule), as this was becoming a problem of Americans missing the 60-day window and then being penalized.  The IRS realized that transfers this way were in some cases part of a ‘scheme’ by the individual to access the money easily for loan purposes.  Regardless of the number of unattended accounts you want to move into your one IRA, you are limited to one transfer per year if you have the check come to you from the old account custodian.

If you have unattended retirement accounts that you would like help with, please contact our Las Vegas Financial Advisor office for a meeting.

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Top 10 Tips to Investing

Investing is a process that takes time, should be thoughtfully monitored and has a better chance of success if planned out.  Regardless of what stage you’re at in your life and even if you’ve started investing, making a plan and sticking to it will benefit you.  Keep the following tips in mind as you start, or restart, your investing journey:

Tip #1- Get Started.  If you haven’t started investing in various vehicles available to you, meet with your financial advisor to determine which ones meet your investment goals and timeline.  You’re not limited to just choices at your employer.

Tip #2- Make a Plan, a Financial Plan.  Part of the process is having a financial plan completed, and then redone every 2-3 years to help keep you on track.  Financial plans are great because they are like a ‘story book of your retirement story’.  Seeing your information in writing keeps it ‘real’ versus just discussing it.

Tip #3- Stick to IT!  Stopping and starting on investing can hurt you and slow progress towards your financial goals.  Even if your financial situation changes, at least continue to invest minimally regularly.  Continue to monitor investments through the ‘peaks and valleys’ of your life.

Tip #4- Diversify.  Know your own tolerance to stock market ‘ups and downs’.  Understanding that different asset classes behave differently than others, will help you and your financial advisor develop a portfolio that can withstand changes.  

Tip #5- Monitor Portfolio Risk.  In other words, “don’t put all of your eggs in one basket”, as the saying goes.  Continually monitor the risk in your portfolio as you age, and adjust as necessary.

Tip #6- Monitor Personal Risk.  Continue to insure yourself and your family against health and property related catastrophes.  The fastest way to have to liquidate investments prematurely is by not having protection in place to offset your financial risk.

Tip #7- Ignore the Media.  When the press talks, the masses listen; unfortunately.  Markets can be driven by emotion created by media.  Stick to your plan and ignore what you may be hearing.  Besides, selling in a down market (bear market) and buying in an upward trending market (bull market) is really the opposite of what you should be doing.

Tip #8- Manage Debt.  If you keep your debt in line, there is more that you can invest each month.  Managing debt means not carrying balances and paying fees and high-interest rates.  

Tip #9- Account for Taxes.  Every investment plan should account for taxes, especially when liquidating assets and when entering into retirement.  Utilize a tax professional to understand how your investments will affect you now and going forward.

Tip #10- Rebalance at Regular Appointments.  No investment should be left on ‘auto-pilot’, and portfolios can become ‘out of balance’ as shares increase and decrease in value.  Consider rebalancing after your regular appointment if your portfolio needs adjusting to reflect your financial goals.

Las Vegas Financial Advisor

Spring Time = Scam Time

As spring time comes back to many parts of the US, so does many ‘seasonal’ scams.  Partly because of tax season and partly because home projects ramp up, and travel ‘springs up’, this is the time of year to be more alert regarding potential scams.  Since credit card companies and financial institutions have implemented ‘chip cards’ with card readers, scammers have to be more creative to access card numbers.  Here is a list of spring time scams to be aware of:

Facebook Scam- You receive a ‘friend request’ from someone you are already connected to or aren’t sure that you know.  As you accept the request, they are suddenly messaging you regarding financial issues, or a need for financial help.  Recently, Facebook instant messaging has ‘friends’ that are messaging you, but it really isn’t a connection you truly have; it’s a created profile.  Once the conversation switches to you sending them money, drop the connection by ‘unfriending’ them.

Door to Door Repair Services- A service for hire comes to your door ‘working your area’ from anything from driveway paving, to roofing, to painting services, or any other service.  Generally, these individuals are not from the area, and many times are asking for payment upfront.  Ask for references, business cards, and definitely do not pay them anything until the work is completed.

Tax or IRS Scam- You are called by phone and are ‘notified’ that you have a pending tax court hearing unless you clear up your IRS lean.  Other scams involve that you owe money and that you can pay over the phone.  Remember that the IRS notifies you by letter, and if you’re expecting a tax return or have a tax professional prepare your taxes, more than likely you do not owe anything.

Spring Break, aka the ‘Grand Parent’ Scam- You receive a call from someone saying that your grandchild is on spring break and is in trouble.  As they continue the conversation, they start to ask you to send money that they will ‘give’ to your grandchild.  Some stories range from the grandchild being in jail, to the grandchild being unable to talk themselves because they’re sick, etc.

If you feel that a phone call, email message, or someone coming to your door seems ‘out of the norm’ on what you’re hearing from the individual, choose to not interact with them.

Group Of Children Playing In Park

The ‘Ins and Outs’ of 529 Savings Plans

Are you a parent or related family member thinking of starting a 529 savings plan for a child? Starting a plan to save for college or other type of technical career training is a smart choice because small amounts are contributed monthly over time. Legally known as “qualified tuition plans”, 529 plans are also called ‘college saver plans’ and sponsored by states, state agencies, or educational institutions. To get you started, understanding the ‘ins and outs’ of these plans will help you decide if this makes sense for you to invest in for the benefit your child or grandchild:

There are Two Types of 529 Plans, pre-paid tuition plans, and college savings plans. Some common features of each are:

529 Plans (college saver plan):

  • Covers all qualified higher education expenses including technical colleges and room and board, fees, books and computersContribution limits set at $200,000
  • Contribution limits set at $200,000No age limit, open to adults and children and
  • No age limit, open to adults and children and the beneficiary can be changed, allowing the plan to pass to another sibling or parent can use.Investment options subject to market risk, not guaranteed.
  • Investment options subject to market risk, not guaranteed.

Pre-paid Tuition Plan:

  • Locks in tuition prices at eligible universities, and public and private colleges
  • Guaranteed or backed by state
  • Have age/grade limit for beneficiary
  • Owner or beneficiary must be resident of state they listed as college/university choice
  • Set lump sum and installment payments based on the age of beneficiary and number of years of college tuition purchased.

To further understand the tax implications and benefits of each type of plan, as well as restrictions, contact our office to set up a time to visit. Additional information can be found by visiting the SEC (Securities Exchange Commission) website. (https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html)

Understanding the ‘ins and outs’ of college savings plans will help you decide if this investment is appropriate for the benefit your child or grandchild.

Schedule a Free Consultation with our Las Vegas Financial Advisory to Learn More…

retirement catch up

Time to Play Retirement Account Catch (up)

If you’re approaching retirement in the next fifteen to twenty years, it may be time for you to focus on saving more.  Playing ‘catch up’ by contributing more can make a big difference.  It’s never too late even if the time line is getting closer.  It’s always better to try to put away more than to not try and face the reality of working longer, which may not be what you wanted.  Many situations can cause early retirement even if you’re not financially ready, so make a plan to be proactive.

Catch up on additional payments now by increasing your contributions to your company retirement savings plan, and Roth IRA; even adding 2% can make a difference over time.  If you’re contributing the maximum allowed contributions, congratulations!  If you’re not contributing your ‘max’ start with small steps and the 2% this year.  Remember you can increase your contributions at any time, you don’t have to wait until the next benefit meeting!  If you have the ability to set your contributions on auto-increase, set that into play so that next year and going forward you’re increasing 1%-2% each year.

Utilizing the IRS’s ‘catchup provisions’ if you’re 50 or older is in your best interest, if you’re not already doing so.  You’re allowed to contribute an additional $1000 into IRAs, and an extra $6000 into 401(k)’s.  Other self-employed and solo 401(k) type accounts also have increases this year, so consult with me to determine if you qualify to contribute more.

Playing catch up can benefit you once you start putting into motion steps to increase your savings.  For a basic calculator on how it can benefit you, utilize Bankrate’s Traditional IRA calculator to give you an estimate of how your increases can impact your savings.  Use a lower, realistic rate of return on your initial calculation.

Additionally, plan for us to meet for a financial planning meeting if we haven’t already done so.  Planning for contribution increases can be applied into the financial plan, and seeing how that can benefit you with no increases versus increased contributions, can be a motivator to get your game started.

Young woman credit card

American Financial Literacy

In December 2016, FINRA (Financial Industry Regulatory Authority) released their report, “Investors in the United States 2016”. The results of the study indicated that overall, American investors felt ‘confident’ in the stock market and the economy, but many felt they didn’t have a good understanding of basic investment principals or basic financial concepts.

One of the most serious findings in the study regarding financial literacy was that when asking study participants to answer ten basic questions relating to financial concepts, those that felt confident about their financial literacy scored less than 50%! Those that indicated they were not confident and didn’t understand basic concepts scored slightly worse than the confident investors. This shows that overconfidence doesn’t necessarily mean understanding.

What does that mean for us as a society? Numerous reports indicate that if we don’t teach our children (and Adults) financial literacy, there will be consequences that will hurt our country for years to come. A few key things we need to consider:

Requiring a Financial Literacy Class to Graduate. Currently, only 17 states require a financial literacy class to graduate from high school (Latest study released in 2016). No states currently require standardized testing of basic financial concepts. Financial literacy experts know that teaching students how to manage their income and expenses and giving them a basic understanding of financial concepts will enable them to have financial successes regardless of their future income.

Credit Scores Improve After a Financial Literacy Class. Having trained teachers that know financial literacy content help students develop better credit behaviors in childhood. This leads to students that are likely to make on-time payments and understand how to manage debt and credit.

Bring Financial Literacy to the Work Place Improves Participation in Retirement Savings Plans. When employees are invited to attend workplace classes on budgeting, saving, and investing, they are more likely to save for retirement and not live beyond their means. These classes are commonly conducted by the financial advisor that oversees the company retirement plan, the HR Department, and other financial literacy educators.

What can you do for yourself if you feel you are in need of sharpening your financial literacy? Start by asking questions of a financial advisor or another capable instructor when you don’t understand something. This can include asking CPAs, literacy teachers, and others that specialize in educating with unbiased intentions. It’s up to all of us to improve the statistics we are seeing in our population regarding distressing facts on where we lag in comparison to other countries in financial literacy.

Tips to Timing stock market

Tips to ‘Timing the Stock Market’

Now that the title of this article has grabbed your attention, is there a ‘bad’ or ‘good’ time to invest? Is there a ‘science’ to timing the stock market? Consider the following and if ‘timing the market’ is a good investment strategy for you:

Tip #1 Invest- Whether you invest at the ‘top’ or ‘bottom’ of the stock market (price per share), just investing in the stock market can make a positive difference when you have ten or more years to invest. Not investing in the stock market will yield little, or no return on your investment when adjusted for inflation.

Tip #2 Watch for Market Shifts- Bull Markets (stock prices rising) last longer than a Bear Market (stock prices falling), in fact they last four times longer. Watching for a Bull Market provides you an opportunity for growth in your portfolio. Consequently, a Bear Market provides you an opportunity to purchase stocks at a lower prices per share than previously, but can make it harder for you to pick profitable stocks due to market conditions.

Tip #3 Take Advantage of a Bear Market- Investing at only stock market peaks versus only at stock market troughs produces a worse overall return over a period of 20 years or more. It pays to buy shares at a lower price by purchasing more during those times.

Tip #4 Consistent Investing Produces a Higher Overall Return-Commonly referred to as Dollar Cost Averaging, involves investing consistently (ex. monthly) a fixed dollar amount over a long period of time, such as 20+ years. Timing the stock market and only participating during certain conditions does not yield as high of return as investment consistency.

If investors emotions were not at play in the investment process, investment consistency and monitoring would outweigh ‘timing the market’ over a long period of time and produce higher returns. For additional information, visit Investopedia’s article Buy and Hold Investing vs. Market Timing.

An investment strategy involves consistency, monitoring, and an overall plan to achieve the goals that you want to achieve. By working together to develop and implement a financial plan, we remove the ‘timing factor’ that could impact your portfolio. Feel free to contact a Wealth Management Specialist at our Las Vegas office if you would like to schedule a meeting.

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Self Employment and Retirement Readiness

Self-employment is a growing trend world-wide and in the US.  The desire to work for themselves, being able to designate working hours, and the perks of flexibility when they work is part of the reason many choose to be self-employed.  However, there are growing statistics that show many are forced to start their own business due to ‘down-sizing’ by American companies, and the ability for companies to hire ‘contracted labor’ for what they need versus hiring full time and paying benefits.

Necessity has created an entrepreneurial opportunity for many to become self-employed.  However, the US lacks in self-employment as only 6.5 percent are self-employed, in comparison of 1 in 3 people being self-employed in other countries, such as China, Brazil, and Turkey.  The trend in the US is that we will see an increase in the number of people becoming self-employed due to technology advances eliminating workers, longer working years past age 69 in comparison to previous generations, and the slow recovery of business growth resulting in new positions with wages above minimum wage.

Being self- employed creates an interesting scenario when it comes to benefits others receive through their full time employment, such as health insurance and a retirement savings plan.  Most countries rely on a three system approach to retirement savings:  Governmental savings plans, employer savings plans, and personal savings.  The alarming trend in the US is that self-employed individuals are not participating in these same savings plans; they are only paying in to the governmental plan which in our country is Social Security.  Many self-employed have not set up their own retirement savings plan, such as a solo 401(k).

Many self-employed have irregular incomes, which makes it difficult to save on a regular basis.  In some situations, individuals have been self-employed for many years, building a business which they plan to liquidate upon retirement to provide themselves with retirement assets.  In either situation, planning needs to take place in order to ensure there are assets to use for retirement.  Since the self-employed have typically had ‘to do it themselves’, they often feel they need to plan themselves and are not consulting with financial professionals.

Regardless of what your age and how many years you have been self-employed, it’s important to meet with an advisor who can assist you in planning for your future.  For additional information on the self-employed and retirement readiness, visit the Global Retirement Survey.  Feel free to contact me regarding setting up a self-employed retirement savings plan, or reviewing the one you have in place.

Tips to Timing stock market

April 2017 Newsletter | Tips to ‘Timing the Stock Market’

Tips to ‘Timing the Stock Market’

las vegas financial advisoryNow that the title of this article has grabbed your attention, is there a ‘bad’ or ‘good’ time to invest?  Is there a ‘science’ to timing the stock market?  Consider the following and if ‘timing the market’ is a good investment strategy for you:

Tip #1 Invest- Whether you invest at the ‘top’ or ‘bottom’ of the stock market (price per share), just investing in the stock market can make a positive difference when you have ten or more years to invest.  Not investing in the stock market will yield little, or no return on your investment when adjusted for inflation.

Tip #2 Watch for Market Shifts- Bull Markets (stock prices rising) last longer than a Bear Market (stock prices falling), in fact they last four times longer.  Watching for a Bull Market provides you an opportunity for growth in your portfolio.  Consequently, a Bear Market provides you an opportunity to purchase stocks at a lower prices per share than previously, but can make it harder for you to pick profitable stocks due to market conditions.

Tip #3 Take Advantage of a Bear Market- Investing at only stock market peaks versus only at stock market troughs produces a worse overall return over a period of 20 years or more.  It pays to buy shares at a lower price by purchasing more during those times.

Tip #4 Consistent Investing Produces a Higher Overall Return-Commonly referred to as Dollar Cost Averaging, involves investing consistently (ex. monthly) a fixed dollar amount  over a long period of time, such as 20+ years.  Timing the stock market and only participating during certain conditions does not yield as high of return as investment consistency.

If investors emotions were not at play in the investment process, investment consistency and monitoring would outweigh ‘timing the market’ over a long period of time and produce higher returns.  For additional information, visit Investopedia’s article Buy and Hold Investing vs. Market Timing.

An investment strategy involves consistency, monitoring, and an overall plan to achieve the goals that you want to achieve.  By working together to develop and implement a financial plan, we remove the ‘timing factor’ that could impact your portfolio.  Feel free to call our office if you would like to schedule a meeting.

American Financial Literacy

las vegas financial advisoryIn December 2016, FINRA (Financial Industry Regulatory Authority) released their report, “Investors in the United States 2016”. The results of the study indicated that overall, American investors felt ‘confident’ in the stock market and the economy, but many felt they didn’t have a good understanding of basic investment principals or basic financial concepts.

One of the most serious findings in the study regarding financial literacy, was that when asking study participants to answer ten basic questions relating to financial concepts, those that felt confident about their financial literacy scored less than 50%!  Those that indicated they were not confident and didn’t understand basic concepts scored slightly worse than the confident investors.  This shows that overconfidence doesn’t necessarily mean understanding.

What does that mean for us as a society?  Numerous reports indicate that if we don’t teach our children (and Adults) financial literacy, there will be consequences that will hurt our country for years to come.  A few key things we need to consider:

Requiring a Financial Literacy Class to Graduate.  Currently only 17 states require a financial literacy class to graduate from high school (Latest study released in 2016).  No states currently require standardized testing of basic financial concepts.  Financial literacy experts know that teaching students how to manage their income and expenses and giving them a basic understanding of financial concepts will enable them to have financial successes regardless of their future income.

Credit Scores Improve After a Financial Literacy Class.  Having trained teachers that know financial literacy content help students develop better credit behaviors in childhood.  This leads to students that are likely to make on-time payments and understand how to manage debt and credit.

Bring Financial Literacy to the Work Place Improves Participation in Retirement Savings Plans.  When employees are invited to attend work place classes on budgeting, saving, and investing, they are more likely to save for retirement and not live beyond their means.  These classes are commonly conducted by the financial advisor that oversees the company retirement plan, the HR Department, and other financial literacy educators.

What can you do for yourself if you feel you are in need of sharpening your financial literacy?  Start by asking questions of a financial advisor or another capable instructor when you don’t understand something.  This can include asking CPAs, literacy teachers, and others that specialize in educating with unbiased intentions.  It’s up to all of us to improve the statistics we are seeing in our population regarding distressing facts on where we lag in comparison to other countries in financial literacy.

Time to Play Retirement Account Catch (up)

Las vegas financial advisory

If you’re approaching retirement in the next fifteen to twenty years, it may be time for you to focus on saving more.  Playing ‘catch up’ by contributing more can make a big difference.  It’s never too late even if the time line is getting closer.  It’s always better to try to put away more than to not try and face the reality of working longer, which may not be what you wanted.  Many situations can cause early retirement even if you’re not financially ready, so make a plan to be proactive.

Catch up on additional payments now by increasing your contributions to your company retirement savings plan, and Roth IRA; even adding 2% can make a difference over time.  If you’re contributing the maximum allowed contributions, congratulations!  If you’re not contributing your ‘max’ start with small steps and the 2% this year.  Remember you can increase your contributions at any time, you don’t have to wait until the next benefit meeting!  If you have the ability to set your contributions on auto-increase, set that into play so that next year and going forward you’re increasing 1%-2% each year.

Utilizing the IRS’s ‘catchup provisions’ if you’re 50 or older is in your best interest, if you’re not already doing so.  You’re allowed to contribute an additional $1000 into IRAs, and an extra $6000 into 401(k)’s.  Other self-employed and solo 401(k) type accounts also have increases this year, so consult with me to determine if you qualify to contribute more.

Playing catch up can benefit you once you start putting into motion steps to increase your savings.  For a basic calculator on how it can benefit you, utilize Bankrate’s Traditional IRA calculator to give you an estimate of how your increases can impact your savings.  Use a lower, realistic rate of return on your initial calculation.

Additionally, plan for us to meet for a financial planning meeting if we haven’t already done so.  Planning for contribution increases can be applied into the financial plan, and seeing how that can benefit you with no increases versus increased contributions, can be a motivator to get your game started.

First Job or New Job? Sign up for Employee Benefits Immediately

las vegas financial advisoryPerhaps you’re going to be a new graduate, or maybe you’ve decided to switch jobs.  Whatever your situation, a new job is a new opportunity to find out everything you can about the employee benefits they offer you.  Some benefits may be covered 100%, others may be at your cost but evaluating what is best for you is important.  Consider these things to sign up for as soon as you can:

Life Insurance- Even if you’re single or within 10-15 years of retirement, consider the life insurance options available to you.  Many time an employer automatically pays for life insurance policy that is one or two times your annual income.  You do need to sign up to take advantage of this benefit.  There may be additional insurance that you can purchase through paycheck deduction at your cost.  A new job provides you the opportunity to protect yourself even more.  Make sure you understand if this insurance ends when your work position does or if you can continue coverage.

Disability or Income Replacement Insurance- A disability insurance plan is commonly offered by employers, but not subsidized by most employers.  This is coverage that will protect you if you can’t work due to an injury or illness.  Don’t think that Social Security Disability will help you immediately because there is the ‘period of proof’ that you can’t work (up to six months), and it may be up to 24 months since the injury before benefits start.  It’s a good idea to consider this benefit.

Health Insurance- Make sure you’re covered by choosing the plan that makes sense for you and your health history.  If dental, vision, and prescription drug coverage are an additional option, determine your needs.  Many times health insurance is paid by the employer entirely for the employee, and at additional cost to the employee for additional family members to be covered.

Retirement Savings Plan- Participate in your company’s plan at least enough to get the employer match.  Consider additional increases over time and the addition of any other savings plans that your company provides in order to help prepare you for retirement.

By participating in the benefits that are available to you through your employer, you can save financially because the employer picks up part of the cost.  By no means are these benefits all you should be doing; you may have a need for other coverage outside of work.  By reviewing life insurance, disability, and retirement savings plans you have privately, I can assist you in determining if you are well covered between what you have and what is offered.

Having Debt versus being Debt Free Two Blue Road Sign with text Debt Free and Debt with sky background, 3D Illustration

Refinancing Debt: Is This a Good Idea?

How often have you walked into your bank and been ‘invited’ to open a new credit card, or better yet ‘refinance’ your debt?  The opportunity to ‘participate’ or receive a ‘special offer’ happens every day not only at banks, but at other places such as department stores.  We have become accustomed to accepting offers of debt, and seldom realize that places that should help us eliminate debt are actually working against us.

Banks own credit card companies, and have a stake in the debt game is very profitable for them.  Statistics show Americans are taking on more debt in order to make ends meet due to a variance between wages and the cost of living.  With increasing costs for food, medical, and housing, banks have adjusted qualification standards in order to offer debt solutions to more people.  What is surprising is how easy it is to refinance debt with debt!

Prior to considering a credit card ‘refinance’ by opening another account and transferring debt to it, evaluate if this makes sense for your personal situation.  If you anticipate carrying debt for 1-2 years, it probably makes more sense to stop spending and start a plan to pay off your debt.

If you’re considering selling your house in the next 2-3 years, refinancing in order to access equity to pay off debt doesn’t make sense.  Tying up your equity eliminates the chance to use it to purchase another property, and also increases the likelihood of limited negotiating power when you’re stuck at a ‘reserve’ price in order to cover your debt when you sell.

When you’re offered the opportunity to refinance your debt at your local financial institution, ask the solicitor to ‘work the numbers’ for you to evaluate if this makes sense for you.  If they can’t explain features, benefits, and conflicts to you regarding the transaction, you probably should not consider it.  For an interesting article and statistics on credit card and other types of debt Americans carry, visit Nerd Wallet’s 2016 survey.

Las Vegas Financial Advisory

Boomers vs. Millennials: Common Financial Differences

It’s common for the previous generation to think that the younger ones are less responsible, spend more, save less, and the list goes on! In the case between the grandparents and grandchildren, or Boomers versus Millennials, the Millennials are getting it right in money management, according to Pew Research. The Millennial generation has experienced the same type of economic conditions as their great grandparents did at relatively the same age. There are differences in saving for retirement between the generations as Boomers had retirement plans and consistent employment, whereas Millennials are likely to have more than one job (part time equals full time) with no retirement plan, and inconsistent employment. Boomers entered the work force during the retirement pension era that was replaced by the 401(k) era. They were lucky in that they had retirement accounts that were automatically set up with contributions via pension money. However, they were a generation that felt satisfied by title, or entitlement and the corner office, versus work that was meaningful. This was the ‘keep up with the Joneses’ generation and their spending led to the credit card industry’s birth.

Research studies are concluding that Millennials are spending less, more financially responsible, prefer to pay in cash, and have debt related to education loans and not credit card spending. The Millennial generation is renting versus buying due to economic insecurity in the job market. They are not able to find jobs in their profession, and are taking less paying jobs in order to make ends meet. They are not paying for items that are considered ‘extras’. Young Money Magazine wrote an article on the generational differences that includes Millennial’s parents and grandparents you may find entertaining. Here is a quick comparison of fun differences between the two generations:

Boomers:

  • Land-Line & Cell Phone
  • Cable/Satellite TV
  • Dress up for Work
  • Dining Out
  • Buying With Credit

Millennials:

  • Cell Phones
  • Internet TV- Hulu, AppleTV
  • Jeans and Casual Wear
  • Eating at Home
  • Paying in Cash

Additional information regarding spending and saving between the generations can be found in the 17th Annual Transamerica Retirement Survey. Regardless of your income or what generation you belong to, having a saving and spending plan is important. This goes for both Boomers who may be retired, and Millennials, who are early into their careers.

Las Vegas Financial Advisor

March 2017 Newsletter | Boomers vs. Millennials: Common Financial Differences

Boomers vs. Millennials: Common Financial Differences

Las Vegas Financial AdvisoryIt’s common for the previous generation to think that the younger ones are less responsible, spend more, save less, and the list goes on!  In the case between the grandparents and grandchildren, or Boomers versus Millennials, the Millennials are getting it right in money management, according to Pew Research.  The Millennial generation has experienced the same type of economic conditions as their great grandparents did at relatively the same age.  There are differences in saving for retirement between the generations as Boomers had retirement plans and consistent employment, whereas Millennials are likely to have more than one job (part time equals full time) with no retirement plan, and inconsistent employment.

Boomers entered the work force during the retirement pension era that was replaced by the 401(k) era.  They were lucky in that they had retirement accounts that were automatically set up with contributions via pension money.  However, they were a generation that felt satisfied by title, or entitlement and the corner office, versus work that was meaningful.  This was the ‘keep up with the Joneses’ generation and their spending led to the credit card industry’s birth.

Research studies are concluding that Millennials are spending less, more financially responsible, prefer to pay in cash, and have debt related to education loans and not credit card spending.  The Millennial generation is renting versus buying due to economic insecurity in the job market.  They are not able to find jobs in their profession, and are taking less paying jobs in order to make ends meet.  They are not paying for items that are considered ‘extras’. Young Money Magazine wrote an article on the generational differences that includes Millennial’s parents and grandparents you may find entertaining.  Here is a quick comparison of fun differences between the two generations:

Boomers:

  • Land-Line & Cell Phone
  • Cable/Satellite TV
  • Dress up for Work
  • Dining Out
  • Buying With Credit

Millennials:

  • Cell Phones
  • Internet TV- Hulu, AppleTV
  • Jeans and Casual Wear
  • Eating at Home
  • Paying in Cash

Additional information regarding spending and saving between the generations can be found in the 17th Annual Transamerica Retirement Survey.  Regardless of your income or what generation you belong to, having a saving and spending plan is important.  This goes for both Boomers who may be retired, and Millennials, who are early into their careers.

Refinancing Debt: Is This a Good Idea?

Las Vegas Financial AdvisoryHow often have you walked into your bank and been ‘invited’ to open a new credit card, or better yet ‘refinance’ your debt?  The opportunity to ‘participate’ or receive a ‘special offer’ happens every day not only at banks, but at other places such as department stores.  We have become accustomed to accepting offers of debt, and seldom realize that places that should help us eliminate debt are actually working against us.

Banks own credit card companies, and have a stake in the debt game is very profitable for them.  Statistics show Americans are taking on more debt in order to make ends meet due to a variance between wages and the cost of living.  With increasing costs for food, medical, and housing, banks have adjusted qualification standards in order to offer debt solutions to more people.  What is surprising is how easy it is to refinance debt with debt!

Prior to considering a credit card ‘refinance’ by opening another account and transferring debt to it, evaluate if this makes sense for your personal situation.  If you anticipate carrying debt for 1-2 years, it probably makes more sense to stop spending and start a plan to pay off your debt.

If you’re considering selling your house in the next 2-3 years, refinancing in order to access equity to pay off debt doesn’t make sense.  Tying up your equity eliminates the chance to use it to purchase another property, and also increases the likelihood of limited negotiating power when you’re stuck at a ‘reserve’ price in order to cover your debt when you sell.

When you’re offered the opportunity to refinance your debt at your local financial institution, ask the solicitor to ‘work the numbers’ for you to evaluate if this makes sense for you.  If they can’t explain features, benefits, and conflicts to you regarding the transaction, you probably should not consider it.  For an interesting article and statistics on credit card and other types of debt Americans carry, visit Nerd Wallet’s 2016 survey.

 

Self Employment and Retirement Readiness

Las Vegas Financial AdvisorySelf-employment is a growing trend world-wide and in the US.  The desire to work for themselves, being able to designate working hours, and the perks of flexibility when they work is part of the reason many choose to be self-employed.  However, there are growing statistics that show many are forced to start their own business due to ‘down-sizing’ by American companies, and the ability for companies to hire ‘contracted labor’ for what they need versus hiring full time and paying benefits.

Necessity has created an entrepreneurial opportunity for many to become self-employed.  However, the US lacks in self-employment as only 6.5 percent are self-employed, in comparison of 1 in 3 people being self-employed in other countries, such as China, Brazil, and Turkey.  The trend in the US is that we will see an increase in the number of people becoming self-employed due to technology advances eliminating workers, longer working years past age 69 in comparison to previous generations, and the slow recovery of business growth resulting in new positions with wages above minimum wage.

Being self- employed creates an interesting scenario when it comes to benefits others receive through their full time employment, such as health insurance and a retirement savings plan.  Most countries rely on a three system approach to retirement savings:  Governmental savings plans, employer savings plans, and personal savings.  The alarming trend in the US is that self-employed individuals are not participating in these same savings plans; they are only paying in to the governmental plan which in our country is Social Security.  Many self-employed have not set up their own retirement savings plan, such as a solo 401(k).

Many self-employed have irregular incomes, which makes it difficult to save on a regular basis.  In some situations, individuals have been self-employed for many years, building a business which they plan to liquidate upon retirement to provide themselves with retirement assets.  In either situation, planning needs to take place in order to ensure there are assets to use for retirement.  Since the self-employed have typically had ‘to do it themselves’, they often feel they need to plan themselves and are not consulting with financial professionals.

Regardless of what your age and how many years you have been self-employed, it’s important to meet with an advisor who can assist you in planning for your future.  For additional information on the self-employed and retirement readiness, visit the Global Retirement Survey.  Feel free to contact me regarding setting up a self-employed retirement savings plan, or reviewing the one you have in place.

A Job Relocation in 2017? Compare Costs Before You Accept That Offer

Las Vegas Financial AdvisoryWith the new US Administration enticing American companies to relocate jobs back to the US, you may be hoping to benefit and are tempted to start looking for a new position in a new geographical area.  The recent economic ‘feel good’ atmosphere (according to analysts) may be an indication of growing job opportunities.  As you interview and are possibly offered a position in another area of the country, it is important for you to do your research to see if that opportunity is worth it economically.  A higher salary is no indication that you will bring home more money.

Considering the cost of living, medical care, and if you will receive on-going raises beyond the cost of living is important.  Secondly, do a cost of living analysis on the area you’re intending to relocate to.  Compare housing, electricity, food, medical care, and any associated expenses similar to what you have now.  All of these costs can vary greatly depending on the area of the country you move to.  For example, utilities and food tends to be more expensive in northern regions due to transportation costs (food, pipelines) and housing tends to be more expensive in warmer climates if the area is a ‘more desirable’ metro destination.  Check the CNN Money Relocation Calculator to help you determine costs by comparing that geographic area to where you live now (US metro areas in each state are included in the latest data calculator).

If you do relocate, take your former employer retirement savings plan with you by rolling your assets into an IRA.  As people age and have more employers, they tend to forget about 401(k) plans at former employers.  Due to the costs of keeping plans of terminated employees, many employers automatically roll those accounts over to another custodian you may have no control over.  Contact me if you have old 401(k) plans that need to be combined, or are anticipating moving and would like a financial planning consultation prior to relocating.

Link Financial Advisor

February Newsletter: 2017 Retirement Plan Savings Changes

2017 Retirement Plan Savings Changes

Las Vegas Financial Advisor

For those people that are participating in a traditional 401(k) or government retirement plan such as a 457 or 403(b), contributions will remain the same for 2017. Employees under age 50 can save up to $18,000 in the plan, with those age 50 and older socking away an additional $6,000 catch- up contribution.

IRA’s have not seen a change in many years, with the same $5500 limit and a catch-up contribution for people 50 and older of $1000.

There are other plans that will see an increase starting in 2017. For those that benefit from a traditional pension plan, the maximum annual benefit will increase to $215,000 (up $5000).

If you’re a self- employed individual or have a company you work for that has a 401(k) similar type plan, the amount that can be contributed annually is up $1000, from $53,000 to $54,000. The type of plans that benefit from this increase are Single 401(k) and SEP IRAs.

Regardless of the plan type you participate in, check to make sure you’re contributing the maximum amount. Some plans have a feature that allows your contribution to automatically increase each year, to the maximum at some point. As your wages increase, automatic contribution increases are good way to ensure your contributions increase offsetting your taxable earnings.

If you have any questions regarding these types of retirement savings plans or would like me to review your plan, feel free to contact our new Las Vegas Financial Advisory.

Retired and Kids Are Grown? You Still May Need Life Insurance

Las Vegas Financial AdvisorWhen you were starting out your young life, acquiring assets, having children, and moving up the ‘corporate ladder’ was part of your everyday life and having life insurance made sense.  After all, protecting your family in your absence was part of your plan.  Now that you’re retired and the kids are grown and gone, do you still need life insurance?  If you can answer “yes” to the questions below, you probably do even if you’re over age 65!

Are you responsible for taking care of someone other than yourself?  If you are caring for someone else financially, such as a parent, spouse, or child, you still have a need for life insurance.

Are you still working?  If you’re still working and intend to continue working for one or more years, the loss of your income could be catastrophic to others.

Do you intend to leave assets to beneficiaries when you pass?  Not having life insurance in place can have a major impact financially if your beneficiaries have legal fees and taxes to pay on your estate.

Do you have debts?  If you have a mortgage or other payments, life insurance could be used to pay your debts if you pass away.  Your debts are not ‘forgotten’, your estate (or family) has to pay them off!

Do you have a retirement plan that stops when you die?  If you receive payments from a pension or a single life annuity, when you pass your beneficiaries receive nothing.  The income stream that you had does not pass to a spouse or heir, and if you are financially supporting them, life insurance is a must.

Do you plan to pay for your own funeral or final expenses?  As much as you may not want to think about it, death is unavoidable.  Having life insurance in place is a way to cover the final celebration of your life.  In most instances, your beneficiaries filing a death claim and receiving proceeds of a life policy takes less time than liquidating retirement assets to cover the expenses.

If you have questions as to if you still need life insurance when you’re retired, let’s have a conversation.

When An Investment Is Too Good To Be True

Las Vegas Financial AdvisorEveryday regular, trusting, hard-working people fall victim to scams involving investments.  This happens all over the world, not just in our country.  Many times, victims are associated by profession, friendship, religious affiliation, and other associations they belong to.  Why does this happen in an ‘associated group’ way?  Because scammers know that large scale success lies in getting an associated group to buy into their scam.  It is easier to ‘sell’ their scam when they can use associations and ‘name dropping’ when inviting you to participate or discuss their ‘investment’ with you.

When considering an investment, professionals working in a regulated industry never ‘name drop’ or discuss associations and individual members that they work with.  It’s not ‘legal’ to name other individuals they do business with due to Federal privacy and personal information laws.

If you hear about an investment that sounds ‘too good to be true’, it is up to you to question that investment.  If you ask questions and don’t have them answered in an understandable way, the person telling you the information may be changing what they are telling you, or are trying to make you feel you are not capable of understanding it.  They position it as a ‘complex’ investment that you’re lucky to be invited to participate in.  Investments should not be too complicated to understand, or too simple that it seems like a ‘get rich quick’ exclusive opportunity!  Investing and reaping the rewards of the investment takes time and is not something too good to be true.

Regulated investments are registered, sold, and serviced by licensed professionals who have no criminal history, no bankruptcy, have received training, and participate in continuing education.  As you hear about investments that are ‘too good to be true’, examine who is selling them, if they’re regulated, and do your ‘on-line’ research on the investment and the person you’re doing business with.

Are Your Priorities ‘Out of Sync’?

Las Vegas Financial AdvisorIt may be easy to get lost in the “black whole of stuff” and what we ‘think’ is a priority if we’re not careful.  Having a new car, an updated cell phone, things we can’t afford long term, and keeping up with others should not take precedence over taking care of YOU.  Don’t let your priorities get out of sync this year and examine what you’re doing in each of these areas:

Protect Yourself.  Aside from making good, healthy decisions for yourself, are you insured?  Do you have health insurance, life insurance, property and casualty insurance?  If you’re not insuring yourself and your assets and are spending money on going out every weekend instead of insurance, you have your priorities out of sync.  Use your health insurance and have a preventative exam this month!

Pay Yourself First.  Before you pay your bills, make sure you are saving each month for your retirement.  Over the long term, you will accumulate savings that you will need later in life.  Save now while you’re healthy enough to work and save.

Keep a Roof Over Your Head.  Pay your mortgage or rent first; bills come second.  If you have too many bills related to debt that it makes it hard to make your housing payment, assess your priorities and make a plan to get rid of them!

Learn to Say “No”.  No to spending on things you don’t need, no to choosing activities that don’t benefit you or your health.  Once you’ve learned to say ‘no’, it becomes easier to say ‘yes’ to things that benefit you long term.

Make a Plan.  It’s been said and proven that ‘those that fail to plan, fail’.  Planning can be as quick as making a list to accomplish this week, or as slow as saving money for retirement over a number of years.  Without making a plan, starting, and reassessing, you are more likely to fail and do nothing.  During your planning process, examine all of the areas listed above and see what you’re plan is lacking.

Prioritizing makes sense and is adjustable according to what is happening in your life.  Take care of your most valuable asset first (You and your family) and don’t assume that your plan is complete without examining it periodically. If I can assist you in ‘syncing your priorities’ please feel free to contact me.

Las Vegas Financial Advisor

January 2017 Newsletter

When Overconfidence Hurts

Las Vegas Financial Advisor

There are times in our lives when being confident is a good thing. But there are situations where being overconfident can hurt, especially when it comes to investments. Psychologists have studied confidence, and how it relates to previous knowledge we have. During the study, they asked questions that would require a range of answers based on previous knowledge such as “how long do you think the Nile River is; 20 miles, 50 miles, or 100 miles long”? What they found was that the participants of the study were more often wrong then not! Expecting only a small percentage of incorrect answers to their study’s questions, the reverse happened where only a small percentage of participants were right in their answers! They termed this phenomenon the overconfidence effect. The overconfidence effect also applies to forecasting, such as the stock market’s performance over a year, leading one to being overconfident that their predictions will be accurate. Interestingly, the study found that people that are believed to be ‘experts’ in their field of study (or experiences) will suffer from the overconfidence effect more than the average person. They actually believe the incorrect answer is right.

When thinking about investments, being overconfident can hurt us by making us believe that we are more knowledgeable than outside sources. Other people with knowledge pertaining to investments, such as financial advisors, could help us make better decisions. The overconfident investor tends to trade too often, cost themselves more money, and sets the stage for poor performance over time by picking investments that are not aligned with their goals. They tend to believe they are outperforming in the stock market in comparison to others, which tends to be inaccurate. The study also found that overconfidence effect is more prevalent in men than in women; women tend to not overestimate their knowledge as much.

To overcome being an overconfident investor, discussing your investments with a financial advisor in Las Vegas may help. Setting goals, diversifying, and working toward your goals over time and not just in the short term can change the outcome of bad decisions being made due to being overconfident. Confidence is not a bad thing, but getting a second opinion on what is truly happening with your investments and not what you perceive to be happening is never a bad idea.

Transferring Wealth Through Estate Planning

Las Vegas Financial AdvisorTransferring Wealth has no ‘right or wrong’ way of doing it, but is best done in the way that you prefer, and you consider how it will affect your heirs. Planning to transfer assets should involve more than one professional as you develop and plan for transferring wealth. Always include an attorney, tax professional, and your financial advisor so that everyone involved can explain benefits and consequences to your heirs and your surviving spouse, if still living. No one solution works for every family. With 2016’s tax exclusion at $5.45 million per individual estate donor ($10.9 million per couple), you don’t want your giving to result in financial consequences for your heirs.

You want to regard your wealth transfer as ‘leaving a legacy for others’ which includes protecting others while you pass on your values and financial dreams for them. Some people consider transferring wealth to benefit their children and their children’s children, and if the wealth is great enough, endowments can be created to benefit many people. The complexity of the wealth transfer increases with the number of people it is being created to benefit, and the length of time you want the assets to last. Wealth transfer may become complex due to the personalities of the people it benefits, just like a family can be complex due to different personalities.

Important things to consider are how much control you want to have prior to passing, understanding issues that can arise from not equally distributing assets among family members, and if part of the estate should start to be transferred now and the remainder at death. Transferring wealth through estate planning should not be a ‘quick decision’ decided in only one appointment. Not considering all outcomes and how it will affect all heirs can be costly, as well as lead to relationship consequences.

Once you’ve created your estate plan talk to your family about it. Invite open dialog, and invite their questions while appropriately answering them. Help your family understand the reason behind your decisions, but don’t be swayed by your decision to be generous if not all members agree with decisions. Letting them know the resources for information that helped you to your plan many times eliminates concerns when family members know you consulted legal, tax, and asset professionals. You may not choose to disclose certain information regarding the wealth transfer, which is your decision. Informing family members that there is an estate plan in place many times eliminates concern regarding asset transfer.

If you have any questions regarding wealth transfer, please schedule a free meeting with my Las Vegas office to learn more about how we can help you with estate planning.

The Value of Planning

Las Vegas Financial AdvisorPlanning is valuable for many reasons and helps to ‘normalize’ things when you find yourself in the middle of an unexpected life event. A death, job loss, new family member, an inheritance, divorce, or a catastrophic event that can cause a major financial detour. How you plan will help determine how you survive and normalize after these events.

Planning can be as simple as making sure you have the right insurance coverage, from personal to property insurance. All insurance is in place to offset risks and protect other assets that you’ve worked hard to accumulate. Another step in planning is to make sure you have a will in place if something happens to you so that your loved ones know you want things taken care of.

As strange as this may sound, some people even go as far in their planning to offset risks to their financial plan if they go through divorce. Financial advisors are working with couples to plan for the life event of going through a divorce to help plan for offsetting financial risks of saving and planning for one! Not all people plan for the ‘what if I become single again’ risk and may find themselves unprepared for income and savings being decreased.

With life’s constantly changing events, you may need to reassess your goals and plans for achieving them. Are you on track for retirement if any of the above circumstances happen? Does your portfolio strategy reflect sudden life changes? In working toward your financial goals it is possible to run scenarios to see the outcome of life events and the possibility of how it may affect you. If you get detoured by a life event, or even a bad investment decision, planning (and previous planning) helps you to recover sooner to what felt ‘normal’. We all know life can be messy, and what you do now can help make the difference for what may happen later. No one can predict the future, but it helps to prepare ourselves as much as we possibly can.

Planning for all types of events is valuable. If you would like to visit regarding planning for potential risks to your retirement plan, please contact our Las Vegas office to set an appointment.

Money Market Reform

Las Vegas Financial AdvisorOne of the last reforms to happen after the financial crisis fallout of 2008 is Money Market Reform, implemented in October 2016. Money market funds have at times been misunderstood by investors as a ‘safe investment’ during times of financial crisis. The reality is that money market funds are traded in the same manner as other securities. There is no ‘safety net’ or ‘guarantee’ your investment in a money market will not lose value. Money Market funds took a hit during the financial crisis just like the rest of the stock market did. Reform of money markets? Here’s why:

Money Market Funds managed by the Reserve Primary Fund prior to 2008 were at a fixed $1 NAV (Net Asset Value). When the market started to drop and investors started liquidating Money Market funds because their value had dropped below the $1NAV, mass redemptions started taking place, causing a loss of more than two thirds of the value of the fund in 24 hours.

Now, eight years later the SEC (Securities and Exchange Commission) has issued new rules for the management of money market funds to help with stability and restrictions on the fund’s holdings and liquidity requirements. These money market funds now have a ‘floating’ NAV, no longer a fixed NAV.

Secondly, fund providers are now required to impose ‘liquidity fees’ in an effort to deter a liquidation run on a money market fund that is triggered when the fund’s value starts to drop. Fees can range from 1-2%. Funds can also suspend liquidation of the fund for up to ten business days in a 90 day period in order to deter mass liquidation.

Who may be affected by this new ruling? Retail investors may not see any changes since retail money markets still maintain the %1NAV, although there may be liquidation stipulations. However, investors in 401k plans will see changes as institutional funds are subject to the new rules. Most of the money market funds inside these plans will switch to US Government money markets which are not subject to the floating NAV. Those investors seeking a ‘higher return, higher risk’ money market will have to invest outside of their 401k plan as many plans will be switching their money market option to another solution, or removing money market funds completely.

If you have questions regarding your money market funds inside a retirement plan, or are looking for another alternative feel free to contact our Las Vegas office.