Steps to Take Before Committing to a Retirement Age

Looking ahead to retirement may raise more questions than you expect. Full retirement age is defined by the Social Security Administration between 65 and 67, depending on your actual year of birth. But your employer may define it in a different way. This can make it difficult to determine when is the most appropriate time for you to decide to retire. If you retire too early without having appropriate savings, you could wind up in financial trouble. A financial advisor, as well as other professionals, such as a CPA and your estate planning lawyer, can help you put together a plan to meet your needs and goals so that you feel confident about the decision that you have made.

Start by taking inventory of your assets, writing down your savings balance, every debt, liability, insurance policies, and potential income streams. Don’t forget about any other valuable possessions that could impact your overall net worth as well as your estate plan, such as vehicles, properties, and collections. Creating a worksheet that you can adjust on a regular basis is the best way to do this.

The Bureau of Labor Statistics reported that the average American age 55 or above spend $67,000 per year. Other experts recommend the benchmark of having a million dollars in order to retire comfortably. Make sure that you discuss your personal goals with an experienced financial team so that you can feel confident about your decisions and chart a course that can be adapted over time. You may need to adjust your retirement age based on individual preferences or shifting circumstances in your family. But having the inside of outside experts can make this much easier.

Contact our offices today to learn more about how retirement planning works in conjunction with your estate plan.

Seven Times You Need To Meet With Your Financial Advisor and Estate Planning Attorney

There are many different changes that can happen throughout the course of your life and some of these prompts setting up a meeting with your team of financial professionals. This can include an estate planning lawyer, your financial advisor, or even your accountant.

As these changes occur, it is crucial to consult with these experts about how adaptations in your life or the bigger picture such as laws can influence your strategies for your future. If any of these describe your current situation or an upcoming issue, consider setting up a meeting now.

  • You’re preparing to retire in the next couple of years.
  • You currently manage your own investments but could benefit from the insight of an unbiased third party as you may be overlooking opportunities in your portfolio.
  • You have recently inherited money and are attempting to determine the best thing to do with it.
  • You have children and are planning for their inheritance or saving for college.
  • You’re getting divorced and want to know how this will impact your finances.
  • You want to build wealth.
  •  You are concerned about future healthcare expenses in retirement and later years.

All of these circumstances merit a consultation with your team of financial professionals to determine whether or not your existing financial plan will help you to accomplish your goals as listed. Our office is here to help guide you through these steps in your life and empower you with the information you need to make informed decisions. Working with an attorney is helpful for understanding how these smaller pieces fit into the big picture.

How to Minimize Estate Tax Liability as Part of Your Financial Plan

The idea of the estate tax doesn’t apply to plenty of people in America, but for those that it does impact, it is extremely important to have the resources provided by an experienced and dedicated financial expert. Understanding the various steps in this process is extremely important to determine how to create a customized plan with the help of an estate planning lawyer.

There are several different strategies you can use to address a comprehensive financial and estate plan that considers all of your investments and saving strategies, planning ahead for retirement, and the legacy you wish to leave behind for your loved ones. These steps include things such as:

· Creating an irrevocable life insurance trust

· Giving gifts to family members

· Establishing a family limited partnership if you have any family-owned assets or businesses

· Making charitable contributions

· Creating and funding a qualified personal residence trust

A financial advisor and an estate planning attorney can help you to look at your situation from a big picture perspective. This can help you to figure out the next steps you need to take and how to adapt and adjust your financial and estate plan over time. Schedule a consultation with a member of our experienced team to learn more about your options.

Our office works with clients to help you with the individual pieces of your planning process, but also to help you adapt as circumstances change in your life. Whether it’s a change in the tax code or a personal change in your life, we’re here to help you ensure that your financial plan is always up to speed.

Consumers and Financial Advisors Want More Specialized Services

When it comes to planning ahead for your retirement and thinking about your estate plan, it’s easy to get overwhelmed. There are both general and specific questions that must be answered from a planning perspective.

Taking charge of your finances means addressing issues not just now, but thinking about the best ways to protect your interests now and in the future. Working with outside professionals to establish a plan and to stay in touch as your financial needs change is key. Most people seeking out financial professionals now are looking for more specialized help to ask the right questions and evaluate all the possible strategies and tools that cover their main concerns.

A recent study identified that financial advisors and consumers are on the same page about the need for more specialized services, especially as it relates to the possibility of planning for retirement income. In fact, consumers say that this is the most important service they seek from a financial advisor.

With over 71% of independent advisors currently wanting to advance their own specialized knowledge in light of the growing number of retirees, consumers are also seeking information at the same time. The survey found that consumers want guidance with retirement planning more than any other area, especially when it comes to how much they can safely spend in retirement. Improving the performance of their investments is also a top priority.

When you need to hire someone to help you with tax minimization, asset protection, and other financial strategies, seek out a team that has the right experience and commitment to get you there.

Looking ahead to the future and considering all of your potential risks is extremely important when you find yourself in the position of planning ahead for retirement. It is crucial to identify an experienced estate planning lawyer and any other financial professionals who may help you to accomplish your goals.

Study Shows Lack of Financial Education Expensive For 80% of Americans

A recent study completed by Go Banking Rates found that when asking 1,000 adults in America how they feel about their finances, only 20% of them felt appropriately educated to the point where it has not harmed them financially.

A lack of financial literacy has negative impacts in the short and long term. Some of the potential fallout from a lack of financial literacyincludess overpriced loans, significant debt, and a reluctance for people to save or invest their money. Today, savings accounts yield a minimal 0.07% interest on average, and investing unspent income is critical for wealth generation.

This can help to provide for your own future in retirement, and also leave behind a nest egg for your loved ones if you choose to do so. Not everyone needs to be a financial expert in order to achieve their goals, however. Most people with significant assets under management recognize that being guided by a team of professionals is the best way to leverage time and resources. Knowing someone who understands your situation and works hard to help you adjust your financial strategies gives you peace of mind, but also a place to turn when you have questions or when market conditions change.

The only way to accomplish these goals is to work directly with experienced professionals in the financial industry, and to create a comprehensive estate plan to address many of the most common concerns and questions. Being proactive with your financial planning can pay off in spades down the road by empowering you with the knowledge needed to create and adjust your plans as needed.

Contact our team today to learn more about how to create a plan to protect your interests. We’re here to help and guide you.

What To Do During Periods on Inflation

So, we all talk about what exactly is Inflation? Inflation is a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.

Now that we’re on the same page about it, what should you do to protect your personal finances during times of high inflation?  Well, there a handful of things you may consider with your advisor but here are three personal finance tips to consider during times of high inflation :

1) The name is Bond. James (just) Bonds.

  • When inflation is higher than the fixed rate of a bond, you’re losing the purchasing power of your money.
  • Owning a bond is like making a loan:
    • A Treasury bond lends money to the federal government.
    • A municipal bond lends money to a city or state.
    • A corporate bond lends money to a company or corporation.
  • The other side of owning a bond is borrowing. When the mortgage rate is lower than the inflation rate, the bank is taking the bad end of the deal.

2) Wicked Smaht Debt.  Investing vs. paying off your mortgage

  • When fixed income rates were much lower than mortgage interest rates, we suggested that clients pay off their mortgage with extra income rather than invest the money.
  • Recently, mortgage and fixed income rates are equalizing, so we are coming to the point where it may make more sense to invest your money than pay off your mortgage.

3) Beware the Big Bad Wolf blowing your house down. Re-examine your homeowner’s insurance

  • Since home values, raw materials and labor have dramatically increased, it’s important to have enough coverage to replace your existing home in the event of a disaster.

If you are worried about how inflation impacts your retirement & financial foals.

I scream, you scream-we all scream for…“I Bonds”?

This is the time of year when most people have ice cream on their minds, in their freezers & (eventually) in their belly.  However this year, I’ve been asked more about I-Bonds than Ice-cream.   That’s because by the time you read this, it’s likely that the U.S. Treasury will have to announce new Series I Savings Bonds will earn a healthy 9.6% annualized rate. This very attractive yield has generated a good number of questions about the use of Series I Savings Bonds.

What are these securities and how do they work?

Series I Savings Bonds are issued by the U.S. Treasury and earn interest for 30 years that is federally taxable but exempt from any state or local taxes. The interest rate earned on Series I Savings Bonds, or I-Bonds, is compounded semi-annually and is currently quite attractive at the aforementioned 9.6%. The interest rate is a combination of fixed rate (currently 0%), which does not change during the life of the bond, and an inflation rate (currently 9.6%), which adjusts semi-annually based on the Consumer Price Index for all Urban Consumers, or CPI-U. This rate resets in May and November each year.

While these securities sound like excellent investments, it is important to note that I-Bonds have some limitations:

• You must own them for one year before you can cash them in.

• If you sell them before a five-year holding period, you forfeit three months of interest.

• Investors can only purchase $10,000 worth of I-Bonds electronically from the Treasury in any given calendar year. An additional $5,000 of bonds can be purchased in paper form, but only through the proceeds of your federal income tax refund check.

• I-Bonds are ineligible for Roth IRA accounts.

ConclusionWhile there is no denying the appeal of these securities, the purchase restrictions make their use impractical for the vast majority of clients. If you have questions about how these, or any investments may fit with your plan-don’t hesitate to reach out!

Worried About Stocks? Why Long-Term Investing Is Crucial

“In 1997,  I had just graduated from Penn State with my finance degree & was about to start law school.  I even had hair. I wasn’t into Harry Potter but I did know about Y2K, this new thing called the Internet & the Russian financial crisis. David Booth in the article below highlights what is happened since that time and what it means for stocks and investments. Hope you enjoy the article!”


We are living in a time of extreme uncertainty and the anxiety that comes along with it. Against the backdrop of war, humanitarian crisis, and economic hardship, it’s natural to wonder what effect these world events will have on our long-term investment performance.
While these challenges certainly warrant our attention and deep concern, they don’t have to be a reason to panic about markets when you’re focused on long-term investing.

Imagine it’s 25 years ago, 1997:

  • J.K. Rowling just published the first Harry Potter book.
  • General Motors is releasing the EV1, an electric car with a range of 60 miles.
  • The internet is in its infancy, Y2K looms, and everyone is worried about the Russian fnancial crisis.

A stranger offers to tell you what’s going to happen over the course of the next 25 years. Here’s the big question: Would you invest in the stock market knowing the following events were going to happen? And could you stay invested?

  • Asian contagion
  • Russian default
  • Tech collapse
  • 9/11
  • Stocks’ “lost decade”
  • Great Recession
  • Global pandemic
  • Second Russian defaultWith everything I just mentioned, what would you have done? Gotten into the market? Gotten out? Increased your equity holdings? Decreased them?
    Well, let’s look at what happened. From January of 1997 to December of 2021, the US stock market returned, on average, 9.8% a year. A dollar invested at the beginning of the period would be worth about $10.25 at the end of the period. These returns are very much in line with what returns have been over the history of the stock market. How can that be? The market is doing its job. It’s science.

Investing in markets is uncertain. It’s the role of markets to
price out that uncertainty.

Investing in markets is uncertain. The role of markets is to price in that uncertainty. There were a lot of negative surprises over the past 25 years, but there were a lot of positive ones as well. The net result was a stock market return that seems very reasonable, even generous. It’s a tribute to human ingenuity that when negative forces pop up, people and companies respond and mobilize to get things back on track. Human ingenuity created incredible innovations over the past 25 years. Plenty of things went wrong, but plenty of things went right. There’s always opportunity out there. Think about how different life is from the way it was in 1999: the way we work, the way we
communicate, the way we live. For example, the gross domestic product of the US in 1997 was $8.6 trillion and grew to $23 trillion in 2021. (Read more about the merits of investing in innovation.)

I am an eternal optimist, because I believe in people. I have an unshakable faith in human beings’ ability to deal with tough times. In 1997, few would have forecast a nearly 10% average return for the stock market. But that remarkable return was available to anyone who could open an investment account, buy a broad-market portfolio, and let the market do its job. Investing in the stock market is always uncertain. Uncertainty never goes away. If it did, there wouldn’t be a stock market. It’s because of uncertainty that we have a positive premium when investing in stocks vs. relatively riskless assets. In my opinion, reaping the benefts of the stock market requires being a long-term investor. By investing in a market portfolio, you’re not trying to fgure out which stocks are going to thrive, and which aren’t going to be able to recover. You’re betting on human ingenuity to solve problems.

The pandemic was a big blow to the economy. But people, companies and markets adapt. That’s my worldview. Whatever the next blow we face, I have faith that we will meet the challenge in ways we can’t forecast.
I would never try to predict what might happen in the next 25 years. But I do believe the best investment strategy going forward is to keep in mind the lesson learned from that stranger back in 1997: Don’t panic. Invest for the long term.

By: David Booth
Executive Chairman and Founder

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value Dimensional Fund Advisors does not have any bank affliates.

Pressing the Reset Button After a Financial Loss

Even when you’ve worked hard to build a diverse portfolio and multiple income streams, it’s still possible to experience the frustration of financial loss. In light of the pandemic and the many future economic uncertainties, now is a good time to step back and think about how you can safeguard your finances, but also set up tactics to know how to bounce back if and when that is necessary.

Some of the most common ways for people to experience financial loss include:

  • A sudden medical diagnosis (that requires out of pocket expenses and missed time at work)
  • Divorce
  • The loss of a job
  • A big downturn in the stock market
  • Waiting too long to start saving

No matter which of these might impact you, the important thing to remember is that with enough awareness, you can bounce back. One of the key things to keep in mind is that without an asset protection strategy, your wealth erodes over time. Whether it’s inflation, the risk of lawsuits, or changing tax laws, you simply can’t “set it and forget it” with your finances. Instead, you need an ongoing strategy that helps you adapt to the challenges in front of you.

Be aware of the need to always set aside emergency savings and to watch for the creep of lifestyle expenses. As people earn more money, they often turn to spending a bigger portion of their income because it feels “extra.” However, savings and investments must be viewed as just as dynamic in order to protect your financial resources for many years to come.

If you’re ready to build a plan that helps protect you from unexpected financial losses, we can help you focus on resilience in your greater financial plan. Contact us today to learn more about how we can help.

How to Define Your Personal and Financial Legacy Values

Plenty of studies have shown that people believe financial planning needs to be introduced to people much earlier in life. With no formal educational requirements in traditional K-12, many adults are forced to adapt their financial plans seemingly on the fly. It’s a big reason why many of them turn to experienced financial experts to chart a course for the future.

If you’re not sure where to start, but you know that you want to develop financial values that live on beyond you, it’s good to consider your own personal goals around money. What’s most important to you and how is that reflected in your regular spending?

For example, perhaps building a nest egg has been a top priority for you because you’re concerned about having the right assets to support your lifestyle in retirement but also any potential health issues that might arise. Documenting these wishes and talking about them with your family helps everyone get on the same page about what is important to you, but it can also be inspirational for your loved ones to see how you’ve protected your interests and concerns, too.

Here are some questions to get you jumpstarted in thinking about refining your own financial legacy:

  • How has money supported you during your life? How has it supported your family?
  • Have you been able to give to causes that are important to you?
  • What factors go into your decision about how much to save and invest? Have you adapted those strategies over time?
  • What do you want to be remembered for, both in your family and beyond?
  • How has your money been used to help support the goals most important to you, and how have you established plans for that to continue in the future?
  • What do you want your children and other heirs to know about how you view money?

Working with the right financial and asset protection planning professional can be a big step forward in securing your future. Set up a meeting today to learn more about working with us.

Surprisingly Benign: How Stocks Respond to Hikes in Fed Funds Rate

On May 4, the US Federal Reserve increased the target federal funds rate1 by 50 basis points as part of what the central bank said will be a series of rate increases to combat soaring inflation in the US. Some investors may worry that rising interest rates will decrease equity valuations and therefore lead to relatively poor equity market performance. However, history offers good news: Equity returns in the US have been positive on average following hikes in the fed funds rate.

We study the relation between US equity returns, measured by the Fama/French Total US Market Research Index, and changes in the federal fund’s target rate from 1983 to 2021. Over this period of 468 months, rates increased in 70 months and decreased in 67 months. Exhibit 1 presents the average monthly returns of US equities in months when there is an increase, decrease, or no change in the target rate. On average, US equity market returns are reliably positive in months with increases in target rates.2 Moreover, the average stock market return in those months is similar to the average return in months with decreases or no changes in target rates.

What about the months after rate hikes? This question may be of particular interest when the Fed is expected to increase the federal funds target rate multiple times. Exhibit 2 presents annualized US equity market returns over the one-, three-, and fve-year periods following one or two consecutive monthly increases in the fed funds target rate, as well as following months with no increase. In reassuring news for investors concerned with the
current environment of increasing rates, the US equity market has delivered strong longer-term performance on average regardless of activity at the Fed.

With a number of Federal Open Market Committee meetings remaining in 2022, the Fed’s signals and actions will continue to be closely watched by the market. As the Fed often signals its agenda in advance, we believe market participants are already incorporating this information into market prices. While it’s natural to wonder what the Fed’s actions mean for equity performance, our research indicates that US equity markets offer positive returns on average following rate hikes. Thus, reducing equity allocations in anticipation of, or in reaction to, fed funds rate increases is unlikely to lead to better investment outcomes. Instead, investors who maintain a broadly diversifed portfolio and use information in market prices to systematically focus on higher expected returns may be better positioned for long-term investment success.

By: Kaitlin Simpson Hendrix
Senior Researcher and Vice President

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value Dimensional Fund Advisors does not have any bank affliates.

Singled Out: Historical Performance of Individual Stocks

Many investors end up holding large concentrated positions in single stocks, whether as the result of employee compensation or a handsomely rewarded stock selection. Familiarity with these stocks or a successful track record while holding them may discourage investors from diversifying. Unfortunately, this can lead to one of the most well-known cautionary tales in finance: tragic declines in wealth from losses in single securities. And data on the behavior of individual stocks suggests it’s hardly rare for firms to underperform—or even go under—regardless of past performance.

Industry development and innovation are signs of a healthy economy. Financial markets reflect this dynamic through the birth and death of public companies. As shown in Exhibit 1, this translates to meaningful turnover among individual stocks. The average survivorship statistics over rolling periods imply a little over one in five US stocks available in the market at a given time delist within five years. The survival rate goes down over longer periods, with just under half of stocks on average still trading 20 years later.

Not all delistings produce the same experience for investors. We categorize these delisting events as “good” or “bad” based on the circumstances for each stock. For example, a stock delisting due to a merger would be a good delist, as the shareholders of that stock would be compensated during the acquisition. On the other hand, a frm that delists due to its deteriorating fnancial condition would be a bad delist since it is an adverse outcome for investors. Over 20 years, about 18% of stocks went the bad-delist route on average. Most of us yearn not just to survive but also to thrive. Looking at the last row of Exhibit 1, only a minority of stocks have achieved that. A little over a third of stocks on average survived and outperformed the broad US market over fve years; this rate dwindled to a little more than one in fve over 20 years

The range of returns for single stocks is vast, even among those surviving a long time. Exhibit 2 shows distributions of excess returns for surviving stocks over rolling periods of five, 10, and 20 years formed using the average cumulative return in excess of the market at each percentile. The median stock underperforms the market across all three horizons. Not until we reach the 57th, 57th, and 56th percentiles at the 5-, 10-, and 20-year horizons, respectively, do we see positive excess returns relative to the market. Although the percentage of underperformers is similar across time horizons, the magnitudes of excess returns at the extremes are smaller at longer horizons.

For investors holding stocks with a long history of beating the market, diversifcation might seem like “worsifcation,” reducing expected returns relative to a more concentrated approach. In many cases, these stocks represent successful companies that investors believe will continue to prosper and buck the broad trend of adverse outcomes for single stocks. Unfortunately, a long-term track record of outperformance generally
has not been an indicator of future outperformance. Take, for example, stocks that have outperformed the market over the previous 20 years. Exhibit 3 shows that, on average, about 30% of these stocks continue to survive and outperform over the following 10 years. Of the stocks that have underperformed over the previous 20 years, the average
subsequent outperformance rate is also 30%. In other words, winners have been no more likely than losers to beat the market in the future.

Outperformers do tend to experience a lower bad delist frequency than
underperformers, which likely refects the impact of strong performance on firm size. For example, looking at the same data set of US stocks from CRSP and Compustat, the median market cap of past winners was $4.2 billion as of December 2020—compared to $800 million for past losers. However, the bad delist rate is still 3.0% even for past outperformers; the bankruptcies of companies like Enron, Chesapeake Energy, and Circuit City remain fresh memories for many investors and former employees of those

A well-diversifed portfolio can help investors reliably capture market returns, limit individual stock risk, and improve the ability to tilt toward segments of the market with higher expected returns. Even when accounting for capital gains taxes, transitioning from a concentrated portfolio to a broadly diversifed one can deliver higher growth of wealth. The long-term benefts of diversifcation can outweigh the short-term costs associated with liquidating outsize positions. Personalized vehicles can be used to further tailor
investments, manage taxes, and suit individual considerations

By: Bryan Ting, PhD

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value Dimensional Fund Advisors does not have any bank affliates.

Business Succession Planning: Are You Failing To Value An Ongoing Business?

Even if the future of your business doesn’t include you or other family members, it’s worth planning for. Working with someone who understands the issues at play in business succession and business valuation is important for protecting the value of your organization. The sooner you can find a financial professional to help you, the better.

There are many components to creating a comprehensive business succession plan, but one that is often overlooked is valuing your ongoing business. If you don’t intend to step down from the company or sell it in the near future, it’s easy to overlook this as a crucial step.

Even if an owner is not contemplating an immediate transfer of a business or a sale, a professional valuation of the business can help to identify potential strengths and weaknesses that could all be incorporated into a business succession plan.

A proper business succession plan means thinking ahead about the future and also the other key people who may need to be involved in your business in order to help this company survive in the future if and when you do decide to depart.

A highly valued business could also generate estate tax ramifications that require advanced estate planning opportunities. Finally, a credible valuation could be vital for attracting key employees or even obtaining a loan.

You can think at a broader level about operations, business planning, marketing, legal and personnel when you have done the necessary legwork to value your business and have documented how this has potential impacts for your business succession plan as well.

Increasing the Value of Your Business Before You Sell

Once you have made the emotional decision to sell your company, there are many different questions that must be answered shortly after. Some of these have to do with how you will prepare to sell the business. You may not have intended to always sell your company, making it even more difficult to transition into this phase. There was no business succession strategy in place. But sometimes you get a great offer or it’s an excellent opportunity or you find just the right buyer. Research from BizBuySell shows that the number of businesses bought and sold experienced record numbers in some recent years.

This means that this is an important opportunity to think about potential future ships in the economy and how you can protect your own company. There are several steps that you can take to make your business more valuable before listing it for sale. First, start by lowering the risk profile of your business.

Then consider diversifying your revenue, which might relate to vendors, products, or customers. If a significant portion of your business’s profits rely on the work from one vendor or one client, this may be viewed as an issue that makes your company difficult to sell. Recurring revenue streams are extremely popular with business buyers, so consider how you can use these to make your business more appealing to people in the market.

Cultivating high-quality talent and determining the people, processes, and systems that will be established before you leave makes it easier for a potential new owner to see how they can step in with minimal challenges. Increased profitability and improve your business’s cash flow position, as these can both represent optimal goals for establishing your business as a great one to buy.

Preparing for the Transition of Inheriting Wealth

Inheriting wealth is an exciting opportunity but it also presents just as many questions that can be difficult for the beneficiary to work through. Whether you’ve known about the inheritance for a long time or experienced something unexpected, this can be life-changing.

And you might experience some high anxiety as you think about how best to protect this money. You might be asking questions such as does this change my life? How does it change my life? What are the first things I should do to protect this wealth and my own interests? These existential questions can also be worked through with the support of an experienced financial professional.

Research from the Bureau of Labor Statistics shows that inherited wealth has accounted for up to 20 to 50% of overall household wealth accumulation in the United States. The highest wealth transfer years are currently happening and ahead of us as baby boomers get older.

However, a U.S. Trust survey also found that 78% of respondents who were high net worth individuals felt that the next generation was not financially savvy or responsible enough to be prepared to receive an inheritance. This makes it even more important to think about the goals that you intend to achieve with your estate planning and financial strategies and how you can accomplish these by working with the right financial planner and strategist.

Contact our offices today to learn more about how we can help you with these challenges and more. We’re here to support you if you’re readying to transfer wealth or receive it.

What’s Next After Selling your Business?

It can be a significant shift in your personal and professional life when you sell your company and move onto a new phase.

You might be exhausted or simply leaving room to decide what happens next. Meaning that it can be hard to figure out exactly how to structure your days after you’ve sold your business. You probably spent years building your company, and then even more time finding the right buyer to take over your company. Research published by Coutts Bank found that about one-quarter of owners who sell their company have no idea what they plan to do after the sale.

And 40% of those same people regret that they did not have a more robust plan in place. A couple of key tips can help you to get the most out of putting your business up for sale and understanding how this transition period presents new opportunities and challenges in your life. You’ll need to start by protecting the profits from your transaction, from tax consequences as well as market risks.

This is a leading reason to warp directly with a financial professional who is familiar with some of these challenges. At this point, it is often also recommended that you build a diverse portfolio that combines multiple vehicles such as bonds, stocks, real estate, money market accounts, and mutual funds. Your tax obligations should also be revisited during this phase in your life. This is a great opportunity to work directly with a tax professional to understand any tax implications before the business is formally sold.

Typically, the IRS will consider the sale of every individual asset associated with the company rather than the sale of the company as a whole. Having good financial guidance prior to and during the sale can help you minimize potential tax consequences.

One other major aspect associated with adjusting your life is preparing for emotional transition. It is very common, even for those company owners who are sure it is the right time to sell, to experience a sense of emotional loss after selling their company that they operated and owned for years.

Understanding these psychological impacts can help you prepare for the significant change as well as cope with these feelings in a productive and healthy way as you take up new interests and spend time with friends and adjust to your new life. Focusing on personal fulfillment can help dramatically in this process. Schedule a time to meet with a dedicated financial professional to learn more about these strategies and how best to accomplish your goals.

Contact us today for help!

What Are the Five Financial Stages of Life?

Many people go through a series of similar financial stages in their life, but unfortunately many of them end up older without having incorporated some of the learning lessons and benefits of previous stages.

Stage 1

Stage one is entering the workforce in early career years. These are the years in which it is hardest for people to save because they may have a lower income amount and may be working towards big goals such as owning a home. However, this is the perfect opportunity to start planning retirement and take advantage of Roth IRA, 403(b), 401(k), and other strategies.

Build your savings and establish a good credit history, obtain disability insurance, and live within your means. And these are the best tips for staying afloat in stage one.

Stage 2

Stage two is your family and career-building years. In this phase, you should focus on purchasing health insurance, buying life insurance, updating your disability insurance as needed, reviewing your estate plan, saving for your child college education, and start growing your career or business further.

Stage 3 

Stage three are the pre-retirement years, which ideally should put you in a position to be soon done with paying off your mortgage and other debts. You also want to approach this phase of your life, hopefully able to help support children’s college expenses without taking out additional loans.

If you haven’t done so to this point, this is a good time for you to start a business, and the phase in which retirement planning becomes much more serious.

Stage 4 

Stage four is in your early retirement years, which is when you should pin down your actual potential expenses during retirement. Look carefully at what you’ll actually be able to spend monthly at a whole different point in your life. You may also consider how you’ll leave other assets behind for your loved ones during this time as well. This is for your later retirement years, which is your opportunity to continue optimizing taxes. You might even be thinking about changes you can make with ownership of your assets, such as selling them to make way for other goals.

Stage 5 

Limiting your overall tax liability in later retirement years is an important strategy to discuss with a financial professional. During this last phase, you should also continue to update your estate plan on a regular basis, and any time that you acquire or get rid of new assets. Following all of these tips can help you to accomplish your top goals as it relates to planning ahead for your own financial future. Do not hesitate to contact an experienced attorney to discuss your next steps.

Is Your Retirement Aligned with a New Lifestyle?

Your lifestyle might have changed when you graduated with student loans, bought a house, or had children. Other issues like disability or caring for elderly loved ones can prompt a change here, too. But retirement is a big transition and it’s one well worth planning for in advance.

Entering retirement provides many different potential benefits for you, especially, if you have done the right amount of planning. However, a broad range of problems could potentially impact your life and make it difficult or impossible for you to achieve these goals.

Unfortunately, far too many people find this out too late, and it is crucial to think more about lessons you can learn from previous generations who have retired. Your lifestyle likely needs to change after retirement and your financial projections helping you save enough money were likely considered many years ago.

Some of the biggest mistakes that today’s retirees make is in failing to adjust their expenses to the new budget they have in retirement. Those who have worked over the course of many years might need to adjust their expenses in a dramatic way, especially, as it relates to clothing, entertainment, and dining out.

Relying on the amount of money you had while income was regular can be a drastic adjustment, especially, if your financial projections and what you actually have set aside in retirement don’t match well.

Furthermore, another big mistake that retirees make in this way is to forget that long-term care costs and healthcare expenses can come into play as a person gets older. If you did not plan properly or have enough set aside in your budget, these can represent even more dramatic cuts to your lifestyle expenses.

Make sure that you consult with a professional who has a dedicated support system in place to guide you through this process. Our NJ retirement and transition support services can assist you.

Delaying Social Security: Impact on Retirement

There are many different decisions that need to be made in the wake of an upcoming retirement. There are also so many different questions that are presented to people who are on the cusp of this retirement decision.

It can be overwhelming to think through all of these different aspects but having the right financial professionals to guide you through this process can help you feel more confident about your overall decision, and the next steps that you will take. Consider, for example, how delaying the step of Social Security can add significant dollars to your bottom line.

You can use various planners and calculators to think about your out of money age, your net worth and what you’ll draw from Social Security. This can help you make a firm decision about just how far on the horizon retirement is for you. Working a little bit longer may be to your benefit if it is still of interest, because it offers a variety of different advantages, especially as you delay those first social security payments. This will help you figure out the right decision for you and when to start bringing in the most money over your lifetime.

When you work a little longer, you can save more, delay tapping into your existing savings and earn more income for a longer period of time. You can also think carefully about what assets you already own and whether or not any transitions or additional savings need to be added to that bottom line. The right financial professionals are here to guide you through every transition and next step in your retirement life.