What Does a Financial Planner Do?

What Does a Financial Planner Do?

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Published: May 4, 2018

I am a financial planner. I own and run a financial planning firm. Our primary job is to make a projection and a plan that shows you the decisions that you can make that will help you achieve long-term financial success. Should you pay extra on the mortgage or put it in your 401(k) plan? What type of insurance do you need? Should you refinance? Buy that stock or use a mutual fund instead? We have answers to these questions. In a nutshell, financial planners answer questions. How Financial Planners Answer Questions Financial planners gather information and financial statements and put the

3 Engineer-Like Ways to Test Your Retirement Income Plan

3 Engineer-Like Ways to Test Your Retirement Income Plan

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Published: March 30, 2018

I’ve always found engineering fascinating, particularly when it comes to building something that will last. After all, when you build a skyscraper, you can’t have it fall. The same thing is true for building a retirement income plan – it needs to last. Early in my career, I realized I wanted to find a more engineering-like way to deliver financial planning advice. I wanted answers based on data, not on speculation. Yet, when I started in the financial planning business in 1995, providing answers based on data was not the norm. At that time if someone wanted to know if they

How to Get Thousands More in Social Security Survivor Benefits

How to Get Thousands More in Social Security Survivor Benefits

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Published: January 26, 2018

Social Security widow and widower benefit rules are complex. The amount of the Social Security survivor benefits you are entitled to rests on a host of variables including your age, the age of the deceased, and how old your spouse was when they started their benefits. Let’s look at an example to see how much more you might get by knowing all your options. Diane’s Social Security Survivor Options Diane is a widow. Her husband, Paul, had passed away at 57 and she is now age 62. She is no longer working – but she had worked for most of her life. Here’s

IRA Rollovers, IRA Transfers and 15 Other IRA Basics

IRA Rollovers, IRA Transfers and 15 Other IRA Basics

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Published: January 5, 2018

Some financial terms have become so ingrained in the vernacular that people are embarrassed to ask about them. It’s as if everyone else is speaking a language you feel you should know, but don’t really. Such is the case with IRAs. When clients come to us to discuss their finances, they often reveal they aren’t clear on some of the IRA basics. Below I address some basic terms and concepts about IRAs. What is an IRA? An IRA is an Individual Retirement Account. When you contribute to an IRA, you are putting money aside for your future so you will have

Should I Purchase Long-Term Care Insurance?

Should I Purchase Long-Term Care Insurance?

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Published: August 11, 2017

A 55-year-old friend, Jen, recently asked my opinion about long-term care insurance. Very few Americans, about eight percent, have long-term care insurance policies. Jen, who is at the age when many are weighing the pros and cons of long-term care insurance, had thought about buying a policy but didn’t feel like she had the money to do so. Recently Jen received an inheritance, as Muriel, her mother, passed away at age 87. Now Jen has the funds to pay for long-term care insurance (LTC) but is having second thoughts about it based on her experience with mom. Muriel had purchased

Should You Be a Landlord in Your Retirement?

Should You Be a Landlord in Your Retirement?

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Published: August 4, 2017

In 2005, everyone I knew was buying real estate. With no experience and no money, they bought properties they couldn’t afford and were convinced they were going to make a fortune. Unfortunately, it didn’t work out that way, and most of them now have a foreclosure or short sale in their past. Does that make real estate a bad investment? No. It’s an investment. The good or bad part comes from how you approach it. What’s good for one person can be bad for another. To find out how to make real estate investments work, I decided to talk with a few experienced

How Do You Rebalance Accounts in Retirement?

How Do You Rebalance Accounts in Retirement?

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Published: May 26, 2017

Smart investors follow a plan; specifically an asset allocation plan. An asset allocation plan tells you how much of your total investments should be in stocks versus bonds and then gets into additional detail, such as how much should be in large company U.S. stocks (or index funds) vs. international vs. small cap. You maintain investment ratios by rebalancing on a predetermined basis, such as once a year. In a 401(k) plan, rebalancing is often accomplished automatically by checking a box that says something like “rebalance every x months to this allocation.” In general, while you are saving, rebalancing can be easy. If

Hidden Estate Planning Mistakes That Have Horrible Consequences

Hidden Estate Planning Mistakes That Have Horrible Consequences

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Published: May 13, 2017

Imagine your spouse is ill, and you meet with an estate planning attorney to get your family affairs in order. Your attorney drafts a trust document and a will. You and your spouse sign it. You think everything is fine. Your spouse passes, and shortly after that, you find that the accounts are not set up to transfer the way you both intended. Everything is not fine. Can this happen? Yes, and it happens all the time. The situation described above happened to a client couple that I’ll call Ralph and Sue. It was a second marriage, they had no children in common,

Does the New Fiduciary Rule Matter to You?

Does the New Fiduciary Rule Matter to You?

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Published: April 27, 2017

Not all financial planners or advisors have to consider what is in your best interest when they make investment recommendations. A large number of them make recommendations that they think are appropriate, but they don’t have to have supporting documentation or research to show why this recommendation is in your best interest. In many cases, these advisors are trained sales people and are unaware of other options that may be a better fit for your financial circumstances. However, a new law may begin to change this. A “fiduciary” is someone who legally and ethically must act in their client’s best interest.

My 2017 Market Predictions

My 2017 Market Predictions

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Published: February 10, 2017

As a financial planner, my life is about projecting unknowns. I often tell clients the only thing I can guarantee is once we put the numbers on paper, they’re wrong. Life doesn’t work in a nice linear fashion the way projections do. But by using projections, we can establish a range of possible outcomes, and plan based on that range. As many unknowns as there are, I realize when it comes to the financial markets and human behavior, there are some things that are quite certain. Human beings want to believe someone out there knows the future. Normally, I shy away