Diligence by Who? You or Your Financial Advisor?

By
Mark Nicolet, CFP®, MBA, ABFP™
August 22, 2018
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Recently, I followed up with a client after the client had been away on a family vacation for two weeks. Prior to that trip, the chaos of summer, work travel, and meetings had prevented the client from following up with me on a minor but impactful recommendation I had encouraged the client to consider in our last conversation. Before I had the opportunity to even say, “Hello,” the client apologized and communicated that I was owed a phone call. Yes, I had encouraged a decision knowing the impact would further strengthen the client’s financial situation, but in my diligence, I didn’t expect a phone call. The definition of diligence: careful and persistent work or effort. I love the simplicity of this definition and the use of the words persistent and effort. From knowing the client, I know the client is incredibly diligent in her own work and personal life. You see, when my client picked up this phone call, and the diligence of my follow up had just replaced the client’s call, eased the burden of the client having to call me back (amidst her intense work schedule), and ultimately resulted in the client making a best decision to improve the efficiency and effectiveness of her plan after re-clarifying the client’s priorities and current time frames.

An ongoing and sound financial plan requires an immense amount of diligence. If you are not ready to double down on this level of diligence on your own, why not hire a Decision Coach and Certified Financial PlannerTM professional to sprinkle the entirety of your plan with some diligence? Have you rebalanced your 401(k) lately? Have you increased your contribution percentage after your last raise? Did you update your life insurance planning after you moved into a new home after your second child was born? Are you planning on saving for that dream trip to Europe, or is that just going to magically happen in the next five years? What are the trading fees on your brokerage account? You have given thought to each of these questions. You have even discussed the answers with your spouse or close friends. Yet, you are busy and these action items are on the top of your priority list on a Tuesday. All of these questions require thoughtful planning with ongoing diligence, communication, and action. As soon as you settle into a plan with the right cash flow, life happens and you will need to adjust the game plan. My client didn’t forget to call me back. My client wanted me to call me back. Yet, my client didn’t call me back and didn’t make up her mind, until I called. Was I upset that I had to follow up several times? Was I frustrated my client seemed non-responsive? Of course not! It’s my career and joy as a Decision Coach. It’s part of my role as your financial planner to be diligent, to hold you accountable, to help you make qualitatively better decisions over time. Do I expect this to take a few follow up calls and three incredibly productive and ongoing quarterly progress checks between annual reviews? Of course! I love crafting a game plan for you. I love when you approach a financial decision and prior to making a decision, you reach out to me. I want your plan to be dialed in, so ultimately, you are living the life you want now, saving for the life you want in the future, as I provide the guard rails of diligence all along the way. A lot happens in a year and all of those little decisions have a significant impact over a long arch of time. Why I am so diligent with your financial plan? So, you don’t always have to be…don’t apologize, let’s just make the next best decision together and I’ll handle the follow up so we can one day celebrate together, not just because you are retiring, but because of the life you lived to get there.

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By Trilogy Financial
April 15, 2020

When is the “end” of this Coronavirus season? Do we return to “normal” at the end of the summer? I have no idea. However, I do know that when it happens, I will have already given intentional thought to my plan to return because there are some lessons learned and best practices to hold on to during this period of being at home with my family and work. Here are just a few I’d thought I share:

Be Present. Being more present has always been a pursuit of mine. And amidst a shelter-in environment, I’ve been more present without the back and forth to the office. When we are present, we thrive. When we are present, we are listening to our clients. When we are present, we are having more fun with our family. Compare it to being in the zone in athletics. We are solely focused on the conversation or task at hand, making us ultimately more effective as leaders and parents. Be present.

Be Proactive. Even though none of us anticipated the spread of this virus, there have still been plenty of opportunities to be proactive. Despite the uncertainty, a forward-thinking strategy creates freedom and reassurance. Having the flexibility to make anticipated adjustments and then course correct from there helps us weather the difficult days and be ahead over the long-term. This relates to our financial strategy and our day-to-day structure with kids at home. Have a plan, discuss it, and see it to completion. That might result in a strategy to invest in the market with dollar-cost averaging or decide to double recipes so you don’t have to cook as much. Either way, be proactive in life and at work.

Keep Up Good Habits. I have enjoyed the opportunity to connect over Zoom. I’m still improving my ability to read the emotion through the technology but with the effectiveness of virtual meetings, could I plan to only have Zoom meetings on Friday and stay at home? This would give me a few more hours to spend with my family. I don’t think my clients would disagree with that. Give it some thought. Have there been practices at home that should continue? Read for 20 minutes in the middle of the day? Exercise at lunch?

I’ve been grateful for this time and yet I know, this has created immense difficulty for most people. Through my numerous conversations with clients and friends, I’ve been encouraged by the attitude and fortitude these times require. Here’s to having a plan before we return to normal again.

“The most powerful weapon against stress is our ability to choose one thought over another. Train your mind to see the good in this day.” –Marc & Angel Chernoff

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine what is appropriate for you, consult a qualified professional.

By
Windus Fernandez Brinkkord, AIF®, CEPA
May 24, 2018

When planning for retirement, you need to look at multiple sources of income and be sure that some of the income sources are tax-free. The more, the better. So, how do you plan for a retirement income stream that minimizes overall taxation?

Four Instruments that Provide tax-free Retirement Income

Here are four great ways to provide yourself with tax-free.

  1. Roth IRA is a great retirement investment that can result in a steady stream of tax-free retirement income as long as they are considered qualified. However, you must qualify for an IRA and the requirements are adjusted year by year as is the amount eligible for savings. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

If you do qualify, money put into a Roth IRA is taxed when you receive it, so it is not taxed again when it is withdrawn. In 2018, the eligibility requirements are:

  1. Single or head of household, earning less than $120,000 to fully contribute to a Roth IRA.
  2. Married filing jointly or a qualified widow(er) earning less than $189,000 to fully contribute to a Roth IRA.
  3. Married filing separately earning less than $10,000 to fully contribute to a Roth IRA. (Note that those married but filing separately can use the limits for single people as long as they have not lived with their spouse in the past year)
  4. Municipal Bonds and Funds provide income distributions not taxable by the federal government though they are may be subject to state income tax. Because they are not subject to federal income tax, interest paid on these bonds is typically less than taxable bonds.

There is no income limit to investing in tax-free municipal bonds and funds.

  1. Health Savings Accounts (HSAs) are available if your employer offers health insurance using an HSA. Combined contributions by the employer and employee to this account as of 2018 can be as high as $6,900.00 for qualifying plans.

Following the rules about which expenses are reimbursable, no taxes are paid on withdrawals.

In addition, the HSA funds and earnings can be held until retirement then uses to provide tax-free income by reimbursing the holder for past and current allowable expenses which include Medicare premiums.

  1. Roth 401(k) or 403(b) allow Roth contributions inside these accounts making those contributions and their subsequent retirement earnings, tax-free. These accounts are not subject to income eligibility limits but they are subject to taxes in the year that contributions are made.

Making the Most of Your Home

Another way to make a smart investment for your retirement is to pay off any mortgage that you have on your home before you retire which allows you to live in your home for the cost of property taxes and home insurance alone.

For many retirees, this is a huge reduction in their monthly expenses allowing the money be used elsewhere.

Get Started on Your Financial Life Plan Today