Checklist - Puckett and Sturgill Financial Group

Year End Checklist

Review Investments and Tax Time Strategy

As you look ahead, you want to ensure that your investments and tax strategy are in order so that you can reap the benefits of your hard financial work over the past year. Changes made before the end of the year can impact your final numbers when it comes time to file your taxes, so pay close attention to the details as you work through each of your investments. Here are some practical steps you can take:

Consider ways to offset capital gains

Review potential tax loss harvest opportunities (assets that have declined in value during the year)
Be mindful of wash sale penalties - wait for at least 31 days to buy back sold holdings for a loss Look for ways to offset capital gains elsewhere in your portfolio or ordinary income (up to $3,000 per year)
  Purchasing mutual fund shares in nonqualified accounts before year end may mean paying capital gains taxes on brand new investments Are you selling your primary residence? Remember the allowable exclusion of $500,000 ($250,000 not married) of the gain on home sale Remember that the 3.8% investment income surtax applies to the lesser of net investment income or the excess of modified adjusted gross income over $200,000 (individual) or $250,000 (married, filing jointly) Bear in mind that a 20% capital gains tax applies to individuals filing in the highest tax bracket

Look for ways to defer or reduce income

Make note of your projected marginal tax rate Look for ways to defer year-end payouts, including:
Bonuses Capital gain property sales
  Boost W-2 withholdings if necessary Accelerate deductions Check for deductions from fully funded education savings accounts Use municipal bonds for federal and state (if applicable) tax-exempt income Look for ways to bunch itemized deductions

Review Your Retirement Plan

Your retirement strategy is an important part of your overall financial plan. And while you may not be looking to retire anytime soon, you want to make sure you avoid small problems that could turn into glaring issues later on down the road. Tweak investments that don’t quite work for you and ask your financial advisor which opportunities are right for your portfolio. With careful attention to your retirement plan, you can look forward to your best financial future. Review your IRA(s):
Maximize contributions to eligible accounts Increase retirement contributions, if possible
  If you fall into a low income tax bracket, consider converting from Traditional to Roth IRA
This can be a good option for when you have a low income year but anticipate a higher income in future years Main benefit: future growth from Roth will likely be distributed tax-free
  Learn more about collecting Social Security benefits Review Net Unrealized Appreciation (NUA) opportunities for employer stock options If you are 50 or older:
Look into catch up contributions for IRA and certain retirement plans Avoid IRA/retirement plan distributions prior to age 59 ½ to avoid a possible 10% early withdrawal tax penalty
  If you are 70 ½ or older, take your RMD Do you have a new job? A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages.
Leave the money in his/her former employer’s plan, if permitted; Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted; Roll over to an IRA; or Cash out the account value

Employ a Financial Gifting Strategy

The holidays and other celebrations often signal open hearts and open wallets, especially in terms of financial gifts. Whether you’re gifting to family members as a holiday treat or as a wedding surprise, you can take advantage of these gifts when it comes time to plan your tax strategy. And if you donate to charity, you may be eligible for even greater savings. Don’t let another holiday season escape without learning the best ways to strategize your financial gifting.

Gifting to family

Gifts under $15,000/individual are federal tax-free Put will and trust items in order to take advantage of both estate and income tax deductions Invest in 529 accounts - up to $70,000 at one time

Gifting to others (including charitable donations)

Cash gifts to charity automatically qualify as income tax deductions Consider gifting stock to qualifying charities If you’re older than 70 ½ , take note of your Required Minimum Distribution (RMD) and plan charitable giving accordingly; you may be eligible to donate up to $100,000 and qualify for favorable tax deductions Look into establishing a Donor Advised Fund (DAF) or private foundation for a cause you care about and receive further advantages:
Immediate tax deductions Establish a framework for donor gifting over time
  Consider bunching other charitable donations through the following vehicles:
Charitable Remainder Annuity Trust (CRAT) Charitable Remainder Trust (CRUT) Charitable Lead Trust (CLT)

Check in with Your Estate

Estate planning is an essential part of planning for your financial future. Whether you’ve got a game plan in place or want to get started with setting things in order, use the end of year review to assess your estate. You’ll also want to take time to account for any life changes that may impact your estate. Double check your beneficiary designations and update them if necessary Check trust funding Review trustee and agent appointments Evaluate provisions of powers of attorney and healthcare directives Ensure that you fully understand all documentation

Wrap it up and Look Ahead

Periodic financial checkups - including your year-end review - keep you in control of your finances and leave the guesswork out of managing your financial goals. As you look through your investments, retirement plans and gifting strategies, you can evaluate what needs tweaking and set yourself up to take advantage of new opportunities. Sit down with your financial advisor to take a full-picture view at your portfolio and make sure you have solid understanding of your financial position moving forward. Send the following investment and capital gains information to your accountant to receive an accurate year-end tax assessment:
Income types you had during the year: salary, interest, dividends, short- and long-term investment gains, Social Security income, IRA withdrawals Your Medicare tax responsibility (if applicable) Plan for estimated taxes
  Evaluate your HSA contributions and other healthcare expenses Confirm FSA expenditures for the year Check your credit reports, taking particular note of any suspicious activity
Federal law entitles you to free credit reports from nationwide reporting companies (Equifax, Experian, TransUnion) every 12 months at your request
  Review 529 contribution amounts Discuss major life events with your advisor, including:
Family changes (marriage, birth, death) Job and income changes Significant one-time purchases Retirement or plans to retire Concentrated positions you need to address
  Check that your objectives, risk tolerance and preferences are in order

Sit down with financial advisor Jacob Sturgill to ensure you have a solid understanding of your financial position

[contact-form-7 id="3520" title="Schedule a Free Consultation w Jacob Sturgill"] Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. 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. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
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Financial Planning - Puckett and Sturgill Financial Group

Goals and the Plan to Reach Them

“Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where–” said Alice. “Then it doesn’t matter which way you go,” said the Cat. “–so long as I get SOMEWHERE,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”*

When it comes to your financial picture and long-term goals, do you find yourself wondering as Alice did in Lewis Carroll’s “Alice’s Adventures in Wonderland”? If you are like most people, you probably have a number of financial goals but no real plan to achieve them. What should you do when your objectives compete? Where do you turn for answers? Perhaps you’ve turned to friends, the internet, or popular voices in finance for answers, but you’re still not sure you’re on the right path. A CERTIFIED FINANCIAL PLANNER ™ practitioner can help you connect your investments to what is most important to you and in the end, can help you make better financial decisions. Here’s how:

Your Financial Advisor Should Ask the Right Questions

Money is an emotional topic and talking or even thinking about it can be hard. Very hard. In order for your financial advisor to help you make informed decisions with your money, you will need to share important personal information about yourself and your family. This conversation also requires a transparent assessment of your current financial situation. Moving beyond your assets and liabilities, your advisor should clarify what it is that you want to accomplish both personally and professionally as well as who and what is important to you, what you would like to accomplish as well as when you would like to accomplish it. Modern financial planning is a continuous and evolving process; it isn’t about one-off transactions or products as it might’ve once been or is sometimes perceived to be but is about a relationship with a professional advisor that will help you get from where you are to where you would like to be.

Your Financial Advisor Should Customize a Plan that’s Uniquely Yours

After the gathering information stage, your financial advisor should have a clearer picture of your unique situation and work with a team of experienced and trusted professionals such as CPAs and attorneys to develop a comprehensive plan that addresses your objectives. In this way, your financial advisor works like an architect to design a financial home that suits your current needs as well as your plans for future self. But it takes a clear understanding of investment options as well as an understanding of each clients’ individual financial situation before jumping into the investment deep end. One size certainly does not fit all when it comes to investing. Like a scientist, your financial advisor will put the “things” under a microscope and analyze each factor critically before developing a plan to move forward. Just because something looks good on paper or is recommended by a popular finance blog doesn’t mean it’ll work for you. Your financial advisor knows this and will spend time experimenting with potential combinations before delivering a cohesive financial recommendation for your future. Before you decide to implement any part of an investment plan, you want to find an advisor whose set of investment beliefs, methods, philosophies, and thoughts on markets resonates with you.

Your Financial Advisor Should Offer Ongoing Advice and Recommendations

Once your advisor has a designed a personalized financial plan for you, it’s time to get to work. After all, your financial advisor is there to do just that: advise. From an early age, we are taught that the quickest way to get from point A (where you are today) to point B (where you want to be in the future) is a straight line. In some sense, your initial plan shares the element of a straight line. However, life, like the markets, rarely moves in a linear fashion. This means that at some point your initial plan will need to be changed and you should both know and be OK with that. We won’t know the cause - the who, what, when, where, or how - but as Heraclitus once said: “change is the only constant”. What you should have with your financial advisor by now is a relationship. Relationships take time to build and are built on trust. Like any relationship, they are built on honest, regular communication and from time to time, a little work. How does your financial advisor check out? Does he or she understand your goals and lifestyle, analyze the components critically and offer a custom financial plan for your future? If not, don’t you deserve a financial advisor who can do these things for you? After all, it’s your money and your financial goals on the line.

Start setting your long term goals with the advice of Certified Financial Planner, Jacob Sturgill

[contact-form-7 id="3520" title="Schedule a Free Consultation w Jacob Sturgill"] *Carroll, Lewis, 1832-1898. (2000). Alice's Adventures in Wonderland. Peterborough, Ont. :Broadview Press
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How Do You Compare to Most Americans

Jacob Sturgill, CFP® Most of us have learned how we should take care of our physical health: visit the doctor at least once per year for an annual examination, make every effort to eat healthy, and fit in some daily physical activity. The annual examination serves as a baseline measurement for all future visits, and with it, our physician can more easily determine if our health is improving or declining over time. But what about assessing our financial well-being? Here we take a look at the financial health of Americans and provide some insight into how you can determine your financial baseline for comparison.
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Do You Need a Financial Therapist?

David Hemler, CFP® Hmmm. Good question. And the answer depends. While most of us don’t need to consult a financial therapist, many of us do have some behavioral finance issues or money biases that affect how we enjoy our financial prosperity. Sound about right? Don't worry; you're not alone. As humans, we possess many characteristics that both enlighten and impact our lives. We inherit our physical characteristics, while many of our mental or emotional characteristics we pick up from our environment and upbringing.  My money behaviors may have roots established when I was very young.  One aspect of behavioral finance is to explore our financial views and behavior to try and understand what makes us tick, financially speaking.  You may be wondering, "Does it matter?" Maybe, or maybe not.
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Behavior Gap Illustration - Puckett & Sturgill Financial Group

Portfolio on Purpose

When you look at your investment portfolio, do you know why you own what you own?
  • Does it look like the picture on the left, an eclectic mix of things accumulated over the years? OR
  • Does it resemble the picture on the right, with each piece intentional, organized, structured, well thought out?
  If you’re like many people, your portfolio looks more like a collection - it has a little bit of everything in it. These bits and pieces might include inheritance, something you invested in after read about it (or saw it on TV, heard a tidbit from co worker), last years hot performer, and so forth. In a purposefully designed portfolio, each piece of your portfolio should work together. The goal is not to beat “the market” (after all, what is the market anyway?), but for each piece to work in unison to achieve your goals. Because your investments will eventually be used for something, you may believe the logical thing to do is start with viewing your investments in isolation. But you run the risk of hurting yourself in the long run. Instead of viewing your investments myopically, it’s important to see the whole picture. You want to look at your investments as a means to an end, rather than the end in and of themselves.

Sounds easy enough.. How do we do it? First, start with end in mind.

DO: Prioritize Your Ideal Financial Future (Clarify Goals)

  • Give yourself permission to take your best guess at your financial goals. For example, your favorite artist, movie, etc has likely changed throughout your life. Your idea today of your financial future may be different than what you ultimately end up prioritizing.
  • If you start with a desired end point, it becomes easy to work backward to figure out what you need to do for your financial portfolio today.
  • This can be very challenging. How do you know what is important to you? “They” say the checkbook and the calendar never lie. Start with your daily reality today and work from there.

DO: Develop a Plan

  • Set realistic expectations for your portfolio performance.
    • How much do you think you will need?
    • How much can you reasonably save?
    • When do you need your money? (i.e. what is your time-frame?)
    • What rate of return do you need?
  • While market performance is important, market performance should not be the ultimate goal - achieving your desired financial state should be.

DO: Find the Investments that Fit Your Plan

  • Revisit your portfolio periodically (at least annually) and make smaller changes to it over time.
  • If you know where you are going, it’s easier to know what it is going to take to get there. Think of going on a road trip; you know you’ll need to gas up at some point - but you probably don’t know which exit you’ll actually need to stop at!

Choose a Financial Advisor Who can Help

We are all human. Life happens. Things change. There are always going to be things that seem like better options or bigger risks in the market. Sometimes it seems like one of these factors could jeopardize everything and you may be tempted to make changes. Blind spots are, by their very definition, things we cannot see. A trusted advisor, like Jocob Sturgill, can help you clearly define your goals, set realistic expectations, sidestep common investment mistakes, and build intentional investment portfolios.

Contact Jacob Sturgill

[contact-form-7 id="3520" title="Schedule a Free Consultation w Jacob Sturgill"] Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal.
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WESTMINSTER, Md., March 5, 2018 – Aaron Puckett, an LPL Financial-affiliated advisor at Puckett & Sturgill Financial Group, has been recognized again as a leading advisor by LPL Financial. LPL Financial nominated Puckett to the firm’s prestigious Chairman’s Club for 2018, which is awarded to less than 6% of the firm’s 15,000 advisors nationwide and is based on an annual production of all registered advisors supported by LPL.
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Tempus Fugit!

David Hemler, CFP® Time does indeed fly, and as we get older in years, we might even say it speeds up. As I write this, it’s mid-October and the fall season has begun to show itself here in Carroll County and our surrounding communities. Things are very different this October than last, but regardless fall can be counted on to result in the same outcomes. The leaves will change color and fall from the trees, which is critical to their survival over the long winter months to come. As time marches on we are reminded of two old sayings, “The one thing we can always count on is change,” and “The more things change, the more they stay the same.” Both are true.
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Dollar Bills - Puckett and Sturgill Financial Group

Managing Wealth by Managing Emotions

How do your finances make you feel? Do you feel anxious about growing or sustaining your retirement funds? Hopeful for the impact your legacy will leave? Concerned with market fluctuations you see covered in the evening news? When it comes to managing your wealth, it can be complicated to separate your emotions from your investments. But could your emotions be feeding into the less-than-stellar performance you fear? Likely, yes. However, there are ways to strive to get the most out of your financial activity.

Understand and Identify Emotional Investing Behavior

Before you can reverse the trend of emotional investing behavior, it’s important first to understand what the behavior looks like. You won’t be able to successfully overcome your emotions until you can identify the things that trigger emotional responses. What should investors do in the following scenario: a. Buy low, sell high (and make a profit) b. Buy high, sell low (and lose money) The answer here, as we all know, is “a”. However, market trends play heavily into investor emotionality and real life is not so simple. After all, it can be difficult to tune out the barrage of financial information you receive each day. Everyone wants to avoid major investment losses and own the next hot company with an amazing product that has been all over the news. When it comes to exciting investment opportunities, should investors: a. Research the company (mutual fund, ETF, etc) and potentially invest? b. Ignore the news, stick to their long term plans, and invest as before? The answer to the second question is not as easy. Although “a” might feel more natural because of the positivity, you know that “b” is probably the right answer even though it might not feel as good. This is why you see articles with titles such as “10 Funds to Own Next Year”, “Where to Invest Now”, or “All Signs Point to Bear Market”. Whether you see something on the news, read a blog post about downturn in the tech sector, or are exposed to negative opinions on certain financial ideas in a Facebook group that you participate in, it can be hard to get through a day without something shaking your confidence in your financial future. Being impacted by this information isn’t necessarily a bad thing. It’s what you do as a result of receiving new - and often conflicting - information that matters.

Don’t Follow Emotional Investment Trends

It can be hard to resist the knee-jerk reaction to receiving information that makes you question your investment decisions. And this is a pattern that’s surprisingly prevalent throughout the larger history of human financial behavior. Think of events like the Great Depression, Black Monday and the recent financial crisis of 2008. Each of these events has something major in common: investors reacted with fear to significant financial news and pulled their money out of investments that they thought might cause them future harm. When markets are bad, people may be anxious to rid themselves of their investments and may sell as quickly as they possibly can. Of course, when everyone is trying to sell, the market becomes saturated and prices decline, sometimes excessively - think back to returns during the aforementioned periods. Conversely, when things are going well, people may become confident and may want to invest more money. This is a self-fulfilling prophecy that causes prices to rise. Purchasing when things look good and prices have risen is the very definition of “buying high”.

Manage Your Investments by Seeking the Right Counsel

Despite what we may see on the surface, investing, at times, is not natural. This matters because if we do not understand investing, we can lose our money. So how can you avoid emotionality in investing? First, understand that investing is about more than missing a hypothetical gain or avoiding a hypothetical loss. Investing should be about designing a plan to reaching our goals, finding the right investments for the plan, and making adjustments along the way. A CERTIFIED FINANCIAL PLANNER ™ practitioner can help ease your fears as you consider your investments and will help you decide which options are the best for your present status, as well as your future. Even if you have a hard time taking a step back to view your financial factors objectively, your financial advisor can help you see through them with clarity.

Certified Financial Planner, Jacob Sturgill, can help you look at the markets objectively

[contact-form-7 id="3520" title="Schedule a Free Consultation w Jacob Sturgill"] IMPORTANT DISCLOSURES The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
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The Unknowns of 2018: Are You Prepared?

Deborah Williams, CFP® The future is full of unknowns, wouldn't you agree? Just think back to the beginning of 2017, had you ever even heard of cryptocurrency? Probably not, and now almost everyone has heard of a Bitcoin. Every day, the Federal Reserve, Congress, and the President are making decisions that can impact our overall economy, the markets, and our financial situations. Just a few months ago, we didn’t know what the new tax law was going to look like, now we do. While we can’t always see what’s on the horizon (which can be either invigorating or scary depending on your outlook) we can all become better prepared to adapt regardless. Here is a look at some of the financial unknowns we face in 2018, some may impact you directly, some may not, and what we can do to prepare better.
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Is Now a Good Time to Be In the Markets?

Jacob Sturgill, CFP® There is one question that seems to be growing in popularity over the past several months. The question is not unique to a particular age group, it is pervasive among most of my clients and seems to be lurking in the back of everyone’s mind. You too may be wondering, “Is now a good time to be in the markets?” I think many would even prefer to ask it this way, “Should I be investing in the market because I am afraid of what might happen soon?"
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