Financial Planning

Thinking Retirement? Be Sure to Log These Important Birthdays​

Did you know that your birthdays become more important in the years approaching retirement? That’s right! Once you hit age 50, there are certain birthdays, also known as “legislative birthdays”, that indicate it’s time for you to take action on certain aspects of your retirement planning or that allow you to claim new financial benefits.

Let’s take a look at some important birthdays you might want to keep special track of.

Age 50

Your 50th birthday is the first where you can take advantage of certain retirement planning privileges. After you turn 50, you’re eligible to begin making “catch up” contributions to your retirement accounts, including the following:

  • 401(k) plans
  • SIMPLE 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • Traditional IRAs
  • SIMPLE IRAs

 

Age 55

At age 55, should you decide to stop working, you can start to take contributions from an employer-sponsored 401(k) plan without incurring the 10% early withdrawal penalty for early withdrawal. Of course, if you don’t plan to retire at 55, you may choose instead to use this time to review your retirement plans and make adjustments as necessary.

Age 59 ½

After age 59 ½, you can take withdrawals from your 401(k) plan without incurring the extra 10% tax penalty for withdrawals, whether or not you plan to retire at this age. You need to consult your individual 401(k) plan to ensure that you meet the requirements for withdrawal at 59 ½.

Age 62

When you turn 62, you become eligible to take Social Security benefits. However, it may not be financially advantageous to begin collecting right after you turn 62.

You will want to wait until you reach full retirement age (FRA) if you want to maximize your Social Security benefits. Depending on your birth year, this age will vary; your financial advisor can help you to determine when it makes the most sense for you to start taking Social Security benefits.

Prior to Age 65

Three months before your 65th birthday, you will enter into a seven month window during which you are eligible to enroll for Medicare. By this point in time, if you’re already taking Social Security benefits, you may already be enrolled in Medicare. But if you’re not – or if you’re uncertain – it’s important not to miss this window.

Age 70

At age 70, you reach the maximum age for delaying your Social Security benefit. Even though you may not be ready to retire, you may want to consider your options for taking your Social Security benefit in order to receive the maximum benefit. Just remember, if you continue working and also take Social Security, you will continue to pay Social Security taxes on your taxable income.

Age 70 ½

For most investors, age 70 ½ is the age by which you must begin drawing the required minimum distribution (RMD) from your tax-deferred retirement accounts. Usually, you have until April 1 after you turn 70 ½, but it’s important to understand the requirements for your specific accounts.

If you’re approaching retirement age and have questions about planning your retirement timeline, a CERTIFIED FINANCIAL PLANNER™ can help you to stay on track with managing important dates and accounts. To learn more about your retirement planning options, contact Jake Sturgill today to schedule a consultation!

Your Mid-Year Financial Check-In

Keeping an eye on your financial health and investment performance is essential for staying on track for meeting your financial goals. To stay up to date, it’s important to schedule regular meetings with your financial advisor – and a mid-year meeting may be just the right place to start.

As summer comes to a close, it’s an ideal time for a financial tuneup. In addition to any personal questions and concerns you may have concerning your portfolio, here are some areas to check on when you meet with your financial advisor.

Review Your Investments

The only thing that’s certain about your investment portfolio is that it will always be changing. Over time and as markets fluctuate, certain investments may perform better than others. To stay on course with your financial benchmarks, you need to keep track of how your investments are performing.

Your financial advisor can help you monitor portfolio performance and provide direction when you have questions or concerns. If you decide it’s time to take a different approach to your investment mix, your advisor can help you explore different options that might make sense for your situation.

Take a Look at Your Tax Obligations

It’s a good idea to take a mid-year review of your tax obligations and formulate a tax strategy before you file next tax season. A financial professional can provide the guidance you need to review your situation and try to avoid any surprises once the new year rolls around.

As you work through your tax strategy, you will want to review your lifestyle and income to see whether there are any factors that could impact your potential tax return. Factors like a career change, a new home, or retirement could make a big difference when it comes time to file.

Mid-year is also an ideal time to tweak your strategy in order to offset your tax liability. You can defer funds to charitable giving and retirement investing or look into other strategies in seeking to maximize your potential return.

Make Adjustments as Necessary

Likely, after reviewing your income, investments, tax liability, and other factors, you’ll probably have some questions. Perhaps you’ll feel the need to make an adjustment here or reconsider an investment there.

Your financial advisor is the ideal partner for working through these mid-year changes. Not only can your advisor help you to work through paperwork and get into the details of your specific portfolio, but they can also provide professional guidance to interpret how your financial activity aligns with your financial goals and benchmarks.

By taking advantage of periodic check-ins – such as the mid-year meeting -, you can keep a finger on the pulse of your financial performance and hopefully avoid major surprises. Even when unexpected events occur, your advisor can help you navigate the outcome by bringing a more neutral perspective to balance any emotionality you might be tempted to act upon.

Are you ready for your mid-year financial check-in? Contact Puckett & Sturgill Financial Group today to schedule a consultation.

Back to School: Balancing Educational Savings for Multiple Children

Back to school season is a whirlwind of activity for students and their families. Whether you’ve got elementary-aged children or high schoolers looking ahead to the next step, you’ve probably already considered options for funding the college days to come.

For families with multiple children, this probably means multiple college funds – and that may be a daunting prospect. But with some thoughtful planning, you might find that balancing educational savings for multiple children is more attainable than it seems.

And parents aren’t the only ones who might consider college savings plans. Grandparents who want to contribute to their grandchildren’s educational future certainly need to consider how balancing educational savings for multiple students will impact their financial plans.

Below are some tips that can help you prepare for your children’ or grandchildren’s college savings needs.

Make a Plan

Before you know how much to save for your students’ future educational needs, you need to know what you’d ideally like to set aside for them. Are you prepared to pay full tuition to any school of their choosing?

Saving for college looks different for every family and the most important plan is one that works for your budget. If you want to contribute enough to pay partial tuition at a state college, you will need to set aside less money than if you plan to bankroll every cent of a private four-year education.

Planning for multiple college savings funds doesn’t preclude a generous financial contribution to each of your children’ or grandchildren’s college educations. However, you may need to be prepared to contribute more money at a greater frequency to achieve the savings you desire.

Commit to Saving

Once you know what you want to save, you need to put your plan into action. There are various savings options for parents and grandparents to use when putting funds aside for their students’ future, including the popular 529 Plan. Your financial advisor can help you to determine which plans might be a good fit for your family.

It may be tempting to put your students’ college savings plans to the back burner to be dealt with after you handle regular expenditures and higher priority investments. But if you do that for too long, you’ll begin to fall short of your savings goals.

One of the easiest ways to prioritize college savings is to automate deposits toward your college savings funds. Your financial advisor can help you calculate the amount you need to set aside each month in order to reach your savings goals.

Encourage Academic Success

As your children or grandchildren get closer to college age, their academics will make a greater impact on the amount of family funding they’ll need to get through school. If your students are able to earn scholarships or grants toward their college educations, your piece of the financial puzzle gets smaller.

Encourage your students to pursue academic success by working toward good grades and a high GPA. Help them to study for standardized tests, like the SAT and ACT. Each of these factors will make a difference when it comes time to fill out college applications.

There are, of course, many individual factors to consider when it comes to balancing educational savings for multiple children. If you’re looking at your educational funding options, your CERTIFIED FINANCIAL PLANNER™ can help. Contact Jake Sturgill today for a consultation today!

Prior to investing in a 529 plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax tree. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. 

Plan Your Retirement with Longevity in Mind

There are two important questions that investors need to answer in regards to their retirement planning:

  1. How much money do I need to save? AND
  2. How long should I expect it to last?

Increasingly, investors need to consider even a third important question as they work through their retirement planning:

What if I live to 100?

As medical advancements improve quality of life and offer the potential to extend one’s longevity, there’s the very real possibility that individuals retiring today, next year, or within another few decades are going to enjoy longer, more active lives than generations before them. While this is great news for you and your loved ones, it adds some complexity to the retirement planning equation.

Accordingly, you should plan your retirement with longevity in mind. Read on to learn how.

It’s essential to plan your retirement with longevity in mind. Read on to learn how.It’s essential to plan your retirement with longevity in mind. Read on to learn how.Consider Your Retirement Age

Age is an essential factor to consider as you look toward your retirement plan. Not only should you think of the age you ideally wish your retirement income to hold out until, but you also need to consider the age at which you’ll retire. The individual who plans to retire at age 65 needs to account for many more years of retirement savings than the one who holds off until age 72.

You should also consider what your income will look like in the years as you approach retirement. Do you plan to work full-time at a day job and then launch straight into a full retirement? Or are you anticipating that you’ll have a gradual shift from full-time employment to part-time, and then a post-retirement hobby job that brings in some extra income on the side?

The employment-to-retirement mix looks different for everyone. However, if you plan to remain employed to some degree throughout even a few of your retirement years, you can offset the amount of money you’ll need to rely on from retirement investments during that time. This can help you to extend the life of your retirement savings and may be a longevity strategy to consider.

Hold Off on Claiming Social Security Benefits

Social Security benefits are a part of most investors’ retirement plans, but they aren’t the same for everyone. It’s important to have a good understanding of what your Social Security benefits might look like in order to plot the best course for the remainder of your retirement income needs.

One essential factor in determining the amount of Social Security income that you can rely on during your retirement years is the age at which you plan to start withdrawing your Social Security benefits. The longer you wait, the greater your month-to-month benefit will be.

Ideally, you want to wait until you achieve your Full Retirement Age (FRA) or possibly to the maximum of age 70 in order to take advantage of all that your Social Security investment has to offer. You can consult an FRA table to understand more about maximizing your Social Security benefit.

Evaluate Your Investment Mix

You don’t want to put all of your eggs in one basket when it comes to your retirement planning. A diversified investment portfolio can help to provide confidence as you move forward in your plans.

To plan your diversified retirement strategy, you should consider a variety of investment vehicles and strategies. Often investors will gravitate toward investments that offer certain guarantees or income benefits.  While these may be worthy of consideration, it is always important to remember that every investment has advantages and disadvantages and these products may carry additional fees, charges and restrictions. In the world of finance, diversification is important. Bear in mind that there is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. 

Your financial advisor can provide personalized recommendations for diversifying your portfolio according to your income goals and risk acceptance. Additionally, they may have helpful tips for seeking to maximize your investments with the anticipation of longevity in mind.

Stay on Top of Your Expenses

It is never too early to begin preparing for the phase of life where you will either choose not to work, or be unable to maintain employment.  This is an inevitable event for almost everyone, but unfortunately many individuals fail to plan. Establishing good spending habits is one of the most basic, but also most significant steps that you can take as you think about retiring.  It is common for people to anticipate spending less in retirement, but learning new habits is extremely difficult. By controlling spending during your working years, it will make for a smoother transition to a phase of life where living within your means becomes even more critical. 

With this in mind, it’s important to plan for your retirement with realistic figures that represent your desired lifestyle, length of retirement, and set expenses you can’t avoid. You need a retirement budget that accounts for the dollars you will spend year-to-year so that you can build a retirement income that matches your expenses.

There are calculators and general rules of thumb that can help you to estimate an ideal retirement budget for your lifestyle and longevity plans. But when it comes to getting the best idea of what you as an individual will actually need for your future plans, it’s best to work with a financial advisor who can show you how your financial goals align with your retirement needs with longevity in mind.

Work with a Professional to Plot Your Course

Establishing a retirement savings plan isn’t a simple task. If you’re looking at popular financial resources, blogs, and free calculators to help you put the pieces together, you probably have a lot of questions.

You don’t want to tackle the task of retirement savings on your own. There are too many variables – including the longevity question – that complicate the planning process and challenge oft-repeated rules of thumb.

Don’t leave your retirement savings plans to your best interpretation. Instead, call on the aid of a professional financial advisor who can evaluate your specific situation and help you determine a course that makes sense for your desired retirement.

Your financial advisor will work with you to look at lifestyle factors, anticipated retirement needs, and your risk acceptance to give you some practical options for building a portfolio that’ll work to serve your needs once you hit your retirement years. The experienced advisor will even give you some practical pointers for considering retirement with your longevity in mind.

To learn more about how a CERTIFIED FINANCIAL PLANNER™ professional can help you work through your retirement planning, contact Puckett & Sturgill Financial Group today for a consultation!

Ask an Advisor: What does a good financial advisor do?

Transcript

Aaron: 00:09
Hi, my name is Aaron Puckett. I’m a financial advisor with Puckett and Sturgill Financial Group, here with Jacob Sturgill and this is our Ask An Advisor series where we have a chance to hear common questions or receive questions in through our website and provide answers, so question that we’re going to address today is what does a good advisor do?

Jake: 00:32
That’s a great question, Aaron, and so what I think a good financial advisor does is really boiled down into four main things. The first thing is to clarify your financial goals, right? That’s just simply to say who is it and what is it and when is it that you want to do whatever it is that you want to do. From there it’s to take a look at your current situation and define your current reality and that’s just taking a comprehensive look at all of the factors of where you are today and then to plot the course of how do we utilize those assets and where you are today to get you to your financial goal. That’s the financial plan.

Jake: 01:16
But we all know that life isn’t linear and so this is point three, is it’s really to make the course corrections along the way because I’m sure your life hasn’t gone in a perfect … And you’ve had some surprises along the way, so it’s to provide the course corrections along the way. So what you notice here is I left the investment component out to last because well, investment management is important and is a core component of what we do, the investments really need to be designed to fit the financial plan and to change when the financial plan dictates not when the markets or the news make it seem like we need to make changes, so to fit them into the plan and not the other way around.

Aaron: 02:02
Yeah, so setting my goal, helping me understand where I am, what I need to do to get there, but then maintaining that relationship along the way so that we’re constantly changing and amending the plan and helping prevent any missteps along the way. Yeah, and really, I mean behind all of it is the relationship because a good advisor is going to have a good relationship built upon trust and understanding with their clients and if you have a good relationship with an advisor, I think it allows them to be a good advisor.

Jake: 02:36
Exactly.

Aaron: 02:36
But if there’s not a good relationship there then I don’t think that advisor is able to do a good job.

Jake: 02:43
Exactly.

Aaron: 02:44
Thanks for sending us your questions. I hope that you won’t be slow to call us or e-mail us if you have any questions. We want to provide good answers so thank you for joining us.

It’s Your Turn to Ask

 

 

3 Essentials to Keep in Mind when Strategizing Your Child’s 529 Plan

As the summer winds down and kids get ready to head back to school, you might be wondering what the future holds for your child’s education. Whether your child is busy learning their A,B,Cs and 1,2,3s or starting pre-algebra, it’s never too early to think about what paths they might choose as they pursue college and career.

Many parents find confidence in planning for their children’s future educational expenses by setting money aside in accounts specifically for funding college tuition or other vocational training dependent on what their budding artists, accountants, or astronauts aspire to.

One of the most popular college savings plans is the 529 Plan, which allows parents (and grandparents) to set money aside for their children’s future plans. If you’re considering investing in a 529 Plan for your child(ren), you may have some questions. Here are three essential considerations to bear in mind as you put your 529 Plans together.

1. How Much Should I Save?

Before you start investing in your child’s educational future, you should consider how much money your child will actually need from you to pursue their chosen educational path. While there’s no way to tell which vocational path or university your child will choose – or if they’ll even decide to pursue a college education – you can start to think about how your financial contribution will assist them in their educational pursuits.

You want to decide well in advance how much college the “Bank of Mom and Dad” is going to fund. Are you in for a full-ride to any university? Or is it more realistic for Junior to expect a partial ride to a lower-priced state university?

Your financial advisor can provide some insight into forecasting the anticipated costs you’ll face by your student’s likely enrollment date, as well as how to strategize 529 Plans for multiple children.

2. When Should I Start Saving?

As with most other investment vehicles, the longer you have to let your investment grow, the better likelihood that you’ll come within reach of your financial goals But some families don’t have the opportunity to begin saving for their children’s education until their children are a bit older.

When you’re setting money aside in a 529 Plan, you ideally want to have at least 10 years to grow those funds. That means that if you have a seven- or eight-year-old and are just now considering college savings, you’re not too late to the game. For older students, you may still find a 529 Plan worthwhile, but you should consult your financial advisor for personalized direction on when to start putting funds aside for your child’s future needs.

3. Is a 529 Plan the Best Plan for My Family?

While there are benefits to a 529 Plan, they don’t play out the same way for every family. Depending on the state that you live in, your child’s aspirations, and how many students you’re saving for, you may find another investment account, like a brokerage account, to be a better fit.

One drawback to a 529 Plan is that it’s limited to use for qualified educational expenses. If you have a child who would prefer not to go to college and still want to save for their future needs, you may wish to add funds to an account with less restrictions on withdrawal usage. Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings.

The most important part of planning for your child’s future educational needs is creating a plan that considers your financial goals as they pertain to your family’s situation specifically. Working with a professional financial advisor can help you to determine what these needs are and help you to find a path that allows you to work toward meeting them.

If you’d like to learn more about how a CERTIFIED FINANCIAL PLANNER™ can help you get on the right track for college planning, contact Jacob Sturgill today for an initial meeting about customized college planning.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Ask Aaron: What Steps can I Take to Manage My Investments?

As an investor, you want your investments to perform well and are poised to help you meet your financial goals. Today we’re talking to our own Aaron Puckett, CFP® about some steps that you can take to manage your investments.

Diversification is Key

Even if you’re new to investing, you’ve probably already heard someone mention diversification as a way to position your investments to handle market fluctuations and unexpected loss. But it can be tough to understand exactly what diversification is, how it can help, and how to employ a diversification strategy in your portfolio.

A diversified portfolio is one that is comprised of a variety of investments. One main advantage to the diversified portfolio is that you have the ability to choose investments all along the risk spectrum. This means that if you are interested in a particularly high risk investment, you can balance that investment with other lower risk ones in seeking to insulate your portfolio from total shock should the high risk investment play out badly.

But, of course, all investments carry with them some type of risk. Even supposed “low risk” investments can perform poorly or suffer with a market downturn. So, risk shouldn’t be the ultimate test of whether an investment makes the cut for your diversification strategy or not.

Paths to Diversification

It’s important to note that even a portfolio with seeming diversity may not actually be all that diversified. For example, investing in a bunch of corporate stocks might feel like a diversified activity – after all, there are a variety of differently sized brands across many industries, all with different stock offerings. However, filling your portfolio with a whole bunch of one type of financial product still leaves you vulnerable to weaknesses specific to that financial product.

To achieve true diversification, you want to consider a variety of different financial products with which to fill your portfolio. This mix might include stock products, bonds, and other investment vehicles.

Or you may prefer to participate in a managed fund, like a mutual fund, that pools your investment with those of other investors so that you can participate in a selection of investment opportunities that would otherwise be closed to a single investor. In addition to attended portfolio management, a managed fund generally offers simple way to diversify without a lot of extra effort.

Choosing Your Diversification Strategy

There’s no right path that offers the perfect blend of diversified investments for every investor. In fact, there are a lot of factors that go into determining exactly which portfolio mix is preferable for your investment activity.

Factors like your long-term savings goals, investment threshold, risk tolerance, and value orientation play a large role in narrowing the investment field and developing a custom diversified portfolio. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

You want to work with a professional financial advisor, like a CERTIFIED FINANCIAL PLANNER™ professional, who can help you to connect the dots between where you are now and where you want to be financially. Your advisor should ask questions, not only about your long-term financial goals, but about your personality and your lifestyle to get the best feel for which diversification strategy may likely bring you both confidence and help you pursue desired financial performance.

To learn more about how a CFP® professional can make a difference in your investment strategy and long-term financial outlook, contact Puckett & Sturgill Financial Group today to schedule a discovery meeting with one of our five CFP® professionals!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Stock and mutual fund investing involves risk including loss of principal.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Investment Options for Building Your Retirement Portfolio

You probably already know the importance of setting money aside for retirement. But with so many investment options available, it can be tricky to determine which mix makes the most sense for your needs and goals.

To make matters even more complicated, there’s no single investment strategy that is ideal for every investor. In fact, even when you’ve decided on a strategy, you may later find that it’s not as well-suited to your needs as you initially thought.

While the best course of action for planning for retirement is to align yourself with a trusted financial professional who can help you sort through your retirement needs and investment choices, it’s good to know what options you have available to you. Here are some retirement investments you may consider:

Retirement Income Funds

A retirement income fund is, as the name implies, a managed investment that has the goal to produce income for use during retirement. Typically, these funds are comprised of a portfolio that features stocks, bonds, and other variable investments, in a similar fashion to a mutual fund, but are available exclusively to individuals of retirement age.

Retirement income funds offer the option of a monthly payout, which is appealing to investors looking to budget for their anticipated retirement income needs. Funds are also available at any time, should the investor require a withdrawal at a certain point.

Investors might consider retirement income funds if they anticipate that they will require a month-to-month income replacement at some point during their retirement years but don’t want to spend time continually keeping tabs on their investments. Of course, there’s no guarantee of a monthly payout from a retirement income fund, which is why it’s important to work with a financial professional who can understand the nuances of your investment fund, even if managing the details isn’t your specialty. There is risk, including possible loss of principal. You will need to make sure that the asset allocation is suitable.

Annuities

Annuities are another popular retirement planning vehicle because they, too, offer the benefit of a monthly payout. Many investors find the option to budget monthly around this type of income a boon to successful retirement planning.

While annuities are insurance products, rather than actual investments in the technical sense, they are often considered part of the investment mix because the benefits they offer can be combined with a robust investment portfolio. There are a few different types of annuities out there and some are more appealing for retirement planning purposes.

A popular choice for retirement is an immediate annuity, which begins paying out as soon as you contribute your initial investment. For investors already enjoying their retirement years, this type of annuity is appealing because the benefits are felt right away.

Another option that some use to fill their retirement portfolio is the variable annuity, which allows you some freedom to customize the annuity mix. While this may seem like an appealing option, it’s important to scrutinize the details of any annuity you consider, in order to avoid incurring unnecessary fees or hidden charges.

Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

Bonds

Bonds are somewhat lower-risk investments that offer payout in two ways: first, on monthly interest accrued, and second, on a return of investment at the end of the bond period. These investments are offered by the government and municipalities, so they’re particularly well-backed and should provide the expected payout amount throughout the agreed-upon terms.

When considering bonds as a retirement investment, you may want to consider a “bond ladder” that contains multiple bond investments with varying maturity dates. This way, you’ll earn back investment dollars at different maturity dates throughout the years of your retirement.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield.

Real Estate Investment Trusts (REITs)

For some, the idea of investing in tangible assets makes sense as part of the retirement investment mix. Real estate investments are a popular choice for investing, and with Real Estate Investment Trusts or REITs, you can have ownership in a basket of properties. Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

Managed Funds

Managed funds are another popular choice for retirement investing because they give you the flexibility to pick and choose your investment categories without the day-to-day need to oversee markets and performance. While we mentioned retirement income funds – a type of managed fund – above, it’s important to recognize that there are many other investment options for planning for your retirement.

Depending on your age and asset availability, you may have a variety of managed funds from which to choose when establishing your retirement portfolio. There are a lot of different ways to narrow down which managed fund(s) may work for your situation, but trying to sift through options without missing important details or contrasts can be overwhelming.

As with any type of investing activity, it’s always a good idea to consult your financial advisor when it comes to sorting through your options for managed funds. They have the experience and expertise to give you some ideas of what to look for and what to avoid when comparing and contrasting your investment options.

Are You Ready to Start Your Retirement Planning Journey?

If you’re inspired to start your retirement plans or review an existing retirement portfolio, it’s time to reach out and take that next step. Working with a CFP® professional can give you the boost you need to sort out your retirement goals and establish targets for your future spending needs.

Additionally, working with a professional advisor can provide you with insight to investments that are better-suited to you (or you and your spouse) specifically, depending on your goals, values, and risk tolerance. Your retirement portfolio should be diverse, but not to the point of recklessness. With careful cultivation and portfolio management, you can stay on top of the various components that comprise your unique retirement portfolio.

At Puckett & Sturgill Financial Group, we have plenty of experience in connecting investors with retirement planning tools and investment strategies that are customized to their needs specifically. We would love to meet with you and discuss your retirement needs and answer your questions. Connect today to get started on planning your retirement portfolio!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

Municipal bonds are subject to availability and change in price. They are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply. If sold prior to maturity, capital gains tax could apply.

Ask an Advisor: What does your first meeting with your financial planner look like?

Transcript

Paul: 00:09
Hi. Welcome to Puckett & Sturgill Financial Group’s Ask An Advisor segment. I’m here today with Aaron Puckett, certified financial planner with Puckett & Sturgill. We’re here to talk today about when you come into the office and you’re going to have an initial meeting with a financial planner, what’s that look like, and what do we think? So we’re going to have a little discussion about that, and talk about what you should expect.

Paul: 00:31
I know one of the first things when someone walks into the office is, they’ll come in, they’ll maybe wait for a minute while we gather our things and one of our administrative staff lets us know they’re here, and we’ll sit down in the conference room. What’s the first thing that comes up?

Aaron: 00:47
Yeah, I think this is one of the questions that people get nervous. They’re coming in, they don’t know what to expect. Maybe they never met with us before, met with an advisor before.

Aaron: 00:57
So first thing we’re going to do is usually give them a little bit of a high level view of how our firm works, what it exactly is it that they should expect from an advisor. We usually explain how our compensation models work, so they know how they’re-

Aaron: 01:14
How we’re being paid, how it kind of works in our industry. And then it’s going to be a lot of time for us to just kind of connect with them. I consider that first meeting as a time for them to get to know us, us to get to know them, and for us to just see if there’s a connection. Most of the time we’re not really giving a lot of advice in that first meeting.

Paul: 01:36
Yeah. It’s essentially information gathering, get to know you type of situation, and sometimes there’s an organizational component to it because folks may or may not have all their ducks in a row, and that’s okay. They may not be organized. That’s what we’re here for.

Aaron: 01:50
Yes.

Paul: 01:50
To help create that relationship where we can help you organize and put everything into one place, and make it makes sense.

Aaron: 01:57
Yeah.

Paul: 01:57
And I think that’s one of the things we love to do in that first meeting.

Aaron: 01:59
I’ve heard you call it financial triage sometimes with people. You know, we’re trying to find out what are the most pressing issues? What are the things that we need to really try to address? I guess the one key component to every first meeting that happens is we schedule a second meeting.

Paul: 02:16
Yes, yeah, yeah.

Aaron: 02:16
Because you just don’t accomplish everything in one meeting.

Paul: 02:19
Yeah, and the truth is, and I think that folks should understand this as we get to know each other, it’s a relationship business, and we don’t expect to make decisions that first meeting. We expect those decisions to be made out into the future, and I think that’s what, I think if there’s anything that anyone would take away from this conversation is that this is not pressure, this is not some sort of sales, sales pitch. This is can we help you, can we get your situation figured out and let’s hopefully make, let’s not make decisions today. We’ll make-

Aaron: 02:46
That’s an important point. We don’t ever ask a client to make a decision while they’re sitting in the office.

Paul: 02:53
Right.

Aaron: 02:53
You know, we’re always sending them home and saying “Take your time. Think on this.”

Paul: 02:57
Yeah.

Aaron: 02:58
“Sleep on it.”

Paul: 02:59
Yeah.

Aaron: 02:59
“Talk to your spouse about it,” and then we get back together to implement things.

Paul: 03:03
I think that’s a great synopsis of a first meeting, Aaron.

Aaron: 03:06
Please don’t hesitate to ask your question. Ask through the website, email us, call us, we look forward to connecting with you and it’s our pleasure. So please, give us a call.

It’s Your Turn to Ask

 

 

Tax Saving Tips for Self-Employed Retirement Planning

As a business owner or freelancer, you already know that it’s important to be proactive about tracking your income and keeping detailed financial records. And when it comes to planning for your future plans, including retirement, you want to make the most of each dollar you earn today.

When you’re self-employed, it’s important to consider how year-to-year expenses, including your taxes, can impact your future financial planning activities. If you’re evaluating your mid-year finances and looking for ways to make the most of your retirement strategy, consider some of the following tax saving tips have the potential to impact your retirement plans.

Look into Potential Deductions

As a self-employed taxpayer, you may qualify for certain deductions that allow you to set funds aside for retirement planning tax-free. The 199A tax deduction is one example, which allows you to deduct up to 20-percent of Qualified Business Income (QBI) from a business operated as a sole proprietorship, partnership, S-Corp, or LLC.

Your financial professional is the best person to consult when considering which deductions are right for your situation, based on your business structure, income, and other investments. However, as a business owner, you may qualify for certain deductions that’ll positively impact your bottom line and provide a way to add a little extra to your retirement investments.

Evaluate Your Investments

Speaking of investments, there’s never a bad time to look over your portfolio and review how your nest egg is working for you. Depending on your specific investment mix and your earnings, you’ll have certain tax obligations to report, but you may also get certain benefits due to your self-employed status.

Real estate investments, in particular, can offer some tax savings if you are the manager of your own properties. If you are invested in real estate, your tax professional can provide direction in understanding how to claim these properties and take advantage of business expenses related to their upkeep and management.

More traditional investments, like your stock portfolio, require periodic check ups, too. Remember, the money you earn from these investments is subject to a tax category of its own and you want to ensure that you’re prepared to shoulder this tax burden when you file. If you anticipate that your capital gains for the calendar year will be quite high, look into ways to reallocate the funds or remove certain investments to better meet your target numbers.

Solidify (or Review) Your Retirement Plans

Perhaps you’ve got a retirement plan figured out and you’re humming along with making progress toward your long-term financial goals. Or maybe you haven’t yet started down the path of retirement planning.

Whichever situation applies to you, it’s important to review your retirement options, since your self-employed status can impact the investment vehicles you have available to you. There are a variety of retirement accounts, including IRAs, available to small business owners and your financial advisor can provide guidance on choosing retirement options that make sense for your future goals, while taking your self-employment into account.

In fact, your financial advisor is an invaluable partner in working through your self-employment retirement planning process. They can help you narrow your focus and look at investments that work for your current budget as well as your future plans. They can also help you to determine how today’s actions can impact your tax strategy – and connect the dots to see how that could positively or negatively impact your long-term retirement planning.

To learn more about your self-employed retirement planning options, contact Jacob Sturgill today for an initial consultation!

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.