Rockbridge Named #81 on CNBC's Top 100 Fee Only Wealth Mgmt Firms List
Mar 18

Part 4: What Opportunities Have I Missed?

by

The last part of our “Why to Use a Financial Advisor” series involves missed opportunities.  Knowing there are unknowns out there in financial planning is the first step in identifying areas that can be improved.  A few examples of common missed items that we optimize for clients are:

529 Savings Plan in NYS – New York allows a state tax deduction for 529 contributions on up to $10,000 of yearly additions.  At a rate of 6.85%, that is an extra $685 annually just to save for college in the right bucket.  This can even be contributed in the years where college tuition is being paid.

Savings Buckets – There are many investment vehicles to save money for retirement, college or even a rainy day.  Using the optimal buckets (401(k), IRA, Roth IRA, 529, 403(b), Simple IRA, etc.) can help reduce your tax responsibility

Optimal Diversification – Diversification is becoming easier with target date funds, but many clients have suboptimal portfolios causing them to take an increased level of risk for a given return.

Tax Efficiency – If you are fortunate enough to have savings in both taxable and tax-deferred accounts, the portfolio should be optimized to include both account type characteristics.  In short, bonds and REITs should be in tax-deferred accounts and stocks should be in taxable accounts (using the same asset allocation for a level of risk tolerance).

Simplification – As the years go on, the various number of financial accounts continue to accumulate and complicate the picture.   A financial advisor can help sort through the accounts, combine some, eliminate others and come up with a simplified optimal solution customized to you.

Large Transactions – House purchases, car purchases, and new student loans are just three examples of large purchases that could make or break your financial strategy.  A financial planner can assist you in these transactions, sometimes saving thousands of dollars over the course of a loan.

Legal Documents –Wills, Estates, Trusts, Power of Attorneys, and Health Care Proxies are just as important as savings and investing.  A financial advisor can make sure you have the proper documents in place and recommend excellent professionals who can take care of the paperwork.

Social Security –With Social Security being the primary source of retirement income for most Americans, optimizing lifetime benefits is essential for most retirees.   By delaying and utilizing techniques like “file and suspend with spousal benefit,” a married couple could increase the overall lifetime value of Social Security by up to $500,000.

Return to “Why Do I Need a Financial Advisor?”

You Might Also Like

Other articles filed under Family Finances

Is Your Cash Earning Interest?

October 16, 2018
Interest rates are rising, and yet you may not be earning much on your cash.  As financial markets finally begin to reflect a recovery from the crisis of 2008-09, the brokerage industry is changing the way they handle customers’ cash,...
Continue Reading

Understanding Bond Returns

October 12, 2018
We had several clients this year reach out to ask how bonds were performing in their portfolios. These are great questions, so we created a few items to address what you see in your statements.  Some people notice they have...
Continue Reading

New Tax Law Makes Bundling Gifts to Donor-Advised Funds Attractive

October 9, 2018
“Give, but give until it hurts.” - Mother Teresa -    I don’t think Mother Teresa paid much attention to the tax code, but her quote is unusually prescient for 2018 taxpayers.  The changes have made it unlikely to get...
Continue Reading

What to Ask Your Financial Advisor

September 20, 2018
How does/and how much does your advisor get paid? Fees matter.  It is important to know how much you are paying and the value you receive for that payment.  If you're paying 1% or more for only investment management with no...
Continue Reading

The 5-year Countdown to Retirement

August 16, 2018
While you should think about retirement planning as early as possible, the five years leading up to retirement are critical. If you believe you are 5 years or less away from retirement, now is the time to seriously take a...
Continue Reading

‹ Back to Blog Home

getting started is simple

315.671.0588 info@rockbridgeinvest.com Schedule a meeting Sign Up for Our Newsletter