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

Tax Scams: What to Look For and How to Avoid Them

April 19, 2018
As another tax season comes to a close, we wanted to draw attention to a number of scams and schemes to defraud unsuspecting taxpayers. We think it is important that our clients be aware of how these scams work, and...
Continue Reading

The Value of a Financial Plan

April 17, 2018
It’s common for investors to feel nervous when looking at investments by themselves. Are you saving enough? Are you saving in the right place? Are you holding the right mix of investments? Should you own individual stocks or funds? Are...
Continue Reading

Tuning Out the Noise

April 6, 2018
The markets have seen several ups and downs over the years, but remember - Volatility is normal. At Rockbridge, we believe financial advisors play a vital role in helping you understand what you can control while providing expertise, perspective and...
Continue Reading

Understanding Your Heirs and Knowing Your Beneficiaries

March 20, 2018
Estate planning has often had an air of mystery to some people. The terms used and bantered about by lawyers or planning professionals are not words we use in everyday conversations.  Do you have heirs? Answer: No you don’t –...
Continue Reading

Income Tax Planning – How Rockbridge Can Help

February 23, 2018
It’s tax time again and as you gather your W2s, 1099s, and maybe even your K-1s, we thought it would be a good time to explain our income tax planning approach. Income tax planning is a crucial aspect of the...
Continue Reading

‹ Back to Blog Home

getting started is simple

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