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Will a Personal 401(k) Get You to Your Retirement Goal?

Posted by Larry Jones on Feb 22, 2018 9:30:00 AM


Self-Employed Lives Matter!

In 1978 our tax code was amended to allow the creation of a tax-deferred savings vehicle for employees. It was defined under section 401(k) of the Internal Revenue Code, and quickly became one of the best known employee benefits. Known as the 401(k) plan, it was great for individual investors because tax-deferred growth was a huge benefit over the long haul, was great for employers because it allowed more flexibility than pension plans, and (I'd say) it was also great for the economy as well. Massive employer matched investments fueled a great stock market bull. It was a win-win all around!

There were, however, some drawbacks. The plans were subject to ERISA rules, which defined specifically how the plans could and could not be implemented along with contribution limits and other administrative details. Discrimination between one employee and another was absolutely not allowed, which is a good thing. One of the rules that many didn't like was that self-employed people had no access to this powerful retirement savings vehicle.

In 2001 that changed with the Economic Growth and Tax Relief Reconciliation Act (EGTRRA), and the personal, or Solo 401(k) was born. Now the self-employed worker can take advantage of this powerful savings vehicle too.

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Topics: Tax Deferral

If You Live a Long Life Will Your Legacy Survive Intact?

Posted by Larry Jones on Feb 20, 2018 9:30:00 AM


A Very Difficult Choice

Is living a long time in your future?

You hope so, don't you. It's likely that you will, in fact statistics show that of a married couple over 65, the odds are that at least one of them (probably the wife) will live to be at least 90. What would that scenario do to your legacy?

What a silly question, you might say. But just exactly IS your legacy? It simply means how you are remembered by those who survive you. Most would like to think that when they're gone those that are left behind will remember them fondly. We'd like to know that our family's financial needs are taken care of. That's the reason why you use the services of financial professionals, isn't it? Then why is it that so few advisors address the subject of long-term care?

The typical scenario goes something like this: the husband has some type of medical event, such as a stroke or a diagnosis of Alzheimers disease, and now the wife has to make a choice.

Does she use the money that they have set aside to take care of her husband, the money that she needs to live the kind of lifestyle they had always planned for, or does she take care of him herself?

Most of the time she will choose to do it herself. She will then keep this up until her own health begins to suffer, and then she'll begin spending down their assets because she simply can't do it alone anymore. If this goes on long enough both her health and lifestyle will be drastically changed.

For an advisor to neglect this subject is professional malpractice!

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Topics: Long Term Care

The Retirement Income Planning Sweet Spot

Posted by Larry Jones on Feb 15, 2018 9:30:00 AM

3 Stooges Golf.jpg

Golf, the Sport of Kings

Almost every time I play a round of golf I vow that it will never happen again. I don't believe I have ever hated anything as much as I hate this aggravating and extremely difficult sport. If only I could quit. But something about it keeps bringing me back to try again. That something, is the sweet spot!

Now, I've learned when speaking to other golfers that I am the only one who has these difficulties. It seems that every single person I ask, "how was your round?" will reply that it was an awful day. "I got stuck in a bunker on number three and barely broke 75." It's that kind of crazy talk that really gets to me, and I'm sure it would make even Jordan Spieth nervous to hear it. A typical round for me includes many different activities. Bird watching in the woods is always pleasant. I'm reminded of boyhood trips to the beach as I play in the sand, and I know my putting brings back memories of windmills and dinosaurs. I'm usually just about to throw my clubs when it happens. I take a correct stance, an enviable swing, and, ping! I hit that sweet spot and observe a 250 yard drive straight as an arrow. All thoughts of golf enmity disappear instantly and from now on no greens fee is too high. I'm ready for Pebble Beach! That sweet spot is a beautiful thing, and is responsible for the millions of dollars spent each year by amateur duffers. You can't argue with the sweet spot.

If you're a golfer you know exactly what I'm talking about. But did you know that when it comes to retirement income, there's a sweet spot there as well.


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Topics: Retirement Income

Estate Planning: Living Trust Case Studies

Posted by Larry Jones on Feb 13, 2018 9:30:00 AM


The Tsunami of Death

When a parent dies, or even worse, both parents, a tsunami rolls toward the survivor(s). Along with the emotional strain comes financial concerns, and legal. All of this hits at the worst possible time, a time when the children are least emotionally prepared to take them on. It can be truly an awful experience.

In the last two blogs I've written a bit about revocable living trusts, and how they can be such great stress relievers. Now I'd like to present some practical case studies on their use. (to see the previous blogs see: blog 1, blog 2)

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Estate Planning Tips: 4 Common Misconceptions About a Living Trust

Posted by Larry Jones on Feb 8, 2018 9:30:00 AM

family tree.jpg

A Matter of Trust

In my previous blog I spoke about the importance of having a revocable living trust in your estate planning toolkit.  This type of trust can do several things for you, such as reducing the amount of taxes and fees your estate will pay, shortening the amount of time that beneficiaries will have to wait to take ownership of assets, and removing all of the transactions from the public eye.

Trusts can be an invaluable tool in your estate plan. Irrevocable trusts are usually used by higher net-worth folks to escape the absolute pillage of their estate by the government. There are also some significant tax advantages found in gifting to these trusts, as well as to charities.

The immediate tax advantages with a revocable living trust are less dramatic. However, for the person with an estate of less than $5 million the living trust is much more commonly utilized. Sometimes people confuse the two types- revocable vs. irrevocable - and the benefits that each kind provides.

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Topics: Estate Planning

Should Your Estate Plan Include a Living Trust?

Posted by Larry Jones on Feb 6, 2018 9:30:00 AM


Fins to the left, fins to the right

Everything in our world today seems to be expensive, doesn't it? When I was a child, which was, admittedly, a long, long, long time ago, my Mom used to drop me off at the local movie theatre to watch the latest Elvis film (...a long, long, long, time.....). She'd give me a dollar to spend. The price of admission was 50 cents and then I could get a large coke and popcorn for the rest of it. Have you tried taking your family to a movie lately? There's a good reason to come and see a financial planner, right there!

Well, we know how expensive everything in life can be, but have you considered dying? Kicking the bucket can be one of the most costly endeavors ever, especially if no estate planning has been done. Does the thought of giving away 30-60% of your children's inheritance give you a warm and fuzzy feeling? That's not the case for most.

There are lots of expenses that come into play when you die. Court costs, executors fees, attorney fees, taxes, filing costs, and the funeral costs are among the top. You might be interested to see how the estates of some of our most famous Americans have been plundered:

Individual Value at Death Value After Probate
John D. Rockefeller $26,905,182



Elvis Pressley $10,165,434



Walt Disney $23,004,851



J.P. Morgan $17,121,480



Frederick Vanderbilt $76,838,530



You can see from the chart above that not only does having a good estate plan makes sense, but not having one can be a very expensive mistake. One interesting'll notice that one of the folks in the table above, J.P. Morgan, was a financial professional. Hmmm... 

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Topics: Estate Planning

Alternative Uses for Life Insurance

Posted by Larry Jones on Feb 1, 2018 9:30:00 AM


Are your life insurance benefits important to you?

Are you one of those people who has paid into a cash-value life insurance policy for many years? Do you remember why you originally bought the policy? Does that reason still exist?

Ann is a widow whose husband John just passed away. They had no children. Thirty years ago Ann purchased a whole life policy on herself, making John the beneficiary. The payments on the policy are still continuing, and run over $100 a month. Now that John is gone, with nobody to leave the money to, she's considering cancelling the policy. What should Ann do?

There are a number of alternatives available to Ann. She could take tax-free loans against the cash-value in the policy. She could stop making premium payments and accept some sort of reduced payment of the death benefit. She may even be able to use the cash-value as collateral for a bank loan. I'd like to discuss a couple of lesser-known settlement options of a life insurance policy: viatical agreements and life settlements.

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Topics: Life Insurance

Making College Planning Easy

Posted by Larry Jones on Jan 30, 2018 9:00:00 AM


A Brain is a Terrible Thing to Waste

Should your child go to college?

My parents were part of the "greatest generation." Dad was a veteran of WWII (and not happy about it. He was on the verge of being called up from a minor league baseball team to play in the majors when Uncle Sam summoned him instead...) and came home in 1945 to a world finally at peace. In those days, a college education was considered a sure ticket to success. That's not so much the case today. It really depends on your field of study as to what your opportunities will be, and many college graduates come into the workforce only to discover that it's very difficult to find employment using their particular field of study. Many skilled trades pay as much or more as could be earned with a degree. I'm of the opinion that college isn't for everybody, and many are in college who shouldn't be.

Nevertheless, most parents have the hope that their little angel or angel-ette will one day discover the cure for cancer, bring about world peace, or colonize Mars, and to do that, they're going to need to attend college. 

And so the next question is: how are we going to pay for it?

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Topics: Case Studies, College Planning

Long Term Care vs Your Way of Life

Posted by Larry Jones on Jan 25, 2018 9:30:00 AM


Risk Tolerance and Common Sense

My experience as a financial planner has brought me into contact with almost every type of personality. When it comes to the subject of risk tolerance, folks have many different ways of evaluating what they think risk exactly is. Some people don't consider putting their entire portfolio into third-world currencies risky, while others wouldn't go near Wall Street with a dime. If you've been around this blog long enough you've heard my rants on investment risk and not taking more than you need to in order to achieve your desired results. That's why I always attempt to quantify for my clients exactly how much risk they are being exposed to.

There seems to be one subject that is greatly ignored in the financial plans of many people. That subject is how a long term care event will affect your portfolio, and indeed, even your very lifestyle, as well as your family's. When that bubble breaks loose in your bloodstream it can very well rock everyone's world that you are close to. How is it that we give so much thought to the risk in our portfolio, which is internal, and so little to what is perhaps a much greater risk, which is external, and much more likely to happen? In my opinion, this subject needs to be discussed by any reputable planner with his client. Anything else, in my opinion, is gross negligence.

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Topics: Long Term Care

Investment Risk: How Much Should You Tolerate?

Posted by Larry Jones on Jan 23, 2018 9:30:00 AM

Are You a Risk-Taker?

Mr. Allen is the CEO of a large manufacturing firm, which has done very well over the last ten years. Lately, in considering expansion plans, it was brought to his attention that an attractive opportunity was available in another country for the location of the new plant. Labor costs would be much lower, and access to raw materials was also easier there, and he could count on a much higher return on investment.

On the other hand, this particular country has a history of political instability. In fact, powerful factions in this country were actively working toward political revolution and a committment to nationalizing all industry inside it's borders, effectively taking over all foreign investments.

Should he locate the new plant in this country? How will Mr. Allen decide?

How about you? What would you do?

The answer you'd give reveals a lot about your personal attitudes toward taking risk.

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Topics: investment risk

What you don't know can hurt you!

As a fiduciary I am required to always act in your best interests, and as a professional planner, it's my job to be familiar with all types of possible solutions and financial vehicles. In short, I have no interest in selling any particular product or any affiliation with a particular company. I work for my clients.

Are you:

  • concerned that your tax bill is too high?
  • tired of watching your nest egg decline by significant amounts every 5-7 years?
  • wishing you could find more free time?
  • looking for ways to help protect yourself against litigation that could destroy all you have worked for?
  • worried that Uncle Sam is going to enjoy your retirement more than you are?

If any of the above describes you and you'd like to get a question answered then just click the button below and we'll be in touch.

Let's Meet!

p.s. we have the ability to meet virtually regardless of your location! Give us a shout!


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