Are you winning on wall street? Here are some ideas for the new year!
Where to begin? One of the cornerstones to good financial planning is having a retirement and Social Security strategy.
If you have not yet filed your 2022 tax return you can still fund an Individual Retirement Account (IRA) for 2022. By doing this you can reduce your taxable income by the amount of the contribution for last year. The total contribution limits to your traditional IRAs and Roth IRAs can't be more than: $6,000 or $7,000 if you're age 50 or older.
If you own or you are considering opening a small business Invest in Yourself! Since the arrival of the pandemic there's been uptick in new business formation. Instead of returning to their previous job many people have taken the path to strike out on their own. Here is one example of a popular strategy to help fund a small business.
Entrepreneurs Receive Funding For Business
Begin your business journey with ROBS financing.
A rollover for business startups (ROBS) allows you to invest funds from an existing 401(k) or individual retirement account (IRA) into your business without paying early withdrawal penalties or taxes.
As a Registered Investment Advisor we can help design a strategy to help you reach your goals smarter and faster. We'll help you establish a strategy that allows you to combine a variety of retirement plans into one.
Another consideration even if you've already fully funded your 2022 retirement plan contribution. Take advantage of the 2023 IRA< Roth IRA snd 401k Increased amounts of contributions allowed.
Different types of IRAs:
Traditional IRA. Contributions typically are tax-deductible. You pay no taxes on IRA earnings until retirement, when withdrawals are taxed as income.
Roth IRA. Contributions are made with after-tax funds and are not tax-deductible, but earnings and withdrawals are tax-free.
SEP IRA. Allows an employer, typically a small business or self-employed individual, to make retirement plan contributions into a traditional IRA established in the employee's name.
SIMPLE IRA. Is available to small businesses that do not have any other retirement savings plan. The SIMPLE – which stands for Savings Incentive Match Plan for Employees – IRA allows employer and employee contributions, similar to a 401(k) plan, but with simpler, less costly administration, and lower contribution limits.
The IRS also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023.
Internal Revenue Service announced that the amount individuals can contribute to their their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022.
Required Minimum Distributions (RMDs)
Required minimum distributions (RMDs) are withdrawals you have to make from most retirement plans (excluding Roth IRAs) when you reach the age of 72 (or 70.5 if you were born before July 1, 1949). The amount you must withdraw depends on the balance in your account and your life expectancy as defined by the IRS. If you have more than one retirement account, you can take a distribution from each account or you can total your RMD amounts and take the distribution from one or more of the accounts. RMDs for a given year must be taken by December 31 of that year, though you get more time the first year you are required to take an RMD.
Get a Financial Checkup! Just like visiting your Doctor for an annual checkup.
It's important to have a financial review to be sure that your money is working efficiently.
Registered Investment Advisor Vs Stock Broker?
If you are like many people you may not be confident in making financial and investment decisions on your own. Enter the investment professional.
There are two main categories of professionals who can help you: the Stockbroker and the Registered Investment Advisor.They differ in two ways, A) their level of responsibility to you and B) how they get paid.
A stockbroker is an employee at a financial firm who is paid a commission based on what you invest. He/she is basically a sales person. The investment they sell you must be appropriate at the time of the recommendation but they have no further, on-going responsibility to you.
During the “know your client” conversations, the stockbroker learns many things about you and your financial needs, including
How old are you?
What is your investment time horizon?
Is your investment intended for retirement, down payment on a home,
your child’s future college expenses or something else?
What is your profession?
What is your annual salary?
A Registered Investment Advisor, on the other hand, are fiduciaries, meaning your interests always come first. You will have a continuing relationship with your RIA. An RIA must register with the SEC or state securities regulator, depending upon the assets under management.
Financial Planners help individuals and corporations meet their short-and long- term financial goals. Services include asset allocation, estate planning, tax planning, retirement and more.
There are several methods by which you might pay an investment advisor, including a fixed fee, an hourly fee, or a percentage of the value of your assets they are managing. Is your investment intended for retirement, down payment on a home,
your child’s future college expenses or something else?
What is your profession?
What is your annual salary?
Begin with a search of the firm and representatives with FINRA's BrokerCheck!
Here are just some of the questions that you may want to ask your perspective investment professional
Do you offer the services I need? Investment advisory practices vary widely in the services they provide. In general, they fall into one or a combination of the categories listed below.
Money managers If you need someone to manage your portfolio and do your investing, consider money managers. They: Design investment portfolios, generally consisting of stocks, bonds, and other individual securities.
Financial planners If you need someone to review your situation and help with big- picture planning, consider financial planners. They: Help you look to the future and do long-term financial planning in the areas of retirement, college funding, wealth transfer, tax planning, and insurance. May not offer investing and portfolio management services.
Wealth managers If you need an advisor who can handle both your investing and planning needs, consider wealth managers. They: Provide highly personalized, comprehensive financial planning as well as investment and portfolio management for high-net-worth clients. Coordinate with other professional advisors, such as attorneys and accountants, to serve more complex financial needs, which may include tax minimization, trust management, wealth transfers, real estate management, portfolio performance analytics, and more.
How are you compensated? Knowing how your advisor is compensated may help you evaluate the relative objectivity of the recommendations you receive. Independent financial advisors generally work on a fee-only or fee-plus-commissions basis.
Types of compensation and what they mean to you:
Fee only Asset-based, hourly, or flat fees: Many independent financial advisors charge a percentage of the assets they manage for you (typically 1%–2%). This compensation method rewards your advisor for growing your portfolio. Hourly or flat fees are often associated with a specific, one-time service (e.g., developing a financial plan). The fee may vary by account size and service. In addition to these fees, you may pay other fees for execution of the trades your advisor makes and for custody of your assets.
Fee plus commissions Along with an advisory or financial planning fee, some advisors may receive a portion of the commissions you pay when you buy or sell certain financial products that the advisor recommends, such as insurance policies or annuities.
Commissions only Advisors sometimes receive only compensation from sales commissions on the investments they buy and sell for you. This method may give the advisor an incentive to recommend that you buy and sell more often.
Wrap fees Sometimes advisors charge a “wrap fee,” which is typically a single asset-based fee for both the advice they provide and the execution of the trades they make.
Other things to consider... Why I’m looking for an advisor? Sharing your reasons can give advisors a better understanding of your priorities. If you’re currently investing on your own: My portfolio has grown too complex for me to comfortably manage. My portfolio is not meeting my performance goals. I want someone else to do the day-to-day investing. I’d rather be spending my time on other things. I need help with a plan that addresses my entire financial picture. I need help with a windfall, such as money from a home sale. I’m retiring and want to create a reliable income stream. I want help with tax-efficient investing or developing an estate plan. If you’re already working with an advisor: My portfolio has outgrown my advisor’s expertise. I question the advice I’m currently receiving. The advice I receive doesn’t reflect my goals, situation, life stage, or risk tolerance. My advisor doesn’t seem to be listening to me. Other reasons:
Even a DIY Day Trader will have questions they need quick answers to!
Take the next step, schedule a free consultation and learn how we can help you. Asset and Cash Management Solutions
