The Yearly Journey of 1,000 Steps: It’s Tax Season and I Can Do Better

journeyAh, mid-February- that time of year when my postman provides a daily barrage of tax documents, and scolds me for not retrieving them quickly enough. When it finally becomes apparent that he can no longer jam another rumpled envelope into my overflowing mail slot I know it’s time to file my taxes. While this annual ritual often yields a financial reward in the form of a tax refund, there is clearly a higher purpose for the enormous pile of paper. Note to self: my inner guilt will be quelled; this year I will make better use of tax time, and so can you. Continue reading

Homeowners Insurance 101: What You Need To Know

homebuyersThe purchase of a home is an important decision and often represents the single largest financial transaction that Americans enter into. To protect that investment, homeowners insurance is recommended, and is generally mandated by a mortgage lender.

In addition to protecting your home from a catastrophic loss, and satisfying your lender’s requirements, homeowner policies protect you in other ways that you may not have considered.

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Buckets, Flooring And Structured Withdrawals: Creating A Dynamic Income Plan

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Turning accumulated assets into a reliable income stream is THE critical issue facing retirees. A growing body of research, and memorable terminology, has provided financial planners with the ability to help our clients create a dynamic income plan that best suits their needs.

While each client has a unique set of circumstances, having adequate income to maintain a given lifestyle in retirement is a near universally shared goal. Likewise, many clients will face similar obstacles and challenges throughout retirement. Our job as advisors is to assist clients in identifying their retirement goals, risks, income sources and expenses, and to combine these to help create an income plan that can be revised and adapted over time. In this blog, we will outline three distinct approaches to retirement income planning.

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It Can’t Happen to Me: Why Forgoing Disability Insurance is a Costly Mistake (Part I)

If you had a machine in your basement that printed out $20 bills whenever you wanted, would you buy a warranty for the machine?

We recently had a meeting with a client that we’ve known for a long time.  Despite an annual income of $500K+, we were concerned; his financial plan had a few major shortfalls, which put his family – his wife and two daughters – at risk.

Of note, his financial plan:

  1. Did not have enough liquidity
  2. Had no emergency account
  3. Did not have enough savings for retirement
  4. Had no personal disability insurance

 The first few issues are ones we often encounter with new clients.  These typical financial traps can be safely avoided with a good financial plan that re-allocates income and creates liquidity in savings.

The most worrisome part of this client’s financial plan is that he didn’t have personal long-term disability insurance.

Fifteen years ago, this client had bought life insurance, but declined purchasing long-term disability insurance.   Why?  His excuses are ones we hear far too often:

  1. “My company offers disability insurance” (only for as long as you’re working there)
  2. “It can’t happen to me” (unfortunately, it can’t until it does)
  3. “I don’t want to pay for it” (if you need to use it, the investment in the premium will pay off very quickly)

Fast-forward fifteen years to our meeting last week.  This client, like many people we know, has been diagnosed with a degenerative disease (something similar to multiple sclerosis, or muscular dystrophy, Lou Gehrig’s disease, etc.).  Like many of those diseases, there’s no known cure.  Moreover, the disease will get progressively worse over time.  If/when he becomes disabled, the insurance that he bought through work will not cover him long-term.  If he was to lose his job, not only is he completely vulnerable, but so is his family – there is no coverage in place. 

Think back on the money-printing machine we asked about at the top of the page.  Would you insure it?  Most people answer yes that they would get a warranty for the money-printer; however, most people don’t take the same warranty out on their ability to work, which is their greatest asset and source of future money.