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.
Other articles filed under Family Finances
May 11, 2016
The default investment option for the Lockheed Martin Salaried Savings Plan (SSP) and the Capital Accumulation Plan (CAP) is the managed Target Date funds. A Target Date fund is designed to capture the entire investment market in a single fund. ...
April 29, 2016
Lockheed Martin MST recently announced the upcoming Voluntary Layoff Program with the goal of reducing the divisional workforce by 1,500 employees. If you are considering retirement and are eligible for the Voluntary Layoff Program, it may make sense to deeply...
April 28, 2016
When evaluating a financial advisor, the most important factor is that they truly understand you as a person and your personal situation. At Rockbridge, we have a dedicated focus in working with clients that are employees of Lockheed Martin. Because...
April 14, 2016
Stock Markets After January’s rough start, stock markets bounced back nicely in March, bringing most numbers into the black for the quarter. Domestic Small Cap and International Developed Markets are the exception – down about 1.5% and 2%, respectively. Notice...
April 11, 2016
I will make the argument here: Most people would rather go to the dentist than get their estate documents (Living Will, Power of Attorney and Health Care Proxy) in order. Why? The dentist appointment usually only lasts an hour and...