Financial Planning Archives - Page 7 of 9

Curious About Investing in the Stock Market? Consider these Factors before Jumping In

May 30, 2019 Tags: building a portfolio, portfolio diversification, stock market P&S

When you think of investing, your thoughts may go pretty quickly to the stock market. After all, there’s always a lot of talk about how the stock market is performing, which companies are doing spectacularly well (or spectacularly awful), and why one industry is a better choice than another. People are very interested in and have a lot of opinions about what happens in the stock market.

But what does this mean to you? If you’re curious about investing in the stock market, you probably have plenty of questions. Perhaps you’ve even heard certain soundbytes from popular voices in finance or read about stock market trends on your favorite money blogs.

Before you decide to run with the bulls and bears, it’s important to understand how the stock market works and how to find quality information about the investments that you’re interested in. This way, you can discern whether investing in the stock market makes sense when planning for your financial future.

Choose a Trusted Advisor

The most important aspect of setting yourself up for the possibility of success in navigating stock market investments – even simply to discern whether investing is right for you – is finding a trusted guide to help you along the way. This is where finding a Certified Financial Planner comes in.

A qualified CFP can help you to research your investment options and narrow choices that align with your values and goals for investing. Once your plan is implemented, your financial advisor can help you handle the details and monitor your investments to determine whether they make sense for your portfolio in the long-term.

Evaluate Your Investment Style

One of the first things you’ll do when you meet with an advisor is to sit down to discuss your financial background, ideas for how you’d like to see your financial future unfold, and different tactics that you might take to get there. Your advisor will listen and take notes to learn more about your specific situation and may ask questions to get a better feel for what type of portfolio balance may be preferable.

Your advisor may prompt you to share information about your past investment history and show interest in learning more about how risk tolerant you as an investor (or couple) might be. These factors will work to inform your advisor of your personal investment style and will ultimately help the two of you to decide whether stock market investments are worthwhile, and which ones are more likely to help you to achieve your goals.

Typically, investment style is graded on a range from conservative to aggressive. If you have a conservative investment style, you’re likely to favor less risky investments that may potentially offer lower, yet more predictable returns over the period of your investment. If you tend toward the aggressive end of the spectrum, likely you have a higher risk tolerance and will favor investments that offer the potential for high returns along with greater volatility.

Establish Your Goals for Investing

In addition to knowing your investment style, you’ll want to establish certain goals for your investing activities. Are you saving for retirement? Looking to cash in within a certain number of years and use the returns as a nest egg for some new endeavor?

Whatever your ultimate investment goals may be, you need to be clear about them when discussing your investment strategy with your financial advisor. Perhaps you’re not even certain of what you should be aiming for, but have some ideas – your advisor can help you to work to prioritize your objectives for investing.

Determine How Much to Invest

As with any other aspect of financial planning, you’ll want to set a budget for your investing strategy. This is, again, something that your financial planner will work with you to establish, but some basics for determining an investment budget include setting a goal for how much money you hope to accumulate or how much income you want to draw from your investment later.

Additionally, you and your advisor will work to find investments that have the potential to help you start working toward some of those short-term and long-term financial goals. There are a variety of investment vehicles from which to choose, with some requiring a certain investment minimum, so it’s important to establish a budget to give your advisor an idea of which investments are both helpful for pursuing your goals and stay within a reasonable dollar amount for your specific situation.

Diversify Your Portfolio

Even when you’re ready to take the plunge and invest, you want to ensure that you don’t put all of your eggs into the proverbial basket. Diversifying your portfolio allows you to take advantage of the potential returns offered by multiple companies, industries, or investment vehicles while also being able to compensate for a loss or two along the way.

Diversification is helpful because it allows you to spread your investment dollars between investments to avoid a total loss from one failure. Your financial advisor should steer you in the direction of portfolio diversification while also keeping your budget, investment style, and goals in mind. Finding this delicate balance is part of where the experienced advisor will prove to be an invaluable guide as you work through your investment strategy and onto your financial future.

Monitor Your Investments

Once you’ve taken the steps to invest in the stock market, you don’t want to simply drop your money and wait for a future payout. You’ll want to stay up-to-date with your portfolio’s performance and make adjustments as necessary.

Now, it can be challenging for the average investor to view their portfolio objectively – after all, it’s your money on the line. Market fluctuations, as normal as they may be, take on a whole new meaning when it’s your potential returns rising and falling.

Emotional investing behavior is very common and can cause you to make split-second decisions that have large ramifications. This is another area where you can partner with your financial advisor – after all, their job is to view your investments in a professional manner and help you to decide whether to make adjustments or stay the course.

Your financial advisor should help you build a strategy and investment portfolio that fits your specific situation and gives you confidence. That way, you can enjoy your day-to-day life without waiting for financial news in your inbox every morning and stressing all day about which factors may influence your bottom line.

Do you have questions about your financial future? Do you have a portfolio you feel needs some attention? At Puckett & Sturgill Financial Group, we are a group of CFPs who are experienced in helping clients to navigate the ups and downs of portfolio planning and management.

Contact us today to learn more about our investment services and to schedule a discovery meeting with a CFP to start your investing journey!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

Tips for Utilizing Your Grad’s 529 Plan

May 29, 2019 Tags: 529 plan, Higher education, Saving for college Jacob Sturgill

Graduation season is upon us and if you’ve got a newly minted (or soon-to-be minted) high school grad, you’re probably already thinking through this summer’s pre-college plans. With a fresh diploma in your grad’s hand and acceptance letters sign and sent, you’ve likely got a few questions about how the financial aspect of this new chapter is going to play out.

If you’ve saved for your child’s higher education through a 529 plan, it’s time to look into how to make the use of this money for your student’s college needs. Here are some ways to put grad’s 529 plan to good use.

Reserve 529 Plan Withdrawals for Higher Education Expenses

Qualified higher education expenses are the only ones for which you can use your student’s 529 plan withdrawals. These include many expenses through your student’s college or university, such as tuition, room and board, meal plans, and textbooks. Other school-related expenses, like tech for your grad to keep up with their studies, can qualify.

Expenses like travel to and from campus or dorm decor are not considered qualified expenses by the IRS and can incur a higher tax rate on your 529 withdrawals. In general, it’s best to stick with IRS recommendations for spending your 529 funds and consult your financial advisor with specific questions.

Encourage Your Grad to Keep Relevant Receipts

Since you’re probably not living on campus with your grad and may have a few hundred or thousand miles separating you from your student’s new address, it’s important that your college student is on the same page as you when it comes to allocating education expenses. Clue your student into the expenses that they can count under their 529 plan withdrawals and encourage them to keep relevant receipts for these expenses. With these in hand, your tax time records will be much easier to maintain.

Mind Your Dates

When taking withdrawals from your 529 plan, it’s important to keep your related expenses within the same tax year. If you take money out with plans to pay a future bill, you run the risk of overdrawing your account if you don’t make payments until the following tax year. Plan accordingly when scheduling your bill payments to avoid running into problems with next year’s withdrawals.

Consider Future Contributions

Just because your student is soon to start their college career, you don’t need to stop contributing to their 529 plan. In fact, some parents find that they can increase their college contributions after their student starts school since their household budgetary needs are lower with one less family member living at home.

Additionally, since many parents plan for their 529 plan around ballpark figures, some families prefer to add additional funds once they have specific figures based around their children’s actual higher education needs. Talk with your financial advisor to get the best idea of whether your 529 savings are enough to cover your student’s expenses.

If you’re looking to make the most of your existing 529 plan or are still a few years away from your children’s graduations and want to start saving, contact Puckett & Sturgill Financial Group to meet CERTIFIED FINANCIAL PLANNER™ Jacob Sturgill. Jake will help you work through your family’s higher education funding needs.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings.

Important Considerations for Small Business Financial Planning

May 29, 2019 Tags: Retirement Planning, small business, succession plan P&S

With Small Business Week kicking off the month of May, this is an ideal time of year to consider the unique aspects of small business financial planning. After all, if you are a small business owner, you already know how much goes into the day-to-day of keeping everything running smoothly.

As a small business owner, there are resources available to help your business profits go the extra mile. Check out some ways to make the most of your small business income and save for a rainy day.

Keep Track of Your Finances

Of course, the most important aspect of managing your financial resources is keeping track of the money that you bring in. Accounting software can help you manage income, expenses, invoices, and more, so you can focus on the things that you do best.

You will also want to prepare a cohesive tax strategy that helps you to determine how much tax you’ll owe at tax time and how you can offset your tax expenses through legitimate business deductions. Before filing, you’ll want to consult with a tax professional to ensure that your numbers are accurate and that you comply with applicable tax codes to avoid unexpected expenses later on.

Prepare for a Graceful Exit

When considering retirement, developing a succession plan makes sense. But life can throw plans off course with a sudden twist, and in these cases, succession plans are even more important.

Your succession plan should ideally pinpoint a potential next owner or buyer and should outline how you will go about dispersing business assets, whether you plan to offer a buyout option to a co-owner or key employee or sell the business to an outside party. No matter if you’re a new business owner or a well-established entrepreneur, taking time to draw up a succession plan is an ideal opportunity to consolidate financial and business records and determine key contributors to your business’s success.

Your financial advisor may be able to help with organizing these documents and helping you to lay the groundwork for a solid succession plan. With that succession plan in place, you can have enjoy the daily challenges and thrills of running your business with the peace of mind that comes with having a plan for the future.

Add Value for Your Employees

Most of us are familiar with the 401(k) programs large companies establish on behalf of their employees, but even if you’re a small business owner, there are still options for you to offer retirement plans for your employees. Offering a 401(k) program can help you to attract top talent and invest your own retirement savings as the company owner.

In fact, preparing a retirement package for your business allows you to take advantage of pre-tax contributions, which will save you money on the personal and business side of things. Many business owners overlook this aspect of financial planning for their business and come to the end of their careers without a nest egg of their own.

But you don’t need to let this pitfall endanger your ideal financial future! At Puckett & Sturgill Financial Group, we can walk you through the ins and outs of choosing a retirement plan and can help you develop a customized strategy for implementing a retirement package for your small business. Your next step is as easy as contacting us.

What are the Benefits of Providing a Company Retirement Plan?

May 23, 2019 Tags: 401(k), Retirement Planning, small business Jacob Sturgill

When you’re working through your strategy for adding a retirement plan to your employee benefits strategy, you may wonder what the benefits of providing this perk are for your business and bottom line. Even though you may want to offer a stellar package that attracts top talent or sets your business apart from your competitors, it can be hard to see how else your company might benefit long-term from such an offering.

However, you’ll find that offering a generous package can be a win-win scenario for your employees and for your business. Read on to learn more about the perks of your business providing a company retirement plan.

Benefits for You as an Employer:

When you choose to offer a company retirement plan, you can benefit in a direct way through the ability to invest in the plan for yourself. Saving for retirement through a company plan allows you to participate in a plan that you might not otherwise have access to.

You can also benefit from company tax breaks and incentives from the federal government when you choose to divert income into employee retirement funds. In fact, you can deduct your employer contributions from your current taxes, which can contribute positively to your company’s tax strategy.

Direct financial benefits aside, one of the biggest perks to offering a retirement plan is your ability to set your brand apart as an employer that provides competitive benefits for attracting new employees. If you find yourself competing for top talent or are working in an industry that’s not particularly well-known for going above and beyond when it comes to employee perks, you could find yourself in an enviable position just for adding an attractive retirement plan to your benefits lineup.

Even better? If your retirement plan is tied to company profitability, your employees may be more motivated to work hard and push productivity in order to build their retirement income.

Benefits for Your Employees:

Of course, one of your ultimate goals in establishing a retirement plan for your employees is to help them succeed in planning their financial futures. To this end, you should consider their financial well-being and ability to make long-term plans a significant benefit to your brand.

Even though it requires extra research and investment to establish and maintain a company retirement plan for your employees, you should consider this an investment in your employees’ overall happiness and job satisfaction. Both of these factors can contribute a significant return on your investment; after all, happy employees can be very motivated employees.

When you offer a company retirement plan, you open more savings options for your employees than they might achieve through using a personal IRA investment vehicle alone. Not only can they (and you, as a part of the plan) enjoy the savings benefits of the package, but you and your employees can enjoy the tax benefits of setting aside income for retirement.

Are You Ready to Talk Company Retirement Plans?

Another benefit of choosing a company retirement plan is that you and your employees will gain the opportunity to work closely with the financial advisor associated with your plan. Even if you have questions beyond the scope of your retirement plan, you now have a trusted professional to whom you can turn for personalized financial guidance.

If you’re ready to look into your options for adding a retirement plan to your company’s benefits package, contact Jacob Sturgill today to get a personalized look at your brand’s needs and to receive recommendations for moving forward with your retirement planning!

For Plan Sponsor Use Only – Not for use with Participants or the General Public.

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Retirement Checklist

May 20, 2019 Tags: Goals, Retirement Jacob Sturgill

Putting a retirement plan together can be complicated. It requires time and effort to effectively implement, monitor, and update your plan. However, having a solid plan in place can provide confidence for your future financial planning.

While getting started early on your retirement planning is ideal, you can certainly make a solid plan even if you’re coming into things a little later in the game. A smart approach to retirement planning is to get started as soon as possible in order to make the most of the time between now and when you plan to retire.

And the best part? You don’t have to do this alone. Your CERTIFIED FINANCIAL PLANNER™ practitioner can help you work through your retirement planning strategy and come up with a timeline and portfolio that make sense for your current needs, as well as your desired financial future.

As you prepare to start working with your advisor on your retirement planning, use the following checklist to organize your thoughts:

Define Goals

Before you know how much money you need to save, you need to know what exactly it is that you’re saving for. Retirement can be a nebulous concept until you start to put some numbers and specific plans into place for the period of time that is your retirement.

Here are some questions to ask yourself:

What does retirement mean to me? For some, retirement means spending more time with family. For others, it’s a long-anticipated time for traveling, starting a new business, or working with a charity.
How will I structure my days? Like it or not, your career is an integral part of your identity and many people often spend more time at work than at home. Whether you plan to slow down or start a new journey, your ideal retirement lifestyle is a huge factor in determining how much money you’ll need.
Have I determined a realistic retirement age? The ideal retirement age varies from person to person and can impact your ability to collect certain benefits, such as Social Security. Your retirement age, along with other factors, like your health and family circumstances, can also influence the expected length of your retirement.
Do I have a written plan? While you don’t need to have a formal written plan before you begin working with an advisor on retirement planning, look through your financial paperwork and locate a written plan if you have anything on hand.

Identify Expenses

Before you can decide how to fund your retirement expenses, you need to know the types of expenses you’ll have and how much to set aside for each. In some senses, your day-to-day expenditures may not change, but because your lifestyle may radically change during retirement, certain figures may be higher or lower than you expect.

Consider the following:

What are my essential and discretionary expenses? Essential and discretionary expenses are the combination of expenses that include the things you must have and pay for regularly (essential expenses) and those that you can live without or that will vary from month-to-month, year-to-year (discretionary expenses).
- Essential expenses include:
  - Housing
  - Food
  - Utilities
  - Healthcare
- Examples of discretionary expenses include:
  - Gym membership
  - Traveling
  - Dining out
Will I spend more on travel or hobbies once I have more time to devote to them? Answers to questions about your retirement lifestyle can help you to understand whether you’ll actually be able to devote your time to your travel and hobbies or whether other commitments will realistically require your time and attention.
Do I have any debt? If so, what kinds? Entering retirement with zero debt might be seem ideal but is not always a realistic financial goal.
How will my health insurance premiums change once I retire? Many retirees find the shift from an employer’s health insurance plan to Medicare or another health insurance option impacts their month-to-month expenses.
Should I stay in my current home or move? Another state might be more retirement friendly, with lower taxes or cost of living. You may also wish to downsize from the home where you raised a family to a smaller, more manageable place to live.
Have I thought about taxes? If you are retiring to a lower tax bracket it is important to take advantage of the tax savings on your retirement income.

Evaluate Resources

Do you know where your retirement income will come from? For most investors, this is the (no pun intended) million dollar question. Now that you’ve got an idea of your expenses and long-term financial commitments, it’s time to consider how you’ll fund your retirement lifestyle.

As you work through your retirement figures, take these factors into account:

When will I file for Social Security? You can file for Social Security as early as age 62 and as late as age 70. Filing before your full retirement age might result in a permanent reduction in your lifetime benefits, so plan accordingly.
When can I start collecting my pension (if applicable)?
Do I have annuities that provide income?
How much do I need to have saved in IRA’s, 401k’s, and investment accounts? Often, your investments will provide a significant portion of your retirement income. This is why it’s important to strategize your retirement needs and work backward to the present to determine how much you’ll need to save and which investments are ideal for your situation.
Am I saving enough per year? Many studies suggest individuals need to save 10%-20% of their gross income each year, including amounts saved from personal deferral and any company match.
Do I have a plan for converting investments into an income stream? In most cases, you want to prepare your retirement plan with longevity in mind. However, there are some risks to outliving your benefits. This is a particular issue for pension holders, so if you do qualify for a pension, ensure that you have alternate retirement income to cover the gaps, should they arise.

Dealing with the Unexpected

Retirement investing is contingent on balancing risks. There are plenty of unexpected circumstances that may arise between now and when you’ll begin drawing your retirement income.

Consider these risk factors that have the potential to impact your retirement planning:

How will I manage unforeseen market shocks? You can’t predict how markets will behave over the next decades and when your retirement income depends on a certain level of stability, you could risk your future returns if you need to dip into your underlying investments.
Do I have a plan to combat inflation? Inflation erodes your purchasing power. That means your dollar today won’t be worth as much in the future and it’s important to plan accordingly.
Do I have all the insurance I need? Your insurance needs can change as you transition from working to retirement. Look into how these changes can influence your retirement insurance needs, as well as how your month-to-month expenses will be impacted.
Should I purchase long-term care insurance? Long-term care insurance is a safety net to protect your assets should you require extended care at any point during your retirement. Your health history and family factors can influence your decision to purchase long-term care insurance.
Do I have an adequate emergency fund? It is typically recommended to have 3-6 months’ worth of living expenses readily available as cash for emergencies. You may need (or want) more in retirement.
Do I anticipate any major one-time expenses? There are some one-time purchases that come up from time to time in life – retirement is no exception. If you anticipate some of these larger purchases, such as home repair or college tuition, ensure that you account for these expenses in your retirement planning.

Steps to Take Today

Before you take the leap to retirement, there’s some work to do. But with careful planning, you can create a retirement plan that should ideally be flexible enough to accommodate your retirement lifestyle and expenses.

Here are some steps to take today:

Simplify your portfolio. Consolidate your accounts to make sure you have a clear and accurate picture. Ensure that your assets are invested properly and that your investments make sense for your values and can help you pursue your goals for your financial future.
Prior to retiring, try to live on your projected retirement budget for several months. It’s a good idea to practice a new budget before committing to it full-scale. You may find that you spend more than you think you will and need to make adjustments. There are likely places where you’ll find cost savings and added expenses that you didn’t anticipate in advance.
Don’t be shy about asking for professional advice. You’ve probably never retired before. It’s natural to not know everything about this transition, so find someone who can guide you through the process. A CERTIFIED FINANCIAL PLANNER™ practitioner can help you to prepare for your retirement by thinking through your future needs and identifying savings methods and investments that are suitable for your need.

If you’d like to learn more about preparing for your retirement, contact Jacob Sturgill for a consultation today!

This information is not intended to be a substitute for specific individualized financial or tax advice. We suggest that you discuss your specific financial or tax issue with a qualified advisor.

Ask Deborah: Should I Convert my IRA to a Roth IRA?

May 15, 2019 Tags: Ask an Advisor, IRAs, Roth IRAs P&S

Creating a retirement strategy is an important factor in planning for your ideal financial future. Whether you’re at the first steps and are trying to identify your options or are up for a review of existing accounts, you have plenty of decisions to make.

Today we’re talking to our very own Deborah Williams, CFP to learn more about a popular retirement topic: should I convert my IRA to a Roth IRA? She’ll answer some questions you may have about who is a suitable candidate for a conversion and what benefits such a decision allows.

If you have retirement accounts and are considering an IRA conversion, grab a cup of coffee and stay a couple of minutes as we explore the details of this option for your retirement strategy!

Identifying A Suitable Candidate for a Roth IRA Conversion

Before you determine whether to make the switch from an IRA to a Roth IRA, you want to identify whether this is an appropriate move for you as an individual. While everyone is unique and your retirement needs may likely differ from those of your neighbors or coworkers, there are some general categories of investors for whom an IRA conversion makes sense.

Younger investors, for example, can generally benefit from a conversion to Roth IRA, since they have the time to let the investment account compound and grow. If you’re not going to be dipping into your retirement funds for a few decades yet, you may want to consider making the switch.

Since Roth IRA accounts offer tax savings on distributions and withdrawals, it may be beneficial for those who are in a lower tax bracket currently and anticipate that they will be in a higher tax bracket during retirement to make a conversion. This way, they will pay less tax on the conversion due to their current bracket but enjoy the break later on when they are taking distributions and are in a higher bracket.

Roth IRAs can also be a strategy for investors who are approaching retirement age and want to avoid having to take their required minimum distribution that is mandated at age 70 1/2. In fact, if you plan to sit on your IRA funds and prefer not to use them extensively during your retirement, these accounts are ideal for passing onto your heirs tax-free.

Tax Considerations of Converting to a Roth IRA

For many, the switch from a Traditional IRA to a Roth IRA is motivated by the tax benefits of making such a move. Unlike the IRA there is no tax credit for contributions to a Roth and the value of the account at the time of conversion to a Roth would be added to taxable income for that year. So if your IRA is down in value due to a market loss it may be a good time to consider converting. But if you aren’t able or willing to make the federal and state tax payments that will be attributed to the switch then conversion will not be right for you.

Roth IRA conversions can also offer very specific tax benefits for business owners who are recording a net-operating business loss. Under certain situations, they can use the value of their loss to offset the additional taxable income created by the Roth IRA conversion. With proper planning and consultation with the CPA even an unfortunate business loss may benefit the owner’s long term retirement plan. Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

Your Retirement Savings Options

Deciding whether to convert to a Roth IRA is a personal decision that requires careful consideration. If you’d like to learn more about your IRA options or start planning for your retirement, feel free to contact Deborah at Puckett & Sturgill Financial Group for a discovery meeting.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Should I Set Up a Traditional 401(k) for my Business?

May 13, 2019 Tags: 401(k), business, Goals Jacob Sturgill

When you are a small business owner interested in offering a retirement plan for your business you have plenty of options to choose from. 401(k) plans are one of the many ways in which small business owners can help themselves and their employees save for retirement.

However, 401(k) plans are not the right answer for every employer, nor are they ideal for every employee.

Is a 401(k) plan right for your business? Consider the following factors when reviewing your company’s retirement benefits package.

How Many Employees Does Your Business Have?

The good news is there are plans for business of every size. If you have employees, consider if you are willing to contribute to your employees’ accounts. Employer contributions are tax-deductible from current taxes; some plans give more flexibility than others in regards to these contributions while others do not require an employer contribution at all.

What are Your Primary Goals?

When you consider offering a retirement plan for your employees, it’s important to think about what you would like to accomplish and what is most important to you.

Are you looking for a retirement plan that allows for flexibility in plan rules and employer contributions? You may find that that a 401(k) plan meets your needs, since this plan allows you discretionary employer contributions, as long as they fit within certain parameters. 401(k) plans also have higher contribution limits than many other plans and can be a great fit if your goal is to save as much as possible for your own retirement.

If your main priority is finding a retirement option that is easy to set up and administer, a 401(k) plan may not be the idea retirement option for your employees. Depending on the number of employees you have, how much they earn, and the contributions you’d like to make, you may consider a SIMPLE IRA or SEP IRA as alternatives.

Have You Considered Alternative Retirement Investment Options?

Even if you think that a 401(k) plan is the ideal investment option for your business, you may want to consider other retirement investment options before making a final decision. Here are some other retirement options you might want to think through:

Solo 401(k) – Easier to set up than a 401(k) plan and can be ideal for a solo entrepreneur; contributions cannot exceed the lesser of 100% of compensation or $56,000
Defined Benefit Pension Plan – Can be flexible for the older solo business owner or employer who wishes to contribute a mandatorily set amount for employees’ plans
SEP IRAs – One of the easiest plans to administer; contributions cannot exceed the lesser of 25% of compensation or $56,000
SIMPLE IRA – Easy to set up and administer; employee contributions cannot exceed $13,000 and require mandatory employer contributions of 2%-3%
SIMPLE 401(k) – Similar to a SIMPLE IRA, but offers the loan options of a 401(k) plan
Safe Harbor 401(k) – Another option that is easier to set up and administer than a 401(k); employee contributions cannot exceed $19,000 and require mandatory employer contributions of 3%-4%

To learn more about your business’s retirement investment options, contact Certified Financial Planner, Jacob Sturgill, for a personalized approach to uncovering your retirement investment priorities and to review your potential options.

For Plan Sponsor Use Only – Not for Use with Participants or the General Public.
This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Handling the Hard Stuff: How Your Financial Advisor Can Help After a Loss

May 8, 2019 Tags: estate planning P&S

Working through loss is draining, both physically and emotionally. And while it’s hard to imagine how you might handle the passing of a loved one or another unexpected loss, it can bring some comfort to have provisions in place that’ll protect you or your loved ones when these hard times come along.

An important aspect for working through troubling times is surrounding yourself with a community that will offer support and a helping hand. Your financial advisor can be an invaluable part of this team.

From helping you work through important paperwork to ensuring that you have all of your ducks in a row when it comes to making adjustments to your own legacy planning, your financial advisor can play a critical role in helping you stay on track in the aftermath of a personal loss. And when you can trust your advisor to help you with the details, you have the confidence to work through everything else that comes along with this life event.

Here are some of the roles that your financial advisor may play after a loss:

A Balancing Voice

Dealing with grief is different for every individual. After a loss, you may not have the desire or expertise to work through some of the necessary paperwork and decisions that now fall to you. Your financial advisor can provide a welcome balance to your internal feelings and can help you work through the required steps without getting mired down in emotion or indecision.

If you’re newly handling joint finances on your own, your advisor can provide professional guidance in working through the decisions that you now face. Your advisor can also help you to prioritize decisions to give you clarity on which issues must be handled immediately and which can wait until a later time.

You may be tempted to jump into making financial decisions by the dozen in the weeks and months following a loss, but if these decisions are emotionally motivated, they could be dangerous for your financial future. When you work with a trusted advisor, they can give you the balanced guidance you need to keep emotional thinking at bay and work through your issues holistically, with your entire lifestyle and values-system in mind.

A Helping Hand

Often after loss, there are mountains of papers to be signed and letters to be sent. Sometimes this work can seem daunting, even to the most ambitious family member.

If you find yourself dealing with more paperwork than you can handle, talk to your financial advisor about whether they can help you sort through some of your financial paperwork to ensure that nothing is missed. With this task off of your plate, you can focus on other details and not worry whether you’re going to overlook an important document to file in the meantime.

A Trusted Guide

After loss, your financial status is likely to change to some degree. Whether you’re dealing with a change in income and expenses or want to adjust your retirement goals, you will want to have an in-depth discussion with your financial advisor regarding your financial status as you move forward.

Your advisor will know the right questions to ask in order to help you sort through which changes you’ll need to make to your financial strategy. They can also help you to determine how your new status will impact your current holdings and provide advice on how to avoid tax penalties and other unwelcome impacts.

Part of your financial advisor’s job is to help you work through life changes as they happen, and your advisor has likely worked with plenty of other clients in a similar situation to yours. They are familiar with the territory and can provide counsel on which steps you need to take in order for you to articulate and work toward your new financial future.

Important Steps to Take Today

Of course, it’s the relationship you build with your financial advisor during the good times that allows them to compassionately help you work through loss and other life events. You want your financial advisor to be someone that you can trust to look out for your best interest in the aftermath of loss.

In order to establish that relationship, you need to have deep conversations with your advisor about concerns regarding your estate planning and long-term wealth goals.

Here are some things to do in the short-term to help you establish confidence and a solid ongoing relationship with your financial advisor:

Work through Estate Planning Documents

When it comes to confidence in the aftermath of loss, you may be motivated to work through through as much of your own estate planning process as possible if you haven’t done so already. Your financial advisor can provide you with the documents you need to prepare your assets and can also provide valuable feedback as you work through the planning process.

The earlier you start your estate planning, the more time you have to ensure that all of your documents are in place and to make adjustments as you go along. Since your future plans tie into your overall financial planning journey, it only makes sense to talk about how they impact one another and to make plans for your asset allocation in the event of you or your spouse’s passing.

Work with an Advisor who Cultivates an Atmosphere of Openness

Ideally, your financial advisor is a person who you trust and who has already helped you work through certain financial planning decisions. But if they’re not, or you don’t have a financial advisor that you feel you can trust, perhaps it’s time to find someone that you feel comfortable working with in both the good times and the bad.

Your advisor should work with you to determine your financial goals and provide helpful, reasonable recommendations that balance your values and ideals. At Puckett & Sturgill Financial Group, we believe that all of our clients deserve personalized service that is built on a relationship of mutual trust.

If you’d like to learn more about how working with a trusted financial advisor can pave the way for your future confidence, contact us to schedule a discovery meeting with one of our Certified Financial Planners!

Why Work With a Local Advisor?

May 3, 2019 Tags: Carroll County P&S

Managing and growing money, especially for retirement, are common areas where people are looking for advice. But finding the right information in those areas can be challenging.

There are more resources than ever for advice on how to allocate, save, and invest, which can be useful for someone trying to navigate the nuances of personal finance. However, this information is often not customized for individual financial needs.

This means you might run into some trouble in organizing your retirement portfolios, savings accounts, and other funds if you rely on cookie cutter financial advice or financial calculators. In evaluating possible steps for managing your finances and looking forward to your ideal financial future, working with a professional can offer a level of customized support and guidance.

Not only is each Financial Advisor unique, the firms for which they work also have many differences.

Should You Choose an Advisor with a Well-Known Institution?

It may seem obvious, but a general goal in meeting with a financial advisor is to gain insight and counsel on ideal ways to grow and protect your financial resources. What’s often left out is that not all financial advisors are created equal.

Trusting advisors from a larger institution might seem ideal – after all, these financial advisors are backed by a name you already know and trust. Perhaps you even bank with or have purchased other financial products from a big name institution and are satisfied with this aspect of your financial management.

Some of these firms utilize the same largely proprietary products. However, independent advisors have greater freedom and wider access to different products and services. For example, they can utilize a fee structure that better suits the clients’ needs, and provide personalized service.

Or Should You Work with a Local Firm?

That’s where a local advisor comes in. Groups such as Puckett & Sturgill Financial Group, headquartered in Westminster, Maryland, are part of the local business community. Our clients and other businesses are neighbors, and in putting our clients first, we support their communities and develop sustainable, shared growth. This means our personal touch and local engagement prioritizes the needs of our clients.

Our advisors are independent of the corporately branded product package you might find at a larger financial institution and can offer financial advice custom tailored for you because it’s the advice that they feel is most ideal for your situation.

Yet our advisors also offer the stability, resources, and regulatory assurance through our relationship with the largest independent broker-dealer firm in the United States, LPL Financial (as reported by Financial Planning magazine, June 1996-2018, based on total revenue)l. As of December 2018, LPL has a network of over 16,000 financial advisors, including local advisors such as Puckett & Sturgill Financial Group. So even though our group functions as a local independent firm, we boast the power of scale that working with a larger broker brings. This arrangement allows us to give our clients the best of both worlds.

As a community business with large-scale institutional backing, we’re designed for long-term, client-focused relationships. Grounded in the community, small enough to offer flexible strategies, and connected to a large pool or resources and tools, our local advisors can support you in organizing your personal finances while considering the ever-changing influences of the financial market.

To learn how the working with a local advisor can make the difference in your financial journey, contact us for a discovery meeting!

What are the Most Important Issues to Consider Before Retirement

April 30, 2019 Tags: Retirement Jacob Sturgill

When it comes time to plan for retirement, there’s a lot to think about before making the plunge. From your cash flow needs to insurance requirements and tax strategy, your finances are a central factor when answering questions like: “When can I retire?” and “How long can I expect my retirement to last?”

As you prepare to discuss your retirement planning with your financial advisor, consider some of the most important issues that may influence your retirement goals and planning:

Anticipate Your Future Cash Flow Needs

In order to establish a retirement investing strategy, you need to know what you’re saving for.

First, you want to consider how your cash flow needs will change as you transition from full employment to retirement. Factors like your anticipated income and expenses will help you to determine your cash flow expenses from month to month and year to year.

Basic living expenses, such as housing and healthcare, will remain somewhat consistent throughout your retirement, though things like downsizing your home can influence whether these will remain similar to your pre-retirement expenses. Variable expenses, such as food, travel, entertainment, and taxes are more dependent on your lifestyle expectations and other plans, and are likely going to fluctuate from time to time throughout your retirement.

Your target savings goals for retirement should factor in both your expected basic and variable expenses. Ideally, your retirement portfolio should provide the supplemental cash flow that you need to sustain your anticipated standard of living during your retirement.

You will also want to consider how Social Security and pension benefits play into your retirement planning. Your financial advisor can help you to determine the optimal time for claiming your benefits and taking advantage of any for which you qualify.

Review Your Health Insurance Coverage and Future Situation

Another essential aspect of planning for retirement expenses is ensuring your ongoing health insurance coverage. For retirees aged 65 and older, Medicare is an option. If you plan to retire before 65, you’ll need to look into other options, like extending your health insurance coverage from your previous employer or your eligibility to save on premiums for a plan from the Health Insurance Marketplace.

Looking beyond your initial insurance coverage needs, you will also want to make plans for long-term care, should you eventually require it. Long-term care insurance, self-funded insurance, and assisted living programs can provide the path for funding your care needs and should factor into your retirement savings strategy.

Plan for Taxes

Taxes are an unavoidable part of your retirement planning and you should prepare an advance tax strategy to compensate for these expenses. If you anticipate that you’ll have a high RMD, look into possible Roth conversion strategies or charitable distributions, if you are inclined to use your funds in such a manner.

If your income will be considerably lower after retirement, then a Roth IRA conversion strategy may relieve some of your tax burden during those low income years.

Take Stock of Additional Situations that May Apply

Lastly, you want to take a look at other situations that may impact your retirement strategy and make a plan for handling them. These include things like:

Updating an old or outdated estate plan
Updating beneficiaries
Outstanding loans on employer retirement plans
Multiple accounts with similar tax treatment
A change of residence or house sale
Business ownership issues, including exit strategy and succession planning

Your financial advisor is the an ideal sounding board as you sort through retirement planning and other related issues. Not only can they offer practical advice for organizing your pre-retirement thought process, but they can provide the tools you need to make informed investment decisions to fund your future.

Contact Jacob Sturgill of Puckett & Sturgill Financial Group to learn more about our retirement planning services and start planning your future today!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.