Planning ensures that your goals are met.
Risk Management protects your assets.
Portfolios are built with Modern Portfolio Theory.
Insurance protects the assets that you own. Property & Casualty insurance protects against the loss of your valuables. Health insurance protects against the costs associated with doctor and hospital fees. Disability insurance protects against the loss of your income earning ability. Life insurance is a gift that protects your loved ones against their loss of you. Long-Term Care insurance protects against the costs associated with "assisted living/nursing care" fees.
Annuities are insurance products. Annuities are tax-deferred saving's programs underwritten by Insurance companies. Annuities have different investment choices and returns. Annuities can be set up to pay out income now or later.
Tax planning reduces your annual tax liabilities and empowers you to take advantage of the opportunities that Congress encourages. In legislating the IRS Tax code Congress defines retirement plans with special tax treatment as Qualified. Non-Qualified savings plans are now taxed at historically low capital gains rates. Annuities & 529 Plans are special Non-Qualified savings programs with special tax treatment. The beneficiaries of Life insurance do not pay taxes and avoid probate.
Strategically, you can move stock from your Qualified plans to your Non-Qualified plans, (NUA); as well as take income before 59.5, IRS section 72(t), from your retirement accounts. New schedules lessen the impact of qualified plan distributions, MRDs after 70.5. There are ways you can move equity out of your Real Estate (1031 exchange) and into new investments - as well as between Insurance / Annuity products (1035 exchange).
More than 4 out of 5 College students receive some form of Student aid. Parents need to familiarize themselves with the Federal FAFSA application. It determines your Expected Family Contribution (EFC). The College Scholarship Service (CSS) profile is generated by your processed FAFSA application. It is your starting point.
Education funding can come from Savings or Gifts. 529 plans are now generally considered the best funding plan. Grants, Scholarships, and Fellowships are gifts by organizations that do not need to be repaid. Financial aid includes borrowing. Both parents and/or children can borrow.
Retirement Planning begins when you contemplate reducing work. You must review how your retirement income will pay your expenses. How does your expected future budget compare to your current budget? Do you need help managing your retirement planning?
Congress has defined Qualified retirement plans with special tax treatment. Qualified plans include: Defined Contribution and Benefit plans, as well as, IRAs and Roth IRAs (401k, 403b, SIMPLE, SEP, KEOGH, Profit Sharing, ESOPs & Money Purchase). All your retirement funds in these plans should be rolled over to a rollover IRA when you leave each of your employers. The advantage to YOU of rolling over these funds to a rollover IRA are threefold; 1) better control, 2) higher returns and 3) lower costs.
Non-Qualified savings and investment plans do not receive the same tax benefits as qualified plans. Non-Qualified plans include: Savings, Investment portfolios, tax-deferred Annuities, and Deferred Compensation plans. These assets need to be managed differently from qualified plans in order to minimize your tax liabilities.
Asset Management is the management of all of your assets. Your assets can be managed as a single portfolio with risk management. There are only 2 ways to manage the risks in your portfolio: insuring individual assets and/or diversifying the assets in your portfolio.
Modern Portfolio Theory is the recognized method to optimize returns while minimizing losses. Financial assets can be gathered and separated into Core and Satellite portfolios - empowering you to organize and manage your assets.
Modern Portfolio Theory (MPT) is the highest form of Strategic Asset Allocation. MPT manages the disruptions of Global, National and Regional Economic trends. Additionally, Tactical Portfolio Optimization optimizes your portfolio - recognizing oportunisitc business cycles, fine tuning decisions over years, months and weeks.
Estate Planning empowers you with control over the ownership and distribution of your family's assets. Estate Planning directs the decisions regarding your health, wealth, and the guardianship of your minors. Taking action avoids the State and Federal court system throughout your lifetime.
Transfer wealth through planning. Trusts are private Legal documents that address your concerns regarding your Estate. You can choose to use Revocable Trusts and/or Irrevocable Trusts. Trusts are entered into by single individuals, married couples and divorced/remarried couples and cost a fraction of probate.
Who controls the decisions regarding your health and finances if you become incapacitated? Documents regarding your Will, the distribution of your income and/or assets (including your IRAs), and your beneficiaries should all be reviewed.
Gifting is very important to some people. Smart ways to gift income and/or assets are: Annuities, Insurance, Education gifts & Medical gifts. Smart gifting includes you maintaining some control over your Gifts, as well as, your personal needs (income and/or assets) and your choices of beneficiaries.