As a Certified Financial Planner™ professional, my team and I use a stringent and established process based on the CFP Board of Standards. Many prospective clients seek us out or are referred to us by CPAs, Attorneys, or other clients based on our process and our diligence to truly get to know our clients, their goals, and their complete situation.
Each relationship starts with a discovery meeting where we will discuss and document the prospective client's goals and objectives.
To prepare for this meeting, we ask clients to use our Documents to Gather sheet to gather the necessary information to give us an informed view of your financial situation. We also ask clients to complete a Budgeting Worksheet, and complete a Client Profile Form, and a Risk Tolerance Questionnaire. These are also available on our Forms Page, under Tools.
Internally, we'll start to formulate a plan of action and ask for client feedback. If client assets should be migrated or repurposed, we'll make this recommendation and we'll start to build out the plan in WealthVision, a white-label version of eMoney.
WealthVision allows us and the client to aggregate client assets, client a plan and objectives based on either Cash Flow Analysis or Goals Based Planning, or a combination of the two. We can also run scenarios, stress-test, generate a multitude of reports and much more. It also acts as a financial repository for client documents that clients can access, such as Estate Planning and other Legal Documents, Deeds, Insurance Policies, Financial Statements, and more.
Just as every individual is unique, so is every financial plan. Each person, couple, or entity, may have unique goals and aspirations, along with financial resources. Our goal is to create a comprehensive strategy that gives our clients the highest probability of success in achieving their long-term and short-term goals. This means that we will analyze all of our client's different components to make sure that each area of focus is addressed and creates cohesion to work towards their aspirations.
Imagine going into retirement with the ability to control your taxable income, potentially limit the taxes on your social security, and avoid tax thresholds like IRMAA. For some people, this is possible with the use of different types of accounts based on their tax status, depending on how early they start saving. The three primary types of tax statuses are Pre-Tax (also known as Traditional or Tax-Deferred) After-Tax (also known as Roth or Tax-Free) and Taxable (also known as Non-Qualified or brokerage).
Pre-Tax Contributions are made before taxes. For most individuals, these contributions reduce their Adjusted Gross Income. As the account grows, no capital gains are generated. Taxes are paid as ordinary income at their effective tax rate when distributions are made in retirement (after age 59.5). The intention is that they are in a higher tax bracket when the contribution is made, and a lower tax bracket when the distribution occurs.
Roth Contributions are after-tax, meaning that taxes have already been paid on money contributed. Capital gains can be generated if the account is withdrawn early or if the holding period is not met. When withdrawn in retirement (after age 59.5), the principal and gains are tax-free. For individuals in a low tax bracket now and who expect to be in a higher tax bracket in retirement, Roth may make a lot of sense.
Non-Qualified accounts don't receive any special tax treatment. As the account grows, capital gains can be generated when an investment is sold. When sold, the difference between the amount invested and current value is taxed as a capital gain, which ranges from 0-20% based on your income tax bracket if held for more than 1 year. Investments held less than 1 year are taxed as a short-term capital gain, which has the same tax rates as ordinary income. Contributions are not limited and distributions may be made at any time, for any purpose and are not limited by age, giving maximum flexibility to clients not yet in retirement.
We encourage our clients to have assets in each of the different tax "Buckets". By being able to choose which bucket (or combination of which buckets) to draw from in any given year, we are able to help clients control their taxable income.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
