Frequently Asked Questions

Prepared by Broadridge Advisor Solutions Copyright 2021.

The Risk of “Safe Assets” is that you might end up running in place

How many millionaires do you know that have become wealthy by investing in savings accounts?
I rest my case.

Sources:Bankrate.com, U.S. Treasury, and Standard & Poor’s. Rates of return and inflation are derived using the averages from 1995 to 2016. U.S. equities are represented by the S&P 500 Index. Past performance does not guarantee future results.

Sometimes investment firms create and use identical portfolios for their clients regardless of whether the account is a taxable account or tax deferred account. 

• Perhaps you may benefit from our asset location process.

Your income allocation is comprised of the components of your taxable income you can control.

• How much should I distribute from my IRA each in year in retirement?
• How much should I contribute to my Roth IRA during my working years?
• How much should I convert from IRA to my Roth IRA in any given year?
• How much should I distribute from my taxable savings nest egg?

Every client wants to get the most out of their investments.  They want the highest possible returns with the least amount of risk. 

• Most investors own multiple accounts and products, purchased at different times, for different reasons, with little or no consideration of how those accounts may work together.
• The fact that a part of an investment’s growth is given up in taxes is often seen as unavoidable.
• There is a way to reduce the taxes paid on investments, capture more of the investment returns, without changing the investments themselves.
• Optimizing a portfolio’s asset location provides exactly that.
• Perhaps you should reconsider your asset location strategy.

What is asset location?

• The goal of investing should be to provide the highest after-tax returns across the entire portfolio.  It begins by placing the assets where they will be the most tax-efficient.
• By looking at the anticipated returns from each investment type, and then looking at the way they incur the least amount of taxes.
• This means you keep more of the portfolio’s returns, without changing the overall investments.

Improve your chances for more consistent returns over time. 

•  By investing in several different asset classes, you can improve your chances of participating in market gains, and lessen the impact of poor-performing asset categories on your overall portfolio returns.

Reduce overall risk.

• Portfolio diversification can reduce the amount of volatility you experience by simultaneously spreading market risk across many different asset classes.

Stay focused on your objectives

• A well-allocated portfolio alleviates the need to constantly adjust investment positions to chase market trends, and can help reduce the urge to buy or sell in response to the market’s short-term ups and downs.

• Asset allocation is the process of combining asset classes such as stocks, bonds, and cash in a portfolio in order to pursue a client’s financial goals.

• Taxes can wait
  • sheltering investment growth in tax-deferred accounts over the long term may result in more wealth for retirement.

Participating in your employer’s plan helps to automate your retirement savings through a “savings habit.”

• You may be eligible to receive an employer match for your contributions.
• Your plan offers you tax benefits
• Potential tax deduction
• Tax Deferral on the contributions
• You may be eligible to receive an employer match for your contributions.
• Your plan offers you tax benefits
• Potential tax deduction
• Tax Deferral on the contributions
• Start Young: Rule of 72: How long will it take to double your money? ^FAQ
• Dollar Cost Averaging ^FAQ

• Most investors go through life making a series of periodic investments
  to their savings plan(s), which is called Dollar Cost Averaging. Learn more about Dollar Cost Averaging.

• Dollar-Cost Averaging is one of the most common forms of periodic investing.
  It involves continuous investment of the same dollar amount at predetermined intervals.
• This strategy helps you continue to invest, even when investment price levels fluctuate.
• In early years, because you have time on your side, your focus should be on accumulating
  shares and keeping fees and investment-related expenses relatively low.

The Timing of Distributions Makes a Difference

• During retirement, the timing of investment returns can have a dramatic impact on your account.
• Withdrawing assets in a down market early in retirement can significantly impair your portfolio
  over the long term.

Dollar-Cost Averaging involves buying a fixed dollar amount of an investment or fund on a regular basis.  Instead of trying to invest only at the “right time,” make a commitment to invest and stick to the plan – regardless of what the markets are doing.

• What you spend at any point in your life is the key to understanding the impact of your current and future financial decisions.
• Having the framework to know how much and how you spend your money will provide you valuable insights to your current financial picture and your future financial plan.

What happens if my assets do not keep pace with inflation?

The Risk of “Safe Assets” is that you might end up running in place

How many millionaires do you know that have become wealthy by investing in savings accounts? I rest my case.

Sources:Bankrate.com, U.S. Treasury, and Standard & Poor’s. Rates of return and inflation are derived using the averages from 1995 to 2016. U.S. equities are represented by the S&P 500 Index. Past performance does not guarantee future results.

We can help with your budgeting and analysis:

A written document with the purpose of providing meaningful direction and guidance for trustees and investment professionals regarding the selection and management of investment assets based on established and documented investment goals and objectives.

You should ask your Human Resources Director or the advisor on your plan for such document(s) as, but not limited to:

• Annual Plan Description
• Investment Prospectus
• Detailed Account Related Expenses in your account

Individuals who opt not to engage a professional to assist them with their particular needs often share several distinct characteristics. These traits enable them to successfully manage their tasks without external support.

Essential Elements

• Time: These individuals possess sufficient time to dedicate to their respective tasks. Their schedules allow them to invest the necessary hours to complete what is required.

• Aptitude: They have the specific skills and expertise needed to accomplish their desired objectives. Their unique abilities make them well-suited to handle the job on their own.

• Desire: They genuinely enjoy spending their time working on these tasks. The process itself offers them a sense of satisfaction and fulfillment.

When Professional Assistance Becomes Necessary

If, at any point, one of these three elements—time, aptitude, or desire—is no longer present in their lives, these individuals are likely to seek help and delegate responsibilities to a financial advisor.

By delegating to a professional, they gain the freedom to spend their time in other ways that they find more meaningful or enjoyable.

Why Financial Planning Matters: Engaging in a financial planning process offers several key benefits that can help individuals and families work toward their financial goals and improve their overall financial well-being.

Personalized Guidance and Direction: The process of financial planning provides personalized advice and direction. This tailored approach is designed to help you achieve a better financial position by addressing your specific needs, goals, and circumstances. Having a clear plan allows you to make informed choices that support your financial objectives.

Adapting to Changing Circumstances: The world is constantly evolving, and so are your personal circumstances. A well-structured financial plan helps you navigate these changes, enabling you to make better financial decisions as your life and the broader economic environment shift. This adaptability is crucial for maintaining financial stability and reaching long-term goals.

The Importance of Behavior in Financial Planning: Financial planning is not just about managing money; it is fundamentally about managing behavior. Successful financial outcomes often depend more on your habits and decisions than on financial products or market performance. Staying disciplined and following your plan can make a significant difference in your financial journey.

“No airplane can take off without a flight plan; no ship can set sail without a plotted course.” ~ Nick Murray.

A fiduciary is an individual who is entrusted with the responsibility to act in the best interests of another party. This role requires a high standard of care and loyalty, as fiduciaries are expected to manage assets, make decisions, or provide services with integrity and good judgment.

Understanding the Principles of Fiduciary Duty

Individuals acting in a fiduciary capacity are expected to provide services according to five basic principles of fiduciary duty:

• Prudence: Exercising careful and sensible judgment in managing responsibilities and making decisions.
• Loyalty: Placing the interests of those they serve above their own personal interests.
• Exclusive Purpose: Acting solely for the benefit of the party to whom the duty is owed, with no conflicting interests.
• Diversification: Appropriately spreading investments or responsibilities to reduce risk and protect the interests of the beneficiary.
• Adherence: Following all applicable laws, guidelines, and governing documents relevant to the fiduciary relationship.

We invite you to experience a fiduciary relationship where your interests, goals, and objectives come first.

A written document with the purpose of providing meaningful direction and guidance for trustees and investment professionals regarding the selection and management of investment assets based on established and documented investment goals and objectives.

Making the most of a Roth IRA requires evaluating your financial situation and tax strategy at each stage of life. By considering your current tax position, future income, and retirement goals, you can maximize the benefits of Roth accounts. Below are key strategies for opportunistic evaluation and management of a Roth IRA.

• Balancing Lifetime Tax Management and Income Tax Diversification: Effectively managing taxes over your lifetime means striking a careful balance between your current income tax situation and long-term tax diversification. This approach ensures you are not overly reliant on one type of tax-advantaged account, allowing you flexibility and control over your taxable income in retirement.
• Early Career Contributions: During the early years of your career, your income is typically lower, placing you in a lower tax bracket. Contributing to a Roth IRA at this stage allows you to pay taxes on your contributions at a lower rate, so your investments can grow tax-free and withdrawals in retirement will not be taxed. As your income increases and you move into higher tax brackets, it may be advantageous to shift your contributions to a pretax IRA or 401(k), capturing the immediate tax deduction.
• Proactive Roth Conversions in Low-Income Years: Take advantage of years when your income—and thus your tax rate—is temporarily lower by executing Roth conversions. This strategy involves transferring funds from a pretax retirement account into a Roth IRA, paying taxes on the conversion at a time when rates are more favorable. Proactive Roth conversions can help you build tax-free retirement assets and manage your taxable income in future years.
• Considering Required Minimum Distributions (RMDs) in Retirement: As you approach retirement, it is important to understand how Required Minimum Distributions (RMDs) from traditional retirement accounts will affect your income taxes. Roth IRAs are not subject to RMDs during your lifetime, which can be a significant advantage in managing your taxable income and controlling your tax liability in retirement. Evaluating the impact of RMDs can help guide your decisions about Roth contributions and conversions.

As you approach retirement, there are several important factors to evaluate and decisions to make. The following topics outline the essential considerations for planning a successful and secure retirement:

• The Retirement Landscape: Understanding the overall environment in which you will retire is crucial. This includes the current economic climate, potential changes to retirement policies, and the state of healthcare and housing. These factors can influence your financial security and lifestyle in retirement.
• Your Retirement Equation: Assessing your retirement equation involves evaluating your income sources, expenses, and savings. It’s important to balance your expected income with your anticipated spending over the course of your retirement years.
• Social Security Timing Tradeoffs: Deciding when to begin receiving Social Security benefits is a key consideration. The timing of your claim can affect the amount you receive each month, so it’s important to weigh the tradeoffs between claiming benefits earlier or later.
• Maximizing Your Social Security Benefits: To make the most of your Social Security, consider strategies to maximize your benefits. This may include delaying your claim, coordinating benefits with a spouse, or understanding how your work history impacts your payments.
• Retirement Spending and Inflation: Planning for spending in retirement requires anticipating future expenses and accounting for the impact of inflation. Ensuring your savings and income keep pace with rising costs is essential for maintaining your lifestyle throughout retirement.

What Are My Options When Retiring or Changing Jobs?

As you approach retirement or consider changing jobs, understanding your retirement plan options is crucial to your financial future.

Key Options for Your Employer’s 401(k) or Other Retirement Plan

There are typically four options to consider when leaving an employer’s retirement plan, each with its benefits and considerations:

• Roll your retirement account into an IRA (IRA Rollover): This allows you to maintain the tax-deferred status of your savings and may offer more investment choices.
• Leave the money in your former employer’s plan, if allowed: This option may be convenient if you are satisfied with the plan’s investment options and fees.
• Move the assets to your new employer’s plan, if permitted: Consolidating your retirement savings can make management easier if the new plan accepts rollovers and offers attractive investments.
• Withdraw the entire balance or “cash out” of the plan: While this provides immediate access to your funds, it may result in taxes and potential penalties.
• Convert all or part of your retirement account into a Roth IRA (Roth IRA conversion): This can provide tax-free growth potential, but you may owe taxes on the amount converted.

Each option has its advantages and disadvantages, but the decision should fit into your overall financial plan. For more information, see Financial Planning.

Welcoming a New Baby

Welcoming a new baby is an exciting and transformative time, but it also comes with important financial considerations. Planning ahead can ease the transition and help ensure your family’s financial security.

Pre-delivery Planning

• Understand your health insurance and anticipate potential costs: Prenatal care, childbirth classes, maternity clothes, a crib, a car seat, and hospital costs.
• Review your company’s policies regarding paternity or maternity leave: What is offered and what steps are needed to secure it.
• Draft a baby budget: Expenses in the first few years can be $10k-$20k per year.
• Choose a pediatrician within your insurance network.
• Start a Rainy-Day Fund.

While in the Hospital

• Order a birth certificate and Social Security card for your newborn.

First 30 Days

• Take steps to add your child to your health insurance policy.
• Begin planning for childcare.
• Consider opening a college savings 529 plan.

Beyond the First Month

• Update beneficiaries on life insurance and retirement accounts.
• Purchase disability insurance.
• Write or adjust your will to reflect your new family member.
• Continue to fund retirement accounts to secure your long-term financial health.

“Every night before I get my one hour of sleep, I have the same thought: ‘Well, that’s a wrap on another day of acting like I know what I’m doing.’ Most of the time I feel entirely unqualified to be a parent. I call these times being awake.”—Jim Gaffigan

“In my house I’m the boss, my wife is just the decision maker.”

Financial Checklist for Married Couples

Buying a Home: Buyer’s Guide

“There’s no place like home.” —Dorothy Gale

1. Get a credit report
2. Set a budget
   • Monthly payments ≈ 25%-35% of monthly income
     • Principal, interest, taxes, and escrow program
3. Line up the down payment
   • 20%-30% of the home price
4. Find an agent
5. Search for a home
6. Make an offer
   • Base offer on at least three houses that have sold recently in the neighborhood
7. Enter contract and have lawyers review
   • Deal is contingent on:
     • Obtaining a mortgage
     • Passing a home inspection
8. Secure a loan
9. Get an inspection
10. Close the deal

1. Embrace Market Pricing
2. Don’t Try to Outguess the Market
3. Resist Chasing Past Performance
4. Let Markets Work for You
5. Consider the Drivers of Returns
6. Practice Smart Diversification
7. Avoid Market Timing
8. Manage Your Emotions
9. Look Beyond the Headlines
10. Focus on What You Can Control

1 | Embrace Market Pricing

Financial science has taught us that the market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers; and the real-time information they bring helps set prices.

In USD. Source: Dimensional, using data from Bloomberg LP. Includes primary and secondary exchange trading volume globally for equities. Funds are excluded. Daily averages were computed by calculating the trading volume of each stock daily as the closing price multiplied by shares traded that day. All such trading volume is summed up and divided by 252 as an approximate number of annual trading days.

2 | Don’t Try to Outguess the Market

The market’s pricing power works against stock pickers and market timers: Only 17% of US-domiciled funds beat their benchmarks over the past 20 years. In contrast, by using information in prices, 84% of Dimensional funds have beaten their benchmarks in that time.

The sample includes funds at the beginning of the 20-year period ending December 31, 2024. Each fund is evaluated relative to its primary prospectus benchmark. Survivors are funds that had returns for every month in the sample period. Winners are funds that survived and outperformed their benchmark over the period. Where the full senes of primary prospectus benchmark returns is unavailable, non-Dimensional funds are instead evaluated relative to their Morningstar category index Data Sample: The sample includes US-domiciled, USD-denominated open-end and exchange-traded funds (ETFs) in the following Morningstar categories. Non-Dimensional fund data is provided by Morningstar. Dimensional fund data is provided by the fund accountant. Dimensional funds or subadvised funds whose access is or previously was limited to certain investors are excluded. Index funds, load-waived funds, and funds of funds are excluded from the industry sample Morningstar Categories (Equity): Equity fund sample includes the following Morningstar historical categories: Diversified Emerging Markets, Europe Stock, Foreign Large Blend, Foreign Large Growth, Foreign Large Value, Foreign Small/Mid Blend, Foreign Small/Mid Growth, Foreign Small/Mid Value, Global Real Estate, Japan Stock, Large Blend, Large Growth, Large Value, Mid-Cap Blend, Mid-Cap Growth, Mid-Cap Value, Miscellaneous Region, Pacific/Asia ex-Japan Stock, Real Estate, Small Blend, Small Growth, Small Value, Global Large-Stock Blend, Global Large-Stock Growth, Global Large-Stock Value, and Global Small/ Mid Stock. Morningstar Categories (Fixed Income): Fixed income fund sample includes the following Morningstar historical categories: Corporate Bond, High Yield Bond. Inflation-Protected Bond, Intermediate Core Bond, Intermediate Core-Plus Bond, Intermediate Government, Long Government, Muni California Intermediate, Muni Califomia Long, Muni Massachusetts, Muni Minnesota, Muni National Intermediate, Muni National Long, Muni National Short, Muni New Jersey, Muni New York Intermediate, Muni New York Long, Muni Ohio, Muni Pennsylvania, Muni Single State Intermediate, Muni Single State Long, Muni Single State Short, Muni Target Maturity, Short Government Short-Term Bond, Ultrashort Bond, Global Bond, and Global Bond-USD Hedged.

Index Data Sources: Index data provided by Bloomberg, MSCI, Russell, FTSE Fixed Income LLC, and S&P Dow Jones Indices LLC. Indices are not available for direct investment. Their performance does not reflect the expenses associated with management of an actual portfolio. US-domiciled mutual funds and US-domiciled ETFs are not generally available for distribution outside the US.

3 | Resist Chasing Past Performance

Some investors make choices based on past returns. Yet past performance offers little insight into future returns. For example, stocks that have grown to be among the 10 biggest in the US have tended to lag the overall market after reaching that size, failing to maintain their strong performance.

In USD. Source: Dimensional, using data from CRSP Includes all US common stocks excluding REITs. Largest stocks identified at the end of each calendar year by sorting eligible US stocks on market capitalization. Ten largest companies by market capitalization. Returns after joining the 10 largest are measured as of the start of the first calendar year after a stock joins the lop 10. Annualized excess retum is the difference in annualized compound returns between the stock and the S&P 500 Index over the three-, five-, and 10-year periods, before and after each stock’s initial year-end classification in the Top 10. Three-, five-, and 10-year annualized returns are computed for companies with retum data available for the entire three-, five-, and 10-year periods, respectively The number of firms included in measuring excess returns prior (subsequent) to becoming a Top 10 stock consists of 44 (58) for the three-year period, 43 (55) for the five-year period, and 34 (49) for the 10-year period.

4 | Let Markets Work for You

The financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and the stock and bond markets have provided growth of wealth that has more than offset inflation, as this chart of the past 50 years shows.

In USD. US Small Cap is the CRSP 6-10 Index. US Large Cap is the S&P 500 Index. US Long-Term Govt Bonds is the Bloomberg US Government Bond Index Long. US Treasury Bills is the IA SBBI US 30 Day TBill TR USD. US Inflation is measured as changes in the US Consumer Price Index. Data presented in the Growth of a Dollar chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment.

5 | Target Higher Returns

Academic research into decades of stock and bond returns has identified long-term drivers of outperformance. By investing systematically in the areas with higher expected returns, you can aim to beat the market.

STOCKS

Small companies outperform large companies over time

Value stocks outperform growth stocks over time

Companies with high profitability outperform those with low profitability over time

BONDS

Wider term spreads generally lead to higher term premiums

Wider credit spreads generally lead to higher credit premiums

Global currencies of issuance offer opportunities for higher expected returns and reduced volatility

Relative price is measured by the price-to-book ratio; value stocks are those with lower price-to-book ratios, Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book.

6 | Diversify Internationally

Holding a globally diversified portfolio can broaden your opportunities beyond your home market; putting you in a better position to capture higher returns wherever they appear.

Number of holdings and countries for the S&P 500 Index and MSCI ACWI IMI (All Country World IMI Index) as of December 31, 2024. International investing involves special risks, such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.

7 | Avoid Market Timing

Research has shown there’s no reliable way to time the market; targeting the best days to be invested or moving to the sidelines to avoid the worst days. It has also shown the impact of being out of the market even for a short time. Staying invested helps ensure you’re in position to capture long-term gains.

In USD, For illustrative purposes. Best performance dates represent end of period (November 28, 2008, for best week; April 22, 2020, for best month June 22, 2020, for best three months, and September 4, 2009, for best six months). The missed best consecutive days examples assume that the hypothetical portfolio fully divested its holdings at the end of the day before the missed best consecutive days, held cash for the missed best consecutive days, and reinvested the entire portfolio in the Russell 3000 Index at the end of the missed best consecutive days. Data presented in the Growth of $1,000 exhibit is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The data is for illustrative purposes only and is not indicative of any investment.

8 | Manage Your Emotions

When markets go up and down, many people struggle to separate their emotions from investing. Reacting to current market conditions may lead to making poor investment decisions.

9 | Look Beyond the Headlines

Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. When headlines unsettle you, consider the source is it news or entertainment? Do yourself a favor and tune out the noise.

10 | Control What You Can Control

Work with your financial advisor to stay focused on actions that add value. While you can’t control which way the market will turn, following time-tested principles can lead to a better investment experience.

• Create an investment plan to fit your needs and risk tolerance.
• Structure a portfolio along the dimensions of expected returns.
• Diversify globally.
• Manage expenses, turnover, and taxes.
• Stay disciplined through the market’s highs and lows.

Diversification does not eliminate the risk of market loss. There is no guarantee investment strategies will be successful. This information is for illustrative purposes only.

Bloomberg data provided by Bloomberg. MSCI data MSCI 2025, all rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. FTSE fixed income indices © 2025 FISE Fixed Income LLC. All rights reserved. S&P data 2025 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. CRSP data is provided by the Center for Research in Security Prices, University of Chicago. Treasury bills data provided by Ibbotson Associates via Morningstar Direct. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306-7400 or at dimensional.com. Dimensional funds are distributed by DFA Securities LLC.

Mutual fund investment values will fluctuate, and shares, when redeemed, may be worth more or less than original cost Diversification neither assures a profit nor guarantees against a loss in a dedining market. There is no guarantee investment strategies will be successful.

EIF’s trade like stocks, fluctuate in market value, and may trade either at a premium or a discount to their net asset value. ETF shares trade at market price and are not individually redeemable with the issuing fund, other than in large share amounts called creation units. ETFs are subject to risks similar to those of stocks, including those regarding short-selling and margin account maintenance. Brokerage commissions and expenses will reduce returns.

Investment products:

• Not FDIC Insured
• Not Bank Guaranteed
• May Lose Value

Dimensional Fund Advisors does not have any bank affiliates.

This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions.

The Risk of “Safe Assets” is that you might end up running in place

How many millionaires do you know that have become wealthy by investing in savings accounts?
I rest my case.

Sources:Bankrate.com, U.S. Treasury, and Standard & Poor’s. Rates of return and inflation are derived using the averages from 1995 to 2016. U.S. equities are represented by the S&P 500 Index. Past performance does not guarantee future results.

The Risk of “Safe Assets” is that you might end up running in place

How many millionaires do you know that have become wealthy by investing in savings accounts?
I rest my case.

Sources:Bankrate.com, U.S. Treasury, and Standard & Poor’s. Rates of return and inflation are derived using the averages from 1995 to 2016. U.S. equities are represented by the S&P 500 Index. Past performance does not guarantee future results.

Key Trade-offs to Consider When Claiming Social Security

When deciding to claim Social Security benefits, it is important to carefully evaluate several trade-offs that can influence your financial future. Understanding these factors will help you make an informed decision that aligns with your long-term needs.

• The age at which you choose to claim Social Security benefits can significantly affect the amount you receive monthly and over your lifetime.
• Claiming earlier may result in lower monthly payments, but you should have a plan for your spouse’s benefit as well.
• Delaying benefits may protect a spousal benefit and increase Social Security income later in life, but your portfolio will need to bridge the gap to provide income until benefits are received.

Key Financial Planning Checkpoints Before Retirement

As you approach retirement, it’s important to evaluate several financial planning checkpoints to ensure a smooth transition and long-term security. Consider the following areas as you prepare for this next phase:

Work and Retirement Timing

• Reflect on how long you want to work versus how long you may need to work to meet your financial goals. Clarifying these timelines will help you make informed decisions about your retirement date and lifestyle expectations.
• Think about what early retirement would look like for you. Assess whether you have the resources and plans in place to retire sooner than originally anticipated, and how this change could impact your overall financial picture.
• Evaluate the impact of working one more year on your retirement plan. Sometimes, extending your career by just a year can make a significant difference in your retirement savings and future income.

Retirement Income and Budgeting

• Identify your retirement income needs. Consider your expected expenses and create a realistic budget to ensure you can maintain your desired standard of living throughout retirement. Assistance with budgeting can help you stay on track and adjust as necessary.

Social Security Considerations

• Review how your Social Security election fits into your overall retirement plan. The timing and strategy behind claiming Social Security benefits can have a substantial effect on your total retirement income.
• If you need help understanding the tradeoffs involved in the different Social Security election options, seek guidance to make the most informed choice for your situation.

Lifestyle and Tax Planning

• Consider how you will spend your time in retirement. Planning for a fulfilling retirement lifestyle is as important as financial preparedness. Learn more about how to plan your retirement activities.
• Assess how planning for income taxes plays into your current decision making. Effective tax planning can help you maximize your retirement income and minimize tax burdens. Find out more about integrating tax planning into your retirement strategy.

The Risk of “Safe Assets” is that you might end up running in place

How many millionaires do you know that have become wealthy by investing in savings accounts?
I rest my case.

Sources:Bankrate.com, U.S. Treasury, and Standard & Poor’s. Rates of return and inflation are derived using the averages from 1995 to 2016. U.S. equities are represented by the S&P 500 Index. Past performance does not guarantee future results.

Risk Tolerance and Risk Profiling

Risk profiling is a process for finding the optimal level of investment risk for your client by balancing their risk required, risk capacity and their individual risk tolerance.

 

Risk Required

Risk Required is the risk associated with the return required to achieve the client’s goals from the financial resources available.

Risk Capacity

Risk Capacity is the level of financial risk the client can afford to take.

Risk Tolerance

Risk Tolerance is the level of financial risk the client is emotionally comfortable with.

What is Business Succession Planning?

Business succession planning is an essential process for ensuring the successful transition of a company or its interests to the next generation or designated successors. The main objectives of this planning process help maintain stability, financial security, and minimize potential disruptions associated with leadership or ownership changes.

• Transfer Business or Business Interests to the Next Generation: A primary goal of succession planning is to facilitate the smooth transfer of ownership or business interests to family members, heirs, or chosen successors. This ensures that the business remains under capable leadership and continues to operate effectively after the transition.
• Provide Business Continuity During the Transition: Succession planning is designed to maintain business operations and stability throughout the transition period. By establishing clear plans and procedures, companies can minimize disruptions and maintain confidence among employees, customers, and stakeholders.
• Provide Potential Retirement Income as Part of Succession Plan: Another objective is to secure potential retirement income for outgoing owners or leaders. Through careful planning, individuals can ensure they receive financial benefits as they step away from active business involvement.
• Minimize Gift and Estate Taxes, When Possible: Effective succession planning also seeks to reduce the tax burden associated with transferring business interests. By utilizing appropriate strategies, businesses and their owners can minimize gift and estate taxes, preserving more wealth for successors.

What is long term care?

Long-term care is not limited to nursing homes. Many people will require long-term care at some point, often starting with home care and possibly transitioning to assisted living or eventually care in a nursing home.

Consider how long-term care fits into your overall financial strategy.

• How long might you need long-term care? Average care needs do not tell the full story. Some individuals may not require care, some may need it only for a short period, while others may need extensive care for more than five years.
• Do long-term care costs vary from state to state? Yes, the cost of care can vary significantly depending on where you receive services.

• Do you have adequate life insurance coverage?
• Do you want to provide for specific children?
• Do you have an interest in charitable giving?
• Do you have intentions of leaving certain assets to certain heirs?
• Have your planned for potential estate tax implications?
• How is your buy-sell funded? (If applicable)
• Do you need Long Term Care Insurance?

To better understand your Goals, Needs, and Vision for your desired Asset Transfer Plan.

Asset transfers plans usually need to established with the assistance of an attorney to create:

• A last will and testament (sometimes referred to as “a will.”)
• A revocable trust (sometimes called a “living trust”)
• An irrevocable trust
• A special needs trust

It can be very difficult for investors to be objective and unemotional when it comes to their money.

For that reason, we believe one of the best ways to determine your risk tolerance is to:

• Plan to stay invested
• Divide and conquer
• Build a plan
• Time-based segmentation

Plan to stay invested

• Trying to time the market is extremely difficult to do. 
• Market lows often result in emotional decision making.
• Investing for the long term while managing volatility can result in a better investment outcome.

Divide and Conquer

• Aligning your investment strategy by goal can help you take different levels of risk based on varying time horizons.
• This can help reinforce your saving habits to ensure you are saving enough to accomplish all of your goals – not just the ones that occur first.

Build a Plan

It may be useful to match dependable income sources with fixed retirement expenses while coordinating other investments with more discretionary expenses.

Time-Based Segmentation

• Aligning your time horizon with an investment approach may help you be more comfortable with maintaining diversified portfolio allocations throughout your accumulation years, as well as throughout your distribution years. Learn more about your Financial Timeline.

• Together, we should review your situation periodically, to ensure that your funds are balanced appropriately throughout your portfolio. Learn more about Our Process.

• Plan for longevity – You may need to plan on the probability of living much longer – potentially 30+ years of retirement, and a portion of your portfolio for growth to maintain your purchasing power over time. How does my spending and inflation impact my financial plan? ^FAQ

How can increasing costs impact my retirement picture?

• These increasing costs are sometimes referred to as inflation.
• Inflation can disproportionately affect retirees due to their spending habits, as well as, the price increases for their necessities.
• The rising cost of healthcare continues to be a concern as we continue to live longer.

What is a Power of Attorney Plan?

A Power of Attorney Plan provides several important benefits for individuals seeking to ensure their wishes are respected and their interests protected. The following sections will help you better understand the purpose and advantages of establishing such a plan.

Types of Power of Attorney Designations

Power of Attorney designations generally need to be established with the assistance of an attorney to create the appropriate legal documents. These may include:

• General Power of Attorney (sometimes referred to as “POA”)
• Durable Power of Attorney
• Health Care Proxy
• Advance Health Care Directive
• Living Will

A Beneficiary Review provides the opportunity to confirm who may inherit your legacy. Taking time to periodically review your beneficiary designations ensures that your wishes are honored and that your legacy is passed on as you intend, potentially spanning over a lifetime.

Why You Need a Beneficiary Review

• Do you remember who your beneficiaries are?
• Have you named a contingent beneficiary?
• Do you have accurate information about your beneficiaries?

Documents to Review in a Beneficiary Review

It is important to review any account or insurance policy that designates a beneficiary. These may include, but are not limited to:

• Individual Retirement Accounts (IRAs)
• Retirement Plans with current and previous employers
• Life Insurance policies
• Other insurance policies that have a beneficiary

Life insurance serves different purposes throughout various stages of your life. Your need for coverage depends on your individual needs, desires, and circumstances. For example, in your early years, life insurance can provide financial protection for your loved ones should the unexpected occur. As you transition through major life events—such as marriage, starting a family, or purchasing a home—your insurance needs may change to reflect new responsibilities. In your later years, life insurance may help with legacy planning and ensuring financial security for your heirs. By evaluating your current situation and future goals, you can determine the right level of life insurance coverage for each stage of your life.

Key Stages of Life Insurance Coverage

• Early years
• Managing life’s transition
• Later years

Should I Apply for Additional Life Insurance?

Many employers offer life insurance as part of their benefits package, but this coverage may not be sufficient to fully protect your loved ones or meet your long-term financial goals. Considering an individual life insurance policy in addition to your employer-provided coverage can offer extra security and flexibility, ensuring your needs are met at every stage of life.

Benefits of an Insurance Review

• Do I have the right kind of insurance coverage?
• Do you have adequate life insurance coverage?
• Do you want to provide for specific children?
• Are you paying a fair price for your insurance coverage?
• Do you have an interest in charitable giving?
• Do you have intentions of leaving certain assets to certain heirs?
• Have you planned for potential estate tax implications?
• How is your buy-sell funded? (if applicable)
• Do you need long term care insurance?