Retirement Planning
What do you want to be when you grow up – again?
We like to ask this question of our clients when considering retirement planning. It brings into focus the fact that retirement planning today has taken on many new dimensions that never had to be considered by earlier generations. One of the things we help clients to understand, regardless of age, is that our current understanding of retirement needs to change. People are living longer, and a person who turns 65 today could be expected to live as many as 20 years or more in retirement. For younger generations, retirement can be expected to last even longer.
While longer life spans have created a number of new financial challenges that need to be taken into consideration when planning for our clients, there is also a significant shift in attitude and expectation when it comes to how people want to spend their time later in life. It is very possible our clients may want to consider some or even all of these activities during retirement: travel, start a new career, go back to school, start a new business, start a charity organization, split extended time amongst children and grandchildren, write a book, etc... Working with you to design a rewarding retirement phase in your life is a key focus of our planning efforts. Depending on prevailing economic environments, we will also need to consider innovative approaches to provide guaranteed lifetime income in addition to income tax optimization. Using the tools and strategies available to us, we want to ensure that our clients do not outlive their money while also providing them the lifestyle they desire.
While developing the key elements of your retirement plan, we will consider control and flexibility as two main “themes.” We will carefully plan how your assets are invested, how your assets are protected, and how your assets are taxed. By weaving these strategies of control and flexibility into the fabric of your retirement plan, we want to maintain and grow purchasing power to help support your future lifestyle, in spite of taxes and inflation
For more information on how we can help with your retirement planning, please contact us today.
Your Investments
Asset allocation is the process of selecting a mix of asset classes that closely matches an investor’s financial profile in terms of their investment preferences and tolerance for risk. It is based on the premise that the different asset classes have varying cycles of performance, and that by investing in multiple classes, the overall investment returns will be more stable and less susceptible to adverse movements in any one class.
All investments involve some sort of risk, whether it’s market risk, interest risk, inflation risk liquidity risk, tax risk. An individualized asset allocation strategy seeks to mitigate the risks of any one asset class though diversification and balance.
Personalized Strategy
When done properly, an investor’s allocation of assets will reflect his/her desired goals, priorities, investment preferences and tolerance for risk. Asset allocation is an individualized strategy, so there really is no perfect mix of assets. Each individual’s strategy is built on the careful consideration of the key elements of their financial profile:
Investment Objectives: What it is the investor hopes to achieve using his investment dollars – improve current lifestyle; achieve capital growth; fund a specific goal, such as a college education
Risk Tolerance: This reflects the investor’s comfort level with market fluctuations that can result in losses. Inflation risk and interest risk need to be considered as well.
Investment Preferences: An investor may prefer one asset class over another based on a certain bias or interest towards the characteristics of that class.
Time Horizon: The length of time an investor is willing to commit to achieving his objectives.
Taxation: Investing in a mix of asset classes will have varying tax consequences.
An Evolving Strategy
A sound asset allocation strategy includes periodic reviews.
About the only certainty when it comes to the financial markets is that they will change, and so will your financial situation. Through market gains and losses, a portfolio can become unbalanced and it may be important to make adjustments to your allocation. As people move through life’s stages their needs, preferences, priorities and risk tolerance change and so too must their asset allocation strategy.
Asset allocation, which is driven by complex mathematical models, should not be confused with the much simpler concept of diversification.
Learn more about how we can help with your investments by contacting us today.
Insurance
The intent of proper insurance planning is multi-faceted and these strategies can play an important role as a cornerstone of most financial plans. If tragic events like death, disability or critical illness strike, proper insurance coverage can protect you and your family from undue hardship. No matter your personal situation—if you’re single or in a family; a professional or a seasonal employee; an executive or small business owner—we will work together to design a customized plan for you.
Life insurance
The coverage of life insurance policies is intended to protect and provide for dependents left behind in the event of an unexpected and untimely death, especially for a breadwinner or two-income household. The Death Benefit for life insurance policies passes to beneficiaries Income Tax-free, however may be subject to Estate Taxes depending on the size of the overall estate. The amount of death benefit should be designed to eliminate existing debts while also providing beneficiaries with financial stability and independence well into the future.
When looking at specially structured permanent insurance, we can address death benefit needs while also providing many “Living Benefits.” While Term insurance only offers a death benefit, properly structured permanent policies with a cash value component can offer additional tools for cash value accumulation as well as a supplemental sources of tax-free income. The funds can provide added flexibility in that they can be accessed without restrictions on age or purpose. Please note that these policies need to be treated responsibly and it is very important to consult a qualified insurance specialist before accessing the cash value.
Long-term Care (LTC) & Long Term Disability (LTD) Insurance
The intent of Long Term Disability (LTD) insurance is to replace income if one of the primary “bread winners” is unable to work due to illness, injury, or accident for a long period of time. Most employers offer some level or insurance coverage to address this, however it is important to measure this against the actual needs of the household to determine if it might be necessary to purchase additional personally owned disability coverage. For most business owners and specialized professionals, these types of policies are a very important component of a comprehensive financial plan.
The intent of Long Term Care (LTC) insurance is to replace income and cover medical care expenses if you should need professional medical attention either at home or in a designated facility for an extended period of time. These policies would apply if/when you are unable to perform any of a predetermined Activities of Daily Living (ADLs).Some employers offer LTC policies to their employees, however it is normally not an automatic enrollment and requires the employee to sign up and pay extra from their post-tax earnings. It is important to measure this employer provided insurance against the actual needs of the household to determine if it might be necessary to purchase additional personally owned LTC coverage. For most households, this is a very important component of a comprehensive financial plan, however it can be very expensive. Many LTC policies are also “use it or lose it” by nature, offering no return of premiums if the coverage is never used.
For more information on how we can help design customized insurance strategies for you, please contact us today.
College Planning
It is well documented that the cost of college and post-graduate education is rising much faster than the rate of inflation, and more importantly, much faster than the rise in salaries for families who wish to help their children address college costs In fact, after buying a home, the cost of higher education for children can represent one of the largest financial milestones in a family’s financial life.
There are many tools and resources to help address the rising costs for higher education. Proper college planning today requires much more than simply contributing to a 529 education fund. Proper college planning involves balancing the art of helping your child find and get accepted into the right schools, with the science of funding college costs without sacrificing other key elements of your overall financial plan.
At Reviresco Wealth Advisory, we believe so strongly in the importance of college planning, and its potential for significant financial impacts on households with college bound students, we started Reviresco College Planning, a stand alone service to help families navigate the complex world of college planning today. Please go HERE to learn more
When the time is right, we work closely with families in these three ways:
- Help the kids find a good academic, social and financial fit for college, and help position them to get accepted.
- Help the family efficiently fund college costs by properly positioning assets and finding advantageous ways to address tuition.
- Help parents fund college without sacrificing their retirement.
For more information on how we can help with college planning strategies, please contact us today.
Estate Planning
Planning for the transfer of assets at death is a critical element of retirement planning especially if there are survivors who are dependent upon the assets for their financial security. It is very important to help our clients draft a Will and put the necessary Trusts in place to dictate how their assets are to be handled if they are deceased or unable to make these decisions for themselves.
If we do not use Wills and Trusts to help control our clients’ assets, the state will do it for them, at their own pace and likely at significantly more cost to the estate than anyone might expect. The question we ask our clients is this, “Will the state distribute your assets based on your values and wishes, and will they do it in a timely, cost effective manner?”
In reality, the time an estate can spend processing through probate can range from 12-18 months and cost potentially thousands in unexpected administrative fees. More importantly, your beneficiaries will have very limited access to these assets, if any, during the probate process. Larger estates may be confronted with settlement costs and sizable death taxes which could force liquidation if the proper planning is not done.
We encourage our clients work with an estate attorney who is focused on their personal values and desires. Doing this will ensure that assets in the estate are distributed based on personal wishes, and in a more timely and cost effective manner to ease any administrative or financial burdens on family, friends, and loved ones.
Proper estate planning can help plan and coordinate the accumulation, protection, and distribution of assets as you see fit. A proper estate planning team should consist of an estate attorney, a tax professional, in addition to your financial advisor.
For more information on how we can help with estate planning, please contact us today.
Charitable Giving
Everyone has their own reason for gifting their assets or a portion of their income to charitable organizations. Some find comfort in helping others who are less fortunate, while others simply want to share their good fortune. Many of the institutions of art, sciences and education are supported in large part by those who want to give something back in appreciation for their contributions to the community or the individuals themselves.
Presently, the tax code offers incentives for gifting of one’s assets or incomes. Tax deductions are given for current contributions and, for estate owners, charitable gifts can reduce the size of the estate to help minimize estate taxes.
Often times, an individual will designate a charitable beneficiary in their will to benefit the organization after the individual dies. Charitable planning can involve tax issues that should be discussed with your financial advisor, as well as a qualified tax professional and a qualified estate attorney.
For more information about how charitable planning could be part of your financial planning process, please contact us today.
