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Sep 18

What Can You Buy With 529 Distributions?

By Uncategorized

529 College Saving Plan

Some of the biggest challenges many face when it comes to education are financial. Luckily, a 529 college saving plan can help. And they’re not just for college anymore – added to the tuition eligibility are K-12, private and religious schools. These funds can also be used for four and two- year colleges, trade schools, graduate programs, and some international institutions.

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. State tax treatment of 529 plans is only one factor to consider prior to committing to a savings plan. Also, consider the fees and expenses associated with the particular plan. Whether a state tax deduction is available will depend on your state of residence. State tax laws and treatment may vary. State tax laws may be different from federal tax laws. Earnings on non-qualified distributions will be subject to income tax and a 10% federal penalty tax.

Here’s a list of 529 qualified educational expenses:

Educational Strategy

To take advantage of the 529 distribution for educational costs, you must submit your request for the funds during the same calendar year. If you request cash during the academic year, you may end up owing taxes as a non-qualified withdrawal.

  • Higher Education – Post-secondary students (after high school) are eligible to participate in the federal student aid program administered by the U.S Department of Education and qualify for the use of 529 funds.
  • Vocational or Trade School – Culinary students can draw from their 529 accounts to pay expenses related to culinary institute courses. The institution must participate in the U.S Department of Education for federal student aid.
  • Early Education – K-12 schools, public, private, and religious institutions can now use 529 plan distributions up to $10,000 per student for tuition.

Lifestyle and School Supplies

Learning how best to use your 529 distributions while establishing a manageable budget for qualified and non-qualified purchases can be tricky. Here are some tips to keep in mind.

  • Housing – Campus housing can be paid through 529 distributions, including college room and board fees. Off-campus housing rentals qualify up to the same cost of the room and board on campus.
  • Books and Supplies – paper, pens, and textbooks required by the specific course are qualified expenses. Schools set the budget limit for books and supplies.
  • Needs and Services – Special needs equipment and services qualify for 529 distribution. Students using equipment for mobility may be eligible for 529 distribution purchases. Depending on the circumstances, other modes of transportation may also apply.

Welcoming Technology

Finally, many don’t realize that computers and some electronics are included on the list of qualified education expenses. Keep in mind that these items must be required as part of the students’ study programs to qualify.

  • Personal Computer – Computers must be used primarily by the student during any of the years the student is enrolled at the eligible educational institution.
  • Software – software may qualify as a 529 distribution expense, but only if it’s used by the student and required by a class. For example, technical engineering or design classes may involve computerized assignments.
  • Internet – Lastly, under certain circumstances, internet services can be paid for using 529 funds. Check with your internet service provider (ISP) for more details.

The above tips are sure to help get you started, but make sure to check with the school as well as chat with your financial professional to learn more. As mentioned earlier, each state and school may have different restrictions on using 529 funds. If you are unsure about anything, your plan sponsor may be able to provide some guidance.

Are you in the Reno area? If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Sep 11

Assess Life Insurance Needs

By Uncategorized

Having Enough Life Insurance

If your family relies on your income, it’s critical to consider having enough life insurance to provide for them after you pass away. But too often, life insurance is an overlooked aspect of personal finances.

In fact, according to a 2023 study conducted by Life Happens and LIMRA, which closely follows life insurance trends, nearly 50 percent of Americans say that they have no life insurance coverage at all, even though 39% say they intend to obtain life insurance coverage within the next year.1

Role of Life Insurance

Realizing the role life insurance can play in your family’s finances is an important first step. A critical second step is determining how much life insurance you may need.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Rule of Thumb for Estimating a Person’s Insurance

One widely followed rule of thumb for estimating a person’s insurance needs is based on income. One broad guide suggests a person may need a life insurance policy valued at five times their annual income. Others recommend up to ten times one’s annual income.

If you are looking for a more accurate estimate, consider completing a “DNA test.” A DNA test, or Detailed Needs Analysis, takes into account a wide range of financial commitments to help better estimate insurance needs.

The first step is to add up needs and obligations.

Short-Term Needs

Which funds will need to be available for final expenses? These may include the costs of a funeral, final medical bills, and any outstanding debts, such as credit cards or personal loans. How much to make available for short-term needs will depend on your individual situation.

Long-Term Needs

How much will it cost to maintain your family’s standard of living? How much is spent on necessities, like housing, food, and clothing? Also, consider factoring in expenses, such as travel and entertainment. Ask yourself, “What would it cost per year to maintain this current lifestyle?”

New Obligations

What additional expenses may arise in the future? What family considerations will need to be addressed, especially if there are young children? Will aging parents need some kind of support? How about college costs? Factoring in potential new obligations allows for a more accurate picture of ongoing financial needs.

Next, subtract all current assets available.

Liquid Assets

Any assets that can be redeemed quickly and for a predictable price are considered liquid. Generally, houses and cars are not considered liquid assets since time may be required to sell them. Also, remember that selling a home may adjust a family’s current standard of living.

Needs and obligations – minus liquid assets – can help you get a better idea of the amount of life insurance coverage you may need. While this exercise is a good start to understanding your insurance needs, a more detailed review may be necessary to better assess your situation.

Are you in the Reno area? If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. LIMRA.com, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Aug 28

Retirement Seen Through Your Eyes

By Uncategorized

How do you picture your future?

Some see retirement as a time to start a new career. Others see it as a time to travel. Still, others plan to spend more time with family and friends. With that in mind, here are some things to consider.

What do you absolutely need to accomplish?

If you could only get four or five things done in retirement, what would they be? Answering this question might lead you to compile a “short list” of life goals, and while they may have nothing to do with money, the financial decisions you make may be integral to pursuing them.

What would revitalize you?

Some people retire with no particular goals at all. After weeks or months of respite, ambition may return. They start to think about what pursuits or adventures they could embark on to make these years special. Others have known for decades what dreams they will follow … and yet, when the time to follow them arrives, those dreams may unfold differently than anticipated and may even be supplanted by new ones.

In retirement, time is really your most valuable asset. With more free time and opportunity for reflection, you might find your old dreams giving way to new ones.

Who should you share your time with?

Here is another profound choice you get to make in retirement. The quick answer to this question for many retirees would be “family.” Today, we have nuclear families, blended families, and extended families; some people think of their friends or their employees as family.

How much do you anticipate spending?

We can’t control all retirement expenses, but we can manage some of them. The thought of downsizing your home may have crossed your mind. One benefit of downsizing is that it can potentially lead to no mortgage or a more manageable mortgage payment.

Could you leave a legacy?

Many of us would like to give our kids or grandkids a good start in life, but leaving an inheritance can be trickier than many realize. Tax laws are constantly changing, and the strategies that worked years ago may have more limited benefits today.

Keep in mind this article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax or legal professional before modifying any part of your overall estate strategy.

How are you preparing for retirement? This is the most important question of all. If you feel you need to prepare more for the future or reexamine your existing strategy in light of recent changes in your life, conferring with a financial professional experienced in retirement approaches may offer some guidance.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our financial advisors.

American Wealth Management Reno, Nevada

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Aug 21

Debt Stress

By Uncategorized

The average American owes $59,580 in debt. Of that $59,580, $41,830 is from mortgage debt, $5,640 is from student loans, and $5,470 is from auto loans. Little wonder that money worries can be a major cause of stress.1

The Link Between Stress and Health

Humans have an innate response called “flight or fight.” It is nature’s way of launching our bodies into action; consider the physical responses we feel during moments of stress—faster heartbeat, accelerated breathing, tightening of muscles, and increase in sweating.

These are response mechanisms that prepared our ancestors to run from, or confront, a danger on the savanna. But they can be less useful in more modern times.

In the short term, stress can manifest itself in physical symptoms, such as headaches, fatigue, difficulty sleeping or concentrating, an upset stomach, and general irritability.

These brief episodes of stress usually do not cause lasting harm to personal health.

However, debt—and the stress it causes—is often a persistent problem. If your stress system stays activated over longer periods of time, it can lead to serious health problems, such as weight gain, fatigue, anxiety, depression, headaches, and sleep problems.2

Managing Stress and Debt

If you are experiencing debt-related stress, you should consider attacking the root of the problem. Generally, it takes time to work down debt, but that doesn’t mean you can’t manage the stress during the interim period.3

Developing a strategy to eliminate your debt is the first step to lowering stress since the sense of control that a strategy gives you might furnish you with hope and optimism.

It’s also important that you keep your debt worries in perspective. Remind yourself that debt may not permanently ruin your life. Writing in a journal can be helpful as an outlet for the worried thoughts that can cycle endlessly through your mind. Seek social support—knowing that family and friends are in your corner can be a great source of strength.

Finally, find time for laughter and extending small kindnesses—each unleashes wonderfully positive chemical reactions that are good for the soul and the body.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. BusinessInsider.com, March 23, 2023
2. MayoClinic.org, 2023
3. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific debt-reduction strategy or approach.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Aug 14

How the Federal Reserve Works

By Uncategorized

Have you ever taken a close look at paper money? Each U.S. bill has the words “Federal Reserve Note” imprinted across the top.

But many individuals may not know why the bill is issued by the Federal Reserve and what role the Federal Reserve plays in the economy. Here’s an inside look.

The Federal Reserve, often referred to as “the Fed,” is the country’s central bank. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Prior to its creation, the U.S. economy was plagued by frequent episodes of panic, bank failures, and limited credit.1

The Fed has four main roles in the U.S. economy.

Economy Watch

In addition to its other duties, the Fed has been given three mandates with the economy: maintaining maximum employment, maintaining stable price levels, and maintaining moderate, long-term interest rates.1

It’s important to remember that the Fed cannot directly control employment, inflation, or long- term interest rates. Rather, it uses a number of tools at its disposal to influence the availability and cost of money and credit. This, in turn, influences the willingness of consumers and businesses to spend money on goods and services.

For example, if the Fed maneuvers short-term interest rates lower, borrowing money becomes less expensive, and people may be motivated to spend. Consumer spending may stimulate economic growth, which may cause companies to produce more products and potentially increase employment. When short-term rates are low, the Fed closely monitors economic activity to watch for signs of rising prices.

On the other hand, if the Fed pushes short-term rates higher, borrowing money becomes more expensive, and people may be less motivated to spend. This may, in turn, slow economic growth and cause companies to decrease employment. When short-term rates are high, the Fed must watch for signs of a decline in overall price levels.

Supervise and Regulate

The Fed establishes and enforces the regulations that banks, savings and loans, and credit unions must follow. It works with other federal and state agencies to ensure these financial institutions are financially sound and consumers are receiving fair and equitable treatment. When an organization is found to have problems, the Fed uses its authority to have the organization correct the problems.

Financial System

The Fed maintains the stability of the financial system by providing payment services. In times of financial strain, the Fed is authorized to step in as a lender of last resort, providing liquidity to an individual bank or the entire banking system. For example, the Fed may step in and offer to buy the government bonds owned by a particular bank. By doing so, the Fed provides the bank with money that it can use for its own purposes.

Banker for Banks, U.S. Government

The Fed provides financial services to banks and other depository institutions as well as to the U.S. government directly. For banks, savings and loans, and credit unions, it maintains accounts and provides various payment services, including collecting checks, electronically transferring funds, distributing new money, and receiving and destroying old, worn-out money. For the federal government, the Fed pays Treasury checks; processes electronic payments; and issues, transfers, and redeems U.S. government securities.

Each day, the Fed is behind the scenes supporting the economy and providing services to the U.S. financial system. And while the Fed’s duties are many and varied, its focus is to maintain confidence in banking institutions.

A Decentralized Central Bank

The Federal Reserve System consists of 12 independent banks that operate under the supervision of a federally appointed Board of Governors in Washington, D.C. Each of these banks works within a specific district, as shown.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations.Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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Source: FederalReserve.gov, 2023

1. FederalReserve.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Aug 07

Navigating Retirement Pitfalls

By Uncategorized

Much is written about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Some classic financial missteps have been known to plague retirees, too.

Calling them “missteps” may be a bit harsh, as not all of them represent errors in judgment. Either way, becoming aware of these potential pitfalls may help you to avoid falling into them in the future.

Managing Social Security. Social Security benefits are structured to rise about 8% for every year you delay receiving them after your full retirement age. Is waiting a few years to apply for benefits an idea you might consider? Filing for your monthly benefits before you reach your full retirement age can mean comparatively smaller monthly payments.1

Managing medical costs. One report estimates that a the average couple retiring at age 65 can expect to need $315,000 to cover health care expenses during the course of their retirement, even with additional coverage such as Medicare Part D, Medigap, and dental insurance. Having a strategy can help you be better prepared for medical costs.2

Understanding longevity. Actuaries at the Social Security Administration project that a 65- year-old man has a 34% chance and a 65-year-old woman has a 45% chance to live to age 90. The prospect of a 20- or 30-year retirement is not only reasonable, but it should be expected.3

Managing withdrawals. You may have heard of the “4% rule,” a guideline stating that you should take out only about 4% of your retirement savings annually. Each person’s situation is unique but having some guidelines can help you prepare.

Managing taxes. Some people enter retirement with investments in both taxable and tax- advantaged accounts. Which accounts should you draw money from first? To answer the question, a qualified financial professional would need to review your financial situation so they can better understand your goals and risk tolerance.

This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your investment strategy for tax considerations.

Managing other costs, like college. There is no “financial aid” program for retirement. There are no “retirement loans.” A financial professional can help you review your anticipated income and costs before you commit to a long-term strategy, and help you make a balanced decision between retirement and helping with the cost of college for your children or grandchildren.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. SSSA.gov, 2023
2. Fidelity.com, 2023
3. LongevityIllustrator.org, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Jul 31

WILL POWER

By Uncategorized

Only one-third of adults have an estate strategy document such as a will in place, which may not be entirely surprising. No one wants to be reminded of their own mortality or spend too much time thinking about what might happen once they’re gone.1

But a will is an instrument of power. Creating one gives you control over the distribution of your assets. If you die without one, the state decides what becomes of your property without regard to your priorities.

A will is a legal document by which an individual or a couple (known as “testator”) identifies their wishes regarding the distribution of their assets after death. A will can typically be broken down into four main parts.

1. Executors – Most wills begin by naming an executor. Executors are responsible for carrying out the wishes outlined in a will. This involves assessing the value of the estate, gathering the assets, paying inheritance tax and other debts (if necessary), and distributing assets among beneficiaries. It’s recommended that you name at least two executors, in case your first choice is unable to fulfill the obligation.

2. Guardians – A will allows you to designate a guardian for your minor children. Whomever you appoint, you will want to make sure beforehand that the individual is able and willing to assume the responsibility. For many people, this is the most important part of a will since, if you die without naming a guardian, the court will decide who takes care of your children.

3. Gifts – This section enables you to identify people or organizations to whom you wish to give gifts of money or specific possessions, such as jewelry or a car. You can also specify conditional gifts, such as a sum of money to a young daughter, but only when she reaches a certain age.

4. Estate – Your estate encompasses everything you own, including real property, financial investments, cash, and personal possessions. Once you have identified specific gifts you would like to distribute, you can apportion the rest of your estate in equal shares among your heirs, or you can split it into percentages. For example, you may decide to give 45 percent each to two children and the remaining 10 percent to a sibling.

The law does not require that a will be drawn up by a professional, and some people choose to create their own wills at home. But where wills are concerned, there is little room for error. You will not be around when the will is read to correct technical errors or clear up confusion. When you draft a will, consider enlisting the help of a legal or financial professional, especially if you have a large estate or complex family situation.

Preparing for the eventual distribution of your assets may not sound enticing. But remember, a will puts the power in your hands. You have worked hard to create a legacy for your loved ones. You deserve to decide what becomes of it.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

 

American Wealth Management Reno, Nevada

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1. Caring.com, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Jul 21
financial planners in Reno Nevada

Essential Services Offered by Financial Advisors in Reno 

By Uncategorized

Money still doesn’t grow on trees, but financial advice certainly does. Today, we are awash with financial information. 

Ironically, though, average adults in the U.S. aren’t as informed on good and bad financial practices as you might think. 

According to the P-Fin Index, an annual survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center, there is room for improvement when it comes to financial literacy. Their 2023 survey showed that “On average, U.S. adults correctly answered only 48% of the 28 index questions in 2023.”

Needless to say, the ambiguity created by a flood of financial information combined with weak financial literacy can be a real stumbling block to managing finances, mitigating risk, and achieving financial health. 

So, who can help? Enter, financial advisors. 

Financial advisors provide personalized guidance and expertise that helps individuals make informed financial decisions, manage their investments, plan for the future, and navigate more complex financial situations.

To learn more about how financial advisors help you figure out your finances, read on! 

How Financial Advisors Help With Financial Planning 

Hold on—what’s a financial plan?  

First, your advisor can help you make a financial plan. A financial plan is a money roadmap that outlines where you are financially (income, expenses, debt, assets, etc.) and where you want to be. 

How can financial advisors help? 

Financial planners will help you evaluate your financial goals (or help you make some), taking into account your income, expenses, assets, and liabilities. Based on their assessment, they can create a personalized financial plan tailored to your needs. They can also assist you with budgeting and cash flow management. 

Financial advisors help you plan for the future.

One of the most important services financial advisors provide is retirement planning. They’ll help you set goals around retirement and course correct if you need to. They can also offer valuable insights and assistance in education planning. 

With their expertise, financial advisors empower you to make informed decisions and secure a brighter financial future.

How Financial Advisors Help With Investment Management 

First, why get help with investment management? 

Investing allows you to grow your wealth and potentially generate income beyond what can be achieved through traditional savings methods.

Whether or not someone achieves financial freedom may come down to how they manage their portfolio of investments. This is an area where financial advisors can be real game changers. 

How do financial advisors help manage your investments? 

Financial advisors can conduct portfolio analysis to help you assess the performance and composition of your investments, judge the risk and return profile of your portfolio, and make informed decisions about your asset allocation and investment strategies.

Your financial advisor will tailor their approach to your unique financial situation and risk tolerance. They’ll work closely with you to determine the optimal mix of investments that align with your goals. 

How do financial advisors monitor growth and mitigate risk over time? 

The stock market is volatile, as well as the value of other assets like your home. Your financial advisor understands the importance of managing risk effectively and helps you navigate potential pitfalls. 

Additionally, financial advisors diligently monitor and rebalance your portfolios, ensuring that your investments remain aligned with your objectives over time.

How Financial Advisors Help With Taxes and Tax Planning 

Wait, can you plan your taxes? 

Yes. Tax planning refers to the process of strategically managing your financial affairs to optimize your tax liability. Doing your own taxes requires anywhere from some to quite a bit of knowledge of the tax code, which is available to the public. 

How can a financial advisor help me with my taxes? 

Your financial advisor can be a tremendous help in identifying tax-saving opportunities tailored to your unique circumstances. 

They can ensure you take advantage of available deductions, credits, and incentives so that you’re not overpaying or loaning money unnecessarily to the government until you get your tax return. 

By leveraging their knowledge of the tax code, they help maximize deductions and credits, potentially reducing your tax liability. Financial advisors also provide guidance on strategic tax planning for investments, suggesting tax-efficient investment strategies that can minimize the impact of taxes on your investment returns. 

What about estate taxes? 

Financial advisors can also help you manage the tax implications of estate planning. That is, helping you navigate estate tax considerations when planning how to transfer assets to your beneficiaries. 

How Financial Advisors Help With Insurance Planning 

Why get help choosing an insurance policy?

There are a lot of insurance plans out there and choosing the right one can be overwhelming. Financial advisors can help you evaluate your insurance needs and recommend suitable coverage. 

With their knowledge and personalized recommendations, financial advisors empower you to make informed decisions, offering peace of mind and financial protection for the future.

How financial advisors can help you plan your life insurance. 

One of the major forms of insurance financial planners can help with is life insurance. Financial advisors can help you determine the right coverage amount and policy type to ensure financial security for your beneficiaries in the event of death. 

Disability and long-term care insurance.

Financial advisors help you choose a disability insurance that’s right for you, so you’re protected if you’re unable to work due to illness or injury. Further, they can provide expertise in long-term care insurance, so you’re prepared for potential long-term care and any associated costs. 

How Financial Advisors Help You With Estate Planning 

What does getting help with your estate planning look like? 

Financial advisors assist with estate planning by creating/updating wills and trusts, minimizing estate taxes, ensuring smooth asset transfer, and providing charitable giving strategies. They help you document their wishes, legally bind them, and minimize tax implications on their estate. 

How do financial advisors help you distribute your assets in the event of death? 

Financial advisors guide individuals through the probate process or the process of distributing your assets to your beneficiaries after you die. They also help align philanthropic goals with the estate plan. With their expertise, financial advisors enable individuals to achieve their estate planning objectives and leave a legacy that reflects their values.

How Financial Advisors Support You With Business Planning 

How can a financial advisor help me with my business? 

Financial advisors play a pivotal role in business planning, providing comprehensive support throughout an entrepreneur’s journey. They assist with business formation and structure, ensuring legal and financial frameworks are properly established. 

Can I hire a financial advisor to help facilitate changes to the business?

Absolutely. Financial advisors can help you develop business succession plans, facilitating a smooth transition of ownership and management. 

What about growing my business? Can they help me there?

They can help with that too. Financial advisors provide valuable advice on business expansion and acquisitions, evaluating growth strategies and potential opportunities. Their expertise can help you make informed decisions, optimize business operations, and navigate the intricacies of business planning for long-term success.

Specialized Services Financial Planners Can Assist With 

Financial advisors can address a wide range of unique financial needs beyond financial planning and investment management. 

They assist with divorce financial planning, guiding individuals through the financial complexities of divorce.

Stock option planning is another area where they provide expertise, helping employees maximize the benefits of their stock options. 

Financial advisors also offer trust services, advising on trust creation and management. In philanthropic planning, they help individuals align charitable goals with their financial plan. 

Takeaways About Services Financial Planners Offer 

In summary, financial advisors offer the following key services:

  • Financial Planning: Creating personalized financial plans.
  • Investment Management: Portfolio analysis and asset allocation.
  • Tax Planning: Identifying tax-saving opportunities.
  • Insurance Planning: Evaluating insurance needs.
  • Estate Planning: Creating wills and trusts.
  • Business Planning: Assisting with business formation.

These services provided by financial advisors are designed to help individuals make informed decisions, optimize their financial strategies, and work towards their financial goals with confidence.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

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1. Ameriprise.com, 2023.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Jul 17

Understanding Equity Compensation

By Uncategorized

Employers do what they can to foster a sense of ownership in their employees. After all, if you stand to benefit from a company’s success, you’re more likely to do a great job for them, or so the logic goes.

So, when you are hired for a job or promoted within your existing company, you might be offered some sort of ownership benefit. You might even get to decide whether to take all of your pay in cash or to use some of your pay to purchase equity in the company.

At first glance, the answer might seem simple: Show me the money! However, there are situations in which an equity position may make more financial sense. Finding that line is key to getting the most compensation from your career.

What do you need to know, then, to ask the right questions?

In some cases, employees have the choice to buy company stock in a tax-deferred retirement plan sponsored by their employer, the most common of which is the 401(k). In other instances, there may be other ways to buy into ownership.

Why is a retirement plan choice important? Well, the point of these retirement accounts is that you’re not paying tax on money today but rather at some point in the future when you take a distribution. If you are taking a distribution from the sale of stocks in your 401(k), you may have the choice of treating the appreciated securities as ordinary income or using the net unrealized appreciation (NUA) tax treatment.

It’s critical to point out that the NUA choice only works when you buy stocks that are kept in your workplace retirement account. The NUA election isn’t available for other types of accounts.

With an NUA, when you take this type of in-kind distribution (payment in the form of securities rather than cash), the rules are complex. So keep in mind that this article is providing a high-level overview and is not a replacement for real-life advice regarding assets held in your retirement account. You should consult a tax professional with an understanding of distribution rules before modifying or adjusting a distribution strategy.

There are several benefits to using an NUA with a distribution. For example, when securities are sold, any NUA is taxed at a long-term capital gains rate, which may be lower than an ordinary income tax rate. So, an NUA approach may help you manage your tax bill.1

However, there are limitations, too. The NUA decision must be weighed against the potential market risk of holding a single stock upon distribution.1

Once you reach age 73, you must begin taking required minimum distributions (RMD s) from your 401(k) or any other defined contribution plans in most circumstances. Withdrawals from your 401(k) or any other defined contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.

Each of these scenarios might feel complicated, or even confusing, but there’s good news. You have a financial professional in your corner who may be able to offer insights into your overall compensation strategy. Their assistance may be key in helping you make decisions about whether to add equity to your retirement assets.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. Ameriprise.com, 2023.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Jul 03

Retiring Earlier Than Expected? What To Know

By Uncategorized

Many Americans, through circumstances beyond their control, find themselves needing to retire earlier than anticipated. Whatever the circumstances, it’s difficult not to feel wrongfooted and hurried by the situation. However, it’s important to get yourself back on track as soon as possible. Here are some things to consider as you make the transition:

Don’t Make Fast Decisions

When dealing with a sudden transition like this, it can be tempting to make some sort of hasty decision. But reacting too quickly might hinder your ability to reorient yourself. Unless something is truly urgent, it’s often best to give yourself some space to think about your new life and carefully consider all your available choices. Take the time to organize your thoughts and to put your important documents in order. At the end of that period, you can look at things in a cool, calm way.

Work, if Possible

The American Association of Retired Persons (AARP) states that 56 percent of workers aged 50 and over have faced some sort of unplanned departure from work for various reasons, ranging from health issues or caring for an infirm relative to redundancy . Finding yourself out of work in your 60s can be discouraging, but it’s also true that age is not the barrier it once was. In fact, it’s not unusual for companies to seek an experienced hand to be a consultant or to train the next generation working in a particular field. While it may be part time or even temporary, if you are able to work, you may find great satisfaction in that opportunity, not to mention additional income.

What to Consider with Tax-Deferred Accounts

Your retirement strategy likely includes some form of tax-deferred account. If so, making withdrawals is one choice to consider. For example, if you are not working, you may be in a lower tax bracket than before. But keep in mind that penalties might apply, depending on your age.

This article is for informational purposes only and is not a replacement for real-life advice. Make sure to consult with your financial and accounting professionals before accessing any tax-deferred account.

Is Social Security a Factor?

The longer you delay taking your Social Security payments, the greater they will be. While Americans have an opportunity to start taking payments as early as age 62, the payments will not reflect the amount you could be getting at full retirement age. Starting at 62 may be a consideration for those who need the income or have some other urgent need, such as being in poor health.

Making an unexpected change can bring changes to your overall retirement strategy. However, it’s important to remember that it’s likely your financial professional has worked with other people in similar circumstances. This might be one of those times when it’s good to have someone who can help provide some guidance.

If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

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