Five Tips to Help You Control Your Financial Plan

Tax policy will be driven by the calendar this next year as many tax policies will expire come Jan. 1, 2013, no matter who wins the election. The point to remember is that even if Congress addresses these issues in the next year, your financial plan will be affected in some way no matter what income bracket you are in.

However, trying to predict what will actually happen is a lesson in spinning plates. You never know what plates drop first. So here are some tips on ways to at least take advantage of what we do know.

#1. Roth Conversions: Individuals pay ordinary income tax when converting a traditional IRA to a Roth IRA. The fair market value of the securities or cash becomes income for the year on the day the conversion is recorded. At today’s tax rates it may be better this year than waiting. There is no longer an income limit on conversions so anyone with IRA’s can convert. Because it may push you into a higher income tax bracket, conversions should be discussed with a tax professional. Now is a great time of year to talk about your options.

#2. Consider municipal bonds as a tax-free income possibility. Even if you aren’t in high tax brackets a municipal bond gives you a low risk option for earning a little more on your investments.

#3. Revisit asset allocation. As part of the review process this is always part of the conversation. Best thing is to bring your 1040 or tax forms with you to your next review. Let your tax professional know who your advisor is and vice versa.

#4. Revisit your estate plan. If you don’t have a plan, let’s discuss where you are and if you need one.

#5. Lastly, don’t let the tail wag the dog. Review your investments and continue making deposits to retirement accounts and savings accounts. Having a good financial plan is the best plan for dealing with uncertain times.

More Questions People Ask Me about Being Independent

How we are compensated? Financial planning fees have 2 components. The negotiable hourly fee is up to $150/hour and is paid after the consultations.
Written financial plan fees range from $150 to $2,500, depending on the complexity of your financial situation. Half the negotiable fee is due in advance, the rest upon presentation of the plan, which will always be well within 6 months of our engagement. If you cancel, any prepaid fees will be refunded on a pro-rated basis.
Managed money fees also have 2 components. If we manage your money the annual negotiable fee for doing so ranges from ½ of 1% to 2%, depending on the size and complexity of your account. The fee is paid quarterly, at the end of each quarter. If we help you select other money managers and we monitor them for you, the other money managers (registered or notice filed in Oregon) pay us a portion of the fees generated by you. You do not directly pay for this service.

Are we registered representatives of a securities broker/dealer? No one at Clarity is or will ever be a securities broker/dealer or a securities registered representative.

Do we invest in securities we recommend to you? On occasion, we may buy or sell securities we recommend to you. We have found over the years that clients like to invest in the same investments we do. That makes sense. If we like it for ourselves, why shouldn’t our clients like it too? The type of security always depends on the client’s investment goals, objectives and time frames. When we recommend investments we hold ourselves, we’ll always disclose to you what we own and how much we own. (As an aside, we’ve seen that some salespeople tell clients that they own the same thing they are recommending, but it’s often a minimal amount. We find that to be very deceptive.) We feel that there is just a tiny conflict of interest in owning the same securities as we recommend to you because the securities we recommend are widely held and publicly traded and we are too small advisors/investors to affect the market in widely held and publicly traded securities.

Defining Your Goals

One of the biggest hurdles for financial planners is to get your clients to really relax and tell you what they want to achieve. Everyone would like to retire and have enough money to do so, but what does retirement mean? Setting goals is not something to put off. You may need to adjust the goal as you go, but you won’t know what you can do until you have a better picture of where you are now. So many people have convinced themselves that they can’t achieve their goals so they just stop thinking about it. Unfortunately, it may be within reach you just don’t have a plan to accomplish it. One client of mine was so worried that she couldn’t retire that she wasn’t sleeping well. She is older and didn’t save until later in life, but looking at her true expenses and agreeing to watch her spending she will be able to retire this summer. We set up a budget to help guide her, a plan to withdraw from accounts in the most tax efficient manner and set up a travel savings account for her to do the traveling she wants to do.

Want to start simple? Download this file and fill it out, it’s a great start. Then meet with me to see if I can help guide you to accomplish those dream goals. It may not be what you started with, but at least it’s a step in the right direction.

New Clarity Wealth Development Office

After

The newly remodeled Clarity Wealth Development office on Polk in Corvallis, Oregon, owned by financial advisor Kay Dee Cole.

We removed dark and obscuring bushes and plants, replaced the windows for more efficiency and installed a new, brighter door to make the new Clarity Wealth Development office inviting for our new clients. Come by to visit us and see the new office!

Before

Clarity Wealth Development office in Corvallis, Oregon, before remodeling and landscaping work.Clarity Wealth Development office in Corvallis, Oregon, before new windows were installed.

The office building before was covered by plants, which made it dark and unwelcoming.

Welcome to the Clarity Blog

Welcome to our news blog, a place to share Clarity Wealth Development’s latest information. We focus on the individual and planning the best route for each person, family and small business we work with, so we won’t be sharing one-size-fits-all investment advice here. Instead, we’ll let you know about the services we offer and how they can help you, along with news about our company and community. Please contact us at any time if you have questions about our business or this blog.