Financial Planning Philosophy (For Advisory Clients)
- Correct amount of insurance to protect family’s lifestyle.
- 3-6 months cash in emergency fund & no credit card debt.
- Target 20%+ savings of income (retirement before college).
- Maximize all free money.
- Matching, Employee Stock Purchase Plan discounts, etc.
- Utilize tax favored vehicles to pay the minimum amount of tax
- Tax Deductible, Tax Free, Tax Deferred
- Evaluate paying off debt other than mortgage (cars, student loans, etc.)
Construct a portfolio for risk-adjusted rates of return & to avoid market-timing:
- Tactical Asset Allocation - Modern Portfolio Theory (i.e. risk & reward)
- Goals Based Asset Allocation - match time frames of investments & goals.
- Tax Location – strategic location of asset classes for tax efficiency & creative uses of tax favorable vehicles.
Retirement distributions are designed to be:
- Sustainable throughout anticipated retirement – typically beginning at a withdrawal rate at or below 4% for a 25-year retirement.
- Tax bracket sensitive – use IRA distributions and/or conversions to fill up bottom tax brackets
- Multi-dimensional – taking into account Investments, Social Security, Medicare, Required Minimum Distributions, Pensions, annuities, Insurance, etc.
- Hedged for longevity – taking into account long-term care & other risks associated with living a long life.
- Our happiest clients live for a purpose bigger than themselves
- Define what matters & be strategic on who/what receives your money.
- In the end, you can’t take it with you, & it either goes to family, charity, lawyers, or the government.
- Don’t wait till the end to:
- Invest in relationships
- Be charitable with time & money