News & Insights

7 Financial Tips for Newly Married Couples

by Jim Freeman, CFP® on 2/13/2019

Marriage is a union in many ways. You may have the emotional aspects covered, but what about making the dollars and cents work? Financial tension is a big reason that many marriages fail. Read our seven financial tips for newly married couples to hear some tips for starting off on the right foot.

#1 Have the hard conversations

Why is it so hard to talk about money? Because of the feelings and assumptions that go along with it.

For example, you may have been raised to believe that high earning people are more successful than those who don’t make as much. You don’t want to confront anyone about this, or even worse, be confronted about your own level of earnings. Or, maybe you are harboring a feeling of shame because you spent more money than you should have on something.

The list goes on and on…

Read more

posted in BlogGeneralPersonal Finance

How Accountants Should Find a Financial Advisor to Work With

by Financial Alternatives on 1/15/2019

How can accountants find a great financial advisor to partner with?

Finding the right financial advisor to partner with from a practical standpoint has been, well, a source of much frustration for many CPAs we know. So we’re putting together a sketch of how accountants who want to expand their margins, offer a higher level of service to their clients, and grow their practices through partnering with a financial advisor should go about finding the right one.

#1 How is the advisor compensated?

It matters.

The way an advisor is compensated can create conflicts of interest that influence how their clients – and your clients – will be treated.

Advisors can get paid in many ways, each bringing varying levels of objectivity. Some advisors are paid on commissions – either fully or partially. This may mean that the advisor is held to a suitability standard and must make sure that the recommendations he or she makes are proper given the client’s profile. However there is nothing to say that they are the most proper solutions available given the opportunity set, or that the client’s best interests are truly placed before the person advising him or her.

It would be a wise decision for accountants to consider fee-only Registered Investment Advisor (RIA) firms who work in the sole best interest of the client. These advisors are fiduciaries in the true sense of the word. They are obligated to put the client’s best interest before their own.

Read more

posted in BlogGeneralPersonal Finance

The Surprising Truth about Women and Stock Options

by Financial Alternatives on 12/10/2018

The surprising truth about women and stock options.

A recent article in Bloomberg revealed some shocking data about women being underpaid relative to men – in the progressive technology sector, of all places. As per a study by Carta, “women hold 47 cents for every dollar of equity men do” (Greenfield, 2018). These results should not be taken lightly; here’s why this imbalance may matter for female executives and what they can do to change it.

What the Imbalance Looks Like in Reality

It’s surprising to think that in an industry known for innovation and transparency such a striking disparity would prevail. But nonetheless, let’s suppose that it’s true; what if women do in fact hold less equity in technology start up firms than men.

So what?

Let’s see how this translates in reality. Think about a man and woman who are equivalently skilled and qualified, performing the same job responsibilities for which both earn a salary. For the sake of discussion, we’ll call them John and Sally.

Throughout the year, John and Sally chug along merrily taking home their paychecks each week. It’s a known fact that women tend to be underpaid relative to men when it comes to salary. But a salary is a set amount and it’s not likely she earns less than 20-30% of what he does even given the “gender discount.”

What does it mean when a woman holds less of a stake in a highly profitable tech firm that, say for example, goes through a $50MM IPO?

Let’s apply the 47 cent ratio mentioned above. Let’s say this applies universally across the company. There is $50MM of equity to be divided up; women get $16MM while men get $34MM. According to these numbers, Sally takes home $1.6MM while John takes home $3.4MM.

It’s massive.

Read more

posted in BlogGeneralPersonal Finance

The Trouble with Trusting Your Stock Options

by Chris Jaccard, CFP®, CFA on 11/27/2018

Here's the trouble with trusting your stock options.

Stock options are great for established companies who want to reduce their tax bill, startups who don’t have a revenue stream, and many others in between. But do they always make sense for the employee? Here are some scenarios when you should push back on a stock option offer, and the questions to ask to avoid locking yourself into an unfavorable one.

FINISH READING HERE

posted in BlogInvestmentsPersonal Finance

How Smart a Charitable Giver Are You? Take this Quiz!

by Ellen Li, MSBA, CFP® on 11/27/2018

What kind of a charitable giver are you? Take this quiz.

As the holidays is when many people make charitable donations, it’s a good opportunity to brush up on your giving IQ. Are you making the right moves to maximize value for both you and the charity? How smart a charitable giver are you?

Take this 5 question quiz to find out!

True or False: You can donate and still reap tax savings additional to the write off.

True!

Many people are surprised to hear that you can donate and still get the benefit of additional tax savings in excess of the tax write-off you earned.

For example, one of our clients was donating $10k a year to charity in cash. After we discussed the benefits of other strategies, she decided to use a Donor Advised Fund (DAF) to give appreciated assets she held in her portfolio. These investments bore a low cost basis, and if she sold them she would likely have incurred substantial capital gains and a big tax bill.

Read more

posted in BlogPersonal Finance

Don’t Forget Your End of Year Tax Planning!

by Chris Jaccard, CFP®, CFA on 11/16/2018

Don't forget your end of year tax planning!

As open enrollment season and the calendar year comes to a close, late-stage tax planning often comes into focus.  Just sticking with your current employment elections may be mistake – there are several end of year tax planning options to consider. Here are a few items on the list for you to check as the year winds down.

Health Insurance

It would be wise to keep in mind what the final parts of the Tax Cuts and Jobs Act, signed December 2017, will eventually mean for your healthcare planning.  Although a few of the provisions of the act don’t apply until 2019, they are still important to consider.

The two most significant would include:

  • Medical expenses must exceed 10% of your adjusted gross income to be deductible starting in 2019. Previously only expenses over 7.5% were generally deductible.
  • Penalty payments will no longer be assessed for not purchasing health insurance meeting ACA guidelines.

Given this, it’s quite likely that health insurance costs will see a significant increase next year – particularly for those with individual rather than group policies.

What actions should you consider taking?

Brady Bunch It Up

Consider bringing some medical expenses into 2018 to exceed the lower threshold; afterwards, you can try grouping your medical expenses into one calendar year again in the future — but at the higher hurdle rate.  This late in the year, consider any discretionary medical expenses that you have been putting off such as dental or vision work.

Read more

posted in BlogPersonal Finance

The #1 Thing That Most Executives Aren’t Doing With Their Stock Options and Executive Compensation Plans – and What It May Be Costing You

by Jim Freeman, CFP® on 10/23/2018

Executives are constantly overlooking the automation of their stock options - here's how to do just that.Executives who are time-constrained yet serious about reaching their financial and investing goals commonly overlook one important factor: automation. Set up your plan so that it will be automatically executed without you having to remember what decisions were made. Automate, automate, automate! Here’s why.

A Typical Executive’s Financial Snapshot

Let’s say that you are an executive for a successful company that offers the following executive compensation:

  • Salary & Bonus $350,000
  • Restricted Stock Units (RSUs) of $150,000 annually
  • Stock option grants annually
  • A deferred compensation plan
  • An employee stock purchase plan (ESPP)
  • A matching 401k plan

We also assume your portfolio is overweighted to your company’s stock and you’d like to gradually reduce this overweight. In addition, let’s suppose you are in a high tax bracket and you’d like to reduce your taxes if possible during your peak earning years. You also want to begin saving money for your kid’s college costs, have your mortgage paid off in 10 years, keep your spending to $200,000 per year and aggressively reduce your stock option holdings if your company stock hits certain price targets.

If you’re doing this all manually, as most executives are, you may not realize how much time you are spending on tasks that could easily be achieved in a fraction of the time. In addition, automation reduces the risk of error.

The Automation Advantage

So how could an executive go about reducing the amount of manual work that is done in their financial and investment planning? Here is how this might look.

Read more

posted in BlogInvestmentsPersonal Finance

Financial Survival Tips for the Sandwich Generation

by Ellen Li, MSBA, CFP® on 9/20/2018

Here are some Financial Survival Tips for the Sandwich Generation

Planning a financial life for yourself is complicated enough with competing goals such as pursuing a career, raising a family, saving for college and saving for retirement. But what about when an aging parent needs help or when an adult child moves home? If you’re a member of the sandwich generation, the people in their 30s or 40s who bear the responsibility for financially taking care of both their parents and/or children at the same time as themselves, here are some financial survival tips.

Meet Sandy of the Sandwich Generation

Being sandwiched in between several conflicting and serious responsibilities isn’t something anyone necessarily plans for, but as the following example illustrates, it’s easy enough for almost anyone to end up there.

Let’s take Sandy, a married 47 year old radiologist from La Jolla, California.  As a physician specialist, she makes a decent living, but the income didn’t come without a cost. She’s battling her student loans, even at this stage in the game. She’s earning a high salary, but at the same time much of it is consumed by taxes and professional expenses such as insurance and continuing educational requirements.  Moreover, because of the demands of her work, Sandy is often forced to hire support staff to assist with her home and domestic responsibilities.

Sound familiar?

Read more

posted in BlogGeneralPersonal Finance

Questions to Ask If You’re Considering Working During Retirement

by Chris Jaccard, CFP®, CFA on 9/10/2018

Ask yourself several important questions about the benefit and tax implications of taking Social Security benefits while working.

One of the best ways that modern retirement has changed for the better is the high amount of retirees embracing the decision to stay active. Whether you’re working full time, part time, or pursuing your own dream business or an “encore career”, it should be factored in to your Social Security strategy. Read this article to learn about the benefit and tax implications of taking Social Security benefits while working.

Reduction in Cash Benefits

If you have claimed Social Security and reached your full retirement age (between 65 and 67 years of age depending on your year of birth) you can earn as much as you want and keep all your Social Security benefits.

However, if you claimed benefits before your full retirement age, your benefit could possibly be reduced.  For example, if you claimed early and earned income in 2018, the Social Security benefit paid to you is reduced $1 for every $2 you earn over $17,040.  If you realize you made a mistake in claiming early, you have a once in a lifetime opportunity to pay back what you took and reset the clock – but it must be made within one year of claiming benefits.

Read: A deeper look at Social Security Claiming Strategies

This reduction due to early claiming is not a permanent loss, as the Social Security Administration (SSA) will make a recalculation and add back the withheld benefits when you reach full retirement age.  Still, it may have a large impact on your cash flow and hence spending ability.

Questions to ask yourself:

  • What, if any, is the reduction on every dollar earned now that I am combining SS and income from my work?
  • How much can I work and still get benefits? (only relevant if claimed SS prior to full retirement age)
  • Am I within the one year window period of redacting my SS claim?

Read more

posted in BlogPersonal Finance

Is your CPA a Tax Preparer or a Tax Planner?

by Jim Freeman, CFP® on 8/14/2018

Tax planning ranks low on the list of activities people enjoy. Yet despite how astronomically large the tax bill can be in April, after tax season many people do not sit back down with their tax professionals to do in-depth planning. As a result, simple things getting overlooked on a regular basis that needlessly cost taxpayers thousands of dollars.

The goal of today’s blog is to give you a partial checklist and, most importantly, to inspire you to bring this topic up with your tax advisor and to initiate an annual tax planning protocol.

Below I’ve highlighted a few of the more commonly neglected categories:

Read more

posted in BlogGeneralPersonal Finance

Blog Topics

Featured Literature

Search

Subscribe

Receive updates by email.

Disclaimer

Posts are general in nature and do not constitute the rendering of legal, investment, accounting or other professional advice.