Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.
We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.
Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.
Planning for Retirement Starts by Talking About These Key Questions
We all think about that day when we’ll finally retire, but some of us are more prepared than others. It’s true, you can overthink retirement – but for most of us, planning for retirement involves careful consideration of many factors.
Whether you began thinking of these questions years ago, or haven’t thought of them for years, each is vital in planning for retirement:
1. When Should I Take Distributions?
All qualified retirement plans have specific requirements regarding when you need to take your distributions. For example, some plans allow you to keep your benefits after you’ve retired or have been terminated from your job. If your plan expenses are low and you have other income options, allowing these funds to continue to grow could be a good idea.
2. How Are Distributions Taxed?
If you’re withdrawing early (before you turn 59.5 years old), there will be a 10% tax penalty assessed, in addition to any federal and state income tax that’s due. Some plans allow exceptions, so be sure to check with your plan administrator or advisor.
3. Can I Rollover My Distributions?
If you’re getting a large distribution via a pension or profit-sharing plan, federal law allows you to roll it to an individual retirement account (IRA). Instead of just putting this money in your bank account and getting taxed, you are “sheltered” from the tax while it’s in your IRA account. Then, when you begin taking distributions, that money is subject to income taxes.
4. What About Tax-Free Options?
While all money will be taxed, some prefer to be taxed up front, which is possible with a Roth IRA or Roth 401(k). When utilizing a Roth, you don’t get the tax break up front, but the Roth does allow for tax-deferred growth and tax-free withdrawals in retirement.
5. What About Investment Limitations?
Fortunately, when investing with an IRA, you have few limitations. You can invest in CDs, stocks, bonds, mutual funds or money market funds. However, talk to your investment advisor and make sure you have the options you need to best fit your strategy.
6. Do I Need an Advisor?
You’re not required to have an advisor assist you in planning for retirement or in managing your investments. However, paying modest fees can provide huge benefits on your investment in an advisor.
Perhaps just as valuable (if not more) is the peace of mind and confidence you can experience from not trying to D-I-Y important and life-changing investment decisions. Let’s put it this way … you wouldn’t try to fix a major plumbing problem yourself. You would hire an expert because you want the task at hand managed as effectively and efficiently as possible. And it will free up time for you to do things you enjoy. It’s similar when you hire a professional advisor (especially when you work with one who operates within a commission-free, client-focused setting).
To talk about these questions and others in a jargon-free environment, contact Family Investment Center today. Let’s sit down and determine what your kind of retirement freedom looks like and how you’ll get there.
A Brief Summary of the Changing Seasons of Planning for Retirement
Planning for retirement looks different for everyone, and those differences widen when you consider the various decades of life. Here is a look at how retirement planning changes during different seasons of your life:
The Roaring 20s
It’s important to get started with your investments early, and compound growth is something that should entice the interest of a 20-something. Compound growth is the gain on top of your previous gains. These snowball over the years and work to your advantage.
The 401(k) is the most common investment vehicle, but you can also consider IRAs. Talk to your investment advisor to put together a plan that is the right fit for you.
30-Somethings: Here’s to You
Many investment strategies focus on buckling down when you’re in your 30s, putting away as much as possible while you’re freeing yourself of debt you might have accrued from college or from “learning the ropes” about credit in your 20s.
Some 30-somethings are heavily invested in stocks. This gives them the chance to maximize their savings. Even if the market is volatile, stocks may be a viable option, because in the long run, the ebb and flow of the market can eventually pay off.
For the 40s …
Did your salary increase while you were in your 40s? There’s a good chance your spending followed suit. It’s vital that while in your 40s, you’re not building up bad debt, which means staying disciplined and on budget is a must.
It’s in the 40s that many will begin saving for their children, and/or setting aside money for renovations to a home and other projects. However, it’s important not to borrow against your retirement savings for any kind of project. In fact, it’s in your 40s that you may begin in earnest to make bigger contributions to your retirement funds.
Hitting 50. Now What?
If you’ve taken a closer look at what you’ve saved and begun to panic that you’ll never have enough to retire at age 65, you can increase your savings rates even higher now, as once you hit age 50, many retirement accounts allow a special “catch-up” contribution.
You may consider talking with your advisor more often as you approach retirement to ensure that your investments are properly aligned with your retirement needs and goals.
Arriving at Retirement … Or Not Yet.
Hitting 60 makes retirement feel like a reality, finally. Now is the time to make final adjustments with a more accurate look at your current finances and how what your lifestyle will resemble once you aren’t working.
However, many workers choose to continue working longer, realizing they may live several years longer than originally planned. Or they choose to semi-retire, leaving a full-time position for a flexible or part-time one.
This is an important time to talk in detail with your advisor about stocks (how many to keep, what the ratio might be, etc.). Also, talk to your investment advisor about how you’ll handle your Social Security filing, because there are ways to maximize that source of income. It’s not a “signand done” kind of benefit. In fact, you may be surprised to learn of different options and the outcomes for each of your decisions related to Social Security.
At Family Investment Center, we’ve assisted clients in every stage of life with planning for retirement and the life changes that happen along that journey. Contact us today and let’s talk about what matters most to you.
Three Investment Strategies for Couples
A sound investment portfolio includes a variety of investments to provide a more stable, yet prosperous, result. For couples, investment strategies can be a contentious topic, particularly when one has a low threshold for risk while the other’s is higher.
Opposites might attract, as the old saying goes; however, can that be a good thing when it comes to investing? In some cases, the answer is a definitive “yes.” Take, for example, a husband who is quite conservative when it comes to risk and prefers to keep the family dollars tied up in safe but low-yielding investments. The wife, on the other hand, is a real risk-taker, ready to pounce on a “hot stock.” To keep the investment moving forward and reach investment goals, it is important to balance each other out and stay on track.
So how does a couple like this make their opposing risk tolerance work?
Communicate About Risk
It is not entirely uncommon for couples to never express their opinions about risk. The situation might become clearer in how each person displays their relationship with money, because their upbringings in regard to money management could be quite different.
Having an actual conversation about these backgrounds and how that influences preferences in regard to investment strategies can add a sense of mediation to the process of investment planning, leading to compromises in investment styles.
Regardless of your position on risk, there is probably a set dollar amount put toward your goals, whether they are goals that are reached in stages or if you’re just setting a big retirement goal. When you come to that number, you then need to figure out how you will invest to reach these goals.
The great part about getting to this point is that most investment advisors can set up an investment discipline that allows each individual some autonomy over the portfolio that relates directly to their risk tolerance, giving each an empowered role in the process.
For some couples, investing together would be as awkward as sharing an email or social media account. Investing separately is also okay as long as the communication is good. The couple should maintain a good overview of their assets and stay on the same page with goals. Meeting together with a trusted investment advisor can help ensure there are no unforeseen bumps down the road.
At Family Investment Center, we’ve assisted couples with wildly different views on investment strategies in coming together with a plan that works for both. Talk to one of our investment professionals today and let’s customize a plan to help reach your goals together.
Danford to Help Women Make Unique Financial Decisions in New Position
Sept. 28, 2018: With increasing media attention on the unique financial decisions placed in front of women, Family Investment Center announces the advancement of Chris Danford to an Investment Advisor Representative position. She became an Investment Advisor Representative for the firm in September, after passing the Series 65 Uniform Investment Advisor Law Examination.
“People don’t think about special financial needs for women, but I see it again and again,” says Danford. “Women live longer, may earn less over the longevity of their careers, and may move in and out of the workforce with small children. Decisions can be complex. I’m excited to offer guidance for these life situations and more.”
Danford has served the Family Investment Center firm since 2011 and is also Director of Community Relations. She will continue in this role in addition to advising clients about finance and investing.
“I’m excited to step into an advisor role,” says Danford. “As Director of Community Relations, I’ve watched the team work with clients for years. This is an opportunity for me to help clients directly.”
In her current Family Investment Center positions, Danford draws upon diverse career and community roles. She worked 29 years as a teacher, special education teacher and counselor in the St. Joseph and Park Hill School Districts and Bishop LeBlond High School. After retiring from Park Hill School District in 2011, Danford was an adjunct teacher at Northwest Missouri State University. She was elected to the St. Joseph School District Board of Education and served from 2012 to 2017.
“I helped families for years as a school counselor and I’ve raised three successful daughters. Those coaching skills translate nicely into financial and investment planning,” Danford explains. “Some may think our business is about the numbers, but it is not. It is about the people. That’s my specialty.”
Reflecting her community dedication and volunteerism spirit, Danford has been active in organizations including CASA, InterServ, United Way, The Center and the Buchanan County Extension Council. She was the Missouri High School Counselor of the Year in 2009 and has been recognized as a Distinguished Alumni at Missouri Western State University. She graduated from Missouri Western State University in 1978 and earned an Master of Science in Guidance and Counseling from Northwest Missouri State University in 1990.
Family Investment Center, with offices in St. Joseph, Missouri and Lenexa, Kansas, is a commission-free planning and advisory firm founded in 1998. The company serves hundreds of families and other clients and manages some $275 million in discretionary portfolios.
“I'm excited to join the advisory team at Family Investment Center. What a great time to help others achieve their financial and family goals,” says Danford.
About Family Investment Center
Reflecting an unconventional approach to investing and financial planning, Family Investment Center invites clients to “plan for some serious freedom.” Now in its third decade of service, Dan Danford is Founder/CEO of Family Investment Center, a pioneer among commission-free investment advisory firms. Richard C. Salmen serves as President of Family Investment Center. Salmen also serves as the 2018 Chairman of the CFP Board national board of directors.
With a team of professionals at offices in St. Joseph, MO, and Lenexa, KS, Family Investment Center brings a client-focused philosophy to individuals and families in the Kansas City area and across the country.
Media sources who have interviewed or quoted the Family Investment Center team include The Wall Street Journal, The New York Times, CBNC, Barron’s, InvestmentNews, BusinessWeek, Forbes, U.S. News & World Report, The Kansas City Star, the Chicago Tribune and others.
There’s Still Time in 2018 to Make Changes in Your 401(k) Investing
The IRS announced earlier in 2018 that retirement plan contribution limits for 401(k)s are changing. The increased contribution limits can help you put more away to reach your retirement goals and there’s still time in 2018 to put this change into action.
For three years, the IRS held the amount you can contribute to your 401(k) to $18,000 annually. This year, your opportunity for 401(k) investing improves as the limit goes up to $18,500 (plus a $6,000 catch-up contribution for those 50 and older). They also increased income phase-outs for IRA contributors as well as adjusting gross income limits for those who get the “saver’s credit.”
Changes to IRAs
If your investments include a SEP IRA, the overall defined contribution plan goes up to $55,000 per year (it was previously $54,000), which is seen as particularly beneficial to small business owners and others who are self-employed.
For deductible IRA phase-outs, the IRS is allowing people to earn more in 2018 and deduct contributions to a traditional pre-tax IRA. However, keep in mind that if you earn too much to get a deduction, you can still contribute to this vehicle, it just won’t be deductible.
If you’re an IRA contributor that isn’t covered by a retirement plan from your workplace, and your income is between $189,000 and $199,000 the deductions are phased out, which is up $3,000 from what was allowed last year.
Changes to the Saver’s Credit
Low- and moderate-income workers who are looking to take advantage of the saver’s credit get a $1,000 increase in what they can make and still qualify for the credit. The IRS allows couples that file jointly in 2018 to make $63,000, up from $62,000. Head of household limits go up from $46,500 to $47,250, and single or married and filing separately can earn $31,500 and still qualify for the credit, which is a $500 increase from last year.
Family Investment Center stays on top of changes like these and our team has many ideas, strategies and plans that meet the needs of each individual investor as these changes continue to take place. Contact us today and let’s talk about how we can help keep you on track with your retirement plan