Pure’s Financial Advisor, Joey Bailey, CFP®, CPA, provides insight on how to ensure your portfolio and retirement accounts are on track to meet your financial goals.
Outline
- 00:00 Intro
- 1:20 Examine your budget
- 3:35 Creating a Budget
- 6:18 Review and manage debt
- 7:37 Short- and long-term goals
- 9:45 Reassess cash flow
- 12:16 Portfolio review
- 16:30 Retirement accounts
- 20:12 Q&A
- Is it beneficial to NOT pay off my home? Why wouldn’t I want to pay off my home?
- Does one need property insurance if their home is paid off?
- I feel like the market is volatile. How do I project my investment returns not knowing what this administration will do next?
- My wife loves to spend on Amazon goods. How do I talk to her about budgeting?
- In your opinion, what’re the best states to live in to stretch my retirement savings?
- 27:40 Tax diversification
- 29:58 Estate plan considerations
- 33:47 Q&A
- Is there a formula to determine the amount of funds to convert to a Roth account and not impact my net worth?
- Will vs trust. What’s the pecking order? I thought it was either or.
- What’s the significance of the CFP designation?
- If I transfer my asset to my child, is that the same as being in a trust?
- What does probate really mean?
- Are IUL’s (Indexed Universal Life Insurance) viable options for someone who just retired? They promise protection against market changes.
- Do you pay taxes on your home revenue based on regular income tax?
Transcription:
Kathryn Bowie: Hello everyone. Thank you for joining us. We are so happy that you are here for this mid-year Financial Checkup webinar with our, one of our certified Financial planners and CPA Joey Bailey.
Joey Bailey: We’ll go over a lot of things that if you’re doing them, at the middle of this year. You’re gonna be a lot more prepared for the amount of dollars that you’re able to spend at Christmas. So that’s my promise to you. If you go through these midyear financial checkups, you’ll be a lot more prepared for the financial journey that you have. Ahead of you. We’re gonna talk about is your portfolio on track? What does that mean? Is your portfolio on track? That doesn’t just mean, is it growing right? Is it on track for your budget? Is it meeting your budget needs? Is it on track for your short term and your long term goals? Are you meeting all of the tax strategies that your portfolio is supposed to be meeting for you, right? Is your portfolio gonna be impacted by any debt or any emergencies that may happen? Are you on track for your retirement planning, your retirement account, your retirement investments, and, is your portfolio on track to do the things that you want it to do when you’re gone? Your estate plan? Right, for your gifts for your kids, the things that you want to do with your estate.
Examining Your Budget
So let’s start with examining your budget, right? I think this is important. 45% of people plan to focus on long-term savings goals, right? That means that not even half of the people out there are planning. For any long-term savings goals. It’s an afterthought to them. 55% more people are focusing on short-term goals. But, still only 55%, only half of the people out there are focusing on some sort of short-term or long-term savings goals. So how do you, focus on some of your goals? Well, you gotta examine your budget. You’ve gotta take a look at the dollars that are coming into your bank account, the dollars that are going out of your bank account.
You’ve gotta determine what all of, all your, what are all of your external sources of income, right? Is it a salary, a pension, right? If you’re retired, it’s social security. It’s a pension. If you’re working, it’s a W2 income. It’s your, wages that you might be paying yourself if you’re a business owner, rentals, if you have rental properties, right? All of the different sources of income that you have. And then of course there’s outflows, right? The second that you make money, you’re sending some of it to taxes. You’re sending some of it to your retirement accounts, right? You’re sending some of it to your mortgage payments or your rent. You’ve got food, utilities, gifts, entertainment, right?
There’s a lot of things that this money is going out to, so evaluate all of that, right? Get your hands around all of that, right? Once you have your hands around, all of that, you could check in. Are you meeting your monthly goals? Do you have monthly goals? Right? And, so how do you wrap your hands around some of that? That’s, the task, right? If you have multiple bank accounts, you may have dollars going to, into many bank accounts. You may have multiple credit cards, right? Dollars going out of different debit accounts, different credit accounts. If you’re married, maybe the husband has his own account, the wife has her own account. Maybe it’s combined. Right, but corralling all of these sources is really important, so that way you can start evaluating and examining your budget, really in detail. And it doesn’t have to be complex, right?
Creating a budget could be relatively simple. It’s your income, right? Think of an income statement. Revenue minus expenses equals net income. Income comes into your bank account. Let’s say it’s $8,000 a month. Be cautious with this though. You might make $120,000 a year of wages. That’s $10,000 a month. But maybe only seven or $8,000 shows up in your bank account. Why? Right? Because federal tax, state tax contributions to retirement accounts, right? There’s a lot of things that get withheld. So what income comes into your bank account? What is that dollar figure? And then from there, what are some of the outflows? How much are you saving? Right? Beyond your retirement plan contributions, if any, what are the things that you need? We know the things that we need the roof over our head. The food in our stomachs, right? Utilities to be paid. There’s things that we need to spend money on every single month for as long as we’re alive. What does that cost you? Right? And there’s things that we want. Nicer cars, bigger houses, fancier restaurants, nicer vacations, you name it. We all have different wants, right? We all have a lot of similar needs. But what is the cost of your wants and needs, right? And is there any left after you have that income and you have those expenses, right? What is your budget look like? What does it look like now? What will it look like going forward? Keep it simple.
Check on your emergency fund, right? This is always paramount. Every, several months. You want to be dialing up how much cash you have on hand. What is your emergency fund? You should know, you should take that budget, figure out how much it costs for your monthly expenses, if it’s 10,000 bucks. General rule of thumb is you should have three to six months of emergency funds on hand, right? So if you’re spending 10 grand, have 30 to $60,000 set away for emergencies. If you’re spending less, you should save less. If you’re spending more, you should save a little bit more. That’s a general rule of thumb. Some people would feel very uncomfortable with only three to six months. Maybe your comfort number is a year of cash, right? What is your comfort number? At least three to six months of emergency funds. Your emergency funds aren’t for things like your entertainment and your travel and, all of the wants. It’s for the needs. It’s for rent, the mortgage, utilities, food, transportation, the needs of the budget, right? So, so remember that as you create your budget, what are the things that you need versus what are the things that you want? 55% of US adults had three months emergency savings in 2024, right? So half of us adults have three months saved up.
Review and Manage Debt
Debt. Review your debt. Manage your debt. Can’t say this enough, it could creep up on us. Find all of your different sources of debt, automobiles, credit cards, personal loans, small business loans, student loans, corral your arms around all of it. Figure out how much you pay for each one each month. Figure out the interest rate. Figure out what that’s gonna cost you over the course of a year. Figure out when does that debt mature, and how long is it gonna take for you to pay it off? Okay? If you have multiple sources of debt, you might want to consolidate it.
If you have a lot of different credit cards, doesn’t make sense to consolidate it until one. Can you take one personal loan at a lower interest rate than some of your higher-interest-rate debt? Find your, debt with the highest interest rates and start tackling it. Carve out a portion of your budget each month to tackle that high interest debt. Make sure that you’re tackling your debt. Don’t let it get outta control.
We’re gonna talk a little bit about student loans, in this later, but that’s, one I wanna make sure people are focusing on as, the last number of years, I think people neglected to pay a lot of the student loans and now there’s some, guidance that they will not be forgiven. And so rewrap your arms around those, if you’ve kind of been neglecting your student loan debt for the last year or so.
Long-Term and Short-Term Goals
Long-term goals, short-term goals, these change all the time, right? Inspect what they are. Everyone’s got a little bit of a different short-term goal and a different long-term goal, right? But short-term goals could be like paying down that debt, paying off that credit card statement, doing some travel, spending some of the money that you’re making to have a little bit of fun. Longer term goals, right? Retirement, what’s that cost? How much do you have to save to get there? how long is it gonna take you to pay off your house? Do you wanna do that before you retire or after you retire? College education, family goals, estate goals. Things are going to, you know, be 1, 5, 10, 15 years out. What are they? Identify them, track them, right? And then make sure that you look back at them in a year or so because they will have changed. Maybe you’ve accomplished that once.
Set a new one. That’s the whole point of a goal is that they’re always out there. We accomplish ’em. We set new ones.
So short-term goals. Now, you know, in six months or a year, you should have been able to track your progress against them. Long-term goals you wanna be tracking and measuring your progress against them. How much is your net worth increasing? How much is your portfolio increasing? How much are your expenses increasing or decreasing? Making sure that you’re monitoring and tracking your progress towards your goals, is gonna give you a lot of peace of mind and clarity. It’s gonna give you a lot of focus.
74% of people say they have a monthly budget. I don’t know if I always believe some of these stats. 83% say that they overspend. I think that’s probably, I, see that pretty often, right? People overspend, they think they may be spending less once you dig into their situation. There’s a lot of one-offs. Oh, my normal lifestyle is a hundred thousand dollars. But yeah, but the roof blows off. The tires need to get replaced on the car. The daughter needs some help. The dog needs to go to the vet. So yeah, your typical lifestyle might be a hundred grand, but then all of these one-offs that we can’t control are another 30 or 40 grand. Like guess what? Those one-offs are gonna keep happening. They’re just gonna look a little bit differently. Right.
Reassess Cash Flow
So reassess your cash flows. This is super important, right? Reassessing your cash flows. When I say cash flows, I mean the dollars that are coming into you and the dollars that are going away from you. Income, your social security is any annuities, brokerage accounts, 401(k)s, pensions, your spending on your housing, your taxes, your groceries, dining out, vacations, right? All of those outflows, just reassess all of that. How do you do that? Well, after you’ve corralled your arms around all of that, different credit cards, checking accounts, debit accounts, whatever it may be, look back three, four months, right?
You’ll be able to see line items for food, for gas, for entertainment, for your mortgage payment. You’ll be able to see what your spending is, right? You’re gonna have things that you maybe you want to do more. Maybe things you want to do less. I oftentimes tell people if they find joy in the things that they’re spending, keep doing it. If they don’t get rid of it. See where you can save if savings an a, a, requirement, right? When you add it all up and you’re like, I gotta save. See where you can. There’s gonna be areas where you can’t save. You might not be able to save on your rent or your mortgage payment, but maybe you can downsize, maybe you could live a cheaper, more affordable lifestyle, right?
Insurance is expensive. Have you looked at different insurance options? Or do you have multiple cars or multiple assets that are costing you money, right? They’re nice to have, but they cost you money. Do you need ’em? Relocation’s a big thing. A lot of people are relocating to different cities, to different states, right? Lower cost of living, bigger houses, smaller houses, whatever it is that their lifestyle demands. Luxury items. They get a lot of people, boats, cars. They’re expensive. They’re expensive, right? Make sure you can afford them. Home remodeling, supporting adult kids. What’s more important to you? Ensuring your retirement is taken care of, or making sure that your 30 or 40-year-old kids are a little bit more comfortable? If you can afford to do it, great. But this is an area where I oftentimes see a lot of my retired clients sacrificing a lot of their retirement for the betterment of their kids. If you could afford to do it, great. If you can’t, you’ve gotta get things under control. Second homes, third homes, these things get expensive. It’s great if you can afford ’em. It’s great if you could do them, but just think twice about it. Make sure that you’ve got all of the numbers lined up. How much is this gonna cost you? Can you afford it?
Portfolio Review
Review your portfolio, take a look at it holistically. Okay? I recommend having your investments in your portfolio in, in one location, in one, firm, or at least in one area. One brokerage account where you can see and monitor all of your accounts. It’s difficult to log into 15 IRAs and brokerage accounts and 401(k)s and, monitor all of your investments. It’s just a challenge. You got passwords, you gotta reset ’em. You gotta get new emails, right? You want to go in and spend five minutes to rebalance your portfolio, but it’s complex when you have assets spread out across 15 different accounts, right? So monitor things in one place. Keep your administrative fees in the portfolio as low as possible. You have internal expense ratios, you have administrative fees. Annuities have mortality and expense ratios. There’s rider fees, right? Having things in one area helps prepare for your taxes more simply, like how many 10 90 nines do you want to get? You know, each account gets a different tax form. I think most importantly, having things in one area and having a holistic view is all about the distribution. At the end of the day, you create your portfolio so you can distribute that money back to you so you could spend it. How do you do that when it’s all over the place?
Where do you, which account do you, pick to take money out of? Which position do you sell? These, are, big decisions when you look at your distribution of the, of your, funds, right? The strategy that you use to distribute the funds to you make sure that your asset allocation is appropriate, right?
Is your portfolio targeting a return on investment that you must achieve to accomplish your financial goals? Are you taking more risks than that? Are you taking less risk than that? What is your asset allocation? Take a look at all of your accounts. If there’s multiple ones, you’re gonna have to put ’em all together to figure this out. What’s the amount of stocks and bonds? The amount of cash, commodities that are in that portfolio. Alternative investments that are in that portfolio. Okay. Dividing investment cap capital among three primary investment asset classes like cash, fixed income, and equities is a great way to diversify. Okay? A goal of having, asset allocation strategy is to maximize your portfolio’s return while minimizing its risk, right?
Designing an investment strategy that’s meant to achieve a targeted return on investment without taking too much risk. If you don’t know what your asset allocation is, it’s going to be very hard to determine if that portfolio is gonna get you to where it needs to get you to. Diversification. A well diversified portfolio smooths out the rollercoaster rides that the markets take us on. We just experienced a 20 plus percent drop in the S&P 500 a couple of months back. Well, while that was happening in the United States, international markets actually did pretty good. Different regions are gonna perform differently in different moments. So being globally diversified, from a country perspective and then being diversified from a stocks and bonds perspective is super important to managing the risk of the portfolio and keeping the volatility of the portfolio is low as possible.
Okay, so spreading your assets out amongst different regions, amongst, amongst different sectors and industries. Stocks, you have different types of stocks. You have small stocks, large company stocks, medium company stocks. You have international stocks, you have real estate, right? Bonds. There’s all sorts of bonds, US bonds, government bonds, corporate bonds, international bonds, right?
You, what makeup of stocks and bonds do you need to have in your portfolio to achieve your goals? And then how do you create a diversified strategy to get you there?
Retirement Accounts
Retirement accounts, take a look at your retirement accounts, okay? Your 401(k)s, your 403(b)s, all those ones with the four in front of ’em, your IRAs. If you’re able to, if your cashflow permits, if your cashflow allows you, meaning you have more money coming in than you’re spending, consider increasing the contributions to your retirement accounts. If you’re above 50, you get a little catch up, right? So if you’ve hit 50 and you haven’t increased your contributions, look at your catch ups.
There’s a new contribution rule that, the IRS just passed, or Congress just passed. If you’re 60, 61, 62 or 63, I don’t make these rules, but they put a few year window in where you get an additional $3,750 that you could put into your 401(k), right? So if you’re in that window, from 60 to 63, make sure you’re, maxing those contributions if you’re able to.
There’s other types of re of accounts that may be available to you through your employers. your flexible spending account, that’s an FSA, you have health savings accounts, FSAs, you could put about 5,000 bucks into these accounts. You get a tax deduction on ’em. They could be used for things like adult daycare and child daycare. You know, HSAs similar type of, program. Where you put money in, you get a tax deduction from it. You can invest the dollars they grow tax free when you take ’em out for qualified medical expenses, you pay no taxes on it. Some of the greatest, most powerful accounts, right? I use them all of the time, got kids in daycare. That FSA is definitely a strategic move.
College savings, 529 plans. Those are a big one. Any dollars you put in grow tax free, so long as they’re used for qualified education expenses. Take a look at what, if you have college goals for your kids or your grandkids, take a look at what that might cost you and then what reasonably, what you can reasonably expect to afford. Are they gonna go to an in-state to, school versus an outta state? Are they going to the Ivy Leagues versus a community college? Right? We all know that there’s different costs for education. Are there gonna be grants or student loans that they access? If so, what’s gonna be the amount that you reasonably are gonna have to come out of pocket to, to pay for student loans? Okay. For several years we’ve heard of these possibly getting forgiven. I’ve seen this too many times with clients and prospective clients. They say we’re just not paying them because we think they may be get forgiven. I, heard it. I, hear it. But there’s now been some talk that’s not happening, right? So if you have been putting your student loans on the back burner hoping that they may be getting forgiven, that might not happen, right? So make sure that those are front and center. Those don’t just go away. Now, there is still some programs out there. There’s income, verification limits that could help out a little bit. But make sure you’re not neglecting your student loans.
Taxes, so tidy up on your taxes. So you can’t really determine your financial goals without understanding the taxes that you have ahead of you, right this year plus into the future. So you wanna make sure you understand those income sources and then how are they taxed? How’s your social security tax? How is your wages taxed? Are you taking money from your brokerage account or your IRA or your Roth IRA? How are those dollars taxed, if at all, right? You wanna make sure you’ve got a good tax strategy so that way come April, there’s no surprises. Oh, I owe 10 extra grand.
Q&A
Kathryn: We have some questions. We’ve got a lot of questions, so I wanna see if we can get to some of them ’cause we’re doing really well on time. So first of all, some people say that it’s not beneficial to pay off my home. Why, would I not wanna pay off my home?
Joey: Yeah, it’s a great question. I, there’s a few ways to look at paying off your home. One, what’s the interest rate on the note, right? if the interest rate on the note is very low, we had very low interest rates for, you know, 15 or 20 years. So you are still seeing mortgage interest rates on some prior notes that are two and a half, 3%, three and a half percent. So the rationale between should I aggressively pay this off is. Can, you get a higher return on your investment than that interest rate is charging you mathematically. If you can get a higher return on investment in your portfolio than the interest rate is charging you, it would make more sense to allocate those dollars to your portfolio rather than aggressively paying off low interest rate debt. You also, now this is specific to the individual. If they’re itemizing their deductions, you get a slight tax benefit for the interest that you pay on your home mortgage. And so the effective rate that you’re actually paying could be lower once you, account for the tax benefits that, that, you get that’s one of the thoughts. But there’s also, I think, really important to note, like how do you feel about debt, right? if debt keeps you up at night and you can’t stand the idea of being in debt, then maybe you pay off. The house a little bit sooner, but if you’re comfortable with the debt and, you have other opportunities for your, assets to earn a higher return than what your interest is paying, then it’s, it’s, something you’re gonna have to decide if you want to do or not.
Kathryn: That’s a very good answer. And then on the same note, does one need property insurance? If their home is paid off? You would want property insurance if your home is paid off. Because if something happens to your home or it goes on, catches on fire or, yeah. this is one, I feel the market is volatile. How do I project my investment returns not knowing what this administration will do next. I feel like it’s something new every day. Did you bring your, crystal ball?
Joey: Yeah, no, it’sa great question. And truth be told, there’s this administration. There’s gonna be another one after that, another one after that, another one after that. I believe that time in the markets is a lot more important than timing the markets. Historically we know how the markets have performed through different administrations, through different wars, through different crises, economic crisises, social crisises, and the markets have been resilient time and time again. There’s a hiccup every now and then. We talk a lot about it here at Pure, but time and time again, the power of the capital markets perform. so I wouldn’t worry about this administration. I wouldn’t worry about any administration. I think the power of the capital markets are, much more powerful than, any administration.
Kathryn: Very nice. This one, I don’t know if we can answer this, but my wife loves to overspend on Amazon Goods. Been there, done that. we’ve been married 10 years and it’s hard to get her to stop spending. How do I talk to her about budgeting, buying what she needs and not what she wants? I guess that would be a, you know, how do you, how, what’s your thought being a young, married person, how do you approach the spouse? And I might have a different answer or another different, because I’m an older married person, so go ahead.
Joey: Look, I did this early in my, I’ve been married for about 10 years and I did this probably in the first year, is monitoring the budget. Very strict. It’s one of the things that I do. And I noticed Amazon. I let it go for a few months. I printed out all the credit card statements. I put ’em right there in front of my love, and I said, Aaron, we gotta talk about this. I just want you to see it. And as soon as she saw the number and the volume of transactions, she was like, whoa, I didn’t realize I was hitting buy now every 14 hours. It’s only five bucks or 10 bucks. I said, yeah, but it adds up. Right? So I think one, addressing it might be, you know, appropriate, but then also determine like, does it really impact you, right? I mean, if you could afford it, does, is it an issue? Now, if it’s an issue, an affordability issue, then you need to tackle it head on, right? But if it’s just an annoyance to you, then, that’s just a conversation that you’re gonna have to have with your wife.
Kathryn: And I would say, communication is key in any relationship. And I would also say that, you know, by discussing a budget, as you’ve already laid out very clearly, that if that’s what she wants to spend her money or you know, her allocated budget of free money, you know, like your own, everybody gets to have fun money, I guess I would call it. But, yeah, communication that’s very good in any relationship.
Joey: I mean, it’s a great point, right, that budgeting should be teamwork between the husband and the wife. We are planning on spending X this month on Amazon or on entertainment, right? And then if you go above it, it’s about being accountable. So I think that’s a great point, Kathryn. And just communication.
Kathryn: All right. This is a question that, so someone’s asking, a non-Pure client, I would imagine, does Pure offer references the name and contact for similar people that we can talk to? We do have that where if someone wants to speak to, we have some clients that have agreed we don’t, you know, but Are you, do you have clients of your own that you know are willing to like, speak to somebody Joey?
Joey: Oh, you mean like references from our clients about our services and about our firm? Correct. Oh, I’ve got a handful of them. Be happy to send ’em to you.
Kathryn: Gotcha. this is a, in your opinion, what’s the be, what are the best states to retire in and stretch your retirement savings?
Joey: Mean, look, where are we talking from taxes? Are we talking from sunshine? Are we talking where the kids live? I mean, it really does get down to your own personal goals, right? There’s nine, I think there’s now a 10th state where there’s no income taxes. for me, I’m a, big fan of Sunday San Diego. Man, it’s gonna be hard for me to get out of this place no matter what. so I can’t answer that. Yeah, West Virginia I hear is pretty fun. Yeah. But yeah, truly, I don’t know what the best, that really depends on your own personal, circumstances.
Kathryn: This is a shout out. I thought it was cute. One of our clients says, this is a comment, not a question. Almost everything he is telling us regarding what we should be doing and watching out for are all things we pay pure financial to take care of for us. We trust pure to make sure we have all these bases covered.
Joey: So thank you for that. We do a free financial assessment where that would be something where we, I was on this page when the questions got started, so about tidying up your taxes, right? Making sure you understand. Where your income is coming from and how it’s taxed, right? Like whether it’s W2, social Security, K1 income, or if it’s coming from your retirement accounts, like how is that income ultimately taxed to you? super important. little things. I wanna make sure that you’re maintaining records of your tax deductible expenses. So if you own a business, any business expenses that could be deducted, that mortgage interest expense, making sure that you’re deducting that on your schedule A or itemized deductions if that’s an opportunity for you. Just maintain good books and records over all of your, you know, finances. look at the accounts of type, the types of the accounts that are used to distribute that money. That is probably one of the most important things that we look at on a day-to-day basis.
Tax Diversification
It comes down to tax diversification, right? There’s three different areas where you could invest your money and they’re all treated a little bit differently or, frankly, a lot differently from a tax perspective, right? We’ve got a tax free pool of money, like Roth IRAs. We’ve got a taxable pool of money. These are capital assets, second homes, stocks and bonds held outside of retirement accounts. You’ve got tax deferred accounts. These are IRAs 401(k), right? The difference is, that these tax deferred accounts, you get a tax benefit when you put the dollars in, but when you take the dollars out, you’re gonna pay taxes. Right? Capital assets, these typically have a 15% capital gains tax rate. That’s if you held the asset. For a year or more, right? You put in a hundred bucks, it grows to 200, you pay 15% federal, tax on that. Now there’s some other capital gains tax rates, like net investment income tax. If you make more than 200,000 if you’re single or 250,000 if you’re married, that’s a 3.8% tax.
There’s a 20% capital gains tax break it, cap capital gains tax bracket once your income’s up above about five, $600,000. So being aware of like where your income is, impacts the tax rates that you’re gonna pay, right? This bottom right tax deferred bucket. you have like seven different tax brackets, the 10% to the 30, 7% tax bracket, right? If you make. Zero to if you’re married and you make zero to $20,000, that, that’s taxed at what? 10%. If you make from 20,000 to a hundred thousand, that’s taxed at, 12% and then you’ve got a 22, a 24. and it goes up to 37%. The amount of money that you make determines where you’re at on these tax, on in the tax brackets, right?
So if all of your money’s coming out of this deferred tax bucket, you might be subjecting your portfolio to excessive taxes. So how do you create some tax diversification throughout your, working career and then even in retirement? So that way you have a little bit more control over where you take the dollars that you need from, right? It, reduces your overall taxes, keeps more dollars in your pocket.
Estate Planning Considerations
Estate planning considerations, like do you even have a state plan in place? Right? Start there. If so, has it been updated? When was it last updated? Typically, want to take a look at these things every three, four or five years or anytime there’s a major life event. New kids, new grandkids, move houses, those sorts of things. Move states, right? What’s gonna happen to my children if I pass away? How will they receive these assets? What’s gonna happen to my spouse if I pass away? Do I have a family member with special needs? Are there special needs trust that may need to be established? Are there guardians that need to be in place? Ultimately, how do the assets go where I want them to go and win, right? It’s not always passing assets off upon death. There could be assets that get passed during your life. Do you wanna see the gift being made? Right? Are you leaving anything for charity? If so, what tax opportunities are available? How can you maximize your charitable gift right through the tax code?
24% of Americans have a will, one in one in four right? Of, of adults. So the costs of not having an estate plan, right? You can say, Hey, I’m not doing this, and it’s fine. It’s, up to you. but the costs of not having an estate plan are the burden on the family. They’ve now gotta, determine how all of this gets situated when you pass. There’s no clear directive. I want this person to have X and this person to have Y right? There’s just no clear directive. It keeps everybody guessing. That creates unnecessary taxes, some unnecessary expenses, unnecessary fees. The courts have to get involved, right? And ultimately you may have some wishes that you wish were carried out, but they don’t. So that’s the real cost of dying without an estate plan in place, is that the things that you wanna have happen may not actually happen. So how do you, wrap your hands around all that, right? It’s like, Hey, I’ve already got a lot of homework. Just get my budget together. similar, right? You, create an inventory of all of your assets, your home, your bank accounts, your investment accounts, right? Your cash accounts create.
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IMPORTANT DISCLOSURES:
• Neither Pure Financial Advisors nor the presenter is affiliated or endorsed by the Internal Revenue Service (IRS) or affiliated with the United States government or any other governmental agency.
• This material is for information purposes only and is not intended as tax, legal, or investment recommendations.
• Consult your tax advisor for guidance. Tax laws and regulations are complex and subject to change.
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CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.
