THE COLUMBUS DISPATCH | Special Advertising Section | SUNDAY, OCTOBER 6, 2013
Financial planning week Sponsored by The Financial Planning Association of Central Ohio
OCT. 7-13, 2013
C olumbus F inancial P lanning D ay Wednesday, Oct. 9
3-7 p.m. at the Columbus Metropolitan Library
Columbus Financial Planning Day is made possible by the following:
The Legal Aid Society of Columbus
Social Security Administration
dream big. work hard. we'll help. ™
Free financial help from experts really exists In today’s uncertain economy, planning for your financial future is more important than ever If you have financial questions or concerns, or would like to learn how to better manage your finances, The Financial Planning Association of Central Ohio invites you to attend Financial Planning Day on Wednesday, Oct. 9, from 3-7 p.m. at the Columbus Metropolitan Library Main Branch in Downtown Columbus, where you will (or can)
Erin Mentel-Gaeta CFP,® MS
Mentel Financial Services, LLC receive free, personalized, confidential answers from professional financial planners. Experts from the Financial Planning Association and CERTIFIED FINANCIAL PLANNER™ professionals will meet with you one on one
to offer free, personalized advice on a variety of financial topics, including getting out of debt, retirement planning, investment strategies, tax issues, insurance and estate planning, among others. There are no strings attached. All financial planners are volunteers and will not sell products or services or hand out business cards. Come as you are, or come prepared with financial paperwork related to your questions. You can consult with as many different financial planners as you need. The event will also feature a series of free workshops addressing key financial planning topics, includ-
ing Credit & Debt Management, Education Funding, Social Security & Medicare and Preparing your Estate. Walk-ins are welcome, but admission will be granted first to those who have registered online at financialplanningdays.org/Columbus or by calling toll free at (877) 861-7826. We expect a large crowd, so we encourage you to register early. Studies have shown that individuals who seek advice regarding savings goals and planning for retirement are far less likely to run out of money. Meet with one of our planners to start or check in on your path to financial peace of mind.
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THE COLUMBUS DISPATCH | Special Advertising Section | SUNDAY, OCTOBER 6, 2013 ■
What mission is your money on? Often when clients interview a financial advisor they ask questions such as, “How do you manage money?” and “What’s your historical rate of return?” If every client could be put into the same box or use the same strategy, those questions might be easier to answer. The reality is that no two clients, however similar, have the same mission. To get started, a client and advisor should determine the objective and its time frame, and then discuss the strategies to employ for a successful outcome. Just as each individual is unique, so is the mission for his or her money unique. Two individuals who are the same age and have the same size portfolios could receive very different advice depending on other financial data. A person who has a large pension income and has little need for income from the portfolio could invest more aggressively. That person’s money mission might be more growth oriented for the future benefit of his or her family or charitable interests. Another person counting on his or her portfolio for the majority of income should seek first to protect his or her nest egg and invest more conservatively, because substantial losses could be devastating. The time frame to accomplish the mission is perhaps the most important consideration. The emergency fund’s duty it to be readily accessible, which means it should be conservatively invested. The objective of the kid’s college funds is to be available when they finish high school, which could be around the corner or nearly two decades away. And paying for that trip to Hawaii or a kitchen reno-
Gary Vawter
CFP,® MS, ChFC®, AEP
Vawter Financial, Ltd. vation will dictate yet a different set of marching orders. Once the objectives are defined along with the time frame to accomplish them, it’s time to talk strategy. For those ready to retire, the “mission critical” is to not do anything that might cause them to unretire because of poor investment decisions. Owning a diversified portfolio of investments is among the most important strategies. Anyone “allin” on stocks, bonds, cash or real estate will inevitably hit a rough patch. Stocks got hit badly in the tech bubble and financial crisis. Bonds won’t do well when interest rates eventually rise. Cash used to pay a hefty 10-12 percent, but now pays nearly nothing. Real estate, such as a person’s home, was once thought to be a sure bet to build wealth, but it too, has recently been proven unreliable. Diversification doesn’t prevent losses, but it does minimize the exposure to asset-class meltdowns, also known as a mission failure. Before someone decides to buy an investment or employ a rule-ofthumb strategy, he or she should take some time to thoroughly define what money mission needs to be accomplished and its unique time frame.
Just as each individual is unique, so is the mission for his or her money unique.
The human element that makes us all different applies to investing, too. Mission impossible is blindly
investing money with no specific purpose and hoping for a good outcome.
Congratulations
FPA of Central Ohio wins Pro Bono Team Award — Runner Up Financial Planning Association of Central Ohio President Shawn Ballinger would like to congratulate Erin Mentel-Gaeta, Kristen Moosmiller and the entire FPA Pro Bono Team for being selected as this year’s Team Pro Bono Award — RunnerUp winner for their Financial Literacy Programs with New Directions Career Center. “Today, more than ever, men and women need good
information regarding how to manage hard-earned money in tough economic times. The Financial Planning Association of Central Ohio understands this critical need. Their pro bono initiatives with New Directions Career Center empower individuals to create a sound financial future for themselves — as well as their children,” said Dr. Linda S. Danter, executive director of New Directions Career Center.
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THE COLUMBUS DISPATCH | Special Advertising Section | sunDAY, october 6, 2013
Six things every woman should know about finance Women often rely too heavily on others when it comes to making important financial decisions. Here are some tips to help you take charge of your own financial security.
Choices Should Reflect Goals Look in the mirror. Your financial situation is likely to be a reflection of the choices you’ve made: choices to spend or save, to use cash or credit, to invest or not invest, to cover your eyes and hope for the best or to take charge of your finances. If you want to change your reflection, spend some time carefully considering your shortterm and long-term goals. Write them down, including an estimated cost and date of completion. Be specific. Then make sure that your goals define your choices rather than your choices defining you.
Take a closer look Once you’ve defined your goals, learn what it will take to achieve them. Start by taking inventory to see where you stand. Know your assets (what you own) and your liabilities (what you owe) and review your financial statement regularly.
Don’t pass the buck on money matters Women are often the managers of household cash flow, but we tend to pass the buck to partners, husbands or fathers when it comes to making big financial decisions or investing for our future. Take an active role in making decisions. Gain confidence by talking money with a trusted friend or joining a financial discussion group for women. Share your goals and plan of action with a trusted friend, family member or a qualified financial advisor who will hold you accountable for your choices and encourage you along the way. Regularly monitoring progress toward your goals will help keep you on track.
Lori L. Embrey
further causes that are important to you or to take care of loved ones. Managing money with forethought will help you use it more efficiently and make good choices.
So take a look in the mirror. What does your financial reflection say about you? Copyright © 2013 Hamilton Capital Management. All rights reserved.
MS, CFP®
Hamilton Capital Management, Inc.
Put your money to work When a $10 store coupon arrives in the mail, we rush right out to use it. We recognize its value and are anxious to claim it. Think about investing the same way. It’s putting your money to work. An investment in your employer retirement plan, for example, may be worth far more in tax savings and could earn you an employer matching contribution as well. Take advantage of opportunities like these. While volatility will always be a risk, the price of doing nothing is a certain decline in your standard of living each year. Because the price of groceries isn’t going down and your savings account can’t keep up.
Protect yourself from disruptive events I’ve counseled countless clients who “thought this would never happen to me.” The death of a loved one, disability, dementia, divorce or other personal trials derailed their life plans and upset their financial security. They were forced to make big financial decisions with little knowledge when they were least emotionally prepared to tackle the challenge. Test your own financial safety net before you need it to be sure your household can continue to thrive in the midst of turmoil.
Financial Planning Association of Central Ohio
board of directors
Ralph Abbott Membership Director
Shawn R. Ballinger, CFP® President
Paul J. Dolce, CFP® career development
Scott Eichar, CPA TREASURER
Erin Mentel-Gaeta, MS, CFP® public relations director
Kristen E. Moosmiller, CFP® PRESIDENT-ELECT pro bono director
Mentel Financial Services, LLC (614 )985-3730 erin@mentelfinancial.com
PDS Planning, Inc. (614) 481-8449 kmoosmiller@pdsplanning.com
Martina Peng, CFP® programs director
Bill Shorthill, CFP® partnership director
Premiere Commercial Group, Inc. (614) 339-4255 ext. 2 rabbott@premierecommercialgroup.com
Budros, Ruhlin & Roe, Inc. (614) 481-6900 shawn.ballinger@b-r-r.com
Financial Solutions, LLC (614) 604-3551 pdolce@financialsols.com
Money is a tool Learn to view money as a means to get where you want to go, to help
GBQ Partners, LLC (614) 947-5233 seichar@gbq.com
Mike Mulhern, government relations director
Total Retirement Solutions, LLC (614) 854-6669 mike.mulhern@LFG.com
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Franklin University (614) 947-6174 martina.peng@franklin.edu
Beacon Hill Investment Advisory, LLC (614) 501-3205 bill@bhadvisory.com
admin@fpacentralohio.org www.fpacentralohio.org
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THE COLUMBUS DISPATCH | Special Advertising Section | SUNDAY, OCTOBER 6, 2013 ■
Join the Financial Planners of Central Ohio in Celebrating
Aaron Armstrong, CFP,® CFA Budros, Ruhlin & Roe, Inc. (614) 481-6900 aarmstrong@b-r-r.com
Michael Kline, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 michael.kline@b-r-r.com
Diane Armstrong, CFP,® CPA Armstrong Financial Services, LLC (614) 725-5260 diane@armstrongfinancialservices.com
Brian Becker, CFP® Hamilton Capital Management, Inc. (614) 273-1000 bwb@hamiltoncapital.com
FINANCIAL
Geoffrey Biehn, CPA, CFP® Trinity Financial Advisors, LLC (614) 848-7667 gbiehn@tfadvisors.com
Joseph A. Chornyak, CFP® Chornyak & Associates (614) 888-2121 chornyak@chornyak.com
Joseph A. Chornyak, Jr., CFP® Chornyak & Associates (614) 888-2121 chornyakjr@chornyak.com
Andrea Ellis, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 aellis@b-r-r.com
Lori Embrey, MS, CFP® Hamilton Capital Management, Inc. (614) 273-1000 lle@hamiltoncapital.com
Michael Faieta, CFP® Hamilton Capital Management, Inc. (614) 273-1000 mpf@hamiltoncapital.com
Jason Farris, CFP® Waller Financial Planning Group, Inc. (614) 457-7026 jfarris@waller.com
Douglas Feller, CFA, CFP® Investment Partners, Ltd. (614) 761-9087 dfeller@invp.com
Jim Hamilton PDS Planning, Inc. (614) 481-8449 jhamilton@pdsplanning.com
R. Matthew Hamilton, CFP® Hamilton Capital Management, Inc. (614) 273-1000 rmh@hamiltoncapital.com
Robert Hamilton, CFP® PDS Planning, Inc. (614) 481-8449 bhamilton@pdsplanning.com
Rita Itsell PDS Planning, Inc. (614) 481-8449 ritsell@pdsplanning.com
Christopher Johnson, CRPC, AAMS, CLTC, CEP Ameriprise Financial Services, Inc. (614) 799-2900 christopher.k.johnson@ampf.com
Jessica Lee Budros, Ruhlin & Roe, Inc. (614) 481-6900 jlee@b-r-r.com
William Leuby, J.D., CPA, CFP® Hamilton Capital Management, Inc. (614) 273-1000 wal@hamiltoncapital.com
Jeffrey Loehnis, CPA, CFP® Hamilton Capital Management, Inc. (614) 273-1000 jrl@hamiltoncapital.com
Whitney T. Logan, CFP,® CLU, ChFC ® Logan Financial Group, LLC (614) 442-0214 whitney.logan@raymondjames.com
Meghan Mader, CFP,® CRPC Ameriprise Financial Services, Inc. (614) 799-2900 meghan.m.mader@ampf.com
Christopher Olsgard, CFP® Waller Financial Planning Group, Inc. (614) 457-7026 colsgard@waller.com
Christina Povenmire, CFP,® MBA CMP Financial Planning (614) 487-1244 christina@cmpfinancial.com
Debbie Price, J.D., CPA, CFP® Price Planning, LLC (614) 848-3860 debbie@priceplanning.com
Richard Ray, MBA, CFP® Hamilton Capital Management, Inc. (614) 273-1000 rar@hamiltoncapital.com
Scott Rendle, CFP® Waller Financial Planning Group, Inc. (614) 457-7026 srendle@waller.com
Matthew Stewart, CFP® Key Private Bank (614) 460-3453 Matthew_J_Stewart@keybank.com
Isaiah Stidham, CPA, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 isaiah.stidham@b-r-r.com
Jeffrey Suchy, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 jeffrey.suchy@b-r-r.com
Gary Vawter, CFP,® MS, ChFC, AEP Vawter Financial, Ltd. (614) 451-1002 x108 gary@vawterfinancial.com
Lisa Walls, CFP® Hamilton Capital Management, Inc. (614) 273-1000 lsw@hamiltoncapital.com
The Financial Planning Association of Central Ohio serves and in
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THE COLUMBUS DISPATCH | Special Advertising Section | SUNDAY, OCTOBER 6, 2013
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PLANNING WEEK Robert Cochran, CFP® PDS Planning, Inc. (614) 481-8449 rcochran@pdsplanning.com
John Deitrick, CFP® Advanced Retirement Design, LLC (614) 602-6506 jdeitrick@advancedretirementdesign.com
Connie Demers, CFP® Demers Financial Planning (614) 451-4505 dfp@rrohio.com
Kevin Doll, CFP® Hamilton Capital Management, Inc. (614) 545-4009 kmd@hamiltoncapital.com
Daniel Due, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 daniel.due@b-r-r.com
Jason Eliason, CFP,® ChFC, CFA Waller Financial Planning Group, Inc. (614) 457-7026 jeliason@waller.com
Brian Fenstermaker, CFP® Envision Consulting Group, LLC (614) 794-1111 brian@envisionconsulting.com
Kevin Fix Newhaven Capital Advisors (614) 372-5430 kfix@newhavencap.com
Peter Geldis, CFP® Hamilton Capital Management, Inc. (614) 273-1000 psg@hamiltoncapital.com
Gwen Gloeckner, CDFA Gloeckner Financial Group (614) 310-2400 Gwen@GloecknerFinancial.com
Paul Gydosh, CFP® Kensington Wealth Partners , Ltd. (614) 431-4311 paul.gydosh@lfg.com
Samantha Kavanagh, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 samantha.kavanagh@b-r-r.com
Robert Keidan, CFP® Keidan Financial Consultants (614) 469-5003 bob@keidanfinancial.com
Scott Kidwell, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 skidwell@b-r-r.com
Katherine Kincaid, CFP® Waller Financial Planning Group, Inc. (614) 457-7026 kkincaid@waller.com
Matthew Kirby, CFP® Hamilton Capital Management, Inc. (614) 545-4057 mjk@hamiltoncapital.com
Robert Mauk, CFP® Chornyak & Associates (614) 888-2121 x104 rmauk@chornyak.com
John McHugh, CFP,® CPA Budros, Ruhlin & Roe, Inc. (614) 481-6900 jmchugh@b-r-r.com
Jamie P. Menges, CFP,® CPA PDS Planning, Inc. (614) 481-8449 jmenges@pdsplanning.com
Joseph Messinger, ChFC, CLU Capstone Wealth Partners, Ltd. (614) 754-7805 jsm@capstonewealthpartners.com
Brian Mills, CFP® SS&G Wealth Management, LLC (614) 573-7776 bmills@ssandg.com
John Roessler, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 jroessler@b-r-r.com
Jimmy Rogers, CFP,® ChFC Hamilton Capital Management, Inc. (614) 273-1000 jar@hamiltoncapital.com
John Sestina, CFP,® ChFC John E. Sestina and Company (614) 326-3077 jsestina@sestina.com
Douglas Smith Douglas C. Smith Company, LLC (614) 885-1480 stocksmith@hotmail.com
Beth Sparks, CFP® Raymond James & Associates, Inc. (614) 442-2340 beth.sparks@raymondjames.com
Bart Weiler Weiler Financial (740) 927-2435 bart.weiler@lpl.com
Amy Weldele, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 amy.weldele@b-r-r.com
Kevin Wuebker, CFP® Budros, Ruhlin & Roe, Inc. (614) 481-6900 kevin.wuebker@b-r-r.com
J. Timothy Young, CFP,® J.D. Hamilton Capital Management, Inc. (614) 273-1000 jty@hamiltoncapital.com
Larry R. Zapp, CFP® Larry R. Zapp & Associates, Inc. (614) 478-0500 lrzapp@sbcglobal.net
nspires those who deliver, support and need financial planning.
Timothy Montague, CPA, CFP,® MT
Hamilton Capital Management, Inc. (614) 273-1000 tmm@hamiltoncapital.com
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THE COLUMBUS DISPATCH | Special Advertising Section | SUNDAY, OCTOBER 6, 2013 ■
Seeing retirement through the lens of Generation X If you are part of what is considered to be Generation X, you likely know that you have 20 or 30 years until you’re so-called retirement at age 65 — or at least that’s what the government and most pension plans peg as a “normal” age of retirement. It seems everyone is always talking about retirement, especially in the media. However, we’re often too busy to listen as we focus on other aspects of life, such as advancing careers, growing families and businesses and sending kids to college, all while trying to accumulate a decent net worth along the way. So why address a topic that is seemingly more appropriate for your baby boomer parents? This conversation came about when I was speaking with a couple at a dinner party recently. They are in there early 40s, own a successful business and have done a good job of saving. They had decided it was time to meet with a financial advisor. The first question the advisor asked them was “When do you want to retire?” They didn’t have an answer. Asking a member of Gen X when they want to retire is like asking a 14-year old what they want to be when they grow up. If you were like me at this age, I was too busy crafting mix tapes for my sweetheart and dominating Atari. Let’s face facts — we’re not getting any younger. We’re well into our 30s and 40s, and life is moving fast. As a 35-year old financial planner that works primarily with Gen X clients, here are some questions that can help reframe the conversation so you
Joseph S. Messinger ChFC, CLU
President & Co-Founder, Capstone Wealth Partners, Ltd. can actually attach some meaning to your money.
What do you want your money to do? Money is a resource, not a goal. Most people have things they want their money to do for them besides simply retiring. You may dream about buying a vacation home or a new boat. Or maybe you want to start a nonprofit, a food truck or a yoga studio. Dream big, and use this as motivation to put a financial plan in motion.
What will life look like after work? Work is optional. That has a nice ring, doesn’t it? Most Gen X-ers would rather retire earlier and have the financial freedom to pursue their dreams before becoming too old to enjoy their nest eggs. This could come in the form of launching a business or traveling the world three months a year. Or, maybe you simply want to have the flexibility of working because you want to and not because you have to. Making smart choices with your money now will give you that freedom down the road.
Is creating and implementing a plan
something you want to do on your own?
You should consider yourself the CEO of your family finances. You need to run your household like a business and coordinate all areas of personal finance — cash flow, investments, insurance, taxes and legal services. Ask yourself, “Do I want to commit the time and energy to doing this job myself, or should I delegate this critical task?” What’s the first thing a smart CEO
does? You guessed it, hire a CFO. In this one life, time is your most precious commodity. A long-term relationship with a reputable financial planner can give you the gift of time. Whether you do it yourself or work with a financial planner, take the time to make sure your money is aligned with your most important goals and values. I’m confident you’ll find the motivation to create a solid financial plan, as well as follow through on making it happen.
The importance of drafting a letter of instruction A letter of instruction is also known as a side letter or testamentary letter. It is an informal, non-legal document that generally accompanies your will. It’s used to express your personal thoughts and directions regarding as to what is contained in the will. Unlike a will, a letter of instruction remains private. Therefore, it provides an opportunity to say things you would rather not have become public. A letter of instruction is not a substitute for a will. Any directions you include in the letter are suggestions and are not binding. The people to whom you address the letter could follow or disregard any instructions. Following are some scenarios for which you would use a letter of instruction.
To express burial wishes A letter of instruction is a good way to express burial wishes. A letter left with a close family member, friend or associate can be delivered immediately upon death, saving time and avoiding potential problems later. You may want to consider including in the letter the location of any burial plots you own and in what manner your remains should be disposed. You can also indicate the type of service you want and any other memorials.
Christopher K. Johnson
CRPC,® AAMS,® CLTC,® CEP
Chartered Refinement Planning Counselors Ameriprise Platinum Financial Services Nature and location of information You can use a letter of instruction to state the nature and location of any information your executor may need to settle your estate, such as: • Where your will and trust documents are located • Where your deeds and titles are located • Where your insurance policies are located • Where your birth and marriage certificates are located • Where your military discharge papers are located • The names and locations of banks you use and any account numbers • Who your attorney is • Who your accountant is • Who your life insurance agent is
To explain reasons You may want to use a letter of instruction to explain the reasons
A letter of instruction accompanies your will and offers additional insight into your final wishes. behind particular provisions in your will. Your letter might include the reasons for specific bequests or the disinheritance of a particular beneficiary. For example, you might explain that you are leaving the contents of your wine cellar to a friend instead of a relative, because that friend is a connoisseur.
may know how best to handle such things as stamp collections, works of art, collectibles or investments. You may choose to provide your executor with instructions on when to consult a tax attorney regarding the tax consequences of certain postmortem elections and other decisions that will have an impact on taxes.
To advise your executor
To advise your beneficiaries
You can include any specific knowledge that would help your executor manage your affairs. For example, you
You may want to advise your beneficiaries about how to handle the property you left them.
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Convert your savings to retirement income During your working years, you’ve probably set aside funds in retirement accounts such as IRAs, 401(k)s or other workplace savings plans, as well as in taxable accounts. Your challenge during retirement is to convert those savings into an ongoing income stream that will provide adequate income throughout your retirement years.
Meghan M. Mader CRPC,® CFP®
Financial Advisor, Certified Financial Planner Ameriprise Platinum Financial Services
Setting a withdrawal rate The retirement lifestyle you can afford will depend not only on your assets and investment choices, but also on how quickly you draw down your retirement portfolio. The annual percentage that you take out of your portfolio, whether from returns or both returns and principal, is known as your withdrawal rate. Figuring out an appropriate initial withdrawal rate is a key issue in retirement planning and presents many challenges. If you take out too much too soon, you might run out of money in your later years. Take out too little, and you might not enjoy your retirement years as much as you could. Your withdrawal rate is especially important
in the early years of your retirement, as it will have a lasting impact on how long your savings last. One widely used rule of thumb on withdrawal rates for tax-deferred retirement accounts states that withdrawing slightly more than 4 percent annually from a balanced portfolio of large-cap equities and bonds would provide inflation-adjusted income for at least 30 years. However, some experts contend that a higher withdrawal rate (closer to 5 percent) may be possible in the early, active retirement years if later withdrawals grow more slowly than inflation. Don’t forget that these hypotheses
I have a confession to make The work I do for my clients is not rocket science. As a matter of fact, if you have a little bit of financial acumen and a fair level of interest, you could do the majority of my job. Here’s another secret: You can save money if you do it yourself. I’m telling you this because I am a fiduciary and as such, am required to do what is in the best interest of my clients. I tell all my clients that the advisory services I provide to them can be done on their own. However, most of them will choose not to. Instead, they value several things that I, as their advisor can provide: my education, credentials, professional experience and the internal processes that not only set a client’s financial plan in motion, but also ensure it is reviewed (and revised) on a regular basis. Most importantly, the greatest return we give our clients is their time back. We do the work; they enjoy their time in other ways. My job has nothing to do with finding the next hot stock. Rather, my job is to help my client’s measure risk, so they can have a portfolio that pursues their desired outcome. I also feel obligated to make sure they can do this in the most cost-effective and tax-efficient manner possible. According to the Investment Company Institute, there were 7,596 mutual funds as of 2012. That number exceeds 22,600 when you account for each share class available. And there's another 1,194 Exchange Traded Funds to sort out — not to mention all of the annuities, insurance contracts, real estate and private investments that are out there. Each of these options contains
Jamie P. Menges CFP,® CPA
PDS Planning, Inc. some kind of risk. My job is to guide clients through that maze and determine where they should apply their resources. My independence allows me to do this with only their interests in mind. Am I on track? I get that question from nearly every new client. Does a financial plan answer that question? No, but an ongoing dialogue with my clients allows me to steer them to the practices that will make it likely they will have a favorable outcome. With regular reviews and revisions, I can help them make adjustments to increase the probability of success. How do I sell my company? What should I do about a bad investment I bought years ago? How do I protect my assets from my professional liability? How can I save on taxes? The answers are available, but the time to research them is what my clients lack. That is why I have a job. I have one more confession to make. It’s not just me. Central Ohio is full of highly qualified advisors who have your best interests in mind. They live near you, serve the same philanthropic initiatives as you and work each day to further our profession. Remember, you can do my job. However, if you have not done it yet, you owe it to yourself to ask for help.
are based on historical data about various types of investments, and past results don’t guarantee future performance.
Pulling income from assets You may have assets in accounts that are taxable (CDs, mutual funds), tax deferred (traditional IRAs) and tax free (Roth IRAs). Which type of account you should withdraw from first depends on a number of factors. For retirees who don't care about leaving an estate to beneficiaries, the answer is theoretically simple: withdraw money from taxable accounts first, then tax-deferred accounts and lastly, tax-free accounts. By using your tax-favored accounts last and avoiding taxes as long as possible, you’ll keep more of your retirement dollars working for you. For retirees who intend to leave assets to beneficiaries, the analysis is more complicated. You need to coor-
dinate your retirement planning with your estate plan. For example, if you have appreciated or rapidly appreciating assets, it may be more advantageous for you to withdraw from taxdeferred and tax-free accounts first. This is because these accounts will not receive a step-up in basis at your death, as many of your other assets. However, this may not always be the best strategy. For example, if you intend to leave your entire estate to your spouse, it may make sense to withdraw from taxable accounts first. This is because spouses are given preferential tax treatment with regard to retirement plans. A surviving spouse can roll over retirement-plan funds to his or her own IRA or retirement plan, or in some cases, continue the deceased spouse’s plan as his or her own. The funds in the plan continue to grow tax deferred, and distributions need not begin until the spouse’s own required beginning date.
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