General Information

What Direction Should You Go With Your Investments?

1. Conservative? Moderate risk exposure? Are you more aggressive? Domestic or International companies? Are you a mix between one or more?

2. What types of tax consequences are involved in making the corresponding investments that fit your comfort level(s)?

3. What about the tax consequences that might arise in the near or distant furture

4. Are you trying to start a family?

5. Are you trying to begin saving for your child(ren)’s future(s)?

6. Will you have multiple locations from which you can draw retirement income in order to properly plan for changing tax rates? After-tax account? Traditional IRA account? Roth IRA account?

7. What types of tax consequences will affect your heirs once that time comes?

8. Should you invest in individual stocks? Should you take a more diversified approach and invest in one of many types of mutual funds? What about fixed, guaranteed investments that make periodic income disbursements? How about alternative investments?

9. What is the most prudent way of minimizing both the costs and the tax consequences among your entire household’s accounts?

What Is Your Current Financial Situation?

Here are some of the things that allow us to better understand your financial position and aid you in achieving your needs, dreams, financial goals, all the while staying attuned to your comfort level.

The first step is understanding your current financial status or balance sheet (Estate Analysis). This is comprised of, but not limited to the following:

1. Annual Income, Current Asset Holdings, Reserves in cash

2. How old are you? How about your spouse and child(ren)?

3. Where are you along the path towards your retirement?

4. Do you have life insurance?

5. Are your household expenses rising or about to rise? (Are children on the horizon or are they getting nearer to high school graduation?)

6. Are your household expenses decreasing or about to decrease? (Are dependents are no longer living in home?)

7. Are you planning on setting up a new business? Should you?

8. What are your risk tolerances?

9. What are your current tax rates? This takes into account both your effective rate and your marginal tax rate.


Term Life Insurance

Term Life is the most basic and usually the most affordable. Simply, the policy is purchased for a specific period of time and if you die within the time period defined in the policy and you have timely paid your premiums, the insurance company will pay your beneficiaries the face value of your policy. The policy continues as long as the premiums are paid timely through the end of the policy term period. Usually we recommend that you purchase a guaranteed renewable term policy which means that if you renew your term policy within a set period of time within the term period (usually by the end of the term period), you can extend the policy for another term based on your health status as of the date of the original term policy.

Permanent Life Insurance includes:

– Whole Life Insurance – Universal Life Insurance – Variable Life Insurance – Variable Universal Life Insurance

Permanent Life Insurance

Permanent Life can provide life insurance protection for your entire life as long as premiums are paid timely for a stated period of time, which can be a life time. My recommendation when utilizing a permanent life insurance product is that I like to have the client pay a set amount for a stated period of time (1 payment, 7 years or 10 years), so that after the payments have been met you own a policy for your lifetime without having another payment. It is a good idea to have this obligation met before retirement. It is never a rule set in stone; but, For many clients I suggest to purchase term life insurance and then invest the difference. However, talk with us to discuss how it fits into your customize plan.

What Is The Proper Salary Amount To Pay Yourself From Your Business?

In order to determine the appropriate salary amount to take when you are self employed, you need to answer the following questions:

1. How much money do you expect to make in the business this year?

2. Who in your household is getting paid this year?

3. Are we paying any dependent children?

4. The type of business entity may become a factor, so what type are we using currently and should we change this?

5. Do we have a retirement plan that is based on earned wages?

6. Are there other forms of payment which can legally be paid other than wages?

A. Shareholder Distributions?

B. Rent Payments?

C. Loan Payments?

D. Should a bonus be paid? If so, when?

If you need to discuss any of these issues, feel free to give us a call; we would love to discuss your options with you!

What Is A Roth IRA And How Can It Help You Achieve Your Financial Goals?

A Roth IRA is a relatively new spin on an Individual Retirement Account (IRA). The following are some of the qualities of this type of account:
1. Roth IRA contributions are comprised of money earned that has already been taxed.
2. Roth IRAs provide a tax-free growth option to your portfolio.
3. Roth IRAs have no age requirements for when an owner must start taking withdrawals or discontinue making contributions.
4. Roth IRA principal payments (the amount that the owner contributed) may be taken, penalty-free, at any time.
5. The earnings in a Roth IRA may be taken consistent with the laws governing Traditional IRAs. Please see below.
6. Roth IRAs may be transferred to heirs as Inherited Roth IRAs, meaning that the money within this type of account has the ability to grow, tax-free. The Secure Act of 2019 dictates that you must distribute all funds from an inherited IRA or ROTH IRA within 10 years of the original account owners Death.
Please consult your tax advisor for additional information. The traditional IRA may be a better choice for a person who needs the tax deduction.
There could be many reasons why a ROTH IRA might be a more suitable option. Currently, we believe that it is a very underutilized form of investing money. Call us to discuss more about the advantages and disadvantages of a Roth IRA! You may also find more information in IRS Publication 590.

Compare Traditional and Roth IRA’s

What are the differences between Traditional and Roth IRA’s and which one is best for me? Compare the advantages and disadvantages of each IRA to see which one makes sense for you and your financial objectives.

Federal income tax treatment on contributions

Traditional IRA

Roth IRA

Taxes are deferred until distributions are made; taxable portion of distributions are taxed as ordinary income.If nondeductible contributions have been made, each withdrawal is treated as coming proportionately from the taxable and non-taxable portion. Maximum Contribution for 2024 is $7,000.00 and $8,000.00 for catch up (age 50 and older)Contributions are made with after-tax money; therefore, withdrawals from contribution amount (basis amount) are always tax-free. Maximum Contribution for 2024 is $7,000.00 and $8,000.00 for catch up (age 50 and older)

Federal income tax treatment on earnings

Traditional IRA

Roth IRA

Earnings grow tax-deferred until distributions begin. Distributions are treated as ordinary income.Qualified distributions are tax-free. Nonqualified distribution — Earnings are taxed as ordinary income.


Traditional IRA

Roth IRA

Conversion to a Roth IRA — Allowed. The converted amount is taxed as income, but no penalty applies.Recharacterizations  a Roth conversion can be undone (recharacterized) for any reason. Investors have until their tax filing deadlines (including extensions) of the year they converted to a Roth IRA to undo their conversions.


Traditional IRA

Roth IRA

To employer-sponsored plans — Pretax contributions can be rolled over to a 401(k) or to another qualified plan, as well as to 403(b) and 457(b) plans. However, the receiving plan must accept IRA rollovers.

From employer-sponsored plans — Eligible pretax and after-tax distributions from qualified plans, as well as from 403(b) and 457(b) plans, can be rolled over.

From/to another Roth IRA — allowed.From employer-sponsored plans — Eligible pretax and after-tax distributions from qualified plans, as well as from 403(b) and 457(b) plans can be rolled over.

Non-spouse beneficiaries can transfer retirement plan account balances to “inherited IRAs.” (Spouse beneficiaries already have this right.) Such transfers can provide a tax benefit in cases when plans pay death distributions immediately. Distributions from an inherited IRA — along with taxes on those distributions — can be spread out over time. (If plan balances are transferred, no additional contributions can be made to the inherited IRA.)


Traditional IRA

Roth IRA

Distributions from contributions and earnings can be taken after age 59-1/2 without penalty.Mandatory withdrawals must begin at age 72. Premature distributions are subject to a 10% penalty tax unless IRA owner qualifies for one of the following exceptions:


  • Owner is age 59-1/2
  • Owner is disabled
  • Owner is taking substantially equal periodic payments
  • The distribution is for certain medical bills
  • The distribution is used for health insurance premiums during unemployment lasting at least 12 weeks
  • The distribution is for qualified education expenses
  • The distribution is used to purchase a first home (up to $10,000 lifetime maximum)

Distributions to the IRA owner’s beneficiaries are also exempt from the 10% penalty.

Distributions from contributions can be made at any time without taxes or penalty.Distributions from earnings are tax-free if the initial contribution to the account was made at least five years ago and the IRA owner meets one of the following exceptions:


  • Owner is age 59-1/2
  • Owner is disabled
  • Owner is purchasing a first home

Payments made to the IRA owner’s beneficiaries after the owner’s death and after the five-year period are also tax- and penalty-free.

For other distributions, earnings are taxable but not subject to the 10% penalty as long as IRA owners qualify for an exception. The exceptions are the same as those for traditional IRAs.

Distributions from a conversion amount must satisfy a five-year investment period to avoid the 10% penalty. This rule pertains only to the conversion amount that was treated as income for tax purposes.

Required minimum distributions (RMDs)

Traditional IRA

Roth IRA

Must begin no later than April 1 of the year following the year the taxpayer turns 73. May be taken in a lump sum or annual payments.All IRA balances are aggregated, but the withdrawals may be taken from only one.There is no required minimum distribution for Roth IRA owners.For beneficiaries, traditional IRA distributions apply.

Please contact us or look to IRS Publication 590 for more information about the differences between these retirement accounts.

Retirement Plans


Who can establish this plan type?Any employerAny small business employer (with fewer than 100 employees)501C(3) organizations, churches and educational institutions (private and public)Any employer except Government Entities

Initial SetupIRA’s must be established for all eligible employeesSimple IRA’s must be established for all eligible and /or participating employeesQualified custodial accounts or annuity contracts requiredQualified trust must be established (can be self-trusted)

Deadline to EstablishTax-filling deadline of employer; plan year is typically calendar yearBetween Jan 1and Oct 1; plan year is always calendar yearBefore first deferral contribution; plan year can be calendar or fiscal yearBefore first deferral contribution; plan can be calendar or fiscal year

Ongoing MaintenanceNo annual filings or required disclosures from employerAnnual notice to eligible employeesAnnual form 5500 filings, annual notices for safe-harbor contribution, QDIA, automatic enrollment as applicableAnnual form 5500 filings, annual notices for safe-harbor contribution, QDIA, automatic enrollment as applicable

Investment DecisionsParticipantParticipantParticipantParticipant

Investments AvailableWide VarietyWide VarietyOnly mutual funds and annuity contractsWide Variety

Nondiscrimination TestingCoverage and benefits applyPlan is deemed to meet all  nondiscrimination testsCoverage and only ACP benefits tests apply; if safe-harbor requirements are met, all nondiscrimination testsCoverage and ACP, ADP and top-heavy benefits tests apply; if safe-harbor requirements are met, plan is deemed to meet all nondiscrimination tests


Access to ContributionsDistributions: Immediate AccessDistributions: Immediate AccessDistributions: Restrict, subject to plan termsDistributions: Restrict, subject to plan terms
 Vesting: 100%
Vesting: 100%
Vesting: 100% Immediate for participant and, generally, for employer contributionsVesting: 100% Immediate for participant contributions; employer contributions subject to schedule, with exceptions

Participant LoansNoNoAvailableAvailable

Benefit at RetirementAccount BalanceAccount BalanceAccount Balance of Custodial Account; AnnuityAccount Balance

Gift Tax

The current lifetime gift exemption for 2024 is $13.61 million for any one individual. This means that a married couple has the opportunity to transfer $27.22 million to their heirs without any estate taxes if done properly.

It is important to also understand the annual and life time gift exemption limits: currently a person is allowed to give $18,000 per person to any number of recipients in a calendar year without paying Federal estate or gift tax. No gift tax is owed when the gift is made, and the gift is not added back to the taxable estate at death.  Anything made at or below this number will not affect the lifetime gift exemption.

You can also check out some additional detail here.

UGMA (Uniformed Gifts to Minors Act) &
UTMA (uniformed transfers to minors act) accounts

Their names may sound intimidating, but the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA) can be a benefit to parents working hard to save for college. Anyone can contribute to an UGMA/UTMA account and there are no income limits. You can give up to $15,000.00 per child each year free of gift tax consequences ($30,000 for married couples).*

They two accounts are similar in many ways, but one major difference is what each type of account can hold as far as assets. The UTMA can hold virtually anything including real estate. The UGMA cannot hold Real Estate, but can hold securities, bank deposits, and insurance policies.

Contributions are made with after-tax dollars, which means a deduction for the contribution cannot be taken. The child does not gain control of the money until he or she reaches the age of majority (18 or 21 in most states).

For children under 19 and for full-time students under 24 whose earned income is less than one-half of their support, the first $950 of earnings is tax-free. Earnings between $950 and $1,900 are taxed at the child’s rate; earnings above $1,900 are taxed at the parents’ rate. Therefore, if the child’s tax rate is 0%, then the child is able to earn up to $1,900 tax free every year, (based on the 2010 tax treatment of a dependent child’s income).If used properly, this type of plan can complement your other investment choices nicely. To learn more contact us.* The amount is indexed for inflation and may increase over time.