“Mark Belcak, Daryl Okken, and Bill Maughan”
One or more of these names is very familiar to some of you. If you are very, very lucky – one or more of these gentlemen serve as your financial advisor. Each More than Money advisor co-ordinates a team to serve the financial needs of their clients. Service to clients. These gentlemen and every member of our MtM team arrive at work each day with the purpose of serving as many of our clients as they are able. This is really our mission. We are on a mission to serve and care about – even love – our clients. Thanks to Mark, Daryl, and Bill MtM can serve many more people than Gene ever could on his own. Thanks to all of you for allowing us to complete our mission to serve you.
“PODs and TODs – Save Time and Money”
Settling an estate can take a long time and run up big legal bills – or not. There are a number of techniques and tools you might employ to reduce both the time and expense your heirs will face in settling your estate. PODs (Payable on Death) and TODs (Transfer on Death) designations can assist you in doing just that. These tools work very much like beneficiary designations do on life insurance policies, annuity contracts, and IRAs. If you name someone (or multiple someones) as your POD or TOD on a bank account, brokerage account, CD, etc. they will be able to receive those funds by simply providing the institution with a copy of your death certificate. Those assets will transfer in days or weeks not months or years. There should be no or virtually no cost to accomplish this transfer.
Should you use a POD or TOD? It depends . . . . of course. Please confer with your financial advisors. State tax laws may apply. POD or TOD may not adequately address your estate planning needs.
“A Widow at Age 41”
A young (41) woman recently asked for guidance following the loss of her husband in a car accident four months ago. Her husband had significant amounts of life insurance and left his widow with a very large estate – now sitting in money market accounts. She realized she was earning very little on these funds and didn’t want to be foolish. What should she do?
Right now – nothing. Certainly nothing with the life proceeds. Four months is too soon after the sudden loss of her husband to make significant long term financial decisions. Far better to accept minimal returns (with little or no risk) than to make hasty decisions that might have negative impacts for decades to come. The right time to begin making long term plans is different for everyone. I would think six or eight months is a minimum.
One action she should take is to begin to get financially educated. Spending time interviewing financial advisors would be a wise use of her time until she is in a position (emotionally at least) to make long term decisions. It would be wise for her to take a long a trusted family member or friend to these interviews. Very often, particularly at an emotional time such as this, a second set of eyes and ears will pick up cues she might miss. If an advisor tries to ‘hurry up’ the process faster than she is comfortable – that’s a clear signal to cross that advisor off the list. There are lots of very good advisors out there. Don’t settle.
“I would invest in my 401(k) if I just knew what investment options to use”
Then get ready to invest. Most if not all 401(k) plans offer a ‘default’ fund. This is the fund the plan administrators will ‘select for you’ if you don’t choose one yourself. Generally speaking the default fund is considered appropriate for the vast majority of the participants of the plan.
If you’re willing to participate, but are afraid of the risks of the market – choose the stable value fund. Most (not all) 401(k)s have a choice that is extremely conservative (maybe a money market fund in some plans) often called a stable value fund.
If you’re willing to take risk, but want to keep it simple – consider a target date fund. Target date funds are actually a collection of funds brought together under one umbrella that the fund managers believe are appropriate for someone planning to retire at a certain date in the future. Choose a target date fund whose date range covers the year you expect to retire.
If you want the most customized approach, simply select a trusted financial advisor to assist you. A financial advisor will evaluate all of the investment options available to you inside your 401(k). Your advisor will then construct a recommended approach (likely a combination of the funds on your list) he/she believes appropriate for you and your retirement objectives. Which approach is right for you? It depends . . .
Regardless of the fund you choose, please read the prospectus carefully before investing. The prospectus includes more information about a fund, including risks, objectives, fees and expenses.
“Greece, China and a Stock Exchange ‘Glitch’”
In recent weeks Greece has flipped off the EuroZone and then came back to the table to complete a ‘deal’. China’s stock market lost about one-third (1/3) of its value and then seemed to stabilize. The New York Stock Exchange (NYSE) went ‘off-line’ for nearly four hours and then came back from this ‘glitch’ – seemingly none the worse for wear.
What are we to do this ‘information’?
Not very much – if you’re investing for the long term.
Too much – if you’re not.
If your investment portfolio is well designed with your personal financial goals, time frames, and risk tolerance in mind – these events are interesting topics of conversation over a root beer – and very little more. If you have no real investment strategy and your emotions rule your decisions you’ve probably already lost your mind with these three events and headed for the exits. Talking about these or any other significant financial events is normal. What you do with all that talk is what will determine how well you fare with your long term financial results.
A young woman (age 25) emailed to ask about Roth 401(k)s. She was recently eligible to participate in her company plan and found the Roth option on the enrollment paperwork. Not being familiar with this option she sought counsel from a financial advisor. She questioned why she would do a Roth 401(k).
Lots of reasons. She will pay tax on her contributions now (when she can most easily afford them) and no tax on her retirement withdrawals (when she will most appreciate tax free income). She will be making regular (payroll deduction) investments. She will see her gains sheltered from income tax as they compound for the next forty (40) years. She can invest much more each year in a Roth 401(k) ($18,000) than she could in a Roth IRA ($5,500). There are more, but you get the idea. Young woman – very nice opportunity.
Have Breakfast with Gene every Saturday Morning at 8:06 as
More than Money with Gene Dickison airs on AM790 WAEB.
all with your questions live at 610-720-7900
Two Full Hours – 8:06 through 10:00 AM.
Who would you like to see interviewed on our radio or television show?
What topics would you like Gene to discuss?
Send your suggestions to JoAnne@AskMTM.com
Words are Powerful Tools for American Freedom
One of America’s thought leaders in business today is quoted as saying:
“Naive people believe business to be unfair when a CEO makes tens of millions of dollars and an entry level employee only $30,000. This is a fundamental error in judgment. It is both fair and exciting for the future of America that employees (from entry level to CEO) are paid for the value they bring to the enterprise. Under this eminently fair system, everyone who wishes to be paid more simply needs to improve their skills and become more valuable to their company. In America, there is no limit on how valuable any of us can become.
Now that’s a fair system.”
Do you know who said these words? Email your answer to JoAnne@AskMtM.com. We’ll give you the correct answer in our next newsletter.
Please allow us to serve you and those you love.
P.S. What skills could you develop that would make you more valuable to your employer or your business? How high is high for you?