Divorce is a common occurrence in the US, with 50% of all first marriages ending in divorce. According to the American Psychological Society, that is even higher for those marrying a second time. Marriages end for many reasons from infidelity, stress, personality changes, and financial. They are not only devastating to the children and extended family but devastating to your assets and ability to accumulate future assets. Divorce requires assets to be divided, attorneys to receive payments (on-going sometimes), and the divorcing couple soon finds themselves having to live on less to make ends meet. Studies find that the divorced spouses need more than a 30% increase in their income to maintain the same standard of living they had before divorcing.
When emotions come into play, divorces often turn into battles to take assets, leaving a financial battle scar on the other spouse. Divorce doesn’t have to be this way. Uncontested divorces cost hundreds of dollars, whereas divorces taking months or even years can end up costing thousands of dollars- usually paid from the settlement of assets. The cost of ending a marriage, having to live on less, decreased income (for those paying alimony or child support) from becoming a single-earner household can make divorce almost as destructive to your retirement savings as the Great Recession was. Aside from the above reasons, retirement assets are usually divided to ‘equalize’ the retirement savings of each spouse.
When marriages are going well, couples participate together in financial planning, developing personal budgets, and savings and spending plans. The same should happen when anticipating a divorce, during divorce proceedings, and after the marriage ends. Financial advisors are in a position to discuss with both spouses (at the same meeting if amicable) the effects of fighting over assets, a plan to maintain retirement savings going forward, and keep the couple on track to retire as planned. If solutions can happen without fighting between attorneys, the couple stands to win by ‘playing nice,’ saving what they worked so hard to achieve before the marriage fell apart. The impending divorce now becomes ‘business,’ but understanding what you want and why can have positive financial outcomes for both parties.
Financial advisors can’t provide legal advice when it comes to divorce but can provide financial guidance regarding the liquidating of assets, effects on retirement accounts and future retirement savings, budgeting for a single-earner household, and other economic questions you may have. During this time joint investment accounts, personal investment accounts, and all financial records must be disclosed to the other party. Our office will remain impartial as we view each client as vital while we continue advising both of you.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
*These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
Regardless of your age, having a will or estate plan is essential for many reasons, and isn’t just limited to passing assets at death. A will provides necessary asset passing, although many times isn’t enough when situations become more complicated. Although estate plans and wills become typically become active at death, they can be helpful during catastrophic life events, while still living. One such document that is part of both an estate plan and a will is a Medical Directive, which provides the blueprint for your wishes in the event of a debilitating injury or illness.
Without estate plan and will documents in place, the decision is left to your family to make decisions you wouldn’t have been happy about. At times these decisions may lead to conflict among family members, additional expenses paid by heirs or from your estate, or an extended probate at death as its run through the court system in your state of residence.
There’s just as much planning for living as there is for dying, which is why there is no reason to wait to have either done. We recommend working with an attorney that specializes in this type of law (and not everything else). As you age, have children or acquire more assets, your situation changes and so should your estate plan. There are common mistakes to avoid in every estate plan or will to prevent:
Naming Beneficiaries and Contingent Beneficiaries. Update name changes, changing and removing beneficiaries should be done periodically to ensure your estate plan has the most recent information. Common mistakes include misspelling names, incorrect dates of birth, and the wrong former last name of a beneficiary. This pertains to investment accounts that require recipients. Naming a child as a beneficiary requires legal due diligence, as minor can’t inherit assets and need an adult to manage the assets until the child is eighteen years old (or older).
Naming Specific Investments. As people age, the likelihood of an investment no longer owned by the grantor is likely, unless the estate plan or will has been updated to remove it. If a specific asset is named to pass to an individual and no longer part of the estate, it may cause extended probate or lead to the asset being repurchased or ‘equalized’ through another monetary settlement to the beneficiary.
Not Naming the Beneficiary of your Financial Accounts or Life Insurance Policies as your Estate. If you intend to have the estate plan be the final legal document that contains everything in your estate, you can eliminate problems later. Having some accounts or policies that name an individual and some that name the estate may cause heirs to contest the estate plan or will. Your attorney will determine which is best for your situation and wishes. Having a will or estate plan drafted by a legal professional is strongly encouraged as an integral piece of financial planning. Secondly, keep us updated on your desire to changes beneficiaries, contingent beneficiaries, and changes to investment accounts we may not manage but have included in your financial plan. Lastly, please provide us with a copy of your estate plan, will, and other relevant legal documents as they pertain to your investments to help ensure the information we have is streamlined. We are here to provide you with any necessary financial records requested by your legal professional as you create or update your estate plans and wills.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
*These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
It’s that time of year again; kids go back to school, the election season is near, fall holiday planning starts, and suddenly we all move closer to the end of 2018. As we approach the last quarter of the year, remember these ‘money moves’ that you still have time to make:
Add to Your 401K. Now is the time to make additional contributions if you are not already maximizing. Some companies include bonuses in the last paycheck of the year. Consider giving yourself the ‘gift’ of the bonus down the road with a higher balance retirement account.
Re-balance Your Investment Accounts. Meet with me to re-balance your accounts and reassess your financial plan with updated information.
Check Your Budget. Analyze saving and spending, and readjust if necessary. Finish this year by updating your budget to start next year with a spending plan.
Make Purchases With Cash. If you spend on holiday gifts, plan to pay with cash (or debit cards) and keep credit card balances low. Cash purchases are often less than credit purchases per item.
Meet With Your Tax Professional. Discussing options to off-set taxes you will need to pay for 2018 can save you money. It’s better to be prepared and have time to make some changes then be ‘shocked’ at filing time. This year will see the Tax Cuts and Jobs Act takes effect in full force.
Complete a New Risk Assessment and Financial Plan. If you haven’t done either of these in a few years, now is the time to update all information and update your financial plan.
Regardless of how busy you may be at the end of the year, procrastination can hurt your progress toward your goals. Financial planning is for everyone irrespective of age or income and is about your financial situation today so that you can plan for your financial future. I highly recommend doing these simple steps before 2018 is over and look forward to working with you. Contact us with any questions!
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
*These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
Money and technology are so closely related that if a financial advisor isn’t employing the latest technology, how will it equate to risk for you and your money? When it comes to managing your money, you expect your financial advisor to have the best technology resources available to do the job.
Among the new technologies, Artificial Intelligence (AI) and machine learning are in first place for the top development trend in financial services. The acceptance of AI at large financial companies has still deemed a threat to the old system of money management but continues to be widely accepted by established advisors (ages 35-44) even more so than advisors that are new to the industry. New technology is helping clients and advisors to be more efficient in managing assets and their risk.
One of the new developments using AI is in behavioral finance software that determines client behaviors and their adversity to risk before selecting funds, ETFs and other assets to be managed inside portfolios. No longer should selection be done manually when AI can search funds with precision based on client behavioral perimeters. Without an assessment of client behaviors before market activity, potential losses may impact the client and be more difficult to recover.
When behavioral finance software combines with risk profiling, the assessment of misaligned investment choices can be overridden helping to build better portfolios based on scientific data and not solely on past performance. Without behavioral considerations, misaligned investment choices aren’t just possible, but likely.
Investment managers must continuously upgrade their technology infrastructure to keep up with client expectations and best practices to continually improve the client experience and make advisors better at their jobs. While robo technology, or portfolio automation, continues to become an accepted part of the investment equation for younger clients with fewer assets, to clients transferring wealth to future generations, artificial intelligence and machine learning are the next great frontier.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
Planning is valuable for many reasons and helps to ‘normalize’ things when you find yourself in the middle of an unexpected life event. A death, a critical illness, job loss, new family member, an inheritance, divorce, or a catastrophic event that can cause a major financial detour. How you plan will help determine how you survive and normalize after these events.
Planning can be as simple as making sure you have the right insurance coverage, from personal insurance such as medical and critical illness insurance, property insurance and an emergency fund. All insurance is to offset risk, cover expenses, and to protect other assets such as retirement accounts that you’ve accumulated. An additional item is to have a will in case something happens to you so that your loved ones carry out your wishes.
Some people consider financial planning to include risks that are health related. If you or a family member had a major medical event or condition, would you have the financial assets to cover all the expenses and cover your loss of income related to the medical event? How would it impact your portfolio and ability to accumulate assets? Which assets would you choose to liquidate first?
With life’s always changing events, planning for the unexpected when experiencing a significant life event is essential. It is possible to run scenarios within a financial plan to see outcomes of specific circumstances and how they may impact you. If you get detoured by an event or wrong investment decision, planning can help you to recover quickly to a ‘new normal.’ Life can be messy and what you do now will make the difference in what may happen later. No one can predict the future, but it helps to prepare ourselves now as much as we can.
If you would like to visit regarding planning for potential risks and how it may impact your portfolio, please contact our office. We have a team of experts to lead you through the murky financial waters.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
Taking Social Security Benefits can be a guessing game unless you do your research to figure out what age to take benefits is the best for you. Do you receive benefits at the earliest age or wait until your full benefit age? Will you die in early retirement or live a longer life than you imagined? These are the challenging questions many pre-retirees ask because it can add up to thousands of dollars over your lifetime. Most people want to get their benefits sooner than later, not realizing that the odds are in their favor for living longer than they thought. Pre-retirees need to plan for the long haul, or so to speak each generation, on average, is living longer than the previous.
Finding out your ‘break even’ age for Social Security is important to determine what age is best to start taking benefits. Once you make the decision and start benefits at a specific age, you can’t change your decision since it is essentially ‘locked-in’ for life. Benefit amounts will not increase, aside from the occasional small cost of living increases.
The best way to determine when to start taking benefits is by running a break-even analysis to find your break-even benefit age. The break-even age is when an individual’s total lifetime Social Security benefits received would be equal to the benefit amount, but using a different claiming age. When doing your pre-retirement income planning, the break-even analysis is a crucial piece of information to consider.
Deciding to start Social Security benefits at the first opportunity or delaying benefits is a personal decision. Factors to consider are other retirement assets available and their value, genetic health factors, and outstanding debt and lifestyle considerations. If you would like more information on social security benefits and implementing it into your financial plan along with other assets, contact our office for a meeting. Our fiduciary standards always ensure we put your best interest at heart.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser.
*These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.
suit·a·bil·i·ty: The quality of being right or appropriate for a particular person, purpose, or situation.
The definition of suitability seems quite easy to understand and should be clear when it comes to investment recommendations to clients. However, many times when clients come to our firm the investments they have are not suitable for them. We base this conclusion on a set of objectives to consider. Determining suitability includes an examination of the client’s demographics such as age, income, willingness to take on risk, and aversion to risk. Additional factors include how long until the client liquidates the investment, likelihood of recovery from loss, and current financial health including personal debt, and tax considerations. A suitable investment for a forty-five-year-old will look very different than an investment for someoneentering retirement.
Only after getting to know our client through these objectives, or ‘facts’ can we start to develop an investment strategy. Suitability is not always clear-cut and is often in flux. What seems like a suitable investment one day can change with the correction of the stock market, suddenly becoming an unsuitable one. For this reason, constant monitoring of investments coupled with performance and the ever-evolving circumstances of the client make suitability critical to an overall investment strategy. We ask a lot of questionsduring our meetings for this reason.
The client has a crucial role in their suitability as investor knowledge and understanding come into play inside their portfolio. However, this doesn’t that mean that if an investor understands the investment and all associated risks, is it a suitable one. Unsuitable investments can ruin a portfolio and can be a source of on-going stress for the investor. Our recommendations consider suitability, but for those investors that execute an investment on their initiatives outside our advice, there is not much the securities regulators, or we can do. Advice and suitability must come first, asset allocation second, and the execution of the investment last as a continuous process.
Suitability is part of fiduciary standards. We operate our business in this manner and are legally bound to recommend only suitable investments to our clients.
Hello, this is Jeff Junior, President, and CEO of Trajan Wealth. I’ve spent nearly two decades in financial services helping people manage their wealth, prepare for retirement, and manage the ever-changing financial landscape. But before I was serving my clients in the financial sector, I was serving my country as a Marine. Memorial Day is an important day for reflection as I honor my fellow servicemen and women who have served before, with and after me. This day is an opportunity for us to be grateful, and honor those who have made the ultimate sacrifice for us, our families and our country.
I learned a lot while in the Marines and have found three lessons in particular that now transfer to my role as a financial advisor.
2017 was a challenging year for the credit industry. From thedata breach at Equifaxand multiple lawsuits that follow, it has been a tumultuous time for consumers to have faith in the world of credit. Unfortunately, it’s becoming apparent that for Americans overall, it’s not going to get any better in 2018 as the trend of acquiring more debt increases.
Aside from having to shell out money for damages caused in 2017, the credit industry will have a very lucrative 2018 even after paying fines and settlements thanks in part to the American consumer.
According to MarketWatch, U.S. households owe more than $1 trillion in credit-card debt, and the numbers are only rising. Your typical culprits of irresponsible spending that contribute to increasing credit card debt among Americans includes more access by those considered ‘subprime borrowers,’ increased costs for food and housing and continuous spending on unnecessary items. As the average household holds a balance of $15,983 on credit. The cost of maintaining a lifestyle beyond their means can cost a lot more than anticipated with interest rates on the rise.
Leaving a legacy through the passing assets today and after your death is a process that requires correct planning and execution. With the recent Tax Cuts and Job Act of 2017, updated tax codes, and an ever-changing political environment, legacy planning requires consulting with multiple professionals in order to pass assets without financial consequences.
Legacy planning should always be a team effort involving an attorney, tax specialist, and your financial advisor if planning involves securities assets, or will benefit more than one generation, non-profit, or other entity. Transferring wealth has no ‘right or wrong’ way but is best the way that you prefer.
2017 was a challenging year for the credit industry. From the