Financial Model Blog

Say When

Know when to get help



We get this question tons and tons of times. When should I get help from a planner, money manager, or financial advisor, and what's the difference between them? Should I wait until I have about a million or two to get help? We'll touch on these and hope to give you more clarity and understanding on what be right for you.


First and foremost, it's never too early or too late to get help. Of course, if it's the latter, we may have limited options. As far as too early, well, I'm not so sure that exists. At times we get prospects sent to us from existing clients, friends, colleagues, etc. who might be younger and think they're hopeless because they don't meet firm minimums, etc. The fact is, if there's not much we can do to manage the assets right now, there are still small behavioral shifts that can be tweaked to get them set up for success. Think about building a foundation, a roadmap, a blueprint for your future financial picture will look like.


Far too often we see just the opposite. A prospect schedules a meeting, has ample assets but has done no planning. Throwing money into your 401(k), keeping cash stashed in the ashtray or under the mattress is not exactly giving you the kind of insight you need to know if you're on track, off track, or don't even know where the track is. If you can't see a target, how do you know how close you are? You don't!


A good sign is a trend we've been seeing as of late. More and more often we're seeing younger clients scheduling a meeting to be sure they're doing all the right activities, putting their money in all the right places, and have the protection in place to keep their family safe. These meetings are more like a strategy session and involve more conceptual planning and looking at the entire picture. It's this newest generation of early planners that will fair the best when it comes to retirement. Just a little bit of work upfront can go a long way.


Some of the points we touch on in the early phases of planning are:

  1. Budgeting

  2. Where and how to save

  3. Estate Plan

  4. Health Insurance

  5. Life Insurance Protection

  6. Risk tolerance

  7. Objectives

  8. Goals

  9. Time Horizon

Like anything else in life, the sooner you identify what you want and plan for it, the better off you are. The trend seems to be sooner and more frequent than the generation prior. The "Baby Boomers" tended to work hard, stay loyal and rely on a company pension and social security to fund most, if not all of their retirement.


So what about the other end of the spectrum? When we have prospects schedule a meeting and they're entering or already in retirement. Well, those can go well, but chances are, they're scheduling a meeting for a reason - and it's not usually good. Let's face it, asking for help when it comes to finances is typically causational; meaning, you ask for help at the last minute - when you absolutely need it!


By all means, asking for help, even later in life can help. We've been able to help clients with late-stage planning. There may be tax savings, income security, or asset management that make a world of difference for these folks. It could also be along the lines of asset protection, survivor benefits, or estate planning. We all work hard throughout our lifetime and you certainly don't want to goof things up when you've actually accumulated the money and "stuff" you've always dreamed of.





I get asked quite often from prospects or people not familiar with the firm; what do you have for sale? The answer is nothing. There are no product shelves filled with goods on the verge of going stale. No sales targets, gimmicks, or firm thresholds to meet. We are consultative and thrive only when clients remain clients; forever. In fact, we hope you're so thrilled with our services you never want to leave and hopefully brag about us to your friends and family. There are no commitments or penalties if you feel the need to sever your relationship with the firm. We are owners, care about our clients, and have no moves to make up the corporate ladder. The fact is, we're already at the top and fortunate to have loyal clients that continue to hire us throughout their lifetime.


So, schedule an initial consultation, fill out our new client application, and learn more about our process. I assure you there will be some takeaways regardless of where you are in life. We look forward to meeting you soon and wish you well until then.


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Leave it alone or grab the money and run

What to do with that old retirement plan

You may have just changed jobs and not sure what to do with the old retirement plan your employer offered you. There are a ton of people who forget to take control of these funds and leave them as they are. Is that the best decision for you? There are a ton of things you should be thinking about when making that choice. Keep in mind, doing nothing is actually a decision. It's the conscious choice to keep your money invested in the same way you set them up when you started putting money away. That could be six weeks, six months, or even six years ago. I bet a ton has changed in any of those scenarios. I have yet to find a plan that is perfectly crafted, has the right fund lineup or flexibility to make the most of your money. Even if the plan score is decent, who knows what the investment menu will look like in the next several years. The last thing you want is multiple sites to log into, forget about the account, ignore it and not play an active role in your investment choices. Is it easier to just leave it alone and do nothing? Heck yeah, but easier doesn't always mean better.


One thing a lot of people don't know is all the options they actually have when you change jobs, retire or reach an age when your plan allows for what is called an in-service rollover. Let's take a deeper dive into those options and what you should be considering when you evaluate so you can make the best choice for you. Below are the options laid out:

  • Do nothing

  • Roll funds into your new employer's 401(k)

  • Roll funds into an IRA

  • Cash-out


Keep in mind, making the wrong choice could potentially force you to work years longer than necessary to afford the retirement you've dreamed of.

The downfalls to avoid

You'll want to know what to watch out for if you ever want to get to your retirement goals.

If you truly want to retire as soon as you possibly can, there are a few obvious things to avoid. Investments that don't perform up to expectations, owning the wrong things, and nose-bleed fees. Skipping past those mistakes can help you grow your retirement bank quicker, with more efficiency, and result in a bigger balance when you're ready to start income.

  1. Investments that just don't make the cut - 401(k) and IRA investments fall into two fundamental types – active funds and index funds. Active funds are just that - active. They attempt to outperform a benchmark (e.g., S&P, Dow, etc.) by making active trades in the account to avoid a downturn or to capitalize on an upswing. Index funds will simply try to match an index. Now - there's no clear winner with those basic types of investments, but one that doesn't meet similar funds trying to do the same thing is considered an underperforming investment. Numerous studies have been done to compare the type of management and their performance. The results show most, but NOT all active funds fit the bill.

  2. Wrong things to own – Allocating your money into a diversified portfolio is a strategy that attempts to help with the balancing act. It's the balance between risk and rewards and it can be difficult to do consistently over a long period of time. It may be tempting to jump into the hottest stock sector or style, but having the right amount of balance is important. If you don't maintain discipline and control, you could miss out on gains or fall victim to unrecoverable losses if you're too aggressive.

  3. Fees, fees, fees – Retirement plans like your 401(k), 403(b), 457 and IRA providers charge you fees to administer your account. It's typical for the charges to be deducted on a quarterly or annual basis. Most of the IRA fees are very transparent, easy to find, and something that can be reviewed with your advisor directly. Employer-sponsored plans may be a little less straightforward retirement.


What to look for in Features you actually want These are the things you should focus on to lessen any pitfalls in your retirement plan:

  1. Gains – Although most actively managed funds can fit the bill, some studies show that a passive portfolio may outperform active funds after the fees are deducted. Keep in mind, all funds are NOT created equally and this isn't an idea that passive always better than active or visa-versa. Some of the lowest cost providers are the big names like Vanguard and Schwab which tend you have many good choices. They don't always score at the top of ranks so don't fall in love with any single fund family or manager.

  2. The help you deserve - To make sure you follow a plan, stay focused, remain disciplined, and don't fall victim to making decisions based on fear or greed; get help from an expert. You will want professional investment advice to help you navigate the investment landscape and make decisions with your hard-earned money. The right advisor will help you maintain an appropriate allocation, look for opportunities in various sectors or asset classes and give you peace of mind in uncertain times. Various Vanguard studies have shown an advisor can add an average of 3%+ a year in value by helping to avoid poor investment decisions.

  3. Low, low, fees – It's the admin fees that will lower your investment returns dollar-for-dollar. If there is a plan or platform your advisor can use to keep those admin fees low, the better off you'll be. Despite finding ways to get the most value on those fees, they are inescapable because the providers have costs to provide custody, reporting, technology, etc for your account.


And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

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Double-Digit Returns

Photo by Sammy Williams on Unsplash

Double-digit returns are great unless they're being paid out to someone other than your own account.  What do we mean here?  Had a look at your health insurance premiums lately?  Although we're mid-way through the year you can expect to receive the annual notice of the proposed premium rate change.  I've voiced concerns about the rising costs of healthcare for some time now and it doesn't appear to be slowing much at all.  When you're premiums for insurance are more than your mortgage, you know there's a problem.  

Supposedly inflation is non-existent right now even though the costs of goods and services are on the move.  Gas prices are one of the things we often keep an eye on and I've seen them go up around 30% in the past 4 months.  Yikes!  What about other areas in the economy where prices are going up - many in the double digits!  Energy, healthcare, college tuition, food, lumber, raw materials, and services are things we want to keep an eye on. 

How about these eye-popping health insurance premium increases:

  • 2016 - 7.1% 
  • 2017 - 16.6% 
  • 2018 - 13.9% 
  • 2019 - 8.6% 
  • 2020 - 6.8% 
  • 2021 - 1.8% 

*Source | More detail and article found --> Here

What can you do about your own health insurance and what are your options?  You'll definitely want to reach out to your HR department if your employer offers different types of coverage or an insurance broker to help guide you and give you all the insight that's specific to your situation.  If you don't have an insurance broker or don't know where to find one, consider Optima Benefits & Payroll.  

There are so many different types of insurance or alternatives that you might not know.  Things like HDHPs (High-deductible Health Plans) paired with a Health Savings Account or even cost-sharing plans.  I personally couple my HDHP plan with an HSA and it works extremely well for our needs.  Using this strategy, we're a healthy family with limited visits to the doctors other than routine visits and wellness checkups.  None of my family is on expensive medication or has pre-existing conditions that require regular screening or preventative measures so this is a very efficient way to get the coverage we need with flexibility.   

Health Savings Accounts (HSA's) offer a ton of benefits for the right families and individuals.  They offer a robust system to allow for tax-deductible contributions, tax-deferred growth, and tax-free distribution when used for covered items or services.  I've been able to help tons of people invest and grow their HSA's after they've made the decision that an HDHP is the right choice.  You can learn more about various insurance alternatives --> HERE

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Danger Ahead

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Danger ahead or does the party continue?  Despite political unrest, chaos in the streets, high unemployment, looming inflation, and concerns about a return to normalcy, the market has been kind to us.  That does assume that we have been invested the entire time and not made a knee-jerk reaction to the unprecedented events that unraveled in the past year.  Does that mean that all of us have done just that? No - of course not!  Recently, we have been meeting with potential clients who have allowed their nerves to get the better of them.  After losing around 30% in March/April, they sold investments and remained anxiously waiting in a cash position.  Looking back now does nothing good for those in the camp that the sky was falling.  With that said, how does that create a learning narrative and impact decisions moving forward?  A logical question you may be thinking about even if you were invested the entire time. 

Danger ahead?  Well, maybe - but what does that actually mean, and how does it impact your overall investment philosophy?  The reality is, nobody truly knows when the market will "correct" or go into bear market territory.  We are NOT "Perma-Bulls" by any means, but that doesn't mean that we would ever recommend going 100% to cash.  In our 25+ years of combined experience, we have yet to see that strategy pan out.  The market is fickle.  It has no feelings, doesn't know how to tell time, and doesn't care about year-to-date performance.  It can be your best friend and your worst enemy; many times over a short period of time.  At some point valuations will matter.  That's right, earnings, cash flow, balance sheet, and future sales potential will come into focus.  

Photo by Esteban Lopez on Unsplash

Attempts to be a hero and avoid market crashes can be a costly novice mistake.  Possibly the worst investment at this current point in time is cash.  So, does this mean that you should do nothing, remain invested the entire time, and become an innocent bystander as your account gets slaughtered?  In short, no!  Not at all.  Keep in mind the stock market has two ends of any trade.  There is always someone making money whether the market is going up or down.  Finding areas of the market that appear to be undervalued or provide potential upside is our job.  It's literally what we are paid to do each and every day.  

Is there anything you can do to protect your income or principal?  Of course, there is, but that comes with a number of follow-up questions and trade-offs with respect to capping your overall return or tying up your capital for a given period of time.  We have ways to hedge against loss, speculate in certain sectors, or even provide defined downside protection.  Yes, it's true - there are things you can do to help protect against loss.  That in itself is a lengthy discussion and can be done in many ways that are specific to each individual.  The point is that you can and should be taking action if it's imperative to meet your needs, goals, and comfort.  In many cases, active management and diversification will tackle those challenges and mitigate your willingness to make a foolish decision.   

Berkshire Hathaway Chairman and CEO Warren Buffett  GETTY IMAGES

What are the "experts" saying about the market right now?  We cannot ignore the insights from the Oracle of Omaha, Warren Buffet, and his often candid commentary on the market.  In the latest article citing Mr. Buffet, (FOUND HERE) his market indicator reveals that prices are expensive and a correction may be around the corner.  Like most of us, logic, rationality, and common sense don't always line up with market returns.  The market knows no time.  As the Oracle has mentioned in other articles, "...They are dancing in a room in which the clocks have no hands" (FOUND HERE).  

The quote is from 2000 and has relevance over 21 years later.  The question shouldn't be "if" the market is going to crash, but "when"?  It will happen and you will see your account value drop.  Market cycles are a natural thing that reigns in pricing that has run up a little too far ahead of itself.  If you've been investing in the past two decades you would have experienced full market cycles that bring down account values and create opportunities.  Stocks become a moving target that requires discipline, strategy, and nerves of steel.  We watch the markets tick by tick, hour by hour and it's something we don't recommend for the average investor.  The number of emotions that can run through your head during the course of a day can be astounding.  

Photo by Heidi Fin on Unsplash

Investing is a journey.  This is NOT a sprint and shouldn't be treated as such.  It's something we hope to be a part of and provide you guidance, knowledge, support, and disciplined strategies as we navigate through inefficiencies of the market.  We remain diligent and active in our approach to money management and believe this will aid you in the pursuit of your goals.  Although we are not market timers, don't employ leverage, or take on high-risk "bets", we do what we can to protect on the downside and seize opportunities when they present themselves.  If you are new to our firm or investing, the one thing we can guarantee is that the market will go up and down.  It's not a one-way street and that has to be embraced.  Long-time clients of ours know and understand this.  We communicate our strategies and rationale in the most difficult of times; the times when most money managers do not want to meet or discuss things.  

If you have money to put to work, a looming market correction should not impair your goals.  It might mean the type of investments selected are different when things of yesteryear are no longer relevant and change is around the corner.  We have a number of headwinds that will work to combat market appreciation and there will always be hints of a catalyst to move the market higher.  Remain focused on your goals and we will help work towards achieving those outcomes. Consider our firm as a true partner in your overall journey we call life. 


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Sell Your Stocks and Head for the Hills?

Photo by Joe Caione on Unsplash

"Sell in May and Go Away" was an old adage used to advise clients to sell their portfolios during this time.  There has been some historical evidence that in cases has proven beneficial, but that evidence has been conflicting; especially in the past decade.  If you had followed that advice and sold your portfolio boy would that have been a major mistake!  You see in eight of the past ten years the market has been positive and not by a marginal amount either.  The historical stats told a compelling story from the '50s until around 2013.  Is it by chance, is there evidence or is something else happening here?  People have claimed that most Hedge-Fund managers take off from May - October to enjoy some downtime from stress and take those typically warmer months to travel and lay low.  The one thing to note is access to trading platforms and how the markets have evolved.  We can all pretty much trade and react within minutes if not, seconds, of getting news about market movers.  That was all changed with smartphones and the apps that have leveled the playing field.          

With that logic, what might we expect for this period and what's happening right now?  We have discussed the rotation out of tech and into value for months now on our PennyWise Financial Podcast.  We continue to see this theme play out and it does not appear that the shift will end anytime soon.  European markets appear to be weak and the virus is still a major headwind for those economies.  We view the European markets and International to be behind the U.S. markets by about 6 months or more.  

Print baby, Print!  That has been happening for a while now and the government seems to be ramping up the distribution of funds with programs to help.  Everyone agrees on the need for programs to exist, but how and why they hand over greenbacks is something left for discussion.  Inflation should be one of the primary risks for investors right now.  It is also the primary risk to bondholders.  That's right, the people who wanted safety and didn't want to invest in the stock market could have some challenging times ahead.  

Some other factors to include in your portfolio allocation is the looming tax legislation proposals for a corporate tax hike, capital gains tax, and estate taxes.  Value stocks are trading at a lower multiple than the high-flying large tech companies which makes them much cheaper and more attractive.  Where are managers getting the cash to buy these value names?  In your portfolio!  They are looking to peel back some of the gains in the tech sector, lock in profits and look for the next big score.  

At the end of the day, we consider all these types of considerations to be valid, except the adage to rip all your money out of your investments to sit in cash.  Stocks and the stock market don't pay attention to calendars, year-to-date returns, or any other correlation we try to formulate to use as the rationale.  Earnings, market conditions, sentiment, employment, interest rates, GDP, legislation, and other factors are real metrics to use when analyzing your investments.  We don't follow the "Sell in May and Go Away" strategy as we view this as baseless and a matter of coincidence.  We're not believers and we don't think you should be either.

Are all credit cards Toxic?

Photo by Pablo Stanic on Unsplash

We've all been trained to think credit cards and carrying balances to be toxic to our financial health.  That would be true in most cases, but that doesn't mean you should close all your cards, cut them into pieces and never carry one in your wallet or purse.  First off, you shouldn't be afraid of them.  There are a ton of benefits that come along with credit cards and you should use them to your advantage.

We all shop online and credits provide all of us some insulation from all that can go wrong with spending money online.  The pandemic has only created a tailwind for online spending and that's also increased the number of data hacks and fraudulent websites trying to go after your hard-earned cash.  Using your debit card instead of a credit card means you immediately part ways the funds in your bank account.  Use a credit card and you're leveraging the credit card company's cash.  If there's a problem with the order, fraud, wrong item, or a delay - it's not on your dime.  How about a product that breaks right after the warranty period?  Well, that's happened to be at least a hand full of times.  If your credit card has an extended warranty program, you could be entitled to have the product fixed or replaced without any deductible or having to jump through hoops.  Some credit cards have decent rewards without an annual fee and that's great, but you shouldn't shy away from the cards that come along with an annual fee.  The reason being, some of the added benefits can far outway the cost of that annual fee.  Don't be shortsighted on this as it can make you whiff at getting the most bang for your buck. 

Points, Cashback, Miles, and such are a huge win if you make two very important choices.  First, pick a credit card that provides you the best benefits you're looking for.  There's no reason to choose an international airline if you mainly fly domestic etc.  This one is a must - spend responsibly.  It makes zero sense to buy things you don't really need, just to get the additional miles and such.  Those points and cashback are also redeemed tax-free.  With potential tax hikes around the corner, we can all use a little break wherever we can get one.  

Good credit is extremely important.  For those who say they'll pay cash for everything, there will come a time when you will need good credit; perhaps to buy a car, vacation home, or investment property.  Credit cards and having access to capital on credit cards will help your credit score.  Lavish spending and carrying balances on credit cards can have just the opposite effect; it will hurt you more than the outrageous interest you'll be paying on the balance.  Utilization of credit impacts your credit score quite a bit and it's important to keep the cards open as long as you can because longer credit history will also benefit your score.  

Promotional offers can be a decent option as a short-term "get out of jail free" card to use on debts carrying higher balances.  Where most get in trouble here is doing this without an actual plan.  A zero-interest offer for a year or two is tempting for anyone, but don't allow this benefit to turn on your and create more havoc than it should.  This is NOT recommended, but I did work with a client back in the mid-2000s that utilized the zero percent offers that carried no fee, and invested those funds into CDs (Not the ones we used to play in our car).   He was able to make minimum payments on the balances and collect the interest at the end of his CD term - at the time that was around 6 - 7%!!  Anyhow, using credit cards as a part of your overall plan can be a useful tool in building credit, protecting yourself in purchases, shell out some perks in the form of points, cashback, and such.  

Another Manic Monday

Photo by Ryan De Hamer on Unsplash

I hate to be the bearer of bad news to start the week, but this is not your average Monday for things that will leave you feeling a little less than comfortable.  For starters, the Peloton brand is finding itself in some hot water after another child is injured by its equipment.  Apparently like anything if used by a minor or unsupervised adult, injuries can happen.  Let's face it we've all witnessed adults using equipment wrong in the gym so just imagine how a child might want to play on this stuff.  At any rate, the stock is suffering from the latest news as it appears they have some things to change or possibly have better ways to alert their owners that this is equipment that can result in serious injury.  At any rate, continue using your equipment safely, and let's hope the fitness maker and others can prevent future injuries.  More info can be found HERE.

How about your car driving on autopilot or auto-assisted driving?  Do you feel comfortable riding along your commute to or from work with a computer getting you there?  Tesla has been ahead of the auto industry for some time now and they claim their assisted driving programming is safer than you behind the wheel.  The statics have shown it to be safer versus humans driving, but there lies some questions to be considered about the algorithm and ethics put into the programming when making split-second decisions on the road.  The latest news shows that the Tesla crash leaving two dead over the weekend was at the hands of the assisted driving feature in the car.  This too is leaving some damage on the stock and raising some eyebrows about what happened and how comfortable we should be allowing programming to take over the wheel. More info about the crash can be found HERE.

Another blurb about an internet hack that leaves us more than vulnerable surfing the online web - Facebook and another company called Ubiquiti have been hacked and your data is online for everyone to see.  Like other hacks, the best you can do is log in, change your password, enable 2-form authentication if the app or website allows it.  It also brings about more questions about how responsible these companies are with our private data.  I'm not sure about you, but I don't want everyone around to have access to my cell phone, etc.  Take a look for more information on the FACEBOOK BREACH as well as the UBIQUITY BREACH for more details.   

Giving back the American Way

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The pandemic has created challenges for a ton of business owners across the globe, but none quite like restaurant owners.  Monarch Wealth Management began initiatives early into the crisis in 2020 and made efforts to spend local and raise awareness to encourage local spending.  This caught fire and a ton of folks ordered food delivered to their home, take our and whatever they could to support these local business owners and help them fight for survival.  When I opened my email from American express and learned of this new program I couldn't help hold back!  What a great way to help give back and keep these places alive!  

We don't promote credit cards or offer them to our clients, but we do get questions about benefits, cashback, and point promotions all the time - and it's hard to deny that these offers are pretty sweet.  We're not just a cookie-cutter money manager or large investment firm flying on auto-pilot.  Our clients want advice and guidance on anything financial that can help.  Take advantage of these, put some money back in your wallet and help out a local business owner fight the good fight.    

??????? In an effort to keep the good vibes flowing this Good Friday I want to start a campaign that will run through the rest of 2021. Restaurant owners have been hit hard and I want to do what I can to help. Below are the details:

1. Read my #FinancialModelBlog post to learn more about the promotions going on right now through various corporations and how you can use those to support local places in your area right now.

2. Vote for your favorite restaurant by using Facebook, LinkedIn, or Twitter and tag Monarch Wealth Management, LLC and the #ROCHESTER #RESTAURANT of your choosing. All votes must be cast by the 15th monthly and I will announce each month's winner by the end of the month.

3. I will commit to visiting the winning restaurant once a week for an entire month. Each month a new restaurant will be chosen based on the votes and I will do this through the rest of the year.

4. I'll also tag a friend to match my efforts each month, post pictures, and tag the restaurant to promote our experience.

??????? This starts now - ready, set, go......

???? I also want to recognize the following organizations for helping with the additional cashback, rebates, and promotions they're running to get things moving.

Americanexpress | Delta Air Lines | Marriott Hotels | Hilton

Take a look at the details from the American Express Website or visit their site for more details. 

CLICK HERE to check out more details or look below for a brief summary of what they're doing!

New Consumer Dining Amex Offers Through 2021

Eligible U.S. Consumer Cobrand Card Memberscan enroll to earn up to $220 in statement credits at U.S. restaurants, whether they dine in or take out through December 31, 2021. Offers include:

  • Delta SkyMiles Amex Offers:
    • Up to $110 in dining statement credits: Delta SkyMiles® Gold American Express Card Members can receive $10 back per month (up to 11 times).
    • Up to $165 in dining statement credits: Delta SkyMiles® Platinum American Express Card Members can receive $15 back per month (up to 11 times).
    • Up to $220 in dining statement credits: Delta SkyMiles® Reserve American Express Card Members can receive $20 back per month (up to 11 times).
  • Hilton Honors “Score More on Dining” Amex Offers:
    • Up to $55 in dining statement credits: Hilton Honors American Express Card Members can receive $5 back per month (up to 11 times).
    • Up to $110 in dining statement credits: Hilton Honors American Express Surpass® Card Members can receive $10 back per month (up to 11 times).
    • Up to $220 in dining statement credits: Hilton Honors American Express Aspire Card Members can receive $20 back per month (up to 11 times).
  • Marriott Bonvoy Amex Offers:
    • Up to $110 in dining statement credits: Marriott Bonvoy American Express Card Members can receive $10 back per month (up to 11 times).
    • Up to $220 in dining statement credits: Marriott Bonvoy Brilliant American Express Card Members can receive $20 back per month (up to 11 times).

Taxes on the move

Photo by Kelly Sikkema on Unsplash

Things have been a little less than concrete since the pandemic and the IRS isn't much different when it comes to tax returns and reform.  What changes should you know about and discuss with your tax professional?  Below are a few things to consider...

1. Relax and enjoy Some Extra Time to File...well - Maybe

We have mentioned in previous blog posts that the deadline to file your return and make those payments has shifted to May 17th.  This was done to help us all as some Americans struggle more than others through the pandemic.  More than likely the IRS is behind schedule as well.  Great news for those of us who like to drag our feet and get things done.  Don't forget to check your state deadline versus the federal extension as they don't necessarily match.

2. More time for...

Let's not forget the people who like to delay filing or request an extension typically wait till the last minute to fund their IRA's and other tax-advantaged accounts.  More time to file means more time to save and that includes your contributions to IRA's, HSA's, and college savings plans.  

3. What about estimated tax payments?

The news about the extension is more time to file, get your tax documents in order, and carefully file for an accurate return.  The delayed filing deadline applies to those who pay estimated tax, but it does NOT delay the due date for estimated payments to be made.  

4. Understand the power of paying now versus later

You might be like a ton of us who hear tax savings today, reduce your tax bill now, and other ways of using tax deferral and tax deductions to help your situation.  Talk to your tax advisor and if your younger, have a long time horizon, the benefits of prepaying taxes now eliminate 100% of the tax down the road.  Of course, we're talking about Roth IRA or Roth 401(k) contributions. 

5. Knowledge is power

Talk to your tax person about any legislation changes, deadlines, or strategies.  If you don't have a trusted CPA or tax professional - get one!  Find someone you trust and can relate to.  Fee schedules vary quite a bit and the advice they give can be quite different as well.  There are a ton of variables to consider so like most consulting it is more of an art than a science.  If things were as simple as using a formula, everyone would use the same calculator and do what's best for their situation.


Securities Backed - huh?

Photo by Ben White on Unsplash

You want to add liquidity to your finances and you have a ton of options, but may not know or realize this could be one if you're working with the right firm.  There are a ton of reasons why someone may want or need to add some flexibility to their current situation.  Tax-time is here and for some that can pose short-term cashflow issues, they'll need to address.  You don't NEED to sell your investments or other assets to pay for short-term obligations to then further magnify a tax obligation. What are we talking about? A Securities-backed line of credit - also known as an SBLOC.  

First, you have to know what it is.  We have talked about it on our #PennyWiseFinancialPodcast in the past, but it's a line of credit that uses your investment portfolio as collateral.  That means you don't have to liquidate securities at an inopportune time, pay the tax, or worse, sell on a market dip.  You can then draw on that line of credit when and if you need to use the funds any way you want.  It will provide you with a ton of flexibility. 

Let's list some of the benefits to better understand the details of how they work.  The application process is streamlined because of our partnership with various lenders.  Again - you have to be working with the right firm and the advisors who know where and how to unlock access to these types of programs.  There is zero application fee, annual fee, or monthly fee for access to these programs.  You might wonder how fees are assessed to the account if there aren't any application fees or annual fees.  The account is charged interest based on the amount you borrow from the line.  So it's only the portion of the line you're using that will be charged anything.  Common uses are for taxes, tuition, real estate transactions, estate settlements, business investment, and other purchases. 

In a nutshell, this program can be another outlet for you so you don't have to submit to using emergency funds, credit cards, selling investments or other assets, or your home equity line of credit if you don't have to.  This is another tool that can make sense for clients that want an outlet to have access to capital they may need in a pinch.  If you have questions about how this works or if you want to learn more about this strategy, SCHEDULE A MEETING NOW!

Disclaimer: The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Basch Solutions to provide information on a topic that may be of interest. Basch Solutions is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Securities offered through LPL Financial, Member FINRA & SIPC. Investment advice offered through Private Advisor Group, a Registered Investment Advisor.

Private Advisor Group and Monarch Wealth Management are separate entities from LPL Financial. Access to BrokerCheck. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NY, FL, OH, TX, NC, SC, IL, AZ.