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What to Ask a Financial Advisor

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By Justin Pritchard, CFP®

Thinking of working with a financial advisor? Ask these questions to find out if you’re talking to the right person.

The questions below can get you started, and the explanations provide context answers from prospective advisors. Remember, if you don’t understand something, there’s nothing wrong with asking for clarification. Changing advisors is a pain, so it’s best to get all of the details right.

If somebody gets dodgy when you ask for more details, that probably tells you everything you need to know. But if an advisor is open and honest, making a genuine effort to help you understand what your relationship might look like, that’s a good sign. The same is true of those who clearly explain how much they earn from working with you.

Bonus: See retirement-specific questions you need to ask if your primary need is retirement planning, and see my answers at the bottom of this page.

Summary:

  1. Are you a “fiduciary” with all clients at all times?
  2. How do you earn money?
  3. How long have you been working directly with clients?
  4. How often will we meet to discuss my finances?
  5. Do you have a clean regulatory background?
  6. What kind of experience do you have with goals like mine?
  7. What education and certifications do you have?
  8. Can you help with needs besides just investment management? How does that work?
  9. What is your approach to investing and/or planning?
  10. For asset management clients, what is your typical client size?
  11. Will I work with you directly, or with a junior advisor?

“Trick” questions:

  1. How much will I make?
  2. What’s your investment performance like?

Are you a “fiduciary” with all clients at all times?

A fiduciary financial advisor is required by law to act in your best interests, minimize and disclose conflicts of interest, be transparent about costs, and otherwise do what’s right. But most “advisors” (including people who might call themselves financial planners, financial consultants, brokers, and more), are not fiduciaries.

You use the word fiduciary, but is that always the case? Some advisors are sometimes fiduciaries, and sometimes not. They might be able to act as salespeople—not acting in your best interest—while displaying the word “fiduciary” on marketing materials and in fuzzy conversations they have with you. To avoid problems, it’s prudent to work with somebody who is always a fiduciary. They cannot earn hidden commissions or win a vacation as part of a sales promotion. They can’t (legally) bait-and-switch with the promise of fiduciary services. Instead, they just give you the help you need and charge a fair price.

How do you earn money?

Ask financial advisors how they charge clients. You can pay for financial advice in a variety of ways. Perhaps the most dangerous way to do so is to work with somebody when you don’t know how they earn money or how much they’re charging you. When somebody says “there are no fees,” proceed with caution.

Woman raising hand, asking a financial advisor a questionCompensation models can fall into one of these categories:

Fee-only: Advisors charge a project-based fee, hourly fee, asset-management fee, or other flat fees to provide services. In this model, there are no commissions, so advisors don’t just select products that pay the best commissions. Fee-only planners can get paid whether you invest money or not—which means they’re more likely to give you unbiased advice.

Commission: When you buy something, a salesperson earns a commission. Whether or not you see that commission or know how much it is depends on numerous factors. The potential problem here is incentives: When somebody’s livelihood depends on you buying a product, there’s a good chance that they’ll promote that product heavily. That isn’t always done with malicious intent, and a salesperson may genuinely believe that they’re providing the best option available. But your universe of options is dramatically narrowed, and there’s a tendency to steer you toward commission-paying products that the salesperson has “in inventory.” 

Fee-based: A fee-based advisor can earn both fees and commissions. The term is often confused with fee-only, but they’re different. A fee-based financial planner might be a fiduciary at some times, and might be a broker at other times.

Biases can exist below the surface of an advisor’s awareness. After all, advisors need to make a living, and they may practice selective ignorance. Whether or not your advisor is a nice person, you pay the price.

How long have you been working directly with clients?

When it comes to your finances, experience may be important. To be sure, some new entrants into the industry have a fresh perspective and they’ve recently learned topics in-depth that could help with your plan. But my opinion is that it’s ideal for an advisor to have experience on their side.

As you ask about experience, be sure to drill down into client-facing experience with the topics you need help with. Somebody might have worked for an investment or other financial firm for a long time, but unless they were helping clients like you, their day-to-day work was probably different from what you need. That’s not to suggest that they’re clueless—and life experience is also important—but if somebody lacks experience, be sure they can make up for it somehow.

Scroll down for more questions, or watch an explanation by video.

How often will we meet to discuss my finances?

Find out what your experience as a client will look like. Do you need to proactively contact your advisor periodically, or do they reach out to you? Does the frequency of contact vary throughout your relationship, or is there a rigid system in place? 

One and done? Some advisors are eager to win your business, but they disappear after you transfer money to them. If that’s not what you want, listen for cues as you ask about the client experience. During your interview, ask what they’ve been doing during recent events, and ask if they’ll provide a copy of a generic communication (without any confidential client information).

How much is right? Consider how much contact you really want with your advisor. During the beginning of a relationship, especially when advisors help you with financial planning, there may be a lot of contact: Discussions about your goals, follow-up questions, conference calls to your service providers, and more. But what do you want after that? Do you want to sit in the same room with them every three months, or are you satisfied with a few phone calls or video discussions per year? Does the advisor send emails with tips and ideas throughout the year to help you manage your finances?

Do you have a clean regulatory background?

This is something that clients often fail to ask their advisors. In addition to asking, you should verify for yourself. To do so, run a web search with the advisor’s name, looking for headlines about criminal charges or behavior. Also, view regulatory reports that contain important information, which you can access at the SEC’s website.

If somebody has negative marks in their history, that’s a signal to use caution. Ask the advisor what happened, and decide if you’re comfortable with the answer. For severe violations (stealing money, etc.), it’s probably best to move on quickly.

What kind of experience do you have with goals like mine?

An advisor might be really smart, but if they don’t work in the universe you need help with, they might not be the right fit. Sure, they can figure anything out (and the same goes for you), but that takes time, and there’s a risk of missing details. If you want help with retirement, work with somebody who focuses on that topic.

What education and certifications do you have?

Again, smart people can figure out almost anything. But there’s something to be said for education and certifications that can help with your finances. Always look for an advisor who is a Certified Financial Planner (CFP®) professional. That designation, considered the “gold standard,” entails:

  • Several years of experience helping clients.
  • A set of required courses covering a broad range of financial topics.
  • A clean background
  • High ethical standards and practice guidelines
  • Ongoing continuing education requirements
  • A fiduciary requirement with 15 elements
  • A rigorous test (when I took it, was on paper over two days, and roughly 49% of people failed)

After passing that hurdle, it could make sense to look for additional certifications specific to your needs. For example, if you want somebody to evaluate the fundamentals of individual stocks for you, it may be helpful to work with a Chartered Financial Analyst.

Did you know: In many cases, the only requirement to be a financial advisor is to pass two short tests—and you only need to score 70% to pass? The tests primarily cover securities laws—not financial planning topics.

Is this legit? Be wary of designations that are designed to make you think an advisor is skilled and knowledgeable. Some advisors buy designations that sound lofty, but they’re awarded as soon as you pay for them (with minimal—or nonexistent—standards and requirements).

Can you help with needs besides investment management (financial planning, conference call with my credit union to get answers on issues, etc.)? How does that work?

Are you looking for holistic help? Some advisors almost exclusively manage money, which may leave you wanting.

While that may provide efficiency, it’s a pretty narrow offering. If you need more than just somebody to hand your accounts over to, make sure you can get what you need. Some advisors don’t have the knowledge or desire to talk about bigger picture topics, and some are not allowed to do so because their employers prohibit broader discussions. Ask financial advisors about the variety of topics they’ve helped clients with recently.

What is your approach to investing and/or planning?

Ask out what the “deliverables” will look like when working with an advisor. 

Investment-related questions:

  • Do they invest in individual stocks and bonds (specific companies, for example), or do they use mutual funds and ETFs to diversify?
  • Do they use active or passive investments?
  • How often will they trade in your accounts?
  • Do you pay fees every time they trade?
  • Where will your money be, and how can you view your accounts? (Never work with somebody that you write a check directly to. Instead, your funds should be at a reputable custodian like TD Ameritrade, Schwab, Fidelity, or other big names)
  • Can I set restrictions on the investments you use?
  • Do you offer socially-responsible investments or ESG in my accounts?

Financial planning related questions:

  • What information will you need from me?
  • How long does the process take?
  • What will I receive (is it a one-page summary, a 70-page volume, etc.)?
  • Will you provide investment advice as part of a planning engagement?
  • How much will this cost?
  • Do you offer one-time, ongoing, or other planning arrangements?
  • What happens when life changes and we need to make an update?
  • Which topics are included (taxes, cash flow, budgeting, estate planning, retirement, education funding, debt strategies, real estate, investments, insurance and risk management, etc.)?

For asset management clients, what is your typical client size?

If you hire an advisor to manage your investments, find out how your accounts compare to other clients. This isn’t the “bad” kind of comparison with others—it’s helpful to know where you stack up for the advisor’s time and attention. Plus, at certain asset levels, your finances get more complex, and you may want an advisor familiar with the challenges you face.

In some cases, the difference between a large and small client might not be as relevant as we think.

Will I work with you directly, or a junior advisor?

You may want to have a lifelong relationship with an advisor (assuming all goes well). But if you don’t meet the person you’re actually going to work with day-by-day, it’s hard to make a decision. Find out how the firm works and who you’ll have access to.

If you’ll work with a junior advisor, find out about their background, education, skills, and philosophy.

Trick Questions

You can also ask questions that have no real answer. But your (prospective) advisor’s style of responding can tell you a lot about who you’re working with.

How much will I make?

There’s no way to know what your investments will earn. It’s a reasonable question for clients to ask, but the only reasonable answer is “I don’t know,” or something similar. For many clients, the returns will be similar to what the market does—adjusted for your level of risk. Most clients don’t invest 100% in stocks, so your returns won’t match the markets perfectly. And sometimes, if you’re properly diversified you’ll be invested in areas that don’t do well. That’s an unfortunate reality for smart, long-term investors.

Be careful if an advisor suggests that they can deliver certain results, that they’ll “beat the market,” or that you can expect to outperform. You may be dealing with somebody who is overconfident or who is willing to say anything to get a new client.

What’s your performance history?

Again, it’s understandable when clients ask this, but advisors need to use great care when answering. Each client or investment model may be different. Plus, next year will be different from last year, so past performance is no indication of what you’ll actually earn in your accounts. Advisors might discuss an investment model that would fit with your profile, and we often look at long-term capital markets assumptions based on reasonable research. But pay attention to any (lack of) hedging language. Advisors should make it clear that things change constantly, and there’s no telling what you’ll earn.

A skilled advisor should help you shift the conversation to your needs and circumstances (or your “goals”). You can only control how you invest, and the markets will do their own thing.

My Answers

Photo of Montrose Financial Advisor Justin Pritchard, CFPYou’ve read a lot already, so we’ll keep this brief:

  1. Are you a “fiduciary” with all clients at all times? Yes, I only work with clients as a fiduciary.
  2. How do you earn money? I am a fee-only financial advisor.
  3. How long have you been working directly with clients? I’ve been working with individual clients (helping people plan and invest) for over 15 years.
  4. How often will we meet to discuss my finances? As with the explanation above, it depends. There’s a lot of work up front, and we typically talk several times per year, although each client is different.
  5. Do you have a clean regulatory background? Yes.
  6. What kind of experience do you have with goals like mine? I primarily work with people who are planning for retirement or in retirement. 401(k) plans are another area I spent a lot of time in.
  7. What education and certifications do you have? I am a Certified Financial Planner (CFP®) practitioner. I have an MBA and an MSIS, which help me understand the business world and work efficiently. I have completed other courses and programs, as well.
  8. Can you help with needs besides investment management (financial planning, conference call with my credit union to get answers on issues, etc.)? How does that work? Yes. For ongoing client relationships, I usually include that type of assistance. For one-time projects, I quote a price and tell you what we can do together. That often includes 3-way calls to a financial institution.
  9. What is your approach to investing and/or planning? This is a big question. To keep it brief, I help people project how the future might unfold, primarily related to retirement. Relationships are either one-time or ongoing. When I manage assets, I usually consider that an ongoing relationship. For investments, I use low-cost mutual funds and ETFs. They are primarily passively managed, but not exclusively.
  10. For asset management clients, what is your typical client size? Most clients have between $100,000 to several million, but there are certainly exceptions.
  11. Will I work with you directly, or with a junior advisor? You work directly with me.

If you’d like to learn more about working with me, let’s just talk—there’s no cost or obligation to chat. You can schedule a time that’s convenient, and then take your time deciding what (if anything) is next.

If that feels like a bigger step than you’re up for, start by getting more free information from me. You’ll learn a lot about retirement planning, and you get easy access to tips and videos over the coming weeks and months. If you decide you don’t care for it, it’s extremely easy to opt-out at the bottom of every message.

Wow, You Just Learned a Lot!

Hopefully this is helpful. If you need to find a different financial advisor, you can find fee-only financial advisors from several other sources:

  • XY Planning Network features fee-only planners with the CFP® designation.
  • NAPFA includes fee-only advisors only.
  • Garrett Planning Network includes advisors who work on an hourly basis.

Want to talk about this more? To get answers to your questions, start with a short, no-obligation phone or video call. You can share what’s going on in your world and describe your questions. Then, we’ll talk about how I typically help people. If it makes sense to work together (ultimately, that’s your choice), we explore the next steps. Learn more.

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Will Your Roth Get Taxed? #shorts
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What types of retirement plans can not-for-profit organizations use? Help employees save for retirement and provide an employee benefit by setting up an employer-sponsored retirement plan. Learn the pros and cons of each option.  This is a release of a 2019 video, but the main thing that has changed is the maximum dollar limits.  Nonprofits traditionally used 403b plans, for the most part. That's still an option, and may even be the best option for some organizations. But you may also benefit from using 401k plans or IRA-based plans (like a SIMPLE IRA) for your staff.  See the pros and cons of different types of retirement plans. We'll look at administrative fees, maximum contribution limits, matching and profit-sharing contributions, features like loans, and the ability to make after-tax Roth contributions to your retirement plan. There's also the issue of discrimination testing, which can be an issue for some employers.  403b plans have some unique features. Small, private nonprofits (not government, church, or school, for example) don't always get the most out of those plans, but we'll highlight a few of the most interesting strategies you can use with a 403b in the right circumstances.  With this information, hopefully you're on your way to choosing the right retirement plan for your nonprofit.  For more details, see: https://approachfp.com/nonprofit-retirement-plans/.  IMPORTANT: Verify all information with a CPA before you open any accounts or take any action. This information may be inaccurate or may not apply to your circumstances.  In many cases, nonprofits can use 403(b) plans, 401(k) plans, SIMPLE IRAs, payroll deduction IRAs, and more. Even defined benefit pension plans (as well as non-qualified deferred compensation plans) work for some organizations.
Retirement Plans For Nonprofits: 403(b), 401(k), or Something Else?
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See the 3 most important factors that affect your retirement. There are things you can control, and things you can't. The key is to improve your chances so you're in the best position possible at retirement.  We'll cover:
1) Retirement income, such as Social Security
2) Ideas on how much you can spend from your savings (or figuring out how much you need to save)
3) Healthcare costs in retirement  Get answers to questions like:
1) How can you get the most out of Social Security, and should you even include Social Security benefits in your retirement plan?
2) You’ve seen those huge, scary numbers for healthcare costs. How will that really work out for most people?  Note: Originally recorded sometime in 2020, but I thought it might be helpful to release to the public. The Social Security numbers have been updated for inflation since this recording, but the release date is appearing as 2021, which is understandably confusing. For the latest Social Security numbers, please see https://www.ssa.gov/news/press/factsheets/colafacts2021.pdf.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration. This video might contain errors or omissions, so please verify your plan with a financial professional.
When Can I Retire?
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Surprising details about using Roth money to fund your retirement.  As you plan for retirement, you need to decide if you want your retirement savings to be in pre-tax or after-tax (Roth) accounts.  Pre-tax savings make it easier to build up your retirement nest egg. Also known as deductible or traditional contributions, those savings can potentially reduce your taxable income. But you need to pay taxes eventually, and the traditional view has been that you might be in a lower tax bracket in retirement. Sometimes that’s true, and sometimes it’s not—and other factors may come into play.  Roth money can potentially provide tax-free income in retirement. But you don’t get a tax break when you contribute to Roth accounts, making it a bit more difficult to build up your savings. However, withdrawals in retirement can be beneficial. When you don’t have to pay income tax, you get to spend all of the money you withdraw. Plus, those withdrawals might not cause issues on your taxes that lead to other “hidden” or unexpected costs.  Taxable income in retirement can affect whether or not you pay taxes on your Social Security income. It can also affect your Medicare premiums and your ability to qualify for credits and deductions. Finally, we don’t know what types of means testing may arise in the future that could impact you in a variety of ways, so having a low income might be helpful.  All of that might point to Roth as a no-brainer. But it’s not so simple. Tax rates and rules could change, making a Roth strategy backfire. We can’t predict how things like consumption taxes, VAT, flat taxes, or other issues might affect the decision to use pre-tax or after-tax accounts. As a result, you need to make the best decision you can with the information available today (and your assumptions about the future).  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  Note that all of this depends on your ability to successfully satisfy IRS rules. For example, if you don’t qualify for a deduction or you don’t qualify for tax-free withdrawals, things get more complicated (and other issues are certainly possible). Be sure to review your strategy with a CPA or a tax expert who is familiar with all of your details before you make any decisions. This video is just high-level information, and it is not made with any knowledge of your circumstances. Plus, the video may contain errors and omissions, and things change over time.  Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
The Logic Behind Roth IRA and Roth 401(k)
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Hi, I’m Justin Pritchard, CFP®, and I provide fee-only financial planning and investment advice to clients nationwide (see disclosures).

I don’t know everything about everything, but I have been quoted in the New York Times, Consumer Reports, Wall Street Journal, and more. My 15 years of experience working directly with clients helps me offer customized advice to clients planning for retirement and saving for goals.

Right now, get two free guides for retirement planning—you’ll know more about retirement and investing, and that knowledge should help you make smart decisions.Cover of e-book on retirement planning shown in mobile device

What Makes Approach Financial Unique?

  • ✔️ Over 15 years of direct experience working with clients
  • ✔️ Focus on retirement planning and investment management
  • ✔️ Down-to-earth vibe (no suits)
  • ✔️ Privately-owned business
  • ✔️ No executives forcing me to push unnecessary products (“flavor of the month”)
  • ✔️ Don’t need to share half—or more—of revenue with a big company and charge you accordingly
  • ✔️ Skilled at working remotely while keeping your data secure
  • ✔️ Fee-only (no commissions allowed)
  • ✔️ Colorado-grown, and able to work with clients in most other states

 

Let’s talk about working together. I work with clients throughout the U.S.

  • 📞 970-765-0595
  • ✉️ Info@ApproachFP.com
  • 🗓️ Schedule a time

Explore your options:

Overview of pricing for one-time financial advice, retirement planning, or investment management

Who Does Approach Financial Work With?

You look like most (but not all) of my clients if you:

  1. Are planning for retirement or a transition
  2. Are in your 40s or older
  3. Have retirement savings of $100,000 to $5 million
  4. Are not struggling with debt
  5. Want help from a financial advisor, even though you’re probably smart enough to figure everything out yourself (there’s just not enough time, or you want professional guidance)

 

Not every client matches this profile, but most people do.

Approach Financial

Approach Financial
It can feel great to pay off your mortgage when you retire. And sometimes that becomes a possibility because you get access to the money in your (former) employer’s retirement plan. You’ll be free of the monthly payment, and you stop paying interest on your loan balance.  But there may be a catch (and there are solutions). If you’re going to use money from a pre-tax retirement account to pay off your home loan, things can get complicated. Taking a substantial withdrawal may cause you to pay taxes at high rates. Plus, you may make your Social Security income taxable,and you could pay higher costs for health coverage like Medicare.  See those issues in more detail in this video: https://youtu.be/Utzru1S2vAI  Now, let’s talk about solutions.  With some strategy, you can minimize the impact on your taxes and other financial matters. The trick is to pay off the loan in stages instead of all at once.  We’re assuming that paying off your mortgage at retirement is the right move. That might or might not be the case (my other video reviews some pros and cons), but we’ll assume that you’ve decided this is right for you.  We’re also assuming that the money is in pre-tax retirement accounts. If you have the funds available to pay off your home loan in taxable or Roth accounts, things are different. That doesn’t mean you should or should not move forward—it’s just that we’re looking at traditional IRA and pre-tax 401(k) money (or TSP, 403(b), and others).  Figure out how much you can withdraw each year to avoid unwanted costs, and take out as much as you want up to that limit. You should definitely review your strategy with your tax preparer and other financial professionals before you decide on anything, as they may be able to spot things or share insight based on their knowledge of your tax return and your bigger-picture finances.  Remember that there are infinite ways to approach this, and this is only one way of looking at the issues. There may be other (better) solutions out there, and you need to evaluate if aggressively paying off the mortgage early makes sense. Hopefully, this gives you food for thought and helps start the conversation with your professional advisors.  Chapters:
0:00 Intro, and How to See Pros and Cons
0:48 2 Critical Assumptions: It's the right move, and it's pre-tax money
1:24 Your Plan, Light at the End of the Tunnel
1:38 Overview: Slower Withdrawals Over a Few Years
2:17 Avoid a High Federal Income Tax Bracket
3:33 Avoid Income Tax on Social Security Benefits
4:37 Avoid Higher Medicare Premiums (IRMAA)
5:44 Under Age 65? Note ACA Subsidy Levels
6:31 Evaluate the Costs, Pros, and Cons  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  Get free retirement planning resources: https://approachfp.com/2-downloads/
🔑 9 Keys to Retirement Planning
🐢 6 Safest Investments  Learn about working with me at https://approachfp.com/  Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.  IMPORTANT:
It's impossible to cover every detail and topic in a video like this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a restult, you need to speak with your own tax, legal, and financial professional who is familiar with your details. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
A SMART Way to Pay off the Mortgage With Retirement Savings
YouTube Video UCFFNzgGX4UyGQk12KL38I1Q_xWt7QGw9toI
A Roth IRA can provide tax-free income in retirement when you follow IRS rules. But sometimes you need to take early withdrawals, and a Roth can be a flexible account. Even if you’re at retirement age, the tax rules can be complicated, so we’ll review how things work in this video.  Whether or not you get a tax-free withdrawal from your Roth depends on several factors. The type of money you take, how long you’ve had your account, and your age are all important.  You can typically take back your regular contributions at any time with no taxes and penalties. Those are your standard annual Roth IRA contributions of several thousand dollars per year. Then, you may have earnings in your account (you could also have losses, which change things), and it’s possible that you’ll owe income tax and penalties on the earnings portion of your withdrawal.  Roth conversions are not regular contributions, and they’re treated separately. It’s possible to owe the IRS money when you withdraw conversions, especially if you’re under age 59.5. Plus, each conversion has its own 5-year rule, which might delay the availability of tax-free access.  And what about your Roth 401(k) or Roth 403(b) accounts? Most people roll those funds over to a Roth IRA, but that’s not always the right move. Evaluate the pros and cons, and if you decide that a Roth IRA is the right place for that money, consider opening and funding a Roth (if you don’t already have one) to start the 5-year clock for that account.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  A few resources to help you research this topic. It’s critical that you triple-check everything.
Basics of Roth IRA distributions: https://www.irs.gov/publications/p590b#en_US_2020_publink1000231061
Interactive tool to help you determine if a distribution is taxable: https://www.irs.gov/help/ita/is-the-distribution-from-my-roth-account-taxable
Explainer on Roth IRA withdrawals: https://www.schwab.com/ira/roth-ira/withdrawal-rules
Roth 403(b), 401(k), and 457 (also known as Designated Roth Accounts): https://www.irs.gov/retirement-plans/designated-roth-accounts  Note: It's impossible to cover every detail and topic in a video like this. You need more information, so please consult with a professional who is familiar with your circumstances. This is general information and entertainment, not specific advice.  Always consult with a CPA before making decisions or filing a return. Verify with your plan administrator and a financial professional who is familiar with your individual circumstances. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration. Justin Pritchard, CFP® is a fee-only fiduciary advisor.
Roth IRA: Early Withdrawals & Tax-Free Income
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Three seemingly little questions can have a surprisingly big impact on your retirement happiness. These are non-financial items (at least they’re not directly related to your retirement accounts). But simply thinking about these things helps improve your chances of living a satisfying, comfortable, and rewarding retirement.  By envisioning your retirement years, you can be sure to address some of the most important things: Your day-to-day satisfaction and autonomy, your housing situation, and your connection to loved ones. That’s all crucial to enjoying yourself and maintaining your health after you stop working.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  This is from research done by MIT’s Agelab and Hartford. Approach Financial is not affiliated with either of those organizations, but Hartford makes the research available to financial advisors like me.  It's impossible to cover every detail and topic in a video like this. You need more information, so please consult with a professional who is familiar with your circumstances. This is general information and entertainment, not specific advice.  Always consult with a CPA before making decisions or filing a return. Verify with your plan administrator and a financial professional who is familiar with your individual circumstances. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration. Justin Pritchard, CFP® is a fee-only fiduciary advisor.  #shorts
3 Retirement Questions (Non-Financial) #shorts
YouTube Video UCFFNzgGX4UyGQk12KL38I1Q_DOJIHUbT60w
See what you need to know when you leave your job and you’re thinking of moving money to an IRA.  You may have the opportunity to roll funds from your 401(k) plan to an IRA that you control. There are several advantages to doing so (like potentially lower fees, more investment choices, and better control over distributions and beneficiaries).  But there may also be disadvantages to making the move. For example, if you leave your job after age 55 or you plan to do Roth conversions, it could make sense to leave your money in your former employer’s 401(k)—at least temporarily.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  We cover some of the pros and cons of a 401k to IRA rollover here. While there may be other aspects to consider, you’ll learn about some of the biggies, and you’ll be off to a decent start.  Remember that you don’t need to roll the money over immediately. If it makes sense to wait and do it later, that’s often an option. Just verify with your former employer to see what’s available to you.  Read about this topic and download sign up for free downloads and retirement planning resources here: https://approachfp.com/how-and-why-to-transfer-your-401k-to-an-ira/  Be sure to research issues on creditor protection. This might be a good start in your journey as it relates to IRAs: https://www.irahelp.com/slottreport/your-ira-protected-creditors-you-may-be-surprised  Always check with a CPA before making decisions or filing a return. Verify with your plan administrator and a financial professional who is familiar with your individual circumstances. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.  By Justin Pritchard, CFP®.
401k to IRA: Pros and Cons, How to Do It
YouTube Video UCFFNzgGX4UyGQk12KL38I1Q_wRc2EW1aqCg
Your vested balance is the amount of your retirement account that you actually own. But can you take that money out right now and spend it? It depends.  Vesting is a strategy that encourages employees to stay with their jobs, and it can also be a cost-saving measure for employers that offer retirement plans.  Your vested account balance is the amount you can take with you when you leave your job. The funds might also be available for 401(k) loans or hardship withdrawals. Once you’re vested, the employer generally can’t take that money back.  Any money you contribute from your pay (or any rollovers into your retirement plan) are typically 100% vested immediately. But employer contributions, like 401(k) matching dollars, might have a vesting schedule. An exception would be certain safe harbor 401k contributions that vest immediately.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  There are several different vesting schedules, including a 6-year graded schedule, cliff vesting, and other approaches. It’s important to know what vested means with your particular plan so you can decide what to do about your job. If you’re only 40% vested, does it make sense to stay longer and boost your vested account balance?  Unlike 401k vesting, IRA-based plans don’t use vesting schedules. If you have a SEP or a SIMPLE plan, you generally have access to take that money out whenever you want. However, doing so reduces your retirement savings, and there may be tax consequences.  Find out exactly how your 401k vested balance works before making any decisions. This is a general overview, but every plan is different. Plus, this information may contain errors and omissions, so it’s critical that you double-check everything. Check with a CPA to learn about the tax impact of taking money from a retirement account—you don’t want any unpleasant surprises.  Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.
Vesting: How Your 401k Vested Balance Works
YouTube Video UCFFNzgGX4UyGQk12KL38I1Q_KWffAznGNZA
Roth IRA savers often wonder if lawmakers will change the rules. A Roth 401(k) or IRA can ideally provide tax-free income in retirement. But what if tax laws change 😨?  That would be unfortunate for those who made after-tax contributions and completed Roth contributions expecting to reap the benefits in retirement.  We clearly can’t predict the future. But it’s interesting to see how much revenue might be available if lawmakers wanted to tax the earnings in Roth accounts.  The good news for Roth investors is that it doesn’t look like there’s a significant payoff for changing tax laws. But things could still change, and extra revenue is more than no revenue at all, so anything is possible.  This excellent research comes from JP Morgan, and the retirement team, in particular, cobbled together information from a variety of sources. The latest data is not as of yesterday, but the proportions are probably more important than the specific numbers, and new information will come out eventually.  🌞 Subscribe to this channel (it's free): https://www.youtube.com/channel/UCFFNzgGX4UyGQk12KL38I1Q?sub_confirmation=1  Please discuss your situation with a financial professional who is familiar with your details before you make any decisions. I’m not saying things will go one way or the other—I have no clue what will happen. This information may contain errors and omissions, and things change, so please don’t rely on this for important decisions.  Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.  #shorts
Will Your Roth Get Taxed? #shorts
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Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.

Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Approach Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.

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