Being Smart with $$ -- Roth or Traditonal IRA?

It’s tax day for most of the country. It’s the last chance to contribute to your IRA for 2018.  But should you choose a Roth IRA, where you don’t get a tax deduction for last year but all money grows tax free, or should you choose a Traditional IRA where you get a tax deduction now but all the money in the account will be taxable later when you withdraw it for retirement?  There are some different considerations but in simple math terms, it all depends on whether your tax rate will be higher or lower in retirement.  If your tax rate will decline, you may want to choose the Traditional IRA and get the deduction now.  If your tax rate might be higher in retirement, then you may choose to pay the taxes today and contribute to the Roth IRA.  But contrary to what people often tell me they believe, if your tax rate will be the same, then you come out equal.  It does not matter how long you own the assets.  If you assume the same investment in each account with the same returns, and assume that you can put the full pre-tax amount into the Traditional IRA but only the after-tax amount into the Roth IRA (because that’s all the cash you have left after paying taxes), then only the tax rate can cause a different result.  But hurry.  You’re almost out of time.

Larry Pike, CFA

Client Priority Financial Advisors LLC
www.clientpriority.com 

Being Smart with $$ - Firing Your Financial Adviser

When you fire your financial adviser, do you expect to be treated with respect and gratitude considering you likely paid him/her tens of thousands of dollars in fees over the last few years?  You may be surprised by the childish reaction you receive.  I have had multiple clients decide to work with me once they came to appreciate my hourly advice model where they are never sold a commission-based investment and they will not pay higher and higher automatic, annual adviser fees.  On multiple occasions when clients let their former adviser know they are moving to my client-friendly model, the adviser tells them to go…well, I can’t say it in polite company.   In some cases, these former advisers were considered good friends.  But if this is their reaction, are they really your friend or do they just like the $5,000 to $50,000 they take out of your account every year?  If you are paying thousands of dollars to have your account managed by a friend, but don’t think you are getting anything but average results, you may ask yourself whether you are maintaining this relationship just because you were classmates in high school.  But then ask yourself, how many other friends do you write a check to each year for $5,000 or more and since the answer is 0, you may consider that it’s time to move your account to a model that favors you rather than your adviser.  Then you will find out if this friend just sees you as an ATM machine.  And I promise you that if you fire me in the future, I will still want to be your friend.

Larry Pike, CFA

Client Priority Financial Advisors LLC
www.clientpriority.com 

Being Smart with $$ -- Hourly Advisers Can Help You Manage Your Own $$

Most people manage their own money according to CNBC/Acorns/SurveyMonkey with no help from a professional or online tools.  I understand the hesitance when many advisers want to take $5,000 from your half million dollar portfolio every year or sell you some suspect financial product.  But what if you could self manage your portfolio but still get advice?  That’s one of the great benefits of working with an hourly adviser.  Many of my clients love maintaining control over their money but having someone who can answer their questions and keep them out of trouble.  Most people realize the benefits of getting financial advice from a professional are greater than they expected but that doesn’t mean they want to be “sold” something or pay exorbitant fees.

https://www.cnbc.com/2019/04/01/when-it-comes-to-their-financial-future-most-americans-are-winging-it.html

Larry Pike, CFA

Client Priority Financial Advisors LLC
www.clientpriority.com
Blog: clientpriority.blogspot.com