By Brian Macmillan Managing Director Mergers and Acquisitions When developing a succession plan for your business, you must make many decisions. Should you sell your business or give it away? Should you structure your plan to go into effect during… Read More
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Live Long and Prosper
By: Joseph Manfredi, MBA | Chief Operating Officer / Senior Portfolio Manager Living longer is a goal for many people, but living well as you age should be equally important. After all, what is the point of living until you are 100 if you cannot enjoy those… Read More
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Annuities: Guaranteed Return? Take a Closer Look!
By: Thad Ismart, CFP® | Senior Financial Planner Planning for retirement can be stressful, especially when you see huge swings in the value of your retirement and investment accounts. It is during these times of volatility that investors are often presented with investment opportunities that may seem too… Read More
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Millennials and Estate Planning: How to Get Started
By: Robert G. Carpenter President & CEO Millennials stand to inherit about $41 trillion from their baby boomer parents over the next four decades, representing the single largest intergenerational wealth transfer in the history of the US. Many parents wonder whether… Read More
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Long-Term Care Expenses in Retirement
Thad Ismart, CFP® Senior Financial Planner More than 70% of people over the age of 65 will need some sort of long-term care during their lifetime. In addition, there is a 40% chance that you will enter a long-term care facility if you reach the age… Read More
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Unanswered Retirement Questions? BWFA Can Help
Baby boomers are retiring—or being forced to retire—at alarming rates. And this unprecedented rate of workers leaving their jobs is redefining what we mean by the word “retirement.” Many of these aging boomers aren’t quite prepared to handle the options that… Read More
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Long-Term Care Options
As the American population grows older, the need for long-term care continues to increase. The Department of Health and Human Services has estimated that 70 percent of people 65 and older will need some form of long-term care services during their lifetimes…. Read More
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Who Will Buy Your Business?
By: Brian MacMilllan | Managing Director Mergers & Aquisitions Selling a privately held business is complicated. If you are a business owner, understanding the options available to you when selling your business can make a huge difference both in how much you receive from the… Read More
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Bundling Services: The Best Way To Maximize Value From Financial Professionals
By: Benjamin Dorsey,CPA, CFP®, CDFA™, MST | Director of Tax Services Professional financial advisors work with clients on investment, planning, and/or tax strategies. Unfortunately, when financial advisors of different disciplines are not in sync and/or not working with the entire set of goals and information,… Read More
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Start With ‘Doing’ Rather Than ‘Having’ In Retirement Planning
By: Thad Ismart, CFP ® | SeniorFinancial Planner & Jim Edwards, CFP ® | Financial Advisor & Portfolio Manager The idea of “retirement” is changing drastically from what it used to be. Traditional financial planning typically begins with an emphasis on how much pre-retirees need to save… Read More
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IRS Creates “Mega-Sale” on Employer Retirement Plan Taxes
By: Mark Stinson, CPA , CFP ®, MBA | Director of Planning I am putting all my money in taxes—the only thing sure to go up. – Henny Youngman The IRS has proved Henny Youngman wrong—at least in one case. If… Read More
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Planning for Digital Assets
By: Thad Ismart, CFP ® | Financial Planner Many of us do much of our communicating and shopping online. Our email and social media accounts, along with many of the things that we purchase—songs, books, movies—exist only in electronic form, often… Read More
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Being Prepared: The Best Kept Secret To Low-Stress Tax Return Filing
By: Benjamin Dorsey,CPA, CFP®, CDFA™, MST | Director of Tax Services “In this world nothing can be said to be certain, except death and taxes” — famous words from Benjamin Franklin that have stood the test of time (and likely… Read More
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Selling an SBA 8(A) Government Contractor
By: Brian MacMilllan | Managing Director Mergers & Aquisitions While the Small Business Administration 8(a) Program can provide business owners with numerous benefits, selling an 8(a) contractor can be difficult. However, the notion that an 8(a) contractor cannot be sold… Read More
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Planning for Required Minimum Distributions
BWFA Tax Manager Joe Hill was recently featured in the November issue of The Business Monthly magazine, discussing how to plan for a required minimum distribution (RMD). Follow this link to read the article: Planning for a Required Minimum Distribution
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Planning for RMDs
By: Joseph Hill, Jr., CPA, MBA, MSF | Tax Manager After investors reach age 70 ½, “the tax man cometh.” That’s when the IRS requires mandatory withdrawals from traditional Individual Retirement Accounts (IRAs), employer-sponsored retirement plans such as 401(k)s, 403(b)s,… Read More
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Growing Your Business Through Acquisitions
By: Brian MacMillan | Managing Director Mergers & Acquisitions There are two main ways to grow a business: organically (increasing your customer base, obtaining new contracts, growing current client relationships, etc.) and through acquisitions. Growing a business organically is commonplace… Read More
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Am I Ready to Retire?
By: Saxon Birdsong | Founder I retired 25 months ago. Every day since then has been wonderful, and it just keeps getting better. I haven’t missed working for even a minute. I find this puzzling, because my friends and family—and… Read More
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Financial Planning for Business Owners
For many business owners, their personal life and business life are practically inseparable. That is why it’s important to integrate all the aspects of owning a business in developing a personal financial plan. To deliver the combined expertise that a… Read More
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Variable Annuities: A Closer Look
At some point, you have probably heard a broker or an insurance agent ask that question to you: “How would you like to invest in the stock market, protect yourself from a market downturn, have a guaranteed annual return,… Read More
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The Family Summit
Though one of America’s wealthiest men, Joseph Kennedy often lectured his family about their extravagance. One evening at dinner, having received a new batch of bills, the senior Kennedy unleashed a barrage of criticism, causing Ethel (Bobby Kennedy’s wife) to flee from… Read More
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Taking the Long View on Long-Term Care Insurance
When the famous Dutch physician and chemist Hermann Boerhaave died in 1738, he left behind a sealed book entitled The Onliest and Deepest Secrets of the Medical Art. The book was auctioned for a vast quantity of gold. When the… Read More
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Interest-ing: What Is Going on with Lending?
Bonds, and more particularly the curious subjectivity involved in pricing them, are at the heart of Bloomberg’s business. Many factors affect a bond’s value, including the interest rates it offers, the time to maturity, and the going rate for government… Read More
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On Target? Do You Know What Your Target-Date Fund is Doing?
During a guest appearance on “Live with Regis and Kelly,” pro skateboarder Shaun White attempted to jump (“ollie”) over Kelly Ripa using his board. Regis was quick to point out that White risked accidentally hitting and injuring his lovely co-host…. Read More
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Retirement Annuities
While attending a physics symposium in Las Vegas, Albert Einstein, to the astonishment of many of his sober-minded colleagues, spent a fair amount of time at the craps and roulette tables. “Einstein is gambling as if there were no tomorrow,”… Read More
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The Real Estate Elephant
New York Mayor David Dinkins was once urged by his advisors to buy some property in Manhattan. Despite claims that the proposed deal presented an “extraordinary opportunity” for the city, Dinkins declined. “If they’re selling elephants two for a quarter,… Read More
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Beneficiary Designations Are Just One of Many Planning Complexities
Four of Douglas Fairbanks, Sr.’s best friends were told they would be remembered in his will, so they were surprised when the document did not mention them. Sixty days after his father’s death, Douglas Fairbanks, Jr. produced an envelope containing… Read More
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The State of Estate Taxes
Legend has it that the following exchange took place between F. Scott Fitzgerald and Ernest Hemingway: Fitzgerald: The rich are different than you and me. Hemingway: Yes, they have more money. Maryland Estate and Inheritance Taxes Hemingway probably… Read More
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Big Money Mistakes
Actor Jack Lemmon once found Rita Hayworth working her way through a large pile of letters by tearing them up-unopened! “Stop!” he cried, mortified. “There may be checks in there.” “Oh there are,” Hayworth nonchalantly replied. “But there are also… Read More
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Pensions, Loans and Trusts in a Low-Interest-Rate Environment
Before becoming a comedian, Jeffrey Jena worked as a grade-school teacher. “Children are stupid,” he says. “That’s why they’re in school. I’d lecture for an hour about percentages and interest rates, and at the end I’d ask one simple question:… Read More
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Protecting Your IRA from Creditors or Lawsuits
Though born the son of slaves and reared by his master, George Washington Carver earned a degree in agriculture in 1896 and worked for the Bureau of Plant Industry at the U.S. Department of Agriculture, specializing in the industrial uses… Read More
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Retire Now?
What did the late King Prajadhipok, the last absolute ruler of Siam (now Thailand), do to prepare himself financially for life after his anticipated overthrow in the early 1930s? He took out unemployment insurance with French and British insurance companies…. Read More
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The Taxman Cometh?
“Anyone who says businessmen only deal in facts, not fiction, has never read old five-year projections.” ~ Malcolm Forbes, Forbes Magazine The financial plans created by BWFA project our clients’ income and expenses many years into the future. Unfortunately, sometimes… Read More
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Should I Convert to a Roth IRA?
In January 2002, the Coen brothers made their first foray into Super Bowl advertising by directing a commercial for H&R Block. Why did they do it? “We have always been fascinated with the mysteries of the tax code,” the brothers… Read More
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Show Me the Fees
Igor Stravinsky was once ordered by an airport official to pay a surcharge for excess weight. When the composer vociferously expressed his annoyance, the official endeavored to explain the charge. “I quite understand the logic of it,” Stravinsky interrupted. “What… Read More
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We Want to Hear from You … in the Good Times and the Bad Times
Often we hear from clients when they receive good news such as inheriting money, getting a large bonus or earning a major job promotion. However, we also want to hear from clients when the news is not so good, such… Read More
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How Safe Is Your Pension?
We are well aware of how declining stock prices affect our investment portfolios. However, little attention has been paid to how the recession is affecting pension plans, even though most pensions hold risky investments, such as stocks and real estate,… Read More
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What You Should Expect From Your Advisor
Disappointment occurs when you expect one thing and get something else. Disappointment in the service we receive from businesses occurs all too frequently these days. So, what should you expect from your financial advisor? Here are the basics: Your advisor… Read More
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Retirement Planning in Turbulent Times
On June 9, 1978, Bob Specas attempted to topple 100,000 dominoes at New York’s Manhattan Center. Unfortunately, his effort to break the world record was thwarted during the preparations when a television cameraman dropped his press badge—and set off 97,500… Read More
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Heir Raising: Understanding Trusts
Following on my last newsletter column, I will continue to look at how BWFA can help you implement the goals of your estate plan. For some clients, trusts are an important part of handling their assets today and cost-effectively transferring them… Read More
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Heir Raising Ideas
“I don’t want to achieve immortality through my work…I want to achieve it through not dying.” ~ Woody Allen The first member of the baby boomer generation (1946-1964) is turning 62 this year and becoming eligible for Social Security. Our… Read More
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Life Expectancies and Portfolio Risk
“Work as if you were to live a hundred years. Pray as if you were to die tomorrow.” ~ Benjamin Franklin Leonardo Da Vinci’s life expectancy was 30 years when he was born in 1452. When my Grandma Branan was… Read More
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When Planning Your Legacy, Don’t Tip the IRS
You must pay taxes. But there’s no law that says you gotta leave a tip. ~Morgan Stanley advertisement Nobody wants to leave the IRS a tip, but without proper planning, we often do that when our retirement ends (when we… Read More
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Let It Roll, Baby, Roll
“The large print giveth, but the small print taketh away.” —Tom Waits, singer and songwriter We have always advised clients that they should roll over their employer-sponsored retirement plan, such as a 401(k) or 403(b), to an IRA when they… Read More
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Retirement: What’s In It for You?
Clients come to Baltimore-Washington Financial Advisors with many questions about their retirement. Often, these are financial — How much money will I need in retirement? How do I draw down my savings for living expenses? But we have found that… Read More
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The Roth 401(k)—Is it Right For You?
Many employers will begin adding a Roth 401(k) option to their retirement plans over the next few years. If your employer is among them, you will have to make a decision whether to contribute to the traditional 401(k) or the… Read More
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Any Final Requests?
In 1960, shortly before his execution by firing squad, the convicted murderer, James Rodgers, was asked whether he had any final requests. “Why yes,” he replied. “I’d like a bulletproof vest.” Unlike James Rodgers, most of us can have our… Read More
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Routine Checkups — Beneficial to Your Bottom Line
Ron Johnson is a physical therapist who loves to play basketball. During a routine medical checkup he “flunked” his stress test. It turned out that Ron had heart disease and needed quadruple bypass surgery. Fortunately, Ron’s heart disease was found… Read More
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Finding a Financial Advisor
If you are considering getting professional help with your investments, you are NOT alone. Although the media constantly suggests that the average investor can and should “do it yourself,” the fact is most people want assistance. They are too busy… Read More
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New-Fangled Mortgages—Borrower Beware!
Our financial lives automatically become more complex. Even something as simple as selecting a mortgage has become a complicated undertaking fraught with danger. As in many other financial transactions, the interests of the lenders and brokers are not always in… Read More
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Lessons from a Long Life
When Dr. Milo Tedstrom arrived in California in 1928 he had a wife, a doctor’s bag, and all his possessions in a Ford Model A. When Dr. Tedstrom retired in 1977, at age 76, he had an estate worth 3… Read More
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BWFA Offers Enhanced Estate Planning Service
This fall, Hurricane Katrina slammed into Mississippi and Louisiana and forever changed many lives. It reminded us all of the uncertainties that we live with every day. In the wake of Katrina we were all frustrated with the delays, confusion,… Read More
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Contracts, Fees and Refunds — Oh My! — Continuing Care Retirement Communities
Mr. and Mrs. Client are very excited; they have found a cottage in a retirement community and everything seems perfect! The only things standing between them and their dream retirement home are contracts, fees and refunds. Oh my! They’ve been… Read More
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Will Privatizing Social Security Impact Your Retirement?
As I write this, the proposal to “privatize” Social Security changes daily. With all the press this issue is receiving, many of you may be concerned about how it could affect you, now and in the future. Background On February… Read More
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Fees Take Toll on Employer Sponsored Retirement Plans
A common mistake people make is to leave their retirement plans (401(k), 403(b), 457, etc.) with their previous employer. When they do this, they incur costs which they can avoid by moving the funds to a Rollover IRA. There are… Read More
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Which Financial Plan is Right for You?
Wouldn�t it be great to have a written financial plan so that no matter what happens in the market or the economy, you still feel confident that you are going to be ok? At BWFA, we have found that where… Read More
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Is Long-Term Care Insurance Worth the Price?
Anyone who has ever looked into long term care (LTC) insurance knows it is not cheap. Depending on your age and the policy you choose, this coverage can cost thousands of dollars per year. If you are retiring and want… Read More
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Are Death Taxes Still an Issue?
There have been well-publicized changes in the federal estate tax system, beginning with the new law that took effect July 1, 2001. The $600,000 federal exemption has been gradually increased to $1.5 million beginning January 1, 2004. However, much less… Read More
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What is a Financial Plan? Part 1: The Client Profile
The Franklins Larry (age 60) and Jill (age 58) Franklin live in Ellicott City, Maryland and have two adult children, Joe (age 31) and Liz (age 33), who live, respectively, in Miami and Naples, Florida. Larry has worked for PFC… Read More
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What Is a Financial Plan? Part II — Retirement and Estate Planning
After preparing a highly detailed analysis of the Franklins� current financial position and their future income, expenses, taxes, and asset values, we were able to provide them with the following recommendations about their upcoming retirement and future estate. Larry and… Read More
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What Is a Financial Plan? Part III — Investments
After careful review of the Franklins� situation, we provided specific recommendations to them in the area of investments. Our investment recommendations are intended to help them manage their money in an intelligent manner that reflects their needs and special circumstances,… Read More
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What Is a Financial Plan? Part IV — Taxes
The table below demonstrates the dramatic changes we expect to occur during Larry and Jill’s early retirement years. (The numbers are approximate and are intended to show the trends in retirement income and tax liability for a typical retired couple.)… Read More
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What to Do When a Loved One Dies
Coping with the loss of a spouse or another loved one is terribly difficult. Often, the last thing anyone wants to think or talk about is the financial issues that inevitably arise after someone dies. And yet, these issues cannot… Read More
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Location, Location, Location
The idea for this article came to me after a recent visit to my barber. As my barber, Rob, snipped away at my ever-decreasing number of hairs, he told me two very interesting stories. The first story was about when… Read More
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Planning for Long-Term Care Needs
The issues associated with long-term care are not as far off as we might like to think. Indeed many of us have already had to confront these issues as they relate to our parents or other loved ones. And inevitably… Read More
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New Year’s Financial Checklist
If one of your New Year’s resolutions is to get your financial house in order, here is a checklist of items to help you get started: Update Your Will. Recent changes in Federal Estate Taxes make this an ideal time… Read More
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You Can Take It With You!
When leaving a company, whether because of retirement, a layoff, or pursuing a new job opportunity, you are faced with many financial decisions. Among those are what to do with the retirement assets you accumulated during your employment. You basically… Read More
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Constructing a Retirement Portfolio
You have worked hard your entire life and now you are looking forward to your retirement. Most of your “Retirement Portfolio” has resided in your principal residence and your company retirement plans. Up to this point it has been easy…. Read More
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BWFA launches new service for younger clients
John and Judy Green were a young couple in their early 40�s with two children to get through college, a goal of retiring while still young enough to enjoy it, and a hodgepodge of investments and old 401(k)s that they… Read More
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The Perils of Do-It-Yourself Financial Planning
Perhaps you�ve heard Suze Orman, the omnipresent financial personality of our era, tell audiences that no one is better qualified to manage their money than they are. �Whether you want to believe it or not, you and you alone have… Read More
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You Had Better Review in 2002
The drama of 9/11 and the depressed securities markets of 2000-2001 have in some way affected us all. According to recent press reports, many Americans have begun to reprioritize their lives and review their financial planning assumptions at this time…. Read More
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BWFA and APLFCU: Financial Planning Services Complemented by the Benefits of Credit Union Membership
BWFA has recently announced a new collaborative relationship with APL Federal Credit Union (APLFCU), located on Johns Hopkins Road in Laurel. This relationship will help both parties market their services. For years, BWFA has served as personal financial advisor to… Read More
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Monte Carlo (Mount Charles?) Sensitivity Analysis: A New Tool at BWFA
The purple graph on this page is a simulation showing the potential outcomes of 125 financial plans for the same person using randomly differing rather than static rates of return, inflation rates, mortality, and so forth. The rates used to… Read More
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Shall We Make a Midcourse Correction or Abandon Ship?
Planning is a process. Part of the process is review. Huge drops in the markets and sideways movements or even declines in investment portfolio balances were probably not the assumptions that were used in your original planning, it is safe… Read More
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More Financial “Dysfunctions”
In last summer’s newsletter, we started a series of articles based on Bert Whitehead’s Financial Dysfunctions. As you may recall, Bert, a fellow fee-only financial advisor, identified seven dysfunctions that plague individuals in their personal financial plans and frustrate the… Read More
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Year End Planning
A comprehensive financial planning firm like BWFA can add value to your life in many ways. Some of them are financial! For example, we can help you take advantage of unique opportunities to create substantial savings in gift-giving, retirement plan… Read More
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Why Two, Kay?
In the past few months your advisors have been exposed to many seminars related to the so-called Y2K problem at our professional meetings and on-line. Y2K, which means Year 2000, refers to the problem associated with computers that don’t understand… Read More
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Dysfunction II: Inappropriate Risk Reactions
In last quarter’s newsletter, we began a discussion on Wisconsin advisor Bert Whitehead’s financial dysfunctions. As you may remember, we looked at seven of them. They were: Mortgage Aversion. Inappropriate Risk Reaction: Either fearful or fearless about investments. Compulsive Spending/Excessive Debt. Poverty… Read More
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Do You Suffer From Financial Dysfunctions?
Frequently we meet people who exhibit financial behavior that prevents them from achieving their financial goals. Bert Whitehead, a Midwestern financial advisor, calls these behaviors and activities financial dysfunctions. At a recent professional meeting, Bert gave a few examples of… Read More
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Does Professional Planning Add Value?
The Smith Family Suze Orman has told PBS audiences all this month that you don’t need a financial advisor, you need her books and tapes. Is this true? Can you get any value from professional financial advice? Let’s look at… Read More
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On Roth IRA Planning Opportunities
The decision to put your money in a Roth IRA in 1998 is based on how your personal income fits into the phase-out brackets (see graphic). Although reading and abiding by the brackets may be simple, there is a more complicated… Read More
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What Worries You?
On Friday, December 12, NBC News and The Wall Street Journal published a poll and its interpretation. In the poll, 2,013 Americans over the age of 18 were asked a great many things about their political, social and financial attitudes…. Read More
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Time To Review Your Plan
Creating a financial plan is a lot of work. Reviewing one is just an occasional chore but with wonderful benefits. Complex and unsure financial environments like those today may cause you to wonder how well your plan is holding up…. Read More
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Should Everyone Open A Roth IRA in ’98?
The many advantages of the Roth IRA are too important to ignore. The types of people that may benefit range from the young to pre- or post-retirees. Each group will find tax saving reasons for opening a Roth IRA. Among… Read More
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Is Long Term Health Care Insurance Appropriate for You?
SALESMAN: “Most elderly people, when asked by the American Association of Retired Persons how they would pay for long-term care, responded that Medicare would cover the cost. Unfortunately, they were wrong.” PROSPECT: “I didn�t know that.” SALESMAN: “Medicare does not… Read More
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Planning for the Terminally Ill
Unanticipated death from terminal illness or accident is difficult to plan through. It’s not the same as Medicaid or cash flow planning for the elderly. Many financial planning principles are reversed. Princess Diana’s accident and Mother Teresa’s recent death got… Read More
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No-Load & Low-Load Insurance
One of the true silent revolutions in financial services is the appearance of price competition in life and disability insurance. This is a direct result of the appearance and success of “fee-only” financial advisors in the marketplace throughout the country…. Read More
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A Note on Estate Planning
A Note on Estate Planning: Estates over $600,000 (in 1997) in assets must be organized to take advantage of all possible shelter from federal and state estate taxes to pass on the maximum possible to heirs. BWFA can help you… Read More