Investment Review, Financial Strategies, & Estate and Gift Planning

We will act as your sounding board. We will review your investment ideas with you and your investment advisor and suggest the best structure to maximize your after-tax return.

Don't ignore the impact of taxes on your investments. While taxes should not drive your investment strategy, understanding how taxes affect your earnings will help you minimize taxes and maximize your return. Consider these items:

Capital gains carry a favored tax status. Consider putting more dollars in investments that return capital gains.
You can take an annual deduction of up to $3,000 of capital losses in excess of capital gains. Consider balancing your winners and losers to maximize this deduction.
Investments which produce high taxable annual income can be given to family members who are in lower tax brackets, thereby saving taxes for the overall family group.
Depending on your tax bracket, you may benefit from investing in municipal bonds. The level of these investments may need to be adjusted as your total income picture changes.

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Financial Strategies
(Use the excellent calculators at the end of this page.)

Start planning and stop worrying!
In a recent Gallup poll, 60% of those surveyed said they worried about their financial future.

There are a few simple steps you can take to help reduce your worries.

Put aside some amount regularly in savings or other investments. The compounding of earnings can be substantial. The longer your investment period, the greater the beneficial effect of compounding.
Invest in what you know. The better informed you are, the better your investment decisions will be. If you don't want to learn about investments, consider hiring a money manager and paying him or her to do your investing for you.
Diversify your investments. Have some of your money in an investment that is easily converted to cash in case of emergencies. The old adage "don't put all your eggs in one basket" is good advice when it comes to your investments.
Prepare an annual balance sheet, a list of all your assets minus all your debts. A comparison of your annual balance sheets will reveal your success at growing your retirement funds.
Plan where you want to be financially by retirement age. The calculators listed below will help you determine your savings requirements. Once you know how much you need to save, put your plan into action. Over 90% of Americans must rely on the government or others for assistance during retirement. With proper planning and diligence, you may be among those who can retire in comfort.
Don't use credit to purchase consumption items. Wait until you can pay cash for things which decrease in value. Borrowing money to purchase a home is usually a sound idea. Using credit to purchase household furnishings is not.
Monitor your investments to maximize your after-tax return. Use the calculator below to compare the long-term results of different interest rates. The differences can be dramatic.
Have your insurance agent do at least an annual review of your insurance needs to determine that you are neither under- nor over-insured.

The Magic of Compounding!
If you could have one of the following as your pay for thirty days' work, which would you choose? (A) $10,000 or (B) a penny the first day, two cents the second day, four cents the third day, eight cents the fourth day, and so on, with each day doubling on out to 30 days.

The $10,000 sounds very attractive, but the fact is that the penny doubled each day for 30 days adds up to over five million dollars. Of course, that is 100% interest compounded daily, a rate not available to most working folk. Nevertheless, you see the power of compounding your earnings.

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Click here for some easy-to-use calculators.

Estate and Gift Planning

Increasing your net worth is an easier task with the help of a financial advisor. We will work with you, and when appropriate your other advisors, to increase your net worth, then plan with you to minimize estate taxes. A total program including an analysis of net worth, investment review, family gifting, trusts, retirement planning, and family business transfers is available to assist you in maximizing benefits for you and your heirs.

A little planning can save thousands of dollars!

You can't take it with you, but failing to plan for your estate can mean that the government, rather than your heirs, may get the major portion of your hard-earned money. Why? Because the top estate tax rate is a whopping 55%!

You may be aware of the $675,000 lifetime exclusion in 2000 for gifts and estates ($1,300,000 for qualifying family farms and small businesses). But the amount over that may be taxed at rates starting at 37% and going as high as 55%. You may be surprised what your estate is worth. Add up the value of all your assets. Don't forget life insurance which may fall into your estate. If your total value exceeds the exclusion, you should look into what a few simple planning techniques can save your family at estate time.

In addition, there are some very effective estate planning ideas that can also cut your current income tax bill.

Some planning possibilities:

	Current tax law allows you to give away $10,000 per year per recipient. Your spouse may join in the gift even if he or she is not an owner in the transferred asset. This means that you could transfer up to $20,000 per year to each of your heirs. To double the annual exclusion yet again, you may want to include spouses of your children. The person receiving the gift does not need to be related to you. These annual gifts do not reduce your once-in-a-lifetime exclusion.
	If you have property which is not needed for your retirement, maybe it is a candidate for transferring during your lifetime. If it is a large income-producer, the future income will be taxed to the new owner and not to you, plus the property will be out of your estate.
	You can make unlimited transfers to your spouse either during your lifetime or through your estate. There are no taxes on spousal transfers, regardless of size. But leaving everything to your spouse may not be a good idea, since doing so fails to utilize the lifetime exclusion amount in the estate of the first spouse to die. Planning will allow you to use the exclusion in both estates, and you'll be able to transfer twice as much to your heirs free of estate tax.
	With proper planning, certain life insurance proceeds can be kept out of your estate.

How much do you need for retirement?

What property, if any, should one consider parting with during his or her lifetime?

Estate and gift planning is a very personal process. Each family plan is unique. Effective planning should involve you, your accountant, your attorney, and in many cases, an insurance agent and trust officer.

Call us!

Please call us for an initial conference at no charge. We will help you assess your need for estate and gift planning. If your financial affairs are simple, the meeting will be short. If you have more complicated matters, the meeting will be longer, but the time will be well spent.

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