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Information or Action?

As a CERTIFIED FINANCIAL PLANNER TM practitioner (CFP®), I invest a lot of time to stay staying current on changes in planning strategies and changes in laws or rules. This is what differentiates me from a financial advisor or broker. My goal is to not just read or publish changes in tax code or laws but evaluate them and develop appropriate strategies to utilize the new rules to keep clients' plans up to date. This can be a challenge as these changes create unintended consequences if not updated. I appreciate the information that is published, and it is helpful to know that there have been changes, but if you don’t know how to implement the changes to a comprehensive plan it is just information. I like construction and I would like to illustrate my point with a construction analogy.

Let’s imagine you have worked with an architect to design your house. From the time you begin designing the house to the time you start construction, the planning department changes the building codes. The architect that designed the plan did so with the old codes in place. If you start to build the house using the plans with the old building codes it will not pass inspection and it may cost you more to build your house with the change orders. Now there are two ways to deal with this. The first would be to have the architect review the plan for any code changes prior to starting construction. The second would be to hire a general contractor that is current with all the building codes and have him/her review the plans for any changes. In both cases it the crucial step is the review of the plan. The problems develop when construction begins without a review of the plan.

The same is true with your retirement or financial plans. In my 26 years working as a retirement planner and the last 15 as a CFP®, I have seen many changes in both tax codes and retirement planning strategies. One of my favorite books is the New Rules for Retirement Planning. This title is great because, as we all know, the rules do change. Just like building codes. Money has to accomplish more than one goal and fortunately, there are some innovative products that can help address the needs. Recently I have read several articles about the “Secure Act” which was passed by Congress in December 2019. It is the most sweeping change for retirement planning in the past couple of decades. While all these articles describe the changes that will occur such as the elimination of “Stretch IRAs” and expanding of Required Minimum Distribution age, they do not provide specifics on how individual plans will be affected. For example, a byproduct of this new legislation is that all IRA trusts that were dependent on the Stretch provisions in the old law will not work. Well if you have one of these trusts it is good information to know but what do you do next? The answer is that you have to re-evaluate your distribution strategy and create a more tax-efficient way to take money out of your IRA and create an efficient way to pass to the next generation. This is accomplished by using both your annual gift exclusion and certain insurance products. Combined properly this new plan will actually provide more benefit to your children and even your grandchildren. The best part is that it will do so tax-free. You will have to pay the taxes when you take the distribution from your IRA, but since we are in the lowest tax brackets in our generation, there is not a better time to execute these strategies.

I became a Financial Planner to help people make these complicated decisions and show them ways to use their resources to their maximum potential. My hope is that this article will help you understand the difference between an advisor or broker and a CERTIFIED FINANCIAL PLANNER TM. While, like the others, I like to provide current information on changes in laws and tax code, I differ in that I am also capable of updating plans and saving you more in taxes. In the end, it is what you keep that is important not what you make. If you do not update or review your plans you may be like the homeowner and have expenses you did not expect and have to pay more than you hoped.

If you have questions or want to see how all this applies to you personally, come to my office and we can discuss your individual situation. I do not charge for the initial meeting and if I can answer your questions at that time the advice is my gift to you. At the end of our time if you need planning services before I start I will explain in detail the cost and benefit of your plan. You can reach me at (828) 559-0299 or

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