Are Fees Robbing Your 401(k)?

Wow January is almost over! It has been a busy month. I have been meeting with clients and protecting their families. Along with that I have invested in a new server and additional Security Protection for my clients. I am happy to announce I just have to put in a few passwords and press a couple of buttons. My IT professional Doug Harvey has been fantastic! There has been a few kinks but he has been fabulous in setting it up. I will let you know a little bit more about his services, but for now I highly recommend him. I hope you are organizing your legal and financial house! I know there is so much to do in the new year but you just have to keep checking off your list. Here is a bit of information about 401 (k)’s I hope you find interesting. If you need a referral I have several that I can recommend. Love to hear from you soon. I will be in Big Bear this week enjoying some cool weather and maybe a little bit of skiing or at least playing in the snow. Blessings, Click HERE to view my blog

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You’re a smart money manager You’re planning well for retirement You put the most you possibly can in your retirement accounts, including a 401(k)… Then you get your statement and find that you’re being robbed blind by outrageous fees. And what’s even worse, you were never given access to information that would tell you what those fees are. The good news - that’s about to change In October 2010, a new rule issued by the Department of Labor requires 401(k) plans to not only disclose their fees up front but also explain them. The bad news is that this rule is an improvement but it’s not perfect. You’ll be told how much you pay in overall expenses but you may not be told how much of that goes to investment management fees as opposed to administrative costs. What You Can Expect Once a year, your 401(k) plan will send you a breakdown of the annual operating expenses for each one of the investment options they offer. The breakdown will show the expenses as a percentage of the assets and a dollar amount per thousand dollars invested. They will also provide sales fees and any other charges associated with each investment option. You’ll receive a quarterly statement showing your 401(k) plan’s expenses for administrative costs such as accounting and record keeping. The statement you receive will only show the fees deducted from your account. Some 401(k) plans will take administrative costs directly from your balance while others use a portion of your investment expenses to cover some of the administrative side. One thing to note - any indirect fees for administrative costs won’t have to be broken out, so chances are they won’t be. For example, if you see a charge of $250 on your account, you won’t know exactly how those fees were spent (i.e., legal fees, accounting costs, etc.) The Benefit of Disclosure Knowing what you’re being charged gives you the opportunity to compare funds. Take a look at the fees for each of the investment options your 401(k) plan offers. Balance those fees against their historic returns and see if the higher paying funds are really a better deal for you. Even though you don’t get a full, line item disclosure of what the administrative costs were for your particular plan, you still have a breakdown of what the investment management fees vs. administrative costs are. This should give you the information you need to pressure your 401(k) plan to keep costs down. One way to do that is to encourage competition. Compare your plan to other plans and see how your administrative and investment fees stack up. If there’s a better deal out there, make sure your Human Resources department knows it. They can use that information when it comes time to negotiate with your plan provider. Would you like a second opinion about your 401(k) investments? Want to make sure you’re making the right investment choices and structuring your retirement to optimize savings?br> WWe can help. I have a couple of great folks that I work with that can take a quick look at your account and see what is going on. Call us to schedule your Family Wealth Planning Session today. Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.

Interviewing Your Financial Planner

Hope your year is kicking off with lots of good things and you are starting your New Year Resolutions – Of course its time to get the financial and legal house in order. Here is a little bit of information to start putting your financial house in order. With all the bad news about crooked investment counselors and dishonest financial planners, you may be more than a little hesitant to trust someone with your life savings. If you want to hire a professional to handle your portfolio, you need to do what folks in the legal trade call “due diligence”. You need to do your homework and interview the planners you’re considering. When choosing a financial planner, ask them the following questions to get a good feel for not only their level of expertise, but their ethics as well. And remember, you need to feel comfortable with the person you are going to allow to invest your money. I have several Financial Planners that I can recommend based on what you are looking for. This is not an all inclusive list but a few things that you should consider. I hope to see you soon and assist with your legal house and protecting your loved ones. Blessings, Click HERE to view my blog

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Key Questions to Ask When Looking for a Financial Planner

Question No. 1: How many years of financial planning experience do you have? They should have at least five years of experience. If you have a sizable portfolio, you want someone with considerably more experience. Don’t let someone “learn the ropes” with your money. Question No. 2: What level of education do you have? Any financial advisor should have at least a Bachelors degree. The more advanced the education, the better. Find out where they went to school and check the school out to make sure it’s an accredited university. You don’t want to hire someone to handle your money who bought their degree. Of course, if it’s Harvard, Yale, Stanford or some other well known university, you can skip this step. Just make sure that it’s a valid degree. And many times its experience that prevails. Question No. 3: Do you have any additional professional certifications? The correct answer to this is yes. They should have at least a CFP, or CPA/PFS certification. These certifications indicate that your advisor has obtained specialized knowledge in their area of expertise. That’s good news for your portfolio. Question No. 4: Are you a Registered Investment Advisor or Investment Advisor Representative? The answer to either of these should be yes. If the person you’re interviewing is not an RIA or IAR, don’t hire them. These are both important certifications. RIA’s and IAR’s provide financial planning services for a fee. Other types of advisors will sell you investment and insurance products and work on commission. Neither of those is in your best interest. Question No. 5: Do you have a criminal record or any disclosures on your NASD or insurance compliance records? The answer to either of these questions should be no. An affirmative answer to either one should send you walking out the door. Don’t even bother completing the interview. Question No. 6: How do you get paid? There are three acceptable answers to this question - hourly, asset-based, or fixed fee. If the answer is commissions, take a walk. Financial advisors who work on commission have a built-in conflict of interest. Their first thought will be making the sale, not protecting and growing your money. There is no time like the present to start planning for your financial future. If you’ve been hesitating in hiring a professional to help you, taking these questions into the interview will make it much easier for you to determine whether or not the planner you’re interviewing is the right one for you. It’s important to get a fee agreement regarding how the financial planner will be compensated. This is your life savings and your future we’re talking about. Take it very seriously and proceed with caution. Call us to schedule your Family Wealth Planning Session today. We can help you with your financial planning questions and ensure that you’re getting the best advice possible. Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.

So, What Exactly Does An Executor Do?

Wow we are almost through the first month of the year! What have you done? Financial Planning? How about Legal Planning? Have you named your guardians? Here are a few things to think about if you are getting your legal house in order. After naming guardians I ask clients who they would like as the executor… Or maybe, someone you know has asked you to be their executor… If either of these scenarios sounds familiar, it might be a good idea to know exactly what an executor does before you make a commitment either way. Blessings, Click HERE to view my blog

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Being an Executor - An Honor and a Burden

The executor of an estate is charged with taking care of a person’s final business on earth. You are responsible for protecting the deceased person’s property until all the taxes and debts are paid and making sure that everyone else receives what they’re entitled to under the estate. That can be a huge task or a small one, depending on the size and complexity of the estate. As an executor, you don’t have to be a legal expert or an accountant but you do have to be honest, impartial and detail oriented. As an executor, you’re charged with a “fiduciary duty” (which means a duty to act in good faith and honesty) in all business of the estate. If you fail to carry out this “fiduciary duty”, you could be held legally liable for that failure. This is a serious consideration when deciding who to name as your executor or whether or not to accept appointment as the executor of someone else’s estate. Again, depending on the size and complexity of the estate, you could feel like Switzerland in the middle of warring factions for a long time until everything is settled. Make sure your nerves are up to the task before you sign on. The Daily Business of the Estate Executors have a lot of work to do to settle an estate, regardless of the size. Some of the things you would be responsible for are: • Finding and managing the deceased person’s assets until they’re distributed to the heirs of the estate. You may be asked to make decisions on whether or not to sell certain assets or keep them in the estate. • Determining whether or not the will needs to be sent through probate. If there is a surviving spouse, many of the assets that were jointly owned may pass on to the spouse without the probate process. Always consult an estate planning lawyer to determine what needs to be done. • Determining who actually inherits property. If you’ve been named as an executor, chances are that your loved one left a will. That makes this part of the process much easier. If your loved one died without a will, you could have a serious chore ahead of you. • Take care of any necessary court filings. Even if the probate process is not necessary, the will still needs to be filed with the probate court. If it turns out that the estate does need to go through probate, you could have a substantial list of filings to take care of. • Handling the day-to-day grind. This could be a laundry list of little details that need to be taken care of to close out an estate. You could be cancelling credit cards, notifying the Social Security Administration and Medicare of the death, stopping mail deliveries from the Post Office, determining who takes care of pets, and the list goes on. Make sure you have the time and the ability to handle all these daily details before you agree to the task. • Setting up a bank account for the estate. If you don’t have signature authority on the decedent’s bank accounts (and you probably won’t), you will need to set up an account to take care of the expenses involved in wrapping up the estate. Any insurance payments, stock dividends or final paychecks will go into this account to pay ongoing bills such as a mortgage or property insurance until the estate is settled and the assets are distributed. A word to the wise - keep thorough records of all sums coming into and going out of this account to head off any potential problems with heirs to the estate. • Paying taxes. Yes, a final income tax return has to be filed for the deceased person and it will cover the period from the beginning of the tax year until the date of death. If the estate is a large one, state and federal estate tax returns will need to be filed as well. Being an Executor Requires Commitment Take another look at the list of duties we just gave you. Stop and seriously think about all the things that would go into settling your estate - who needs to be paid, what needs to be sold, who gets what - and then make a decision on who would be the best person you know to handle all that. Once you have someone in mind, talk to them about it at length. Show them our list and make sure they’re okay with handling this much detail in someone else’s life before you name them as your executor (or before you agree to be the executor of someone else’s estate). Call us to schedule your Family Wealth Planning Session today. As part of our Family Wealth Planning Session, we will sit down with you and go over a list of what needs to be done with your estate and give you an unbiased opinion on your options for an executor. Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.

New Year Goals for 2011

Happy New Year!! I do hope that 2011 will be a healthy and happy year for all. But we all do need to be proactive and take care of business. So don’t wait to take care of those essential necessities in life. I did a little research about New Year’s Resolutions or Goals and put together a list. I know you know what’s number one on my list! But that of course, is even after taking care of your health. Your health should always be # 1 on your list. Think of it this way, if you take care of your legal life, the rest of the year you can enjoy. So while you are on that treadmill or taking that yoga class YOU need to make your appointment and get your financial and Legal life in order! You will have peace of mind once you do. Blessings, Click HERE to view my blog

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Improving your Economic Well Being

1. Create or update your Trust/ Will. (you knew this would be number one my list!) Nobody likes to think about his or her own death. But you can't ignore reality. Look at the earthquake in Haiti, Hurricane Katrina, 9/11 or the unfortunate, 150,000+ victims killed by the Tsunami that spread across Asia and Africa. Tomorrow isn't promised. You all know this is my favorite and I can assist you with this one! Your plan should be reviewed at least every 3 years, unless of course there has been some type life change, marriage, divorce, birth death. Either way I can assist here. 2. Eliminate credit card debt. Tired of being in debt and living paycheck to paycheck? Then it's time to knock out those credit card bills once and for all. There are all sorts of assistances out there to help you. Go on line and they will find you, or get on a budget! 3. Improve your credit rating. Having poor credit will hurt you in many ways. You'll pay more for loans, credit, and insurance. Plus, bad credit could prevent you from renting an apartment, buying a house, getting a loan or getting a job in this economy. If you go online you can get free copies of your credit report. 4. Get proper insurance. Get life insurance and have adequate coverage for your valuables and property – home, car, etc. – too. If something goes wrong, you and your family will be so glad you did. We all need this and it can also assist with your savings as well. 5. Prepare your taxes early. Get any tax form you need from the IRS and file your taxes ASAP. Or see your CPA and you'll avoid the procrastination and stress, as well as the hassles and long lines, at the Post Office on April 15th. Don’t forget, early filers also get faster refunds. 6. Slowly set aside 3 months' savings. If an emergency happens – from a job loss to a car breakdown – your savings cushion will protect you from resorting to credit cards. There are all sorts of ways to save money, but you might have to stop drinking your favorite coffee drink and make it yourself! 7. Make a financial plan. Start writing out your financial goals and what it will take to achieve them. Work with an advisor or do it yourself. 8. Fund a retirement plan. If you have a 401(k) or 403(b) plan at work, start contributing, or increase your contribution. 9. Ask for a raise. (Be careful here) List the ways you've contributed to your company's prosperity or your department's well being, and approach your boss for a raise. The Wall Street Journal's Careers section has tips for getting a pay hike at www.wsj.com. If you work for yourself, give yourself a raise by raising your prices or offering higher-end products and services. I cannot add much on this one, but the Wall Street Journal’s article is helpful 10. Improve your financial record-keeping. Get your paperwork in order, and keep good records all year round. This will save money in the long run and reduce your aggravation come tax time. For help, try the free online budgeting and record-keeping or make an appointment with me to get your Financial Freedom Notebook. Here's wishing you a happy and financially prosperous New Year!