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Financial Planning and You

So what goes into a Financial Plan? There are a lot of vehicles these days that make it quite complex to determine what is right for you.

Many folks just have a 401(k) with their company and think they are good to go. But there are some things that were recognized during this recent financial crisis that these same folks didn’t realize could happen. Because 401(k)’s are based on the stock market, there was a huge loss to that nest egg that had been accumulated over time.

I’m not a financial planner, but I can tell you that for the sake of taxes, this decline does not do you very much good by the way of taxes. You can’t take your money out to save it from further losses because you are hit with penalties unless you are above a certain age. You could invest more, and hope that the market turns around and you get a good bargain on what you put in. But you are looking at more taxes if you are in a Traditional IRA, where you are taxed when the funds are taken out.

So what is the solution? Well there are many. For one, there’s life insurance. Yes, I said it, life insurance. There are many tax benefits to having a life insurance plan that coincides with your other retirement savings. Likewise there are substantial tax savings that once you look at your entire estate and how you are going to betaxed upon your death (not something people commonly plan for, but it happensto 100% of the people).

So in a nutshell, I think the solution is to have a sound financial planner who can help your money grow over time, and a tax planning specialist that can hedge your overall burden to ol’ Uncle Sam. This combination will give you the customized plan for what you are looking to accomplish based on your age, risk adversity, and your long term goals.

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About the Author

Joseph Solomon, Joseph Solomon, CPA
8626 Manassas Rd.
Tampa, FL 33635

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