Why Rebalance Your Financial Portfolio?

Why Rebalance Your Financial Portfolio?

Hello and thank you for stopping by today. We are going to talk about rebalancing portfolios today.

My name is Tina Anders, I am the Fee Only Certified Financial Planner here in Petaluma, California. Anders wealth management is my wealth management firm serving primarily Sonoma County and Marin County in California.

Rebalancing, what’s it all about?

Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain any original or desired level of asset allocation and or risk. In short, what that means is if you have a portfolio 50% stocks and 50% bonds, and the stocks outperform bonds. Then all of a sudden, you might have 70% in stocks because they’ve grown and then bringing your bond portfolio down to 30%. So, now you have a 70/30 allocation. You want to rebalance it to bring it back to 50/50, which would be in this example, your target or desired allocation.

While there’s no required schedule for rebalancing a portfolio most recommendations are to examine the portfolio the allocations at least once per year. It’s possible to go without rebalancing a portfolio but it’s not advisable at all.

Rebalancing gives investors the opportunity to sell high and buy low thereby taking the gains from the high performing investments and re investing them in areas that have not yet experienced such notable growth. Rebalancing is a very good idea. It shouldn’t be done at least once per year. I highly recommend it.

And if you have more questions or comments, please do so below if there’s a topic on which you would like me to do a video, please also let me know. Thank you again for stopping by, Tina Anders, Anders wealth management in your corner always.

What is a Solo 401(K) Plan?

What is a Solo 401(K) Plan?

Hi there and thank you for stopping by today. Today I’m going to talk about part two of a two part series on Sep IRAs versus Solo 401k plans. I spoke about Sep IRAs in the previous video, session one. Today session two, I’m going to talk about Solo 401Ks.

My name is Tina Anders. I am the Fee Only Certified Financial Planner for my firm located here in Petaluma, California, Anders Wealth Management. I serve primarily Sonoma and Marin counties here in California.

A Solo 401k plan is limited to business owners and a spouse who is also involved in the business. A solo 401k plan offers the opportunity to make both employee contributions and employer profit sharing contributions. The employee contributions are limited to the same as for regular employer sponsored retirement plans: $19,500 in 2020, with an additional $6,500 catch up contributions for those who are 50 years or older.

Additionally, employer profit sharing contributions can be made up to 25% of the employee compensation with a combined maximum employee and employer contributions of $57,000 and $63,500 for those 50 or over. And those numbers are for the year 2020. You’ll have until your tax filing date, including extensions to make your actual employee contributions and employer profit sharing contributions.

Unlike a SEP IRA, a Solo 401k can offer a Roth option, that’s after tax contributions, for the employee only contributions. All profit sharing contributions must be made to a traditional non Roth 401k plan. Additionally, loans can be taken for the plan if allowed in the plan document?

Which plan is better for you? Would it be a solo 401k plan? Or would it be a SEP IRA? A SEP IRA is easy to set up, requires virtually no administrative work. The ability to establish and to fund the account right up until your tax filing date offers a high degree of flexibility for you.

With income that varies from year to year you might be better off contributing to a solo 401k. Since the amount that can be contributed to the SEP is totally dependent on your earnings. The amount you can contribute will be limited in years where your income wanes a bit as long as you earn at least $19,500. If you’re under the age of 50, or $26,000, if you’re 50 or older, you can contribute those amounts under the employee contribution component of your 401k.

If you want to be able to make Roth contributions, or you want to be able to take a loan out from your plan, a solo 401k is the better option because you don’t have either option with a SEP IRA. In general if you’re self employed, and you don’t have any employees, and you consistently want to be able to maximize your retirement contributions, a Solo 401k will probably be the best option for you.

Thank you for stopping by. If you have any comments, questions, topics on what you would like me to do a video please comment below and I will respond. Tina Anders, Anders wealth management in your corner. Thank you again.

What Does Your Ideal Retirement Lifestyle Look Like?

What Does Your Ideal Retirement Lifestyle Look Like?

Hello and thank you for stopping by today. I do appreciate it. Today we’re going to talk about retirement.

My name is Tina Anders. I am the Fee Only Certified Financial planner for my firm located here in Petaluma, California, Anders wealth management. I serve primarily the Sonoma County and Marin County areas of California.

And I’m here again to talk to you about retirement. So, what does your ideal retirement lifestyle look like? Dream big, visualize! What would you like it to look like? Would you like to travel? Would you like to spend time with family and friends? Would you like to do volunteer or community service? Would you like to move and potentially to a different state even? Would you like to start business for which you might have a passion? So, many different ways to spend retirement.

Oftentimes, the earlier years of retirement tend to be more expensive than the later years. I say that with the caveat that long term care could become an issue, in which case Long Term Care Insurance is advisable almost always.

Now, how will you fund retirement? Well, financial resources that may be available to you to fund your retirement could include; taxable investments such as brokerage accounts, savings accounts, retirement accounts, such as traditional and Roth IRAs. Employer sponsored plans, such as 401(k)’s, 403(b)’s 457, 401(a)’s, and so forth. Many different employer sponsored retirement plans out there. You could also consider using a pension. And a pension, don’t forget about previous employers, you may have a pension from a previous employer. So, remember that. Then there’s Social Security. Then there are stock options and restricted stock options. There are annuities. I did a video on annuities, you might want to check it out. And if you have an interest in a business, that could also be an income stream during retirement.

Getting ready for retirement will include running financial projections to help determine how much income you can comfortably expect to live on in your retirement years. And the retirement years should be protected out there saying now until the age of 94. But if you’ve got good genes on your side, good for you, plan to 100 or even beyond. Now ideally, the questions that you’re going to want to go over with your Fee Only Certified Financial Planner should be gone over at least 10 years prior to retirement. And they should be gone over periodically up until retirement.

So, if retirement cash can’t support your desired lifestyle, then choices have to be made. So, these might include working a bit longer until retiring. working part time in retirement. Could include reducing anticipated living expenses during retirement. And it could also include saving more while you’re still working. The longer the time until retirement, the more time you and your Fee Only Certified Financial Planner will have to make any required adjustments to your financial plan.

When will you take Social Security? Social Security benefits can be taken as early as the age of 62. But if you wait until your full retirement age, which is sometime around 66 and a little bit later for many of us, your benefits could increase by about 30% more than if you took it at the age of 62. And if you wait until the age of 70, your benefits would increase likely another 32%, 8% compounded per year that you wait between full retirement age and the age of 72.

Some takeaways from today’s video. Retirement planning can be daunting, especially with individuals increasingly responsible for their own financial well being into old age. The first step is to evaluate your lifestyle expectations and then set a financial goal that can meet those expectations. A retirement plan should consider personal savings and investments 401(k)’s or other employer sponsored retirement plans and IRA type retirement plans, social security and other forms of income that I mentioned earlier in the video. Talk to a financial professional to understand both how to plan and then what steps to take to start drawing down your assets in the most efficient manner.

Thank you for stopping by today. If you have any comments, questions, suggestions for other videos, please comment below. I am happy to take care of you. Again, Tina Anders, Anders wealth management in your corner always

How a Financial Planner Can Help You

How a Financial Planner Can Help You

Hi there and thank you for stopping by today. Today I am going to talk about how I help my clients. And my name is Tina Anders. I am the Certified Financial Planner for my firm Anders Wealth Management located in Petaluma, California serving primarily Sonoma and Marin counties.

Talking about how I help my clients, first of all, I asked a lot of questions. And then I listen, and I listen some more. My primary goal with my client meetings is to get to know what’s important to my clients. What has their attention and how I can serve them well? And out of these conversations will come valuable information from which I can begin my financial planning process.

Some areas of concern for clients, not to exclude other topics, but some primary areas are retirement projections, portfolio analysis, social security analysis, insurance review. For instance, do you have life insurance, and do you have enough? Do you have long-term care insurance? Do you have disability insurance and umbrella insurance If you have homeowners and auto? Do you have earthquake? Of course, if you live in California, definitely something to think about. Also, we will look at affording health care in retirement.

Another topic of concern would be, how to prepare for retirement income that can change over time and of course, many other topics of concern. I am able and happy to address. Two of the most common questions that I’m asked are, “Can I afford to retire comfortably when I want to? And if I can’t, what changes can I make between now and my intended, excuse me, retirement date in order to do so?” I’m happy to help facilitate peace of mind in that area of concern.

Another very common question I’m asked is, “Since I am already retired, how can I structure my assets to last as long as I want them to, perhaps the end of my life or beyond, if I have heirs or favorite charities, to which I would like to bequeath some assets?” I structure client portfolios in a conservative manner yet allowing for the growth opportunities in the markets. As a result, my clients have portfolios that withstood the recession of 2008 quite well, and their portfolios are withstanding the COVID market volatility also quite well.

I don’t trade frequently. My aim is to preserve client assets, capital preservation, preservation of wealth. It’s of the utmost priority for me that my clients have financial peace of mind, and it’s given me great pleasure to be able to help facilitate that since I opened my firm in 2007.

I love what I do. I love helping my clients. I love analyzing client financial situations to see where I can facilitate improvement. I am a fee only Certified Financial Planner. In other words, the only thing I sell is my advice. I don’t sell products of any kind. I accept no kickbacks or commissions for anything that I recommend to my clients. In fact, I’ve taken a fiduciary oath to advise and my client’s best interests. So, that’s what you’ll get from me.

Please reach out to me by commenting below if you’d like a video on a particular topic or if you have a question that I can help with. And thank you for stopping by, I do appreciate it and I am in your corner always. Thank you again.