PlanPrep – Financial Planning The Way It Should Be in Ventura California 93001

PlanPrep – Financial Planning The Way It Should Be in Ventura California 93001

The Retirement Tracker

Would you like to know: when you can retire, how much risk you need to take with your money, how much you need to save, how much you’ll be able to spend, how long your money will last, how big your estate may become, and more?

 

Would you like to have an award winning CERTIFIED FINANCIAL PLANNER with experience helping thousands of people create this report for you?

 

For the equivalent of $1.25 a day, you receive all of this and a brief summary written in plain English! Call 858.220.6334 or email bw@planprep.com for a FREE, confidential consultation to discuss your situation today. Your financial empowerment is here for just $450!

Make 2012 Your Best Year Ever!

Many people start the year off with “Okay. This year, I’m going to … lose weight, grow my business, improve my marketing, get a handle on my finances, improve my marriage, become a better person.”  The list can go on forever.  The problem is that most people think about these things, but they don’t always get very far in achieving them.  Why is that?  Lack of commitment and accountability.

 

Recently, I visited with two seasoned coaches in Ventura County, Gloria Miele, Ph.D., from Optimal Development Coaching and Wayne Levine, MA, from BetterMen Coaching.  Gloria is a business coach whose focus is on helping women build successful businesses, and Wayne is a men’s coach who helps men improve the relationships in their lives.  Why would I interview coaches for a piece about setting and achieving your goals?  I’ll answer that with another question:  How many teams have you seen go from mediocre to great with the same players by simply changing the coach?  Plenty!  Here is what these two had to say …

 

Gloria Miele, PhD – Optimal Development Coaching

(Click on this link to visit her website)

 

You need to determine what your strengths, passions and values are.  Your goals should always reflect what energizes, excites and engages you.  You’re going to be more invested in pursuing these types of goals, and more likely to do what you need to do to achieve them.

 

This leads into vision and focus for your business (and goals).  You must know what you’re trying to accomplish before delving into the details.  Start by getting the plans out of your head and onto paper. What are your ideas for marketing, sales processes and strategies?  This doesn’t have to be 20 pages – just get it out of your head. You’re 40% more likely to follow through on something that’s written down.

 

All of this is great, but you need to add accountability to stay on task with your plan.  Find a colleague, friend or somebody who can hold you to task.  This is the great value of hiring a professional coach.  (Coaching will be the feature of a future blog, so stay tuned!)

 

Wayne Levine, MA – BetterMen Coaching

(Click on this link to visit Wayne’s website)

 

The goal is to be happy with the process, not necessarily with the results.  Your goals are going to move and evolve over time.  It’s important to know what kind of person you are being in the process of pursuing your goals.  Happiness is in the doing, and not necessarily what you have at the end.  Focus on the relationships and people in your life.  Become conscious as to the kind of man you’re being in your life.  Realize that the kind of person you are in one relationship carries over into others.

 

Being very successful in business and miserable in your personal life is very unsatisfying.  Make commitments and be sure there is accountability.  Women may try to help their husbands and boyfriends with this aspect, but they usually meet with great resistance and it turns out to be very frustrating.  Men need other men to hold them accountable in most cases.

 

The faintest ink is better than the best memory.

 

Here is a check list of some steps to help you get your 2012 goals in action and on track:

 

  • Align your goals and values with your passion and strengths.
  • Determine what steps you need to take to make your goals a reality.
  • Enlist the people you need to involve to help assure that you will stay on track.
  • Get the first three checkpoints above in writing, even if it’s just on a pad of paper.
  • Enjoy the journey, as it is more important than the destination.
  • Review your progress regularly and make changes as your goals evolve.  Set aside 5 minutes a day to review your goals, and 15 minutes on the weekend to review your game plan.

Tell yourself everyday, throughout your day, that you can do this.  The thoughts that run through your mind each day will be the driving factors in your success.  Control your attitude, and you will control your results.

 

Gloria likes to leave you with this: “Now that  you have  this information, what will you put  into action to move ahead?”

 

Make 2012 the best year of your life!

Burt Williamson, MBA, CFP®

Financial Strategist, Keynote Speaker

858.220.6334

info@PlanPrep.com

www.planprep.com

PlanPrep LLC and Burt Williamson together are a Registered Investment Adviser.

Year End Tax Planning Essentials for 2011

The famous Arthur Godfrey said decades ago, “I’m proud to be paying taxes in the United States.  The only thing is, I could be just as proud for half the price.”

 

The year before the recession started (which doesn’t seem to be over yet), almost half of the state of California’s budget came from those who earned over $490,000.  More than a third of the revenue used to come from capital gains taxes.  The current Governor has been making some tough choices to shore up the budget shortfall, which I applaud.  The federal government is in just as desperate a situation.  Clearly, smart tax planning is more important now than ever.

 

To Accelerate or Postpone – That Is The Question

It’s important to know whether you will be in a lower tax bracket this year or next and whether you (and your corporation, if you have one) will be subject to the alternative minimum tax (AMT).  Those subject to the AMT are not likely to benefit from more tax deductions or investing in certain municipal bonds.

 

Start by having your tax advisor do a year-end tax projection for you.  This will help you determine whether you should look at accelerating some deductions and delay receipt of income (if possible) or the other way around.  If you are NOT subject to the AMT, discuss with your tax advisor what deductions you can accelerate and what income you may want to postpone or receive differently.

 

Deductions for Payments Due in January:  medical expenses; deductible property taxes; 1st quarter state income estimated tax payment; alimony

 

Receipt of Income:  take installment payments rather than a lump sum; sell appreciated assets; postpone the collection of debt, rents, and payment due for your services in 2012 (if you use the cash method only); defer retirement plan distributions until January

 

Tax Gain Harvesting

Who knows how the tax laws may change next year (my crystal ball is on back-order).  Many people expect rates to rise.  Regardless of what the future holds, there are ways to take advantage of the tax rates we have currently.    Discuss these ideas with your tax advisor:

 

1) Consider making annual gifts ($13,000 to any person, and $26,000) of appreciated assets to those you love.  Your tax advisor should file gift tax returns for gifts made by both parents, even though no tax would be due.  Keep in mind that there is no tax advantage to selling these assets until your children are over age 19 or out of college, whichever is later.

2) Consider selling appreciated assets to the extent that you can stay in the 15% tax bracket.  For that matter, you may want to take advantage of today’s capital gains rates, pay the tax now, and reset your basis on assets you will need during your lifetime.  There is no need to do this with assets earmarked for inheritance, as the tax basis will reset for those later anyway.

 

Make IRA Contributions Now

You can make IRA, Roth IRA and non-deductible IRA contributions at year end for 2011 (if you haven’t done so yet) and again in January for 2012.

 

Converting To a Roth IRA

If all of your retirement money is in employer plans, contributions to non-deductible IRAs can be made this year and converted next year to Roth IRAs with little to no tax hit.  You can repeat this process until such time that you rollover your retirement plans into IRAs.

 

If you are retired and are under age 70, you may want to start converting your retirement assets to Roth IRAs to the extent that you will be required to take distributions (RMDs) after turning 70½.  If your RMDs are going to be $50,000 a year and go up from there, consider converting $50,000 a year until that time.  You’ll owe tax on the conversion, but you’re going to have to pay it soon enough anyway.  This is most effective for the amounts you want to earmark for inheritances.  Be sure you have other assets from which to pay the taxes, so that more money can grow tax-free inside the Roth IRA.

 

Business Owners

  • Consider taking excess income from your S-corporation as a dividend, as long as it is reasonable compared to your salary.
  • Decide whether it makes sense to create a defined benefit plan to maximize your tax deductions before year-end.  This does not have to be funded until next year, but it needs to be in place before January.
  • Buy and place new equipment in service by December 31st that you were planning to buy anyway.
  • Determine whether it makes sense to be a C or S-corporation in 2012.
  • Decide in 2011 whether to have different retirement plan in 2012, especially if you currently provide a SIMPLE IRA plan.
  • There is much more sophisticated planning that you can do if your income is substantial enough, but it can’t be done by year-end unfortunately.

 

Other Considerations

  • Make an appointment with your dentist today if you haven’t used up your dental insurance benefits for the year.  Start any dental work now, so you can benefit from your 2011 and 2012 benefits.
  • Adjust your withholding to be sure you don’t get too big a refund or owe too much when you file your returns.
  • Determine your desired retirement plan contribution for the year and divide that amount by your expected income.  This is the percentage to have withheld from your paycheck.  Realize that bonuses paid early in the year can throw this calculation off considerably.
  • Be sure to use up the remaining amounts in your flexible spending account (FSA) by year-end as well.
  • Save your year-end statements for taxable (non-qualified) accounts forever.  You need evidence of the cost basis of your investments to determine the gains and to prove you had your taxes done properly in the event of an audit someday.
  • Consider making your planned charitable gifts (up to $100,000) from IRAs if you are over 70½.  There is no deduction for the gift, but it can reduce your future RMDs and it counts as this year’s RMD.
  • Review your estate plan with your attorney to be sure it has flexible language so that your surviving spouse is not forced to fund a bypass trust with too much money.  Otherwise, the 2010 tax law changes could backfire on your surviving spouse.
  • Qualified dividends remain at favorable tax rates and dividend paying stocks are paying better than any bank out there, so reconsider where you park your “safe” money.  You could be losing money safely.
  • Establish a lifetime insurance plan that offers access to cash in retirement that could be income tax-free, while allowing you to control an asset that may not be in your portfolio currently.  The premiums are not tax deductible, but lifetime life insurance has a lot of other tax advantages.
  • Take advantage of all the tax credits for which you may qualify.

Are you working with knowledgeable professionals, such as a tax advisor, estate planning attorney and financial planner?  You don’t want to tread in these waters alone.

 

Burt Williamson, MBA, CFP®

Financial Strategist, Keynote Speaker

858.220.6334

info@PlanPrep.com

www.planprep.com

PlanPrep LLC and Burt Williamson together are a Registered Investment Adviser.

Chip Away At Your Finances

Those that have a strategic plan are far more successful and efficient than those that don’t.  Unfortunately, less than 40% of businesses have any kind of plan and fewer than 10% of individuals do.  However, you don’t have to do a total money make-over to achieve your goals.  Pursuing them one at a time may be the most prudent and least stressful route to take, but you do need to get started.

 

Change Your Mind, Change Your Results – You may need some motivation before you take on a new task.  Sit back and close your eyes for a minute (please finish reading this article first, though).  Imagine the feeling you will have when your most important goal is achieved.  See yourself enjoying that moment each day until the goal is reached.  Get excited about it.  Become determined to make this goal a reality.  Your attitude is going to be the driving factor in your success, not the stock market or economy.  To paraphrase Henry Ford, “if you think you can or you think you can’t, you will always be right!”  See it happening, and believe that you will succeed.

 

Prioritize – Write down your top three goals on a piece of paper, and prioritize them.  Post it prominently in your home or office.  Maybe you want to start a business, plan your estate, save more on income taxes, build a more secure investment portfolio or protect your business and other assets.  Don’t spread yourself too thin by taking on too much all at once, or little to nothing will get done.  Simply focus on your most important goal and attack it.  Take it one step at a time.  Come back to chip away at the other goals later.

 

Can’t decide which one to pursue first?  Then have a tournament and eliminate them one at a time until you come down to one.

 

Evaluate Your Resources – This economic climate is a serious challenge, but you can reduce your personal stress if you know where you stand right now.  Start with your net worth, which is a list of the things you own and what you owe.  Be honest with the value you place on real estate, art and other collectibles.  Determine what income you can steer toward your goals as well.  Now, draw a line in the sand and go forward from here.  This is your new starting point.

 

Know how much you spend – Most people think they spend 30% less than they really do.  That being the case, no wonder there is nothing left at the end of the month!  You don’t have to go through your spending in excruciating detail (although, it’s a very good idea).  Simply take the last 12 months of bank statements and add up the withdrawal amount in the summary section.  Yes, I know.  It adds up to a lot more than you had expected.

 

GPS For Your Money – The strategy you pursue should map out the path to your destination, but you may need a professional navigator to help you along the way.  Those who have helped others plan and succeed before you can save you a lot of trial and error, and may get you there a lot sooner.

 

Decide On A Plan Of Action – Your plan should outline the steps you need to take, who needs to be involved, what resources you need to commit, when things have to happen and when the goal will be achieved.  You may have to do a variety of things to make this goal happen, but it will be more manageable when there is only one objective for you to keep in mind.  Just don’t get lost in the details.

 

“A journey of a thousand miles begins with a single step.” – Ancient Chinese proverb

 

Get Moving!  Don’t delay.  You may want or need to include others in the process the same way a running back needs blockers, but you need to take ownership of the effort.  Don’t wait around for things and people to fall perfectly into place.  Sometimes you have to get started on your own, and you may have to make it happen entirely by yourself.

 

Check In Along The Way – “How long until we get there?”  You’ve heard this or probably said it a few times yourself, but it’s only natural for someone to ask this when you’re going somewhere.  You need to do the same with your financial strategy.  How are you doing?  Should you continue down this road, change direction, or end this effort altogether?  Don’t set a course of action without evaluating your progress, because you may need to make changes along the way.

 

Be ready for financial roadblocks and detours to pop up along your way (the economy is taking a big detour right now).  Expect tax hikes (to cover the big revenue gaps that are developing), health issues, job security fears, and swings in the prices of everything.  Realize that economic setbacks sometimes present the best opportunity to pursue your dreams.

 

Attitude Is Everything – So, put yours in high gear!  Expect to achieve success, and take action accordingly.  The thoughts you have throughout the day are the determining factor, so make them work for you.  Each goal you knock off will build your confidence and enthusiasm.  Now you can take on your next most important goal.  Be flexible in your approach, and be sure to leverage the feeling from your achievements to lead you to other goals and new heights.

What will you next?

 

Burt Williamson, MBA, CFP®

Financial Strategist, Keynote Speaker

858.220.6334

info@PlanPrep.com

www.planprep.com

PlanPrep LLC and Burt Williamson together are a Registered Investment Adviser.