Sequoia Investments and Insights: Recent Episodes
Sequoia Financial Group
Hello and welcome to the Sequoia Investments and Insights podcast, a podcast providing insights and resources to the financial markets, while discussing relevant and timely topics to help you navigate the current investment industry.
Heather Welsh:
I'm Heather Welsh, vice president of wealth planning with Sequoia Financial Group. On today's episode, we'll be discussing navigating your employer-sponsored retirement plan. Joining me is Kimberly Oros, vice president with CBIZ Retirement Plan Services. Kim, thanks for joining me today.
Kimberly Oros:
Thank you, Heather. I appreciate the time on today's broadcast with your Sequoia audience.
Heather Welsh:
With fewer employers offering traditional pension plans, individuals are tasked with taking a greater role in saving for retirement. Thankfully, many employers offer savings plans such as 401(k)s and 403(b)s to assist with your retirement planning goals. Those plans can take many different forms and have a wide variety of features, which may make them difficult to understand or maximize the benefits available to you. Kim brings her expertise today to help make sense of some of those nuances. Let's start at the beginning, Kim. When are you able to participate in your employer's retirement plan?
Kimberly Oros:
Retirement plans have two potential eligibility conditions, a minimum age requirement, and/or a minimum service requirement. Plan sponsors can set a requirement that participation in the company's plan occur as early as age 18, but no later than age 21. Employers also have the option to set a service requirement, granting entry to the plan immediately, or can require up to one year of service to join the plan. It is also worth mentioning these service requirements typically apply to 401(k) plans. Most 403(b) plans allow employees to participate immediately.
In addition, Congress recently passed the SECURE Act. The SECURE acronym stands for Setting Every Community Up for Retirement Enhancement. One of the provisions in this act allows long-term part-time employees, who may have been previously excluded from plan participation, the option to elect salary deferrals into their employer's retirement plan.
Finally, eligibility requirements vary by plan. To determine when you can participate in your employer's plan, request a document written in layman's terms referred to as the SPD, or summary plan description.
Heather Welsh:
If a plan includes a service requirement for plan participation purposes, does this prevent or delay an employee from rolling funds from a prior employer's plan into their new employer's retirement plan?
Kimberly Oros:
Thank you for mentioning eligibility requirements and how these requirements may apply to plan rollovers. Plan sponsors do have the option to waive eligibility requirements for incoming rollovers. Since so many employers proactively force out terminated employees with account balances under $5,000 for administrative ease purposes, we find in practice today that most of these same plans do allow rollovers immediately into the plan. This ensures that new employees have a place to invest account balances that may have accumulated from prior participation in other retirement plans.
Heather Welsh:
Thanks, Kim. In addition to contributions employees make, I know some employers also make contributions to the plans they offer. Can you discuss the differences between employer matching and profit-sharing contributions?
Kimberly Oros:
Sure, Heather. The main difference between matching and profit-sharing contributions is what you need to do to share in this contribution. Matching contributions require you, as a plan participant, to defer either a percentage or a flat dollar amount of your pay to receive the matching benefit. Profit-sharing contributions are added to your retirement account simply if you have met the plan eligibility terms.
Both matching and profit-sharing contributions are paid out based on a formula found in your summary plan description. Matching allocations can vary greatly, but tend to have two basic formulas, a match based on a percentage of compensation, or a fixed dollar amount. For example, match formulas based on a percentage of compensation could be stated as 25% up to 8%, or said another way, 25 cents on the dollar up to 8% of compensation. Another option is 50% up to 4%, which is 50 cents on the dollar up to 4% of your compensation. Match formulas that are based on a fixed dollar amount could be written as "50% up to $2,000." This means 50 cents on the dollar up to a maximum of $2,000, or dollar for dollar up to $500.
In contrast, profit-sharing contributions do not require a salary deferral, so these formulas are typically allocated based on a percentage of compensation, or a fixed dollar amount. For example, profit-sharing contributions could be allocated as 2% of your compensation, or provided as a flat dollar amount, such as $1,000 for each plan participant.
A couple of notes on profit-sharing contributions. Profit-sharing contributions can change from year to year. In most cases, profit-sharing contributions require that corporate profits exist, so in years like we are facing today, it is possible that no contribution would be allocated for the plan year. Most profit-sharing contributions are paid out after the end of the plan year, so it is likely that if you leave employment during the year, you may not receive a profit-sharing contribution for that year. This is commonly referred to as a last day of service requirement.
Heather Welsh:
Kim, could you discuss safe harbor contributions? Are these matching or profit-sharing contributions?
Kimberly Oros:
Great question, Heather. Safe harbor contributions can actually be either matching or profit-sharing contributions. In simple terms, we like to say that safe harbor contributions are really the gold standard for employer contributions. Safe harbor contributions require the plan sponsors get through a few additional conditions, but they really result in supercharged contributions for their plan participants. Safe harbor profit-sharing contributions provide all eligible employees with a 3% contribution. Safe harbor matching contribution provides those employees deferring to the plan with a dollar for dollar match up to 4% of compensation.
Heather Welsh:
Thanks, Kim. I understand that employer contributions may not immediately be yours to keep. Could you tell us a bit about vesting schedules and what factors should be considered if an employer's plan has a cliff or a graded schedule in place?
Kimberly Oros:
You are correct, Heather. Retirement plans can have three vesting options. These vesting schedules apply to the employer contributions, anything you defer from your paycheck is not subject to a vesting schedule. The three vesting options that may apply to employer contributions are immediate, cliff, or graded.
Immediate vesting usually applies to those gold standard safe harbor contributions, and they are more common in 403(b) plans than 401(k) plans. Immediate vesting means that every dollar your employer puts in the plan on your behalf is yours, regardless of the time you work for your employer.
Cliff vesting means your employer will deposit funds into your account, you will see those dollars on your statement, and will be able to select and modify the allocation of those funds, but these contributions are contingent upon a stated time period as an employee. Plans using a cliff vesting schedule must usually provide for 100%, or full vesting, within three years of employment.
Graded vesting, again, means that the funds are deposited into your account along with your 401(k) deferrals, but instead of the all or none vesting that occurs with a cliff schedule, graded schedules allow for a portion of your balance to vest each year. Vesting typically ranges from 20% to 25% per year, and plans using graded vesting schedules must typically provide for full vesting within six years of employment.
Heather Welsh:
With that background on the different types of employer contributions and vesting schedules, how do you make sure you don't leave money on the table when determining how much to contribute to the plan?
Kimberly Oros:
There are actually two ways that money can be left on the table in a retirement plan. The first is if your plan has a matching contribution. As we mentioned, employers can contribute to plans in two ways. If your plan provides a profit-sharing contribution, you are very fortunate, and are receiving the full contribution just by being an eligible plan participant.
However, if your plan provides for a matching contribution, this is where you could be leaving money on the table. Remember back to our match conversation, these funds are allocated based on a formula. To ensure that funds are not left on the table, make sure your contribution meets the maximum percentage or dollar amount set in your match formula. So if your plan matches dollar for dollar up to 4% and you contribute 3%, you are giving up a 1% tax-deferred pay raise every year you do not defer that full 4%. If your plan matches 50 cents up to $2,000, for example, and you defer $1,000, you are walking away from a $500 annual paycheck that is tax-deferred.
The second time when you could be leaving money on the table refers back to that topic of vesting. This comes into play if you are considering a job change. If you are not vested, or are partially vested in your retirement account, that means those unvested funds do not move with you to your new employer's plan, or to an IRA rollover. These funds stay in the current retirement plan, and are allocated to the employees remaining at the company. This actually seems fair, since these are the employees who will likely handle the work after you have left.
I am not saying that you should stay at a job until you are 100% vested in your retirement plan, but factor this into the decision, and/or your negotiations when evaluating a career move. This is definitely a time to read the fine print in your plan's SPD. Leaving on December 15th, for example, to enjoy the holidays, versus starting your new position on January 10th, could be the difference in whether or not you receive a profit-sharing contribution for the year, or receive another year of service credit if your plan has a graded vesting schedule.
Heather Welsh:
Kim, I've seen retirement plan provisions vary from one employer to another. What plan withdrawal provisions are required by ERISA law, versus optional provisions set by employers?
Kimberly Oros:
The only plan withdrawal provisions that are required by law are when you leave the company. This means if you no longer work for the company due to death, disability, or termination of employment. Features like loans, hardships, early withdrawal provisions and in-service distributions are all optional, and can be set by the plan sponsor.
Loans allow you to borrow half of your balance up to $50,000, which is typically paid back to your account over a five year term. Plans are typically limiting the number of loans outstanding to no more than two at a time. A hardship feature, on the other hand, gives you the option to withdraw funds from the plan permanently if you meet certain needs considered to be a true hardship. The list is restrictive, and limited to the exact financial need to cover the following expenses for yourself or a dependent. Post-secondary education, purchasing of a primary residence, to prevent eviction or foreclosure, to pay medical or burial expenses, in the case of certain natural disasters, and most recently, due to pandemic financial impact.
An early withdrawal provision means that if you do not meet the service requirements and retire before normal retirement age, but after early retirement age, which could be as early as age 55, your account balances becomes fully vested. Lastly, in-service distribution provisions allow a plan participant to withdraw funds while still employed, but after the age of 59 and a half. This option allows for diversification beyond the investment options set up in the plan.
Heather Welsh:
With potential changes to tax rates in the future, Roth contributions are becoming an area of recent discussion with many clients. Can you spend a few minutes discussing Roth options in retirement plans?
Kimberly Oros:
There are many misconceptions about Roth contributions in retirement plans. Many investors do not realize that you can invest Roth contributions in your 401(k) plan, and that these funds are only invested in a IRA account. While the Roth feature is optional, we do see this provision in most plans today. In addition, if your plan has a matching feature, these Roth deferrals are matched, just like traditional 401(k) deferrals. The match is calculated on a single matching contribution. The match is limited to the calculation of 401(k) deferrals combined with Roth.
The Roth feature that is not as common in plans is the in-plan Roth conversion feature, allowing for employers to take traditional 401(k) dollars made to the plan, and convert these Roth contributions by paying the taxes on these funds. We receive questions on this topic frequently, but not all vendors are equipped to facilitate these conversions and the required tax reporting.
Heather Welsh:
Thanks Kim, that's great insight. The recent market conditions have given many investors a better understanding of volatility and risk. Has this change created a greater focus on self-directed brokerage or managed accounts within retirement plans?
Kimberly Oros:
Yes, Heather, the recent and anticipated future market conditions have changed discussions with both plan sponsors and plan participants on these topics. Self-directed brokerage accounts have been available for many years, and allow a bit more investment diversification beyond the plan's core investment menu. These accounts work well for investors who want to do the heavy lifting themselves, and are willing to put a bit more time and research into managing their investments.
Managed accounts, on the other hand, are a newer entry into the retirement account world, and are on the other end of the investment management spectrum from self-directed accounts, by delegating this heavy lifting. Managed accounts are being referred to as the next generation of target date investment options. Target date funds invest retirement assets based on a retirement date. Managed accounts factor in the targeted retirement date, along with the investor's risk tolerance, prior retirement savings, and other demographic factors, to meet the investor's retirement goals.
Heather Welsh:
Kim, what are some best practices for 401(k) or 403(b) plan participants?
Kimberly Oros:
Best practices in today's retirement plan world focus on making plan enrollment, savings increases, and managing investment allocations easy. This ease comes with automation. Three automated processes we see in many plans are auto-enrollment, auto-escalation, and automatic rebalancing.
Auto-enrollment requires you to take action only if you don't want to participate in your company's retirement plan. If you do nothing, you will be automatically enrolled in the plan at a stated percentage, usually between 3% and 6%, and invested in an age-appropriate mix of funds. Both your deferral percentage and the investment mix can always be changed later, this auto-enrollment process just makes it easy to get started. Auto-escalate takes auto-enrollment one step further. Auto-enrollment gets you started in the plan at a stated percentage, and auto-escalate increases every year to a maximum percentage, typically ranging from 6% to 10%.
Finally, automatic rebalancing keeps your investment allocation in line with your targeted investment mix. This process can be set up to occur quarterly, semi-annually, or annually. This process looks at your current balances and realigns these balances to match your investment elections, ensuring that your portfolio does not get more aggressive or conservative than your targeted allocation. It's also important to note that to manage these automatic features, it's a great idea to register on the plan vendor's website. In addition to the trend of making plan administration easier, the other trend is making plan operations green, so most vendors now use an app to allow for quick and secure enrollment, replacing the paper booklet and forms of the past.
Heather Welsh:
In today's environment, many people may be considering a change to their employment. Earlier, you mentioned how vesting could impact your retirement account balance in this situation. Is there anything else that our listeners should be aware of if they make a decision to leave their current position?
Kimberly Oros:
There are a couple of questions to ask or factors to consider. Number one, do you have an outstanding loan balance? If so, how is that loan balance treated? Two, is there a last day requirement to receive a matching or profit-sharing contribution? Three, what options do you have to keep your funds in your employer's plan, or will you be forced out of the plan? And four, if you want to remain in the plan, what fees will be assessed to you as a terminated plan participant? Finally, ask your new employer about fees in their retirement plan. If you have a large rollover coming into the new plan, it may be more effective to roll those funds into an IRA account.
Heather Welsh:
Kim, thank you so much for walking us through all of these details. If you have an employer-sponsored retirement plan available to you, consider enrolling as soon as you're eligible to do so. While these plans can be complex, they're great tools to help you achieve your retirement planning goals. Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit the talk to an advisor page on our website to schedule a meeting at sequoia-financial.com/talk.
Closing
Thank you for joining us today, we hope you enjoyed our discussion. Please share our podcast on social media, and leave a comment so we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC-registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Hello, and welcome to the Sequoia Investments and Insights Podcast, the podcast providing insights and resources to the financial markets, while discussing relevant and timely topics to help you navigate the current investment industry.
Heather Welsh:
I'm Heather Welsh, vice president of wealth planning with Sequoia Financial Group. On today's episode, we'll be continuing our discussion of teaching your children about money, with a special focus on how to accomplish this in today's digital world. Joining me is John Marchand, a vice-president and advisor at Sequoia. John, thanks for being here today.
John Marchand:
Thanks Heather. I'm really glad to be here. And when I think about teaching my children about money, I can't help but think back to when my dad would say to me, at a very early age, that, "John, money does not grow on trees." And I think if I said that to my seven year old or five-year-old today, they would look at me and say, "Why would anyone think money grows on trees?" And I guess I can't blame them for thinking that, because for them money is in the phone, right? So if they know mom's password to Amazon, they can order the next latest and greatest toy, and it shows up a day or two later.
Heather Welsh:
Yeah, John, that's very true. And today's cashless spending makes educating children about the value of a dollar even more difficult. However, I don't think all hope is lost.
John Marchand:
No, it definitely isn't. And the good news is, you can start early, right? So studies show that you can start as young as age three, and kids are ready to learn about money, right? So as we all know, kids learn by experiencing things and having fun. Basically, if your child is old enough to count you can start off by counting change, right? So dump out that piggy bank, and have them go through it, and maybe even make it a game, right? So count enough change to go buy that item at the local drive-through, or snack. Make it fun, right? I know with our kids, we'll take them to the grocery store with us, and we'll try to look for a good deal, right? So where in the aisle can we find the best deal? And it helps them understand that things have different values. And if you save money on one item, it leaves more money for another item.
So it's fun. It doesn't have to be a classroom setting. And finally, I would also say kids are into technology. I think my kids use technology almost more than I do. And so why not use that technology to help with lessons? One app that we use as a family is Piggy Bot. It's an app that's a virtual piggy bank. So our kids do have the traditional piggy bank, because mom and dad and grandma and grandpa do give cash on occasion. But they also like this virtual piggy bank, and it's fun for younger kids. Basically the whole goal at an early age would just be to teach them that money is not endless. It has to come from somewhere, and it has a value. Heather, what about as children get a little bit older? Do you have any tips on introducing or managing allowances?
Heather Welsh:
When your children are old enough for a weekly allowance, you can start to help them further understand how money is earned and saved. If they perform a job, they receive a paycheck. The harder the job, the larger the reward. When introducing the idea of allowance, set some parameters. Sit down and talk to your child about the types of purchases you expect him or her to make, and how much the allowance should go towards saving. Encourage your child to divide his or her money up. For instance, your child might want to save some of it toward a long-term goal, share some of it with a charity, and spent some of it right away. Young children may lose interest in goals that take longer than a week or two to reach. And if your child fails to reach a goal, chalk it up to experience. Over time, your child will learn to become a more disciplined saver.
Bringing technology into the mix, as you mentioned John, can really help to capture your child's interest in learning about good money habits. There are a variety of apps that can be leveraged to manage allowances. Bankaroo functions like a virtual bank, to aid kids in learning behaviors that help them save and budget for their future spending. Rooster Money is another option, with core features that are free to use, and additional building blocks that do carry a fee. You can use this app to slowly introduce the concept of earning and budgeting through stars, then switch from stars to money for older children. The app can be linked to Alexa, so children can ask Alexa what chores need to be done for the day. And the dashboard offers spend, save, give, and goal spots. Plus the platform provides educational resources.
John Marchand:
So Heather, beyond managing allowances through these apps, how else can technology help kids learn about money?
Heather Welsh:
There are some financially focused video games that can help teach children about a variety of money related concepts. While screen time can be a concern, there may be ways for parents and grandparents to use some of that time in a way that benefits children. For example, Animal Crossing New Horizons is a game that introduces players to a virtual economy and incorporates the idea of buying low and selling high. Succeeding in the game requires grasping the concept of supply and demand, spending wisely, and managing the currency used in the game. Next Gen Personal Finance has several online arcade games covering things such as budgeting, investing, credit, insurance, paying for college, and more. Also, Con 'Em If You Can is an online video game that helps students from middle school through college age recognize the red flags of fraud and defend against them.
John, as children head into the teen years there's even more to learn about money. What insights do you have for parents and grandparents of teenagers, and the role that technology can play for them?
John Marchand:
So it's an interesting age, of course, to say the least. Usually this is when they're going to have their first job, or even more responsibility around the house. So these jobs are a great way for them to learn about the value of a dollar, right? So learning more about saving for the future needs is going to be a really key point as a teenager. Around this time, they probably should think about opening their first bank account. So again, you could do that online, or you can actually go to a local bank and open an account. So they're going to see the value of that online statement going up and down, right? So they're going to learn the value of going to work, adding some dollars to that account, and they're going to get to see that.
They're also going to make mistakes, right? So that's absolutely going to happen, and really those are going to be great lessons. So allow them to make some mistakes. Some small dollar mistakes can lead to great lessons, right? So it's almost a cost of education a little bit. I think it's a really key time for kids to learn their own dollars and what to do with them, with parental supervision of course. If you think about technology in this space, there's a really cool app called Busy Kid. It allows you to actually upload chores and assign monetary values to each of these chores. Once your child completes it, he checks it off, you can check to make sure the job is done, and then you can add that value to the account. This app also allows you to make online purchases, gift to charities, even purchase stock. All this is with parents prior authorization, so they're not going to be able to buy a stock without you authorizing it. But I think this is a great way for kids to start to learn about not only the value of a dollar, but how to invest.
Heather Welsh:
Those are great suggestions, and really helps to tie it all together, John, when we think about the importance of the various uses of money, spending, saving, investing, and giving. And that seems to hit it all. Remember that it's never too early to start financial education. And if we use technology, we can make saving and spending interesting. While apps and games can make learning about money fun, remember that managing real money is serious business. Talk to your children about how to use the skills they learn in the virtual world to make logical decisions in real life.
Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit the talk to an advisor page on our website to schedule a meeting at sequoia-financial.com\talk.
Recording:
Thank you for joining us today. We hope you enjoyed our discussion. Please share our podcast on social media, and leave a comment so we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals. Investment advisory services offered through Sequoia financial advisors, LLC., an SEC registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Hello, and welcome to the Sequoia Investments and Insights podcast. A podcast providing insights and resources to the financial markets, while discussing relevant and timely topics to help you navigate the current investment industry.
Heather Welsh:
I'm Heather Welsh, vice president of wealth planning with Sequoia Financial Group. On today's episode, we'll be discussing, teaching your children about money. Joining me is Ashley Male, vice-president and advisor with Sequoia. Ashley, thanks for being here today.
Ashley Male:
Thank you, Heather. It's great to be here.
Heather Welsh:
Ask a five-year-old where money comes from and you'll probably get an answer along the lines of, from a machine. Even though children don't always understand where money really comes from, they realize at a young age that they can use it to buy the things they want. Children also notice the discussion or lack of discussion of money at home. The simple lessons you teach today will give your child a solid foundation for making a lifetime of financial decisions. Less than half of states currently require a financial literacy course in high school.
Ashley Male:
And you know, Heather, many of those courses are often electives. So I would suggest please encourage your kids to take those classes when they're offered.
Heather Welsh:
Absolutely. And high school is also fairly late to start helping children understand money. It's best to start teaching kids about money as early as possible. By age three, kids can grasp basic money concepts, and by age seven, many of their money habits are already set. But that doesn't mean you stop trying to teach them about money after first grade.
Ashley Male:
Well, Heather, along those lines, do you have suggestions to start the money conversation with young children?
Heather Welsh:
It's important to put it in terms children can understand and in a way that will be of interest to them. One way I've found to accomplish this is through a book titled, The Four Money Bears by Mac Gardener. The book describes what you can do with money in the most simple terms, spend it, save it, invest it, or give it away. It personifies each of these uses of money through cartoon bears and evaluates the pros and cons of each of them when done in isolation. First we meet spender bear who spends every dollar earned. Some benefits of spending might be having nice things, a feeling of accomplishment, or looking good to others.
Heather Welsh:
But on the flip side, it means you don't have any savings available for emergencies. From there, we turn to saver bear who saves every dollar earned. Savings is a good habit to start off with. It's a safe way to grow money, and means you should have cash when needed. However, if you save everything, you don't give yourself the opportunity to enjoy the present or experience the joy that may come from giving or sharing with others. The key here is highlighting that you expect funds you save to be there for emergencies without losing value.
Ashley Male:
Heather, it's funny. I have 14 year old twins and I actually have a spender bear and a saver bear. My son is definitely the spender, and anytime he has a dollar in his pocket he wants to spend it. My daughter is the saver bear and she saves everything. But she's now become the lender to my son who is the spender bear. So he's borrowing from her and she's become the bank.
Heather Welsh:
Does she charge him interest?
Ashley Male:
It's funny you ask that, because I asked her the same question and she said, "No, he's my brother. I would never do that." And I said, "Well, maybe you should. He might learn some things if it costs him a little extra."
Heather Welsh:
It's amazing what we can learn from these real life situations. And that idea of interest, it's a good segue to thinking about the third bear in the book, investor bear, who invests every dollar earned. And investing can be a great way to increase wealth over time. It may allow you to own a business or real estate, and it helps build wealth for future generations. That said, investing can be risky and money can be lost. It takes time and knowledge to be a successful investor. Investing is different from savings because of this risk element. If you put $100 in, you're not guaranteed to get it back. You might also use this opportunity to talk about different types of investments, depending on the age of your child. For example, stocks versus bonds.
Heather Welsh:
And finally, we meet giver bear, who gives away every dollar earned. Giving is a nice way to take care of those who need help. It helps organizations in your community such as churches, schools, or other charities. However, if you give everything away, there's nothing left for your personal needs. People might take advantage of you, and you're left with nothing to save or invest for your future. Talking about giver bear may be a good time to introduce the idea of philanthropy to your child, and open the discussion about different places to give. In reality, the four uses of money need to be used in collaboration. The book goes on to show the four bears working together to create a budget, and encourages readers to spend cautiously, save diligently, invest wisely and give generously.
Ashley Male:
That's fantastic, Heather, and I've encouraged my twins to also be the giver bear. So they do a lot of giving to the community, they do a lot of our organizational things, and not just dollars, but also volunteering their time, which is important too. So, on a different topic, one classic way to teach children about money is using a piggy bank. What suggestions do you have to use those effectively?
Heather Welsh:
It's a great question, Ashley. Savings sets a great example. And one of the easiest ways that we learned to do that at a young age is with a piggy bank. You might consider letting children pick out their own piggy bank. And you can use this as a chance to talk to them about their savings goals and tracking progress toward them. You might even use more than one piggy bank to help your children save toward different goals. While children might not be saving up for anything specific when you start, encourage them to think about what they might want to use the money for someday.
Heather Welsh:
Whether it's a new toy, a video game, or a pair of sneakers, it's a good time to point out how much these items cost, and how much they'll need to save in order to buy them. To help them better understand, you may motivate your children to find ways to earn money to put into their piggy banks. Even if they're not old enough for a part-time job, perhaps they take on some additional chores to earn an increased allowance. Even though small amounts might be added, the money in the piggy bank is the child's money and it can add up.
Ashley Male:
Well, Heather, we're reaching that point now with the savings and the piggy banks. So as that builds up, it might be worthwhile to put those dollars into a savings account. Do you have any tips on setting up bank accounts for children?
Heather Welsh:
It is important to set up a savings account for your child, so that the money that they save or receive as gifts can earn interest and be available to them in the future for things such as buying a car or making a down payment on a house. If you haven't opened a savings account for your child yet, take them with you to the bank to do so if they're beyond the toddler stage and would be able to sit through the account opening appointment. Perhaps they bring along some of what they've accumulated in their piggy bank. If you already opened an account for your child, consider bringing them into the bank to make a deposit. Knowing that there is a brick and mortar building may help make the idea of a savings account less abstract. Ashley, I know you've found some great ways to work money lessons into the day-to-day life for your children. Could you share some examples with us of what's been successful for you in your family?
Ashley Male:
Absolutely, Heather. One thing that we've done just over the past year, because we're coming up on driving age, we've been saving some money for car insurance, and gas money, and all of these things too. So, the savings account is definitely coming in handy. But we've also over the years worked at negotiating the value of a chore. So, I like to say, "earning opportunity," and both of them perk up and say, "Okay, what are we working on?" And I do ask them to negotiate ahead of time. So, what is the wage? How long will it take? And really arrive at a value that they think it's worth. So, I'll put some dollars aside into an envelope and I tuck that away so they don't see the amount and I ask them to negotiate. My son usually goes high in the negotiation, and my daughter usually goes low.
Ashley Male:
And I found that interesting too. So, I've worked with them to really understand the value and what they'll receive for each of those chores. But a number of years ago, my son, he was interested in some basketball shoes. Both my kids play basketball competitively. And they were the Curry basketball shoes. And it was right around the time that Steph Curry was MVP. I know he's been MVP a number of times, but my son came to me and said, "I really, really would like these shoes." So I asked him to do a little project. And I asked him to do a report and a presentation on the pros and cons of buying the shoes. So he put in the features, the benefits, and he presented all the material to me. And it was a great presentation. I had to give him kudos.
Ashley Male:
But then I said to him, "There's something missing. What's in it for mom? If I buy you these shoes, what do I get out of it?" So I wanted him to understand that there's always two sides of it, and both parties need to be happy. So he thought about it for a little bit, and he said, "Mom, you know how you like to show the videos every time I make a three point shot and you share that with all the people at work?" I said, "Yes, I do that quite a bit." And he said, "I'm going to make so many more three point shots with these shoes." So I had to give it to him. And so, he went online and he came back to me. He was so disappointed. He said, "Mom, they're sold out." And I said, "I know, because Steph Curry just got MVP last night."
Ashley Male:
And so, he was very disappointed. And I said to him, "The shoes are going to arrive tomorrow." He said, "Well, how did you know?" I said, "Well, I anticipated that you might want these, so I went ahead and ordered them." And he said, "Well, what if I didn't do the project?" I said, "There's free shipping back to the store." So now he comes to me every time he wants something, he'll get the free shipping. He also looks for discounts, so it costs less. And it's really not going to cost mom or dad any more dollars. So those are a few things that we've done.
Ashley Male:
But another interesting point, and many might see this as they're sending their kids to camp, field trips, things of that nature, many of the venues now they don't take cash. So, it's electronic payments. And one of the field trips that they took a couple of years ago, it was really a field, and there was a game, and they only took credit cards or Apple pay. So I set up Apple pay on their phones, but I was very clear about their spending limits. So, I tried to set really strong guidelines on when and where and how they can use those things. Because that can certainly get out of hand quickly. But that might be something that we see in the future.
Heather Welsh:
Absolutely. Those are great insights. Thank you, Ashley. I know I have a few good takeaways for when my son who's currently in the toddler stage, and wouldn't be sitting through the account opening appointment at the bank gets a little bit older. I think the key is to look for opportunities to create money lessons in everyday life. Real-world lessons may be harder to come by as online banking and bill pay become increasingly common, but there is still plenty of ways to engage children and help them learn about money. Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit the talk to an advisor page on our website, schedule a meeting at sequoia-financial.com/talk.
Closing
Thank you for joining us today. We hope you enjoyed our discussion. Please share our podcast on social media, and leave a comment so we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals. Investment advisory services offered through Sequoia Financial Advisors LLC an SEC registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Intro:
Welcome to today's special edition episode of Sequoia Investments and Insights Podcast. In this miniseries, you'll hear from our female advisors, team members, partners, and colleagues, on relevant financial planning topics and opportunities, to help you take control of your finances and your future.
Heather Welsh:
I'm Heather Welsh, Vice President of Wealth Planning with Sequoia Financial Group. On today's episode, we'll be discussing planning for parenthood. Joining me is Marian Pico, Senior Client Service Associate with Sequoia Financial Group, who recently both obtained the Certified Financial Planner Designation and welcomed to baby girl to her family. Marion, congratulations on both counts and thank you for joining me today.
Marian Pico:
Thank you for having me so excited for this topic.
Heather Welsh:
Parenthood can be both wonderfully rewarding and extremely challenging. Children are special blessings, and they're also very expensive. Whether you're planning for the arrival of your first little one, or subsequent additions to your family, there are financial matters to consider as they relate to having and raising your children.
Marian Pico:
Heather, when planning for the financial aspects of parenthood, where do you suggest starting?
Heather Welsh:
As your family grows, you may need to make changes to your budget. You may find that some expenses go down, such as dining out or entertainment, like tickets to concerts and plays. However, in most cases that's not enough to offset the expense increases. Many living expenses will increase, including formula, baby food, and eventually regular groceries, clothing and diapers, and household supplies. You may also need to account for new expenses, such as childcare, or adjust your budget to account for a decrease in your income if you decide to become a stay at home parent. Your budget may also need to expand to include new financial goals, such as saving for college or buying a home. Making sure that your budget reflects your new financial priorities can help you stay on track.
It's important to reevaluate your budget over time, as your family's expense needs and income changes. When you receive a raise, or an expense decreases or is eliminated, it's important to determine how to best use those newly available dollars to achieve your family's financial goals. For example, childcare costs in a daycare setting are more expensive for infants than for older children. When my son, who's now two, moved from the infant room to the toddler room, the weekly cost of care decreased. We decided to take the amount of that savings and automatically invest it in his 529 plan for college. If we hadn't made that decision, it would have been easy to simply spend the money on some extra cups of coffee, which we could certainly use to maintain energy chasing after a toddler, or other items that wouldn't necessarily have helped us make progress toward our financial goals.
As time goes on, you may not be paying for childcare anymore, but cost for children's activities can add up depending on their interest, or you may decide to send children to private school. The only thing that is certain is that things will change and your budget can adapt accordingly. Another consideration when having a child that will impact both your budget and your broader financial situation is your insurance needs. Marion, what tips do you have regarding insurance planning for new parents?
Marian Pico:
If you're married or you and your spouse may both be eligible for employer sponsored health insurance. If so, it is a good idea to compare plans to see which spouse's policy or first the best coverage so you'll be prepared during the open enrollment period. This is important both when starting a family and as time goes on, as the coverage offered to you may change, or members of your family may have different healthcare needs. Key thing here is that as time goes on, your coverage options and your family change as well. Make sure to review your coverage during open enrollment to determine what is best for your family. Remember that you'll have another person to ensure after birth. Fortunately, adding a baby to the health insurance plan is usually not a problem. Just ask your employer or insurer what you need to do, and when, usually within 30 days of birth or adoption.
To make sure your baby will be covered from the moment of birth, good medical coverage for your baby is critical because trips to the pediatrician, prescriptions and other healthcare costs can really add up over time. Expect additional premiums and out of pocket costs such as co-payments and deductibles after adding your baby to your health plan. Keep in mind that a baby will have to satisfy their own deductible, which quite frankly took me by surprise. Also, make sure to take advantage of your health savings account to fund expenses of pregnancy and childbirth using pretax contributions.
Heather Welsh:
That's great advice, thank you Marion. Aside from health insurance, are there other types of coverage that you would suggest people reevaluate as they prepare to welcome a little one?
Marian Pico:
Absolutely. If you don't already have life insurance, consider getting it. If you already have life insurance, reevaluate your coverage. And if you are a stay at home parent, you may still need life insurance because your spouse may have to pay someone for childcare in your absence. In addition to life insurance, it's also important to protect your earnings capacity. Heather, what are your thoughts on disability insurance?
Heather Welsh:
That's a great question Marion. And people often think about life insurance, but protecting your ability to earn an income with disability insurance isn't thought about as frequently. Statistically, working age individuals are much more likely to become disabled than to pass away. If you become disabled or are unable to work, disability income insurance can pay benefits based on a specific percentage of your income, or a flat monthly amount, so that you can continue meeting your financial obligations until you're back on your feet. Social security disability benefits are often difficult to qualify for unless you're totally and permanently disabled. I recommend seeing what coverage is available through your employer, and potentially considering individual disability coverage to protect your income.
Marian Pico:
While he may not be pleasant to plan for the worst by discussing life and disability insurance, it's an important step to take. Heather, what else do you recommend new parents do to best protect their family?
Heather Welsh:
With a new baby to think about, you should revisit or establish an estate plan. With the help of an attorney, you should prepare a will, if you haven't already. If you have a will make sure it's in line with your current wishes and includes plans for taking care of your children. You'll need to address what will happen if an unexpected tragedy strikes. Who would be the best person to raise your child, you should also name a contingent guardian in case the primary guardian dies or is otherwise unable to serve. If you already have a will, it's possible that you may have included guardian provisions in anticipation of having children, but that's not always the case. If guardian provisions were written in already, it's possible that you may want to include a different guardian now than whoever you previously named.
For example, if you named your parents, but some time has passed before children actually came into the picture. Are they still at an age and in good enough health where they would be able to care for your child until at least age 18? So that his or her life doesn't have to be disrupted once again. Guardianship also involves managing money and other assets that you leave your minor child. You may want to ask your attorney about setting up a trust for your child and naming trustees separate from the suggested guardians in your will. We generally recommend that this be done through a revocable living trust rather than a testamentary trust within your will. Since a revocable trust can help with managing assets if you're ever incapacitated, and also helps avoid the delays and costs of probate. While working with your attorney, you should also consider completing or updating your financial power of attorney, healthcare power of attorney and living will.
These documents allow you to designate someone to act on your behalf for medical and financial decisions if you become incapacitated. When your children reach age 18, they should also establish their own basic estate documents. This will allow you as a parent to step in if there are unforeseen events. Speaking of reaching age 18, having children also often comes with many questions about planning for college funding. Marion, could you share some college planning insights with us?
Marian Pico:
Absolutely. College costs may seem daunting, especially if you're still paying off your own college loans. By starting early, you can help your children incur lower debt for their own college education. Try to save a little bit each month, take advantage of compound interest, and have a sum waiting for you when your child is ready for college. Many different savings vehicles are available for this purpose, some of which have tax advantages. You can also suggest that family members who want to gift could contribute directly to your selected college savings account. While you may be tempted, don't put savings for retirement on hold while you save for college. Your child may receive financial aid to pay for college, but there's no such option for your retirement. Remember you can borrow for retirement. Ideally, you'll want to save regularly for both goals, but if you have limited funds, prioritize saving for retirement.
Heather Welsh:
Those are fantastic insights, thank you Marion. Parenting is an incredible journey and tackling the financial planning aspects of it is extremely important. By reviewing your budget, evaluating your insurance needs, establishing an estate plan, and saving for college if it's an expense you intend to provide for, you can set a solid foundation for your growing family to achieve your financial goals. Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit the Talk to An Advisor page on our website to schedule a meeting at sequoia-financial.com\talk.
Close:
Thanks again for joining us today. We hope you enjoyed our discussion. Please share our podcast on social media, subscribe, and leave a comment, so that we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals. Founded in Ohio in 1991, Sequoia Financial Group LLC takes a truly client centered approach to providing comprehensive financial planning and wealth management services, including asset management, estate, and retirement planning, and family wealth services. Today Sequoia has more than 90 employees in offices throughout Ohio, Florida and Michigan. Investment advisory services offered through Sequoia Financial Advisors LLC, an SEC registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Intro:
Welcome to today's special edition episode of Sequoia Investments and Insights podcast. In this mini-series, you'll hear from our female advisors, team members, partners, and colleagues on relevant financial planning topics. And opportunities to help you take control of your finances and your future.
Heather:
I'm Heather Welsh, vice president of wealth planning with Sequoia Financial Group. On today's episode, we'll be discussing planning for marriage. Joining me is Sara, senior manager, and private client services at Sequoia. Sara, thanks for being here today.
Sara:
Thanks for having me.
Heather:
There's a lot that goes into planning a wedding, the ceremony and reception, invitations and flowers, venue and music, and more. Beyond planning for the wedding day itself. It is also important to take a look at how marriage will impact your financial situation. Well, there's a lot to think about careful planning can increase the likelihood that you'll have financial success as you enter this new chapter in your life. Sara, this is something you're experiencing firsthand right now, as you plan for this new phase in your own life. Congratulations to you and your fiancé. Where did you start when trying to sort all of this out?
Sara:
Yeah. Thanks Heather. It's crazy that we really can't be planning the actual day itself due to COVID and things have gotten delayed there. But we can certainly start to plan for our financial future. We both work in financial services, which makes it a bit easier to discuss our finances, but we've found that communication is key Heather. And really the more thoughtful you work together on money matters, the more financial harmony you'll maintain. So I really recommend starting by taking an inventory of what you have, what you owe and what your current spending habits are. And as uncomfortable as it might be, sometimes it's important to identify any financial commitments or financial problems that you might have, whether that be student loans or credit card debt.
Next, I recommend establishing goals and creating a spending plan and a budget. It's common to have differences of opinion when it comes to finances and allocating some time each week to map out your financial future can really help to be on the same page with one another. I recommend starting by discussing your short and long-term goals, short term can be three to five years. So that could be buying a house. Having a family long-term would be more five plus years, which could be planning for retirement, college planning, things of that nature. Once you have your goals, I recommend figuring out what's most important to you both in creating a budget. Budgeting is a great tool to help you determine how you can achieve your goals. We recommend having two budgets. One when cashflow is good and another in case money gets tight. We know that things change over time. So making sure to review periodically to determine if any changes are needed, we recommend doing most likely an annual basis.
Heather:
Thanks Sara, with the background of where you've each been and thoughts on where you'd like to be in the future in terms of your financial goals, how do you think about managing your assets together?
Sara:
That's a great question, Heather. I really think it comes down to a few different things and that everyone's different. So it started by talking about, do we keep separate versus joint bank accounts? And there was really a few advantages and some disadvantages to both. If you wanted to keep joint bank accounts, some advantages are that you could see easier record keeping, reduced maintenance fees, less paperwork. When you do apply for a loan and simplified money management. If you do choose to keep separate accounts, I recommend considering open and joint checking account for household expenses.
Once you've made that decision, I recommend getting organized by looking at your budget and expenses. I can't say enough how much I recommend having an emergency reserve in place and what that is is at least a six month cash reserve out living expenses, plus any major expenses within the next 12 months or so. The savings should absolutely be part of your monthly expenses. So employer sponsored retirement plans, such as 401(k)s and 403(b)s are great ways to save each payday. It's important to discuss the investments within them and your risk tolerance. A good rule of thumb for you and your spouse is save 49% of your combined gross earnings while you're in your 20s. And then double that savings percentage as you reach your 30s and 40s.
Heather:
That sounds like a solid foundation. Thanks Sara.
Sara:
Absolutely. I know another side of it is the more defensive side, which would be estate planning and insurance coverage. So can you go into a little bit more detail on those areas?
Heather:
Definitely. So as you plan for your financial future together, you should also look at how marriage impacts your insurance needs. Since lack of proper insurance protection can have significant adverse financial consequences. While you might not have felt the need for life and disability insurance when you were single, once you're married, you may find that you and your spouse are financially dependent on each other. If you don't have life or disability insurance, you'll likely want to policies put in place in order to make sure that your spouse's financial needs are taken care of. If you pass away or become disabled and can't work, if you already have life and disability insurance, you should reevaluate the adequacy of your existing coverage. You should also take a look at your property and casualty insurance. This would be things like auto insurance, homeowners, or renters coverage, and possibly an umbrella policy.
For auto insurance check your policy limits and deductibles. Consider pooling your policies with one company, since your insurance carrier may give you a discount if you insure more than one vehicle with them. As for homeowners or renters insurance, you'll want to make sure that your residents, as well as personal property is adequately covered. Coverage for valuable items is generally limited under homeowner's or renter's insurance. So you may consider a personal articles policy for specific items like your engagement ring. While you're evaluating your coverage, also consider an umbrella policy to provide additional liability protection beyond the basic limits in your auto and homeowners coverage.
Finally, evaluate the health insurance options available through your respective employers. Marriage is considered a life event that allows you to make changes to your health insurance selections outside of the typical open enrollment period, but you have a limited window to do so. So it's important to consider your options in advance. Look at the premiums, deductibles and out of pocket maximums, as well as in versus out of network coverage. Are your existing doctors in network? Does one plan provide only local coverage compared to the other offering nationwide benefits? If you travel for work or pleasure a broader network, maybe advantageous in case something happens when you're out of town? Well, no one likes to think about things going wrong, having adequate insurance coverage and finding the best way to cover both you and your spouse is key.
Sara:
That's really helpful. And talking about things going wrong. Another item people often don't like to bring up is prenuptial agreement. So what are your thoughts on prenups.
Heather:
If I or you or your fiancé has, or might inherit substantial assets, particularly if those assets include business interests. Or if either of you has children from previous relationships, you may want to consider a prenuptial agreement. A prenup is a binding contract between future spouses that defines the rights, duties, and obligations that each of you have during the marriage. And in case of legal separation, annulment, divorce, or unfortunately death, a prenuptial agreement typically addresses four areas, first assets and liabilities. Like you mentioned earlier, Sara, it's important to understand what you're each coming into the relationship with. What assets will you each bring into the marriage? What liabilities do each of you have?
Next contributions of each partner. Will there be particular consideration given for special contributions that either of you make? For example, if one spouse limits his or her career to raise children or allow for mobility in the other spouse's job. Also, and something that people don't typically like to think about heading into the marriage divorce, if you and your future spouse divorce, will there be alimony or a lump sum payment? How will you divide assets that were purchased from joint funds? Finally estate planning who gets, what if either of you were unfortunately to pass away?
Sara:
That's really helpful Heather, and with the prenup conversation out of the way, are there other legal documents that you suggest couples consider when getting married?
Heather:
Absolutely. The foundational estate planning document is a will, your will establishes your wishes for the distribution of your estate and provides direction on how those wishes should be carried out after your death. Even if you already have a will, you should likely update it when you get married, dying in testate or without a will, can create challenges for surviving family members that could otherwise be avoided. State laws vary from state to state, but in the absence of a will, it's possible that the surviving spouse might only retain between one third to one half of the estate, if you have children from other relationships.
Once executed, be sure to review your wills every three to five years, to make sure they address your changing circumstances and potential legislative changes. As part of this process, you'll also want to consider other estate planning documents, including a financial power of attorney, healthcare power of attorney, living will, and possibly revocable trusts. If you already have these documents, make sure they reflect your current wishes in light of your marriage. Once the documents are signed, you're not quite done with your estate planning yet. Sara, what additional steps do you recommend taking to make sure your assets pass to the people you intend that they go to?
Sara:
That's a great question, Heather. And really we recommend this for every single account that we open with Sequoia, whether that be at Schwab, Fidelity or an annuity, we recommend having beneficiary designations. And these could be on your retirement accounts and life insurance accounts as well, to make sure that that your estate plan is as up to date as can be. So these beneficiary designations actually take precedence over the instructions left in the will. So we need to be sure that your beneficiaries are current and up to date, depending on the type of plan you might need your spouse's consent to actually name someone else as the beneficiary. This applies to most employers sponsored retirement plans like your 401(k) or your 403(b). It's often most advantageous from a tax perspective, to leave those assets to your spouse and consider other assets or life insurance to provide other beneficiaries such as children from a prior relationship.
Heather:
Those are fantastic points. Thank you, Sara. As you can see, marriage and money can be complicated, but the best thing you can do is be open and honest with communication, trust, and a bit of planning you and your spouse can avoid many potential conflicts about money. By assessing and discussing your financial situation, deciding on a plan for managing your assets, evaluating your insurance needs, and establishing or updating your estate plan. You'll have laid a solid foundation for your marriage. Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit the talk to an advisor page on our website to schedule a meeting at sequoia-financial.com/talk.
Close:
Thanks again for joining us today. We hope you enjoyed our discussion. Please share our podcast on social media, subscribe and leave a comment so that we can continue providing topics and interesting segments focused on the financial industry. Until next time we hope you reach your financial and life goals. Founded in Ohio in 1991, Sequoia Financial Group LLC takes a truly client centered approach to providing comprehensive financial planning and wealth management services, including asset management, estate and retirement planning, and family wealth services. Today's Sequoia has more than 90 employees in offices throughout Ohio, Florida, and Michigan. Investment advisory services offered through Sequoia Financial Advisors LLC, an SEC registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Welcome to today's special edition episode of Sequoia Investments and Insights podcast. In this miniseries, you'll hear from our female advisors, team members, partners, and colleagues on relevant financial planning topics and opportunities to help you take control of your finances and your future.
Heather Welsh:
I'm Heather Welsh, Vice President of Wealth Planning with Sequoia Financial Group. On today's episode, we'll be discussing taking control of your finances. And joining me is Laura Springer, Director of Private Client Services at Sequoia. Laura, thanks for joining me today.
Laura Springer:
Thanks for having me, Heather.
Heather Welsh:
Each of us has financial needs that are unique to our situation in life. Perhaps you would like to buy your first home, maybe you need to start saving for your child's college education, or you might be concerned about planning for retirement. Likely, you have several different goals that overlap and wonder how the many components of your financial life might fit together to achieve them. Whatever your circumstances may be, it's important to have a clear understanding of your overall financial position. That means constructing and implementing a plan. With a financial plan in place, you'll be better able to focus on your financial goals and understand what it will take to reach them. Today, we'll talk through the three main steps in creating and implementing an effective financial plan in order to take control of your finances. Laura, you have a lot of experience helping individuals and families through the planning process. Where do you begin?
Laura Springer:
Thanks, Heather. We do find many people are hesitant to take that first step in understanding their financial picture because there are so many pieces of their financial lives they're just not sure where to start. We suggest beginning with understanding your cashflow. This provides a base for us to meeting your ongoing spending plan and will help in solving how much you need to save each month to maintain it for the long term. You'll want to start by tracking your income and monthly expenses for a few months.
Heather Welsh:
Laura, we find that many people don't have a strategy for tracking spending, especially if they carry several credit cards or have multiple bank accounts. Do you have suggestions for how to streamline this?
Laura Springer:
Yep. That's a commonly asked question, Heather. There are a few ways to do this. If you enjoy using technology, maybe use an app on your phone from one of your bank or credit card companies, or you find a template online that allows you to create your own file and save and update it on your computer. Some of these tools allow you to pull multiple outside accounts into one place, which is a big help. If you prefer using pen and paper, you can also simply review banking and credit card activity and write it down monthly on a chart you create yourself. You should choose whichever method is most comfortable for you. Most important step is keeping track. As we know, the events in our daily lives are fluid and constantly changing so many people are surprised at the end results of this exercise.
Laura Springer:
Because of this, we do recommend minimizing the number of credit cards and bank accounts to make it easier to track and stay within a spending plan. After a few months, you'll want to bring the information together. Try to create categories for frequent expenses. And, yes, it is okay to have a miscellaneous category. We all do. What did you notice? Do you have more leftover each month than you anticipated, or was it the opposite perhaps? Regardless, at the conclusion, you will create your own budgeting and spending plan.
Heather Welsh:
Creating your spending plan sounds like a great first step in understanding your financial situation. Is there anything else you'd recommend considering at this stage?
Laura Springer:
As important as understanding your cashflow is creating an inventory of all your assets and liabilities. People typically refer to this as their balance sheet or a personal net worth statement. Be sure to include all bank and investment accounts as well as any savings accounts you might hold through your employer. If you own a home, list the estimated current value of the home not what you paid to purchase it. After listing assets, you'll also want to account for liabilities. This includes your home's mortgage, auto loans, student loans, and any other evolving liability of balances, including credit cards, that you do not pay off monthly. Some people list the value of their cars, jewelry, or other personal items in a balance sheet. This is up to you, but with the exception of a car, most personal items are never sold. So their value is less meaningful to understanding your financial picture.
Finally, beyond considering your income, expenses, assets, and liabilities, you'll also want to keep insurance policies in mind. Some of us have life insurance through our employer, others purchase it independently, and many people have both. The primary purpose of life insurance is often to protect our future income, but there are other purposes you may hold it that we won't explore in this session. Everyone should have auto insurance, and if you're a homeowner, you'll also have homeowners and perhaps umbrella coverage. Just go ahead and list out those policies so they're in one place for your reference.
Heather Welsh:
With an inventory of cashflow, assets, liabilities, and insurance coverage, as you pointed out, Laura, that would bring us to step two in the planning process, setting and prioritizing financial goals. There are three key areas to consider when setting financial and investment goals. You'll need to think about each, not only in terms of an individual goal, but in terms of your overall finances. The first question you should ask in setting your financial and investment goals is, what is my time horizon? In other words, when will you need the money? Are you investing for your young child's college education or for your retirement 30 years in the future? Or do you hope to achieve your goal in a shorter timeframe? For example, do you want to buy a house in three years or start your own business in five years?
Another factor to consider is your individual risk tolerance. How comfortable are you with seeing the value of your investments fluctuate? Before making any investment, you should try to get a sense of what circumstances might cause you to sell that investment if it began to experience a loss. After all, an investing game plan only works if you're able to stick to it and having an accurate sense of your risk tolerance will help you develop a plan you can stay with. The final question you should ask when setting your financial and investment goals is, what are my liquidity needs? Liquidity refers to how quickly an investment can be converted into cash. Real estate, for example, tends not to be very liquid. It can take a long time to sell either commercial or residential real estate. Publicly traded stock, on the other hand, tends to be relatively liquid, though you might suffer a loss if you need to sell when the market is down.
Cash and cash alternatives are extremely liquid, though even here, some types of cash alternatives may be more liquid than others, such as CDs that could carry a penalty if you take the funds out prior to maturity. Having spent the time to track your income and expenses will go a long way in determining your liquidity needs.
Laura Springer:
Having considered those factors. Heather, how do you suggest prioritizing your financial goals?
Heather Welsh:
That's a great question, Laura. We all have limited resources, so it's important to consider how to best allocate them. In the context of your financial plan, you can evaluate the impact that allocating resources to one area might have on another. There are sometimes trade offs. For example, while you may have a goal to be debt free, it may be more advantageous to allocate dollars to investing for some other future goal if your expected return on the investment is higher than the interest rate on your mortgage or other debt. Ultimately, the peace of mind that being debt free brings may mean more to you than that opportunity cost, and planning can account for both the qualitative and quantitative aspects of making financial decisions and prioritizing your financial goals. One question we often get is whether to save more for retirement or get a head start saving for children's college costs?
Heather Welsh:
While everyone's situation is unique, we generally suggest that you consider allocating dollars to retirement before college savings. Shortfalls in college funding can be met with student loans or perhaps attending a less expensive school. There aren't loans to fund your own retirement. Some savings vehicles such as Roth IRAs might be an option to provide some flexibility and saving for both retirement and college. When paired with your other goals in your financial plan, you can find the optimal balance for you and your family. Once goals have been set and prioritized, we move to the third and final step of the planning process, implementing appropriate savings and investment strategies. Laura, what do you do to put a plan into action?
Laura Springer:
So, at this point, you've done a lot of work and it's time to bring it all together, right? Here at Sequoia, we would call this "creating your financial plan". Some people ask, "Why create a plan at all? Life is always changing." That's true, but by creating a plan, you're placing a stake in the ground to define where you are today. This is going to help you understand if your longer term goals are attainable given your current course of action. Does it look like your existing savings and spending plan will get you there? Or do you think you need to make some adjustments? It also allows you to map the timeframe for each goal and see how changing the timeframe might affect the likelihood of reaching them.
In addition to timeframe, you can also adjust the likelihood of achieving goals by creating an investment plan. For the nearer term goals, it's usually best to save cash in a bank savings account. But for goals further away, retirement being the easiest example, creating an investment strategy of buying stocks and bonds on a regular basis has a better chance of generating higher returns in the long run. Ultimately, the ideal mix of stocks and bonds to get you there is a puzzle for many. An advisor can help you evaluate your options. You can decide of taking on more or less risk is right for you as you understand what to expect from market conditions and determine their impact on the goals you're striving to achieve. By focusing on your longterm goals, the inevitable short term volatility in the investment markets becomes less important.
In the end, a financial plan helps you answer questions like, how much cash should I keep in an emergency savings account? How much do I need to save for my children's college education or retirement? Or, how much can I afford to spend on vacation each year? The planning process also determines if there are planning strategies that might be a fit for you. For example, Roth conversions, donating stock directly to a charity, or intra-family loans, just to name a few.
Heather Welsh:
Those are great insights. Thanks, Laura. By developing a clear picture of your financial situation, setting and prioritizing your financial goals, and implementing an appropriate savings and investment strategy, you'll be well on your way to taking control of your finances. The Sequoia team is available to support you as you take control of your finances through the financial planning process. Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit our Talk To An Advisor page on our website to schedule a meeting at sequoia-financial.com/talk.
Outro:
Thanks again for joining us today. We hope you enjoyed our discussion. Please share our podcast on social media. Subscribe and leave a comment so that we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals.
Disclosure:
Founded in Ohio in 1991, Sequoia Financial Group, LLC takes a truly client centered approach to providing comprehensive financial planning and wealth management services, including asset management, estate and retirement planning, and family wealth services. Today's Sequoia has more than 90 employees in offices throughout Ohio, Florida, and Michigan. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC registered investment advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Welcome to today’s special edition episode of Sequoia Investments & Insight podcast. In this mini-series you’ll hear from our female advisors, team members, partners and colleagues on relevant financial planning topics and opportunities to help you take control of your finances and your future.
Heather Welsh:
I'm Heather Welsh, Vice President of Wealth Planning with Sequoia Financial Group. On today's episode, we'll be discussing retirement planning tips. Joining me is Kristan Preston, Director of Private Client Services at Sequoia. Kristan, thanks for joining me today.
Kristan Preston:
It's great to be here.
Heather Welsh:
As you think about retirement, you may have a vision of what that looks like for you, but how do you pursue that vision? Social security may not provide enough income for your retirement years and fewer employers today offer a traditional company pension plan that guarantees you a specific income at retirement. On top of that, people are living longer and must find ways to fund those additional years of retirement.
Considering these items in combination means that sound retirement planning is critical. The good news is that there are many tools and resources available. Kristan and I have had a lot of discussions regarding these tools and we'd like to focus on a few of them today. Let's start by talking about the importance of having a plan.
Kristan Preston:
Yes, Heather, I'm excited to be here today to talk about this very important topic, retirement planning. It may seem like a very overwhelming topic for many. And I think much of that can be overcome with item number one here, which is having a plan in place. Ultimately, it's helping with the decision-making that you're going to have from now all the way through retirement and helping provide a foundation, a really a backbone to all of those decisions you could be possibly making.
So you might be thinking right now, "I'm too young, I'm too old" or the good old I'll worry about it later. But really a plan can meet you at whatever phase you are in life. So it's never too late, but obviously the sooner you can get started the better, because it's building that foundation. Just to kind of highlight a couple areas that people may be when thinking about retirement planning, we have what's called really the accumulation phase.
Kristan Preston:
So that's the people that are in their early working years to later working years where they're trying to grow their portfolio, grow their wealth so that they can eventually retire someday. So those are your savings. And then you have the distribution phase, really, which is the point where you kind of flip the switch and you go from saving, saving, saving to starting to access those dollars in retirement so that you can live out your retirement the way you would like.
And really that's a hard phase to navigate into for many people because you've gone from saving to now withdrawing. So that's something that a plan can help provide a lot of clarity on that phase of life. And then really the third phase it's not always applicable to everyone, but some people want to be preparing for what happens to their money after they're gone and having a potential legacy and whether that involves providing for future generations of children and grandchildren, or even charitable desires. A plan can help you in kind of all three of these phases. And again, it's helping you make the decisions along the way and providing you a framework for that.
Heather Welsh:
So, Kristan, what's the ultimate goal of planning?
Kristan Preston:
Oh, the big question. Ultimately, the goal is to be financially independent, right? To try and figure out when can you officially retire and no longer be receiving the normal paycheck, but continue to live your life. And so many people think, "Well, how old is that?" Or "How much money do I need?" And it really isn't as black and white as that.
It's much more involved because it ultimately depends on how much do you want to spend during retirement and understanding what other income streams you may be having such as social security and pension, and then how that fits against your expenses. So it's not direct, but again, that's why having a plan in place can help you make those decisions and make them with confidence.
Heather Welsh:
So with the foundation of the plan in place. Let's focus on our second retirement planning tip, diversification. Many people think about diversification in terms of asset allocation, the mix of stocks and bonds, domestic versus international positions or large versus small cap stocks in their portfolio. But it's also important to consider diversification of the investment vehicles you're using in saving towards the goals that you defined in your plan. Because those investment vehicles can have very different tax consequences.
This may require some advanced planning, but it can have a big impact in your retirement years. Traditional IRAs and employer sponsored plans, such as 401ks or 403(b)s are often what come to mind when you think about saving for retirement. These accounts typically involve pre-tax contributions, where you get a tax deduction now for the money you're putting in and perhaps some employer contributions. Those are usually also considered pre-tax since they aren't taxable to you at the time that the funds are put into your account.
While these savings vehicles can be very effective, you may want to consider some other options that are available. Because distributions from these types of accounts will be taxable to you and ultimately to your errors, when you withdraw the money in the future. Tax rates are likely lower today than what we'll see in the future. We will likely have rate increases due to the additional budget deficits that were created by the recent stimulus packages.
And if nothing changes, we know that the tax cuts and JOBS Act is scheduled to sunset after 2025. So rates would automatically revert to the prior higher levels. Also, thinking about the SECURE Act that passed at the end of 2019, that means that for most non-spouse beneficiaries, when they inherit IRA or retirement plan money, they'll have to take it out within 10 years of when somebody passes away.
Heather Welsh:
So that could potentially push them into a much higher tax bracket if they're taking all taxable distributions. So in light of the current and anticipated future tax landscapes, Roth vehicles are often an attractive option. While you don't get a tax for Roth contributions, when funds are withdrawn, the distributions are generally tax-free. And there are several different ways to make Roth contributions starting with a Roth IRA.
Contributory Roth IRAs can receive contributions in years when you or your spouse have earned income. If you're over certain income limits, you might consider making non-deductible contributions to a traditional IRA and then converting those to a Roth IRA. One thing to note is to be careful if you've other pre-tax IRA dollars, since the conversion is pro rata meaning that you can't just convert your after tax contribution. Pre-tax dollars in employer plans, don't count for purposes of that ratio.
Heather Welsh:
Roth contributions might also be permitted in your employer plan, your 401k, your 403(b) and some plans even offer what is frequently referred to as a mega Roth, where you might be able to make after tax contributions and do an income plan conversion to Roth if your plan allows it. If you've built up significant pre-tax savings already, you might consider Roth conversions. You don't necessarily have to convert your entire account and you might instead benefit from bracket topping, converting just enough to take you to the top of your current tax bracket.
Kristan Preston:
That's great, Heather. Specifically, I know in retirement healthcare costs can be very high medical expenses. Are there any particular vehicles that are appropriate to be using in retirement in that regard?
Heather Welsh:
It's a great point, Kristan. Retirement health care expenses can be a significant piece of a retirement plan and health savings accounts can be an optimal way to save for that. They're essentially a triple threat. You can make a deductible contribution, you get tax-free growth and tax-free distributions if you use those funds for medical expenses. There may also be the potential to invest your health savings account balance depending on your time horizon.
Kristan Preston:
That's great. So maybe this is a good time to mention the third strategy really for retirement planning and this also relates to diversification. It's having what I call your two-year bucket. When you are in the distribution phase of life, it can feel completely different experiencing market volatility than it did when you were in the accumulation phase. Think back over the last few months when we've all experienced a lot of market volatility, a lot of changes in our society. It might not always be a global pandemic, but something will cause the markets to decline and something could cause the markets to decline rather swiftly when you are in retirement.
And for these what I'll call distribution phasers. To have two years of distribution needs set aside and something that's not going to move exactly like the rest of the market, that won't experience the same amount of volatility. It really provides a lot of peace of mind to help you kind of emotionally and mentally get through any market volatility that we will inevitably experience.
So knowing where that cash is coming from, ultimately sets you up to make better decisions during retirement. No one wants to be losing sleep when you're at that phase in life. So knowing where that's going to come from over the next two years is a really helpful tool.
Heather Welsh:
Absolutely. So, Kristan, would you say that it's best to keep your two years of cash within your investment portfolio or at your local bank in a savings account or perhaps CDs?
Kristan Preston:
Well, it really depends on a couple of different factors and really your preference. So if you're the type of person that is going to likely spend the cash that's just sitting in the bank, then you probably should keep it elsewhere. You should probably have it in something that's not going to be as easily accessible. Maybe it's even just a separate savings account at a different bank that you're not using for your day-to-day living expenses.
Maybe you're putting it in something like laddered CDs that are a little bit harder to get out of at any given point in time. But what you do want is something to be available to you so that if you go through a period of extreme market volatility like we had back in March, for example, that you don't have to go and sell a position that is depreciated in a short-term perspective to get you to cover your living expenses.
So you could even keep it in your normal long-term investment portfolio, but have it carved out in something that is more short-term focused like a short-term bond fund or even just a traded money market. So I think it could work in both aspects. It just depends on ultimately your preference and how you think you'll apply that savings.
Heather Welsh:
So it sounds like we've got a lot of options. That brings us to our fourth and final point, debt management. Having lower fixed expenses can make you more resilient in market uncertainty during retirement. If you no longer have a mortgage, for example, more of your expenses are truly discretionary, allowing you more flexibility to decide how to allocate your income sources during retirement. While being debt free isn't a requirement to a successful retirement and can often bring a lot of peace of mind and flexibility.
Start by focusing on where you are today. Consider your current resources, salary, your business income versus your future resources, social security pension, your portfolio, and where that will be compared to your future expenses, including your debt payments. You don't need to have everything paid off going into retirement, but you will enter this phase much more comfortably if you have a framework and timeline for when you would be debt-free.
Two frequently use techniques to consider when determining how to pay down debt are the avalanche method and the snowball method. The avalanche method uses free cashflow to pay down debts in order from the highest interest rate to the lowest interest rate. And the snowball method involves applying those extra payments to whichever debt balance is the smallest to free up more cashflow and create a growing snowball cycle.
Heather Welsh:
Another important point to consider is the type of financing that you have. There's a time and a place for variable loan rates, as well as the time and a place for fixed loan rates. And given where we are with our current environment, it's very likely that we are at historically low interest rates. So it may make sense to lock in a fixed rate loan, particularly for longer term financing like a mortgage.
Kristan Preston:
Well, the big question for people sitting on a lot of cash right now, is it best to apply that towards paying off debt, Heather?
Heather Welsh:
It's important to think about debt in the context of your overall balance sheet. Are you sitting on a lot of cash and carrying a lot of debt? If so, do something keeping in mind the two-year bucket that you were talking about, Kristan. Either invest that excess cash if you anticipate being able to out earn the interest rate on your debt or pay down the debt. You're missing out if you're sitting in low yield and cash and paying high interest rates on your debt.
Heather Welsh:
Really, it's never too early to get started on planning for your retirement. By starting with a plan, understanding and diversifying your investment vehicles, knowing where your short-term cashflow is coming from and efficiently managing your debt, you can set yourself up on a path to have the retirement you've always dreamed of.
Thanks for joining us for today's episode. If you would like to dive further into our discussion, please visit our Talk to an Advisor page on our website to schedule a meeting at sequoia-financial.com/talk.
Thank you for joining us today, we hope you enjoyed our discussion. Please share our podcast on social media, subscribe and leave a comment so that we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals. Founded in Ohio in 1991, Sequoia Financial Group, LLC takes a truly client-centered approach to providing comprehensive financial planning and wealth management services, including asset management, estate & retirement planning and family wealth services. Sequoia is committed to exceptional client service by building and maintaining strong relationships that emphasize long-term planning to help their client’s in reaching their financial and life goals. Today, Sequoia has more than 90 employees in offices throughout Ohio, Florida and Michigan.
Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.
Welcome to today’s special edition episode of Sequoia Investments & Insight podcast. In this mini-series you’ll hear from our female advisors, team members, partners and colleagues on relevant financial planning topics and opportunities to help you take control of your finances and your future.
Laurie Marshall:
Good afternoon. I'm Laurie Marshall, financial advisor with Sequoia. On today's episode, we will be discussing the three buckets of money. Joining me today is my colleague and friend, Nancy Spalding, who's a CPA at Cohen & Company. Welcome, Nancy.
Nancy Spalding:
Thank you, Laurie. Good to see you.
Laurie Marshall:
Okay, so today we are going to talk about the different account types and the tax treatment that goes with each of those account types. This sounds really mundane, but it can have a huge impact on your money.
Nancy Spalding:
And we'll be fun about it.
Laurie Marshall:
Yes, we'll definitely be fun.
Laurie Marshall:
We call them the three buckets of money, personal, retirement, and Roth. So the three different buckets of money are personal money. Those are savings accounts, brokerage accounts, your trust account, and the income and the capital gains are taxed every year.
Laurie Marshall:
The second bucket is your retirement accounts, and those might be a 401(k) or a 403(b) or an IRA. Typically, you get a tax advantage for funding those accounts in the year that you fund them, but the money is taxable when you take it out much later. There are penalties on distributions if you take the money out before you're 59 1/2 and there are mandatory withdrawals at age 72 on the assets.
Laurie Marshall:
The third bucket is Roth and Roth IRAs, Roth 401(k)s. You get no tax advantage for making a contribution to those accounts, and there are no mandatory withdrawals at 72. The best part is there's no tax on the earnings. Once the money is the Roth, there are never any taxes.
So Nancy, give us your thoughts about these three buckets of money. How do you incorporate that into what you talk to your clients about?
Nancy Spalding:
Well, a lot of what I talk to my clients about is tax planning. A lot of clients have this concept that taxes are just something that happens to you. You can accomplish all your goals; but if you do it in certain structures and in certain ways, you can end up with more money in your pocket. That's what tax planning is all about.
Nancy Spalding:
So these buckets are really important, and this year is particularly critical. Because of COVID, because of the CARES Act, there are some unique things that are happening in 2020 that we may never see, probably won't see again. There's also the situation where a lot of people who are generally high earners, not retired people, but high earners, are not going to earn as high this year, that either their expenses are going to be high because the COVID, or their earnings are going to down because they had to shut down or else not run at full capacity because of distancing or whatever other things were put in place on their particular industry. So this is a great planning year.
Nancy Spalding:
The CARES Act, one thing they did is they said that people do not have to take the required minimum distributions this year. If you're over 72, and you talked about this, that bucket. If it's in the retirement bucket, you have to take distributions every year. Well, a lot of people at 72 are at the top of their game. They are earning big money. They are doing really well. Then they have to take this retirement money on top of it and they're paying tax. It could be at a 40% rate because they're piling it on top of earning. So for a lot of those clients, the answer is don't take your required minimum distribution this year.
However, if you're somebody who's still earning, and maybe you're somebody who's under 72 and still earning, and your earnings are relatively consistent or continuing to grow every year and getting bigger and bigger, and your tax rate's going up and up, this may be a year, if your income is going to be down, to consider converting it from the retirement bucket that's taxable, move some of it on into a Roth bucket, and you'll pay tax on it this year. But that tax rate will be lower because your income's lower. So it's a great planning year to do that even if you're not retired.
Laurie Marshall:
One other thing to think about is a lot of corporations are actually adding Roth to their 401(k) options. That's something we talk to our clients about, splitting their contributions, half pretax and half Roth, because we really think tax rates are going to be going up in the coming years. So the more you have in that Roth bucket, the better.
Correct. I agree with you. After all the money that's been spent this year on COVID, and we haven't seen the end of it yet, tax rates almost assuredly are going to go up. We don't know that for a fact, but we can guess pretty well that they'll have to.
The other thing you might want to consider is if you are over 72 and you're in a low tax rate, you may want to go ahead and take some of your required minimum distributions out of that retirement bucket this year, and maybe even extra ones if you're still in a low rate, thinking that the rates are going to go up in the future, which is a pretty safe bet. It's just a guess, but it's a pretty safe guess. You could take some of their required minimum distribution this year and roll it into a Roth. Let's say that the rates are really high. You have a big capital gain one year, won't be required to take as much out in a required minimum distribution. And if you do want to take money out of a Roth, it's not taxable at that point. So it's a great plan.
Also, when you think about a Roth for yourself, you need to think about the next generation too. Maybe you're a fairly moderate earner and you've got a ton squirreled away, or you're not an earner anymore and you've got a big retirement account, but it's all taxable. When you pass away, your beneficiaries are going to inherit that and have to pay tax on it. It's different than other things that you inherit. However, if it's in a Roth, if it's in the vehicle of that bucket of a Roth, they don't have to pay tax on it. So if you're somebody whose earnings are moderate now and your tax rate is low, but you've got some high-earning children, that's a great thing to think about is converting it into a Roth for them, not necessarily because you're concerned about yourself.
There's also another little ... Not a little, there's another big thing going on with this CARES Act, is net operating losses. If you have a business that is producing a net operating loss, one that's either passed on to you through a K-1 because of a partnership or a subchapter S or because you're a sole practitioner and you're going to see a net loss this year, in the past in recent years, you've had to push that net loss forward to take against taxable income and get the taxes there. That might be a good plan for you.
However, it might be best for you to eat up some of that net operating loss through conversion to a Roth, from your retirement to Roth, because you do have to pick that up as income. You could wipe out some of that NOL, or that net operating loss, in the current year and take advantage of that, and then get that into a different vehicle for either your retirement or your children's inheritance, so in the future you're in a much better position.
These are just the tips of the iceberg. There's some really unique planning opportunities this year. If you plan well and implement these things in 2020, in the long run, you're going to end up with a lot more money in your pocket for you and for your future and for the people you leave behind.
Laurie Marshall:
Right. Those are terrific ideas. I also wanted to just mention one other thing that you and I have both talked about. We've had clients and discussions with them on this topic that relates less to what's going on now, but is really a planning-related topic to these types of accounts, these three buckets. Say you own a house and you want to buy a new one before you've sold the first house. I think you and I have both had clients who took the money out of their IRA or talked about taking, "Oh, I'll just use the money from my IRA to buy this house." What they fail to recognize, or what we need to help them understand, is that there are significant tax consequences to using that retirement bucket to purchase a property because all of that distribution goes as taxable income on their return.
Nancy Spalding:
Correct. People have the idea that they can take it out and roll it back in. There are some very narrow, narrow parameters in which you can do that. But before you do something like that, please talk to your tax advisor or your financial planner and make sure you're taking it out of the right bucket for you at that time of your life.
Nancy Spalding:
I know a lot of people who have big retirement buckets don't like debt. So if they're buying one house and the other one's not quite ready to sell, they don't want to take on a bridge loan. Well, the bridge loan is probably going to cost you significantly less than just taking it out of your IRA. Yes. So anytime you're thinking of doing something like that, you should really consult with your tax advisor and your financial advisor.
Laurie Marshall:
All right. Well, thank you so much. This has been a great conversation. These are really important topics. The things we want you listeners to remember from today is that you do have three buckets of money. You have personal money, retirement money, and Roth money. It's important to think about where you take the money that you need. It's important to have a tax plan, be proactive. This is the year, 2020, to review your retirement plans and your financial plans with a professional. There are opportunities at almost any age that are unique to this year and that we may never see again. So thank you very much.
Laurie Marshall:
If you would like to learn more about the topics that Nancy and I have been discussing, please visit our talk to an advisor page on our website to schedule a meeting at sequoia-financial.com/talk. Thanks again, Nancy.
Nancy Spalding:
Thank you.
Thank you for joining us today, we hope you enjoyed our discussion. Please share our podcast on social media, subscribe and leave a comment so that we can continue providing topics and interesting segments focused on the financial industry. Until next time, we hope you reach your financial and life goals.
Founded in Ohio in 1991, Sequoia Financial Group, LLC takes a truly client-centered approach to providing comprehensive financial planning and wealth management services, including asset management, estate & retirement planning and family wealth services. Sequoia is committed to exceptional client service by building and maintaining strong relationships that emphasize long-term planning to help their client’s in reaching their financial and life goals. Today, Sequoia has more than 90 employees in offices throughout Ohio, Florida and Michigan.
Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.
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