A planner speaks with you, not at you

Kevin W. Hostert (left) and Rich Liberante (right).

Kevin W. Hostert, CFP

Rich Liberante, Partner, CPA, MPA, CFP

Rich Liberante joined Watermark in 2013 and has a background in tax planning as well as financial planning. Rich is a strong advocate of minimizing unnecessary tax and building portfolios with a high degree of tax efficiency. 2020 brought in the SECURE Act and for the most part Americans were unaware that RMD on IRA’s had been changed to age 72 from 70-½ and that the STRETCH IRA, which previously allowed our heirs to create and have an IRA that could provide them a lifetime of income, now has to be distributed in full within 10 years.

We’ve advised our trust clients that more care will be needed and thought put into how and when to distribute IRA, Roth, and non-IRA investments to the next generation to achieve the

Additional consideration needs to be made when determining which accounts house which assets. Individual investments, whether stocks, mutual funds, ETFs, annuities, etc. have their own unique tax implications. However, account registration types, such a Roth IRA, Traditional IRA, Individual, or Trust accounts have their own unique

Effective financial planning is all about relationships.

To add a bit more confusion, the government ushered in the CARES Act that allowed for the suspension of RMDs all together including inherited IRAs for 2020.

With the major change in the SECURE Act affecting IRAs, it also impacts Roth IRAs, which also have to be distributed in full within 10 years. While this will not impact taxes, it will create a tax dilemma after the distribution, as heirs will have to be cognizant of re-investing assets tax efficiently.

Integrating the changes to IRAs to your estate planning is more important than ever, as heirs are now forced to take all distributions from IRA and Roth within ten years. This change could impact the tax rate for your beneficiaries. tax rules. It’s important to marry up the proper investment with the right account type to achieve the best tax result. It’s amazing how the small change of holding an investment in one account type versus another can improve a person’s tax situation and their overall bottom line income.

You can read further on these topics and more in Rich’s new book. “Climbing Your Way to Wealth” available at Amazon.

Kevin Hostert is Rich’s partner and joined the practice in 2014 and is key in portfolio development and tax efficiency. He states that the process of selecting the right tax efficient allocation is more time consuming, but the tax reward has been well the pursuit of paying less tax and growing their portfolios.

5

tips for vetting a wealth planner

By Brian Sodoma, for Watermark Wealth Strategies

Choosing a wealth planner is one of the most important decisions any individual makes, but finding the right one can be challenging. Here are several important attributes and red flags to look for. They reveal a lot about how a wealth planner operates, and can help someone eyeing retirement choose with confidence.

1 It starts with the phone Your first contact with a wealth planner will likely be through a website inquiry or a phone call. Pay attention to how quickly (or slowly) he or she responds to your requests, particularly by phone. Ask yourself these questions: • Can I get the manager on the phone quickly? Or are there frequent delays and assistants handling my needs, instead? • Does the manager keep suggesting I “do it online?” • Do I have to go through a complex phone system to reach my manager?

These are all red flags that indicate your experience will be far from most advantageous tax result.

personalized, says Carmen Cercone, principal and founding partner of Watermark Wealth Strategies.

“You need individualized attention and 1-800 numbers and automated systems can’t give you that,” he said. “We field personal phone calls from our clients every day.”

2 Consult FINRA The Financial Industry Regulatory Authority (FINRA) is a regulatory body for financial advisors. For peace of mind, prior to hiring a wealth planner, visit the finra.org website and type the person’s name into the “BrokerCheck” tool.

The search will show how long the wealth manager has been in the field, the institutions he or she has worked for, and credentials held. More importantly, there’s also a “Disclosures” section that alerts you to any past disciplinary actions against them.

3 A planner speaks with you, not at you Even in a world full of online and technology efficiency, visit a wealth planner in person before signing up. Your conversation should bring peace of mind and a deeper understanding of the options available to you – and above all, you should feel heard.

A sound wealth planner spends time explaining opportunities and the risks associated with them, embraces open dialogue, listens closely, and encourages input from the client. Some wealth planners do too much directing and telling at times when they should be listening, Cercone adds.

“It’s not about us. It’s about you. In our work, we learn about family dynamics, we talk about mortality and a lot of very personal information is shared,” he added. worth it for Watermark’s clients in

“That’s an important part of what we do and a planner should not take that lightly.

4 Don’t be fooled by “Index” talk It’s a common question in financial planning circles: How did your portfolio perform against the Index? Some planners will even tout their results in advertising or in conversations. Anyone can talk up gains in a bull market run, but real planners also speak frankly about bear market realities, Cercone warns.

“Think about it. If you ask me that question, why would I show you a client’s portfolio who didn’t beat the Index?” he said. “I tell clients, ‘you’re not the index. Each of you are individuals and your needs must be addressed individually.’”

5 Minimums are a red flag Cercone also bristles when he hears wealth planners talk about minimum dollar amount requirements for prospective clients.

“I think it’s wrong to say ‘if you don’t have a certain amount of money I won’t deal with you.’ ... The other day I saw a 9.8 million-dollar client and 42 thousanddollar client. I spent almost the same amount of time with both of them,” he added.

Watermark Wealth Strategies helps thousands of Arizonans with their wealth, estate and tax planning needs. Visit watermarkwealth.com or call (480) 442-3989.

You need a good planner in these uncertain times

Proactive / continued from cover

A nimble portfolio strategy requires more consistent contact with your financial advisor. For decades, touching base with your financial advisor once or twice a year was the norm. Aaron emphasizes meeting three or more times a year, especially during significant market changes.

Making life adjustments, not one answer for everyone Today, a married retired couple can expect a joint-life expectancy of about 25–30 years. Naturally, the earlier years of retirement are more active. Bucket list adventures are being

Due to the pandemic, some have needed to put those plans on hold, and that may affect how they want to invest today. For others, in later retirement phases, preservation strategies that may be less affected by market and political uncertainties may require less of a hands-on approach, too.

Regardless, it’s an excellent time to re-evaluate your life goals and plans for the coming years with the current uncertainties. There is no single approach to serve everyone but pinning down your short-term goals and desires could help anchor a sound short-term strategy. fulfilled, and couples tend to travel more, too.

“There’s really no one-size-fits-all, but you certainly do have options,” Aaron added. “For us, we try to help everyone understand the backdrop of this environment and how it may affect the phase of retirement they’re in and, more importantly, the life they’re trying to lead.”