FAQ

What is Wealth Management?  

Wealth Management according to Investopedia:

Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients. Using a consultative process, the advisor gleans information about the client’s wants and specific situation, then tailors a personalized strategy that uses a range of financial products and services.

So, I think it is fair to say the Wealth Management is a personalized service, for people of wealth who need or want advice tailored to their specific goals.  This is a conscious choice - not a must have.  

How do I generate income in retirement?

There are many investments that are designed to produce income and pay it out on a regular basis (monthly, quarterly, semiannually, annually) so it can be used by the investor for income purposes. Some of these investments include bonds, bond funds, dividend paying stocks, equity mutual funds designed for income & closed end funds. In my opinion, the key is having the income posted to your account separate from the principal which was invested in creating the income. This keeps it available for use and protects a portfolio from selling positions during a down cycle to create liquidity. 

At what rate is dividend income taxed?

Dividends classified as ordinary are taxed at your marginal rate, the same rate you pay on wages. An example of this is CD or Money Market interest earned.

Dividends classified as qualified are taxed at the lower long-term capital gains rates of 0%, 15%, or 20% - depending on your income for the year. An example of a qualified dividend is a dividend from an investment in a US corporation, like ATT or Verizon.

How do I generate tax free income in retirement?

Tax free income can come from three sources. For non-retirement, after tax savings, municipal bonds and municipal bond mutual funds pay interest that is typically exempt from federal income taxes. That income can also be exempt from state income taxes, if the investor resides in the state that issued the bonds.

In retirement accounts, income taken from a Roth IRA is reported but not taxed, as distributions from a Roth IRA are tax free.
Another source of tax-free income could be cash saved in a permanent life insurance policy. This strategy can be more complex in executing than the previous two examples. Hence, getting advice from your insurance agent or financial advisor is recommended before a final decision is made on whether this should be part of your financial plan.  

What is your firm’s focus?

Pick & Roll Weath Management was built on objective advice and comprehensive financial planning. That remains the focus today. As a practitioner with over 25 years of helping people with their personal finance, I am equally equipped to help folks who are struggling financially and want to do better, those who are busy and successful and seek organization and a process to help them reach their future financial goals, or those transitioning into retirement. In all cases, objectivity is the foundation of the advice offered 

What is personal finance?

Personal finance is planning and managing your money so you can reach your financial goals. Topics/ concepts include cash flow management, saving money, managing debt, creating an investment plan and planning for retirement.  

Should I keep my life insurance in retirement?

Although many life insurance strategies are implemented when people ae younger and focused on replacing lost income due to a premature death, life insurance can prove a valuable tool for the retiree. Some examples include:

• Maintaining coverage for the surviving spouse who wasn’t covered by a pension plan
• Creating estate liquidity upon death for those bequeathing illiquid assets (real estate) or traditional IRAs. Since traditional IRAs are created on a before tax basis, tax will be due when the beneficiary taxes distributions from the account after inheriting.
• Increasing the amount, one can leave by providing cash to be used for estate expenses.

Life Insurance can be a complex subject. Please seek advice from your financial advisor or insurance agent to determine if keeping insurance in retirement is right for your situation.  

When do clients typically seek advice?

I find there is typically a “triggering event” that will lead to someone seeking a relationship with a financial advisor. Most of the time, there is some change the person/couple/family is going through. It could be a marriage or second marriage, a job change, birth of a child, impending retirement, inheritance. It could also be something more goal related, like saving for college, building a second home or preparing for a new career. I find most clients can take themselves so far, then the desire and need to seek object advice and counsel becomes clear.  

What is the client experience – 1st year

The first step is a complimentary initial meeting, to determine if we are fit for working together. Assuming we have decided to go forward, there are usually 2-3 meetings over the course of 4-6 weeks, designed for us to connect and for me to lay out a course of action. During that time, we may solve a short-term issue or two, like opening a Traditional IRA for a 401K rollover or opening a Roth IRA. Once we agree on a plan of implementation and reach a point where we are happy with our progress, I schedule 2 review meetings over the next 6 months to give the client a sense of what it is like to work with me on an ongoing basis. At the beginning of year 2, and every year thereafter, we have a meeting to discuss continuing our relationship and any changes that may need to be made. 

Why should I diversify my portfolio? 

Diversification is the strategy of investing in different asset classes and asset types to reduce portfolio risk associated with price volatility.. Also related is the concept of correlation. Correlation tells you how two financial variables move in relation to one another. A portfolio with too much correlation that lacks diversification may provide unintended skewed results.

Investment professionals feel a diversified portfolio with non-correlated investments is one way of reducing investment risk. Which, in turn, gives clients a better chance of reaching their investment goals.  

*Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.