By Jake Bleicher, Equity Analyst, CFA®
Almost half of households near retirement have nothing saved, and that’s a big problem. I believe the biggest headwind is merely getting started: saving money is hard to do. Read more
Have you ever sat across from a financial advisor and only understood every third word they were saying? And yet they were talking about your money, your life, and your future.
At Signal Wealth, we believe clients should understand everything that is happening with their money; that advisors should be just as good about explaining investments as they are at making them.
First, we’re going to get to know you and discuss what’s most important to you. We’re going to figure out your goals and the outcomes you’d like to achieve with this money. We’ll do this by establishing your Family Index Number, which is the rate of return needed on your investments in order to pursue those outcomes. After we determine your Family Index Number, we allocate your money to our various investment strategies designed to help you pursue those goals.
We work with a wide variety of clients – everyone from high net worth investors to those who are just starting out. While each family gets a personalized allocation strategy, we’ve helped thousands of families navigate their complex financial needs and guided them through life’s major decisions.
As your trusted advisor, we’re focused on adding convenience and simplicity to your lives. We will make sure you’re educated on your investments and how we manage your money – as much or as little information as you’d like.
Whether you’re investing hundreds or millions, at Signal Wealth we’re about much more than results – we’re about helping you understand where those results have come from and why the strategy works. If you’re tired of the mystery of investing and want to know exactly what’s happening with your money, schedule an appointment today.
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Our experienced team of professionals will develop a personalized plan that gives you the power – and a path – to realize your dreams. Explore services
By following a disciplined investment process, our team provides you with transparency, proactive service and the trust and accountability you need to meet your financial goals. Learn More
We believe that it is important to identify what can go right while creating a financial plan. Learn more
Tax impacts are felt in every aspect of your financial life. Learn more
Signal Wealth’s mission is to partner with and inspire our clients to live their life by design, rather than by default. Working with a financial advisor should be about more than just investing your money. It is about designing your wealth to fit your life and focusing on True Wealth—everything that money can’t buy and death can’t take away.
True happiness comes when you live according to your values, vision, and goals; what we call Life Defined. We view money as a powerful tool that can assist you in achieving your greatest desires. Your money and wealth needs a deliberate plan and purpose; what we call Wealth Designed. That is why we offer a comprehensive suite of financial planning and investment management solutions.
Contact us today to request a complimentary consultation.
Disciplined investment strategies are the foundation of our investment management process. Our time-tested strategies are designed to meet a variety of investment goals and objectives.
Headquartered near Salt Lake City, Utah, Signal Wealth has office locations and advisors across the country. Contact us today to speak with a wealth advisor or financial professional nearest you.
By Danny Toney
Paying taxes can be painful, just as painful as someone eating 46% of your freshly baked, warm, mouth-watering chocolate chip cookies. Some of us, totally disregard the number that tells us how much we paid in taxes, and choose, instead, to only focus on the refund numbers, for the sake of a positive emotional boost. While we, at Signal Wealth, believe that you should legally pay as little in taxes as possible, many people can get caught in a tax trap by only focusing on the current tax year, instead of looking years and decades in advance.
Some of the most common tax-deferred accounts are traditional individual retirement accounts (IRAs) and traditional 401(k)s. What does tax-deferred mean in this context? It means that the money you contribute to one or both of these accounts is NOT taxed at the moment of earning or contribution. Once the money is in the account, it continues to grow completely tax-free. You are only taxed on that money when you withdraw it from the account.
Common financial advice suggests that maxing out your traditional IRA and/or traditional 401(k) is the best option. This advice is assuming that your future/retirement tax bracket will be LOWER than your current tax bracket. Therefore, by deferring taxes now you will end up paying less taxes overall. This is sound advice if the assumption is TRUE. However, that assumption is not always true.
They are both personal retirement accounts. Roth accounts are “all about paying taxes upfront and allowing tax-free distributions later on in life” (Rewirement, pg. 41). In this aspect, they are essentially opposite of traditional retirement accounts.
|Traditional IRA or Traditional 401(k)||
|Roth IRA or Roth 401(k)||
There are other details associated with Roth IRAs and Roth 401(k)s, but those can be a subject for another article.
One requirement for all IRAs (traditional, SEP, SIMPLE, etc.) and employer sponsored retirement plans (profit-sharing plans, 401(k)s, 403(b)s, etc.) is required minimum distributions (RMDs). RMDs are required to start in the year a person turns 70 ½ years old and are completed every year after that until death. When a client completes an RMD for the year, they must pay the appropriate taxes (taxed as ordinary income). In a nutshell, the government requires RMDs in order to guarantee they get their tax money.
The way RMD calculations are structured is to attempt to require a person to distribute (and pay taxes on) the majority of their account balance by the time they pass away. Therefore, RMD amounts can be well above $100,000 per year.
Individual: Joe Davis
Total IRA balance: $1.6 million
RMD (approx.): $82,000
Individual: Sarah Smith
Total IRA balance: $2.1 million
RMD (approx.): $194,000
Those RMD amounts are significant and will be treated, from a tax perspective, as ordinary income. In other words, according to the IRS, Sarah Smith at age 91 years old, just made $194,000 of income. Sarah may have never made $194,000 in a single year while she was working. Therefore, her tax bracket NOW could be HIGHER than when she was working.
Another way your post-retirement tax bracket could be higher than pre-retirement is if you deferred a significant amount of income.
First, it is not a “bad” thing to have high income in retirement or to be in a higher tax bracket post-retirement than pre-retirement. The problem comes when you are unaware of what you are doing to your long-term financial plan. So, the point is to make sure you understand how your present decisions are affecting your long-term situation.
The foundation of Signal Wealth’s planning process is to use your current, accurate financial data to project what could happen each future year for the rest of your life. Understanding the future as best we can, allows us and you to make better financial decisions now.
Are you tired of wondering if you are prepared for retirement? Are you tired of wondering if the financial decisions you are making now are optimal for you?
Improve your clarity. Take our Retirement Readiness Quiz and connect with an advisor. Talk soon!
This piece is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.
Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.
A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.
The S&P 500 dropped 0.7% last week primarily due to a sharp decline on Monday after the Chinese retaliated against increased U.S. tariffs. The global MSCI ACWI also declined 0.7% as international developed markets increased slightly, but declines in emerging markets pushed the overall index lower. Read more
If you’ve worked in business, healthcare, ministry or almost any corporate entity in the last generation, chances are good you’ve taken a personality test – perhaps even a few. You found out you’re an ENFP or an INTJ or an Otter/Lion, or a Steady Wing 2 who needs to focus on your Bright Side. These tests tell you how you digest information, how you play with others and often things you didn’t know about yourself. Read more
Over the last decade, fund managers who oversee the pensions of the nation’s teachers, firefighters, police and other government workers have doubled down on an investment strategy that has cost U.S. taxpayers at least $600 billion, possibly more than $1 trillion, investment data and calculations by Yahoo Finance found. Read more