Don't build your financial future on a house of cards
At Dashboard, we believe it is our duty to provide stellar care and guidance with regards to every aspect of your financial life – not just investment management, but also cashflow planning, risk management, insurance, estate planning, wealth transfer, tax planning, charitable giving, and more. This expansive scope allows us to make more informed decisions, and help you to build a strong financial foundation upon which we can develop and execute your plan to achieving true financial independence.
If your financial field of view is more narrow, it's far too easy for things to fall through the cracks – that's when a single mistake or oversight can potentially bring your financial "house of cards" tumbling down...
For those of you who still owe money on your home, it's pretty much a "no-brainer" to spend the 1.5 hours necessary to gather documents and assess whether it makes sense to lock in some of the lowest mortgage rates in history. While we are very focused on having our clients reduce the leverage on their homes, we can and likely should still consider locking in these historically low interest rates to save you some money along the way!
You’ll be hard-pressed to find someone out there that detests debt more than we do here at Dashboard. However, having a HELOC truly costs NOTHING until you use the line of credit, and the access to liquidity often allows families to "do things out of order”. For example, should you decide you want to move, a HELOC can provide you the flexibility to place a cash offer on a new home, then sell your home afterwards. In such an example, this can often be the difference between acquiring the new home you want or having your offer get passed over.
Importantly, in order to obtain a HELOC you must be able to demonstrate a level of steady and consistent income. As such, you won't be able to open this line of credit after you've retired or if you've lost your job. So while you still have income, go ahead and obtain a HELOC to grant yourself a ton of financial flexibility for the low low price of......ZERO! If you ever need quick and easy access to "borrowed cash" at a reasonable interest rate, you'll be happy you did!
There are hundreds of companies currently offering early retirement and/or severance packages, many of which include the ability to take a lump sum payout of one’s pension. While this can often sound quite appealing to "take control" of your own pension assets, don’t be too quick to accept this "offer" without doing some serious math. For more details on how to evaluate this decision, check out our article Lump Sum or Pension.
Don’t get us wrong, having and executing upon charitable intentions is superb, and we applaud and support such giving. However, we should "do it properly" to maximize the benefit of your generosity for everyone! With the current tax laws, every family receives a standard deduction of almost $25,000. Therefore, by the simple ability to "fog a mirror", a family receives a $25,000 reduction in income. By giving annually to charities, you are actually diluting the power of your standard deduction. Instead, you may be eligible to perform a Qualified Charitable Distribution from your IRA or you could "stack" charitable deductions by contributing a large amount in one year to a Donor Advised Fund (DAF), then utilizing this DAF to fund charities in future years. Either of these options allows you to reclaim the lost tax benefits of your charitable gifts while ALSO utilizing your standard deduction. Contact us for more details about what solution may be the most appropriate for you given your personal circumstances.
We believe you should fund your Roth IRA EVERY SINGLE SOLITARY YEAR that income limitations allow – it is our inalienable right (and personal obligation) to fund Roth IRA’s for ourselves and even for our kids (as long as they have earned income). We only get one shot at this. These assets can grow tax-free for many many decades...Don’t let this opportunity go to waste!
By not having sufficient cash squirreled away in our bank accounts, we often subject ourselves (and our portfolios) to the vagaries of the market. At Dashboard, our general rule of thumb is to maintain enough cash to meet at least 6-9 months of short term needs plus any big expenditures over the next 12 months. Having this cash on hand allows us to live our lives as usual without having to tap into our portfolio and interrupt our long-term investment plans. It can grant us the financial confidence and good 'ole warm fuzzies to effectively ignore any short term market volatility, knowing we have sufficient cash available to meet our needs.
Oftentimes, when people address estate planning, they only work through their own plans. But it is vitally important to also spend the time to understand your parent's plans (or lack thereof) as well. Too many times we've seen clients who are very well-organized and put together with regards to their own financial and estate plans be forced to unravel an absolute mess when settling their parent's affairs. Don't let this happen to you! Although these can be hard conversations, it may be far better than dealing with the alternative.
That's right...many people should be trying to pay more taxes this year by considering performing Roth conversions and/or harvesting capital gains. Current Federal Income Tax rates and Capital Gains rates are near historical lows! At Dashboard, we believe we should strive to minimize the amount of taxes you will pay over your lifetime. If you ever plan on spending your own money, you should strongly consider taking advantage of these historically low rates that may not be around forever.
Lending services and Securities Based Line of Credit provided by Raymond James Bank, N.A. Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with Raymond James Bank, N.A., a federally chartered national bank. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact us. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion. Investors should consider the investment objectives, risks, charges and expenses of an exchange traded product carefully before investing. The prospectus contains this and other information and should be read carefully before investing. The prospectus is available from your investment professional.