Retirement | Live a Life By Design

Opportunity or Tragedy?

Posted on June 16, 2022June 16, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

The world has become a tenuous planet over the past couple of years. Many people have been impacted, some positively and many negatively. How do you think a person can become positively affected by such trauma and chaos in the world? First, the maintenance of attitude.

Negative people only seek ratification of their advice by recruiting others to the depths they find themselves. The positive people will be a much smaller, yet growing, group of people. No matter the opportunity, someone will always find the negative or “how can I lose” option in the venture. This mindset has not created happy people but rather a group of cynical, and often, maligned population that is skeptical of all positive attributes of life.

A person’s attitude is influenced in many ways. It is better to feed your mind with positive stories of successful people than to focus on excessive newsfeeds of the tragedies of the world. I recommend a good book be the focus of your time rather than negative news on a daily basis.

Another attitude influence is the friend circle you maintain. Personally, I spend ninety-nine percent of time around people that are successful, optimistic and charitable. There is always a success story shared among the group that inspires the rest of us to keep growing and making the world a better place for mankind. The most important asset we hold is our attitude. Assets and net worth are merely tools to accomplishing and maintaining a positive outlook in life by contributing the improvement of less fortunate people. When I see the reaction of families that are recipients of positive support, it motivates me to work harder in creating greater change in our community.

The stock market has recently reached bear market territory. That simply means the S&P 500 Index has fallen by 20% since January 1, 2022. Many of us look at our investment statements on the day after such market changes are posted and frown. Some of us look at this lower price in stocks as an opportunity to buy undervalued stocks that will pay dividends for decades to support our livelihood. Remember, the United States stock exchanges are auction markets. For every one that wishes to sell a stock, someone else must be willing to buy it.

For example, if I were to sell XYZ stock and posted my intentions on the exchange at “market”, a buyer could purchase the stock at whatever its price at the moment of purchase was posted in the marketplace. However, if I were a potential purchaser, I may wish to calculate a target price for which I wish to purchase XYZ and order a stock buy at the price. This means if I want to purchase for $25 and the stock is currently at $26 in the market, my buy order will go unfilled until the stock hits the order price called a buy limit order.

Why I am telling you all of this about attitude and your finances? The real reason is that you have worked for more than 30 years accumulating sufficient assets for your lifetime needs. Don’t allow your fears to cause you to make an immediate decision on a lifetime investment because of short-term market activities. We, as a country, have been here before in the markets and we will improve, and most likely, set new market highs in the future. The bigger question is when.

The manner you have invested your lifetime savings is critical to your long-term success. If you have concerns about your portfolio’s allocation and capabilities to withstand significant market headwinds, consider contacting a CERTIFIED FINANCIAL PLANNER^TM professional. The goal is lifetime income for a better night’s rest. Stay positive!

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How To Remain Prudent During Market Cycles

Posted on May 13, 2022May 13, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

What goes up must come down! Whoever authored this statement of life events and business activities should receive the award for the Most Obvious Statement. However inane the statement, it does contain a little truth when applied to our current economic cycle in the United States.

Factors such as inflation, supply chain disruption, interest rate increases, U.S. Government fiscal policies and continued underemployment in our country have caused significant volatility in the markets. It has been a literal rollercoaster for the various market indices used to measure performance of the exchanges in the U.S.

At the start of 2022, the S&P 500 Index was at 4674.77 and closed on May 6, 2022, at 4175.48. This decline of 16.26% has caused investors to worry about the future of their retirement assets. To mitigate the emotional impact of such a decline, consider past market declines and learn from the period of time after the correction. For example, by remaining calm and investing in a well-diversified portfolio, you will recover your unrealized losses in the future. If you are planning to make a large purchase during a market downturn, it may be fiscally more responsible to consider bank loans which carry a much lower rate of interest. Once the markets recover and the value of your portfolio is an unrealized gain, sell a portion of the investments to liquidate your debt.

Another measure of thriving during market cycles is to utilize noncorrelated investments that respond better to inflationary pressure. For example, real estate is a sector of the economy that maintains cash flow and value during market declines. Think about this approach to your income needs during a period of market contraction. Real estate investors continue to collect rents on a monthly, or some other predictable period, basis no matter the state of the economy.

Of course, no investment is immune to such historic market events as the Wall Street Crash of 1929 or Black Monday in 1987. The key to facing any market disruption is to not allow emotions to control your decision making. One of my favorite quotes of Warren Buffett, “Be fearful when others are greedy and greedy when others are fearful” comes to mind during times we are currently experiencing.

Lastly, remember that you most likely took several decades to amass your retirement assets. The intention of these assets is for them to last you several decades in the future. Unless the need for capital was immediate at retirement, your portfolio will grow and contract as market conditions change. By maintaining a long-term perspective, you will be better suited to investing in positions that are below their book value and allow for a growth opportunity in the future. There are positions that are available for you to make reasonable long-term returns while the overall economy is in contraction.

Keeping perspective and maintaining a well-diversified portfolio will help you weather the storms of the economy much better than attempting market timing. Predicting markets is not an approach that serves you well. If you wish to evaluate your portfolio, contact a CERTIFIED FINANCIAL PLANNER^TM professional. Worry never solved a challenge.

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Buy or Sell?

Posted on March 3, 2022March 3, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

Life has a way of keeping things interesting. After a long cycle of bull returns, the time for profit-taking has arrived. This is the process of capturing the gains in the investments that have performed well. I will explore some of the factors that are currently active in the economy, the markets and what you can do to maximize your family’s best interest.

The overall economy is improving in the United States. When I state that comment I sort of cringe thinking about the impact that is being felt by the families of our country. Inflation has reached a 40-year high at 7.5% according to tradingeconomics.com. Some of the factors leading to this excessive rate are labor shortages, soaring energy costs and supply chain disruptions. Based on a review of ktvz.com, March and April, 1980, inflation had risen to an unprecedented peace time level of 14.6%. Acknowledging that this rate is extremely high by today’s standards, the highest inflation factor in the United States was experienced in 1778 at 29.78% (Investopedia.com).

Improvements in market controls, inventory production, delivery methods and banking policies contributed to maintaining a more reasonable inflation experience for many decades. It is not unusual for the people of the United States to be subjected to a 2% – 3% inflation rate in our overall economy. However, in our modern world where we rely on transportation and housing that must be heated and cooled with natural gas or electricity, an inflation rate above 4% begins to reflect on people’s lifestyles.

The unemployment rate is at historic lows for our country. This rate often touted by politicians to show their outstanding work on the economy is misunderstood by the mass of Americans. To properly understand the application of the rate to the economy, you must consider that underemployed and those individuals not actively looking for work are not considered in developing the rate. For those individuals seeking employment, there are currently more job opportunities than workers to fill them. This is a big plus for our economy. During times of high demand for skilled workers the hourly wage rises. It is simple economics – supply and demand. When demand for something (or someone) rises and the supply (people looking for work) is static or lower, the price for labor will be higher.

Rising wages are good for workers until they realize the costs of goods rise along with them. Companies will increase prices on goods to cover the increased cost of labor while maintaining the profit margin necessary to continue operations.

Another factor affecting the economy is the supply chain disruption. Goods that are manufactured outside the United States must be imported for sale by businesses to the public. Recently, the shelves of some of the largest retailers have been limited or out of products demanded by the public for their functions in life. Don’t get me started about the “Toilet Paper Run of 2020”. There was plenty of the product for the current needs of people in our country. However, a rumor on social media stoking the fears of people caused a panic to buy greater quantities of toilet tissue. Some of the memes on social media were hilarious! At one point it appeared that toilet tissue would become the currency of choice due to the high value it held in the public’s mind.

All these factors create economic conditions of expansion or, more recently, contraction in the economy. People are subjected to many emotions in life. However, in my 34-year career, I have discovered two emotions that are most prominent when it comes to financial decisions about a person’s retirement and investment accounts – fear and greed. Memory fades quickly from the very positive returns of only a few months earlier when a market correction appears. People who have enjoyed almost 14 years of positive returns in their portfolios are suddenly stricken with the fact that markets can (and often do) go down.

Recently, I asked a client if she would sell her home if it went down in value. The look on her face was as if I had asked her to donate a kidney! Her response was “that is a long-term asset and has tremendous value to me”. I then asked the simple question, “Your retirement account is your lifetime asset. Why do you want to sell it when it is down?” She simply stated, “You are right.” The stock market is the only investment I am aware that people buy when its high and sell when its low. This is the opposite to increasing your overall lifetime return and cash flow.

Buy or sell? Each person must deal with their fear or greed. By remaining calm when others are frantic and scared, you will be rewarded with greater opportunity for growth over a lifetime. Make certain your risk tolerance is properly reflected in a diversified portfolio and your cash reserves will accommodate 90 – 120 days of living expenses. This correction will pass.

Your lifetime of financial security for your family is no laughing matter. To alleviate the stress from worrying about your finances, seek out a CERTIFIED FINANCIAL PLANNER^TM professional to help you build confidence in your future so you can laugh all the way to retirement and beyond.

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Three Steps to Reduce Risk In Your Portfolio

Posted on January 21, 2022January 21, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

Wouldn’t the world be a better place if you could predictably earn 8% returns on your portfolio every year and only invest in certificates of deposit? Of course! One problem with this thinking is that you wouldn’t live in the United States of America and the dollar would be worthless.

You face some type of risk every day of your life. While driving your car through town, you may experience an automobile accident. This is the risk of driving a vehicle. You think about staying home and raking leaves. A sudden gust of wind causes a tree limb to fall on your roof causing significant damage to your home. This is environmental risk.

We all seek the best outcomes but many of us do not wish to experience the associated risks involved in the process. The universe works within a risk/reward paradigm. When more risk is accepted, we expect a higher reward. By investing in certificates of deposit, you believe you are undertaking a risk-free investment. Alas, you may expose yourself to interest rate risk, inflation risk, default risk (highly improbable, but a risk nonetheless) and liquidity risk. That sounds like a great deal of risk for an FDIC-insured investment.

Diversify Your Portfolio

The best approach to life is to manage risk, not attempt to alleviate it. The first method of mitigating risk is to fully diversify your portfolio. Diversification does not remove the risk factors but may lower them to a more acceptable level by investing in many different types of investments that are noncorrelated. Simply put, don’t put all of your monetary eggs in one basket.

Inexperienced investors make mistakes that may cost them significant money and time.

Two emotions generally guide individuals in their investment approach – fear and greed. One of the best methods of taking advantage of the stock market, an auction market in which one entity is selling the shares and another is buying them, is the focus on the emotions of other investors in the market. The famous investor, Warren Buffett, is cited as originating a quote that is used as the premise to maximizing your opportunities in the stock market – “Be fearful when others are greedy. Be greedy when others are fearful.”

Understand the Investments You Are Buying

The second method of reducing risk in your portfolio is to understand the investments you are buying. Significant hype typically precedes Initial Public Offerings (IPO) as the underwriter is attempting to create a market for a stock. Without a historic picture of the company’s capabilities to generate a profit and pay a dividend, beyond its operations as a private company, the investor is buying based solely on prospective anticipated performance (i.e., hope). Many of the companies going public provide novel products and services not yet proven in the marketplace. For example, many IPOs will list for a price that reflects much higher value than the performance of the company may sustain. After the hype of the issue, realism sets in and the price may fall to a level that is a fraction of the issue price.

When to Rebalance Your Portfolio

Lastly, consider rebalancing your portfolio to its original target allocation when the variance is 5% – 10% above the intended percentage. For example, when your portfolio experiences growth in one asset class, the allocation for the original investments will change. Stocks have performed reasonably well in 2021 and bonds have provided lower yields. After the year has faded, you look at your portfolio and realize your 60/40 portfolio is now 75/25! Good news is that you have a larger portfolio value but inherently gained more risk. By rebalancing the portfolio consistently and timely, you will maintain better control of the risk in the portfolio.

Many investors may receive a benefit from seeking the assistance of a Certified Financial Planner^TM professional to analyze their portfolio. By implementing a few consistent steps in managing your retirement assets, you may increase your probabilities to achieve your ultimate goals.

See you on the jogging trail!

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How To Secure a Happy Retirement Life

Posted on January 12, 2022January 12, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

One of the most asked questions from our new clients is “How much wealth do I need to last my lifetime?” The obvious answer is “depends.” To help you quantify your needed savings for lifetime income, we will provide you three areas of life that must master to live the life you choose.

First, you must become a saver, not continue as a consumer. The highest savings rate in U.S. history was reached during the pandemic. Not surprising as most people did not feel safe shopping at local stores and malls but rather ordered online. Granted the online experience for shopping has improved exponentially, it is still not the experience most shoppers seek when a day is planned for the exchange of goods and currency (that is the phrase I use when my wife and daughters go shopping).

The savings rate for U.S. citizens in 2021 was a whopping 13.7% (www.statista.com)! This level of savings exceeds the 11% experienced in 1960. Is it enough to meet the demands of rising costs of living for most people? Perhaps if this savings trend were to continue for a period of 40 years representing the work life of most people, their post-career years would be sufficiently funded.

To bring another statistic into this discussion, the total savings of U.S. citizen in 2021 exceeded $2.3 trillion. This is a staggering amount of money considering the U.S. Government has distributed $4 trillion dollars during the pandemic. The average balance maintained in the 401(k) plan of a 65 years of age and older person is $216,720 according to www.personalcapital.com.

If you seek a lifetime of income, in the realm of reasonable support, it is important that you become a saver on a consistent basis to allow the compounding of investments to perform over a significant period of time.

Second, you must determine what happiness is for you in life. One of our clients was an older woman whose husband predeceased her while she was in her career. Her position was mostly clerical, and she enjoyed her work. During her career, she had the opportunity to invest in the company’s stock through a plan where the employer matched her contributions to buy the stock. The highest salary she earned during her career was $51,000, which was two years before her retirement from the company. Granted she worked for a good company and was fortunate to begin her career with the company while it was a fledgling start up organization.

At the age of 66 and 4 months, coincidentally her full retirement age for Social Security Benefits, we assisted her in filing for her benefits and prepared her for retirement. When we opened the most recent envelope containing her statement from the employee stock ownership plan, she could not help but grin at my expression. Her stock value was $1.5 million! She also was prudent and saved money through her employee retirement plan. The sum of this account exceeded $700,000. She looked at me and asked, “Is this enough for me to retire and keep my lifestyle?” Of course, we needed to perform our analysis and testing but offered her some probabilities that she would be simply fine in retirement.

The moral of the story is that time, once again, is the greatest impact on lifetime savings. Start early, be consistent with contributions and treat the account as your next income stream by never borrowing from the account for current lifestyle needs. Happiness for her was continuing to live in her home, travel to worldly destinations and help her grandchildren with college expenses. She, by thoughtfully planning, is still doing all the things that make her most happy in life.

Lastly, you must protect your health as you prepare for an active retirement. My father was one of those people that worked hard all his life and genuinely enjoyed his career. He suffered a heart attack in his early 40’s that opened his eyes to better care for himself so his future would be enjoyable. After finally retiring at 72 years of age, he has lived a wonderful life in retirement. He is reasonably healthy, has enjoyed cruises to Alaska and continues to do whatever he chooses to keep a smile on his face.

His father, my grandfather, died in his early 60’s. I always told dad that he would need to take advantage of the opportunities to maintain his health so that he could break the average mortality for males in our family. He smiled that sheepish grin and said, “I am setting a new bar for the Williams men!”

Exercise regularly, save consistently and find your happiness in life. By preparing prudently today, your tomorrows will be most enjoyable!

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Retirement Challenges and Successes

Posted on January 7, 2022January 7, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

Another year of life has arrived. What are you doing to grow as a person? Grow your wealth? Grow your influence? It has been proven by scientists that individuals who live sedentary lifestyles after their career lose the cognitive abilities they once possessed. To help you keep up your psychological and emotional edge in life during these challenging times, practice the activities outlined in this article.

Get up and get going

Get up and get going. The simple act of walking each day and experiencing the wonder of nature will keep your mind inspired and active. There are differences of opinion that you should walk 10,000 steps per day or 5,000 steps per day. I say, walk until you feel sufficiently energized. If your heart rate is up to an acceptable level determined by your personal physician, walking for as little as 20 minutes per day can help you keep your mental faculties acute and ready for challenges in life that will most certainly arise.

Live each day with a plan for purpose

Live each day with a plan for purpose. Too many of us simply rise from bed and allow the “winds of the day” to blow our lives in any direction without our consent. This is not you. Set yourself a routine of rising from bed at the same time each morning and preparing a list of activities for the day that will stimulate your mind and work your body. For example, I do not start my day without clear understanding of what I must complete for the day. This type of planning gives your mind something to work on even when you are doing something else.

Perform one random act of kindness a day

Perform one random act of kindness a day. What does being kind have to do with your mindset? Everything! When we selflessly give to others in need, no matter the size or scope of the deed, your brain floods your body with dopamine. This chemical in the body brings happiness, euphoria, and other positive feelings. By helping others, you will also feel a sense of accomplishment that gives you energy to continue serving and care for yourself in a better manner. Another benefit to performing a random act of kindness is that the recipient can “pay it forward” to others in need and we can build a better community and planet based on mutual respect.

Build your confidence in your future

Build your confidence in your future. Review your financial picture and see if you have allowed parts of your budget to creep into areas that are not being utilized efficiently for your lifestyle. We often start subscriptions for products or services that automatically renew and fail to remember that we did not cancel them. Another area to focus is our savings pattern. For example, you may have saved 5% of your earnings monthly last year but your income has risen this year. If you do not utilize the additional cash flow and it is deposited in a non-interest bearing checking account, you will lose the benefit of earning interest on the funds.

Read

Lastly, read something stimulating to you each day. A good novel, a biography or anything that challenges your mind to create the background of the story or place yourself in the plot as a character that impacts the potential outcome of the storyline. The mind and body of humans are tremendously powerful devices that require our continual input of challenges, fuel, and rest.

This is a new year! Don’t become so relaxed in life that you fail to live it abundantly on a daily basis. Make 2022 a different outcome for you by facing the challenges of life confidently through strength gained by implementing one or all of the above strategies. You can truly become what you desire in life and build a better community in the process. See you on the walking trail!

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IRA Planning for 2021

Posted on November 11, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

The pandemic of the past two years has brought a tremendous amount of pain to many lives but there is a positive aspect in that dark cloud of gloom. One of the best attitudes, when performing tax and financial planning for your family, is to seize opportunities that are given you. In other words, capitalize on the negatives that impact your life and make the proverbial “lemonade from lemons.”

Many businesses are suffering net operating losses during 2021. If you are an owner of the business and the operation is conducted as a sole-proprietorship, partnership or S-Corporation, you may have a valuable tax saving asset in your future. The net operating losses of these entities are claimed on the tax returns of the owners. For example, if you were a fifty percent (50%) partner in a partnership that lost $100,000 in ordinary income for 2021, you would receive the benefit of $50,000 loss to be reported on your personal return.

With your personal return reporting a loss, or much lower income than you otherwise typically report, your Traditional IRA is holding a great value in it beyond its balance. Consider the conversion of your Traditional IRA, in whole or in part, to a Roth IRA prior to the end of 2021. A taxable event will be triggered when the conversion is performed but your tax computation is based on your taxable income which, when claiming your share of the net operating loss, may be lower than your typical year sheltering the income from the conversion from taxation.

The purpose for converting your Traditional IRA to a Roth IRA is to change the future taxability of the account. You will be taxed on distributions received from the Traditional IRA in the future. The Roth IRA does not mandate required minimum distributions to you at age 72 as a Traditional IRA. Also, you may use the benefits of the Roth IRA to accumulate tax-free income streams from a very young age.

If you believe tax rates are going down in the future, you may wish to contribute to a Traditional IRA to enjoy the current tax savings. However, if you think tax rates will be higher in the future, you may wish to forgo the tax deduction of today and contribute to a Roth IRA.

Both types of IRA may invest in many different types of investments – stocks, bonds, mutual funds, etc. The structure and taxation of the two IRA types are the distinguishing benefits each allows for a taxpayer. The IRS continues to close loopholes such as “back door” Roth IRA conversions and other planning opportunities.

To maximize your opportunities for most challenges in life, it is always an innovative idea to allocate your investments between qualified and nonqualified accounts. Qualified accounts such as IRAs and 401(k) plans are generally taxable upon distribution of the assets to the owner. However, nonqualified accounts such as transfer on death accounts and joint accounts pay taxes during the growth of the assets. When you wish to retire, the type of account may play heavily in your financial plan design.

IRAs are tremendous tools for tax planning. Don’t assume that you simply invest in the IRA every April to save taxes. There are so many other uses of IRAs for estate planning, gifting and lifetime income planning that are often overlooked. As retirement planning experts, we have witnessed a tremendous number of people who fail to maximize the benefits of IRAs.

Proper allocation of your assets is necessary to stage a retirement plan that will serve you well in life. Seek out the assistance of a CERTIFIED FINANCIAL PLANNER^TM professional to help you plan for the future that you wish to achieve. Remember, when you fail to plan, you plan to fail. Be the exception. Take a pragmatic approach to your lifetime of income and enjoy the best of life on your terms. See you on the walking trail!

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The Secret To Investment Success

Posted on June 25, 2021June 25, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

The most negative action to reaching your goals in investing your retirement assets is emotion. Markets, by their very nature, expand and contract in every cycle. Why is it important to state the obvious? When humans invest, two emotions play a part. For example, when the market indexes are setting new records for growth, investors tend to become greedy. As soon as the expansion has cycled down and contraction in the economy is prevalent, fear becomes the emotion of the day.

To control your emotions while investing for your future, it is critical that you understand three factors about the process. First, if you are investing for your retirement, you must acknowledge the process is a long-term perspective. The assets you accumulate in life must sustain for at least thirty to forty years in retirement. With this mindset, you establish a personal investment policy that helps you capture market gains with a minimal amount of risk that you are willing to accept.

By focusing on the term of your income needs in retirement, you can weather the, somewhat volatile, market cycles without excess worry. Let’s face it, everybody worries about something, right? When you initiate your savings plan during your career, the accumulation phase consists of thirty to forty years as well. What this means is that the same approach to investing for your retirement will serve you well in retirement!

The second negative to reaching investment success is continually changing your investments based on returns. There have been many occasions in which an investor has irreparably harmed their success for retirement by simply trading their account excessively. For example, we developed a plan for accumulating a client’s retirement assets. Based on the age of the person, his risk tolerance and projected cash flow needs in retirement, he only had to follow through on the plan. However, he allowed emotion to overtake him when a colleague appeared in his office one day and remarked about the excessively high returns, he was experiencing in his employer’s retirement plan.

Our client decided the well-planned approach founded in logic was not meeting his needs because the markets would yield a much higher return. This is the emotion of greed taking control of the investment process. Within a year, the market cycle collapsed, and his portfolio had fallen by 50%. Imagine the next meeting we held with him and provided a comparison of his current allocation and results to that of the original allocation for his future. He was devastated and an emotional wreck!

The story does have a silver lining. We worked with him to formulate a plan that would place him back on track but required he work three years longer than he originally planned. Allowing your mind to host greed and fear has consequences. The probability of his lifetime plan for retirement being a success is very good.

Of the three negatives that can cause significant harm to your investment success is a concentration of investments. Diversification of risks within a portfolio helps you weather the market cycles by eliminating, or attempting to reduce, the impact of significant market volatility. In recent years, daily market swings have become the rule not the exception. Early in my career, I recall substantial swings in the S&P 500 Index would only be 10 or 15 points. In our current economic conditions, it is not uncommon to see fluctuations of 30 to 40 points in the index.

To allow yourself the highest probability of success in your investments, it is critical that you avoid emotions serving as guiding force, stick with your plan for saving and consistency will help you achieve your goals and diversify your portfolio to capture opportunities for reasonable returns in the long-term. A few small errors in investing can give rise to very large costs in your future savings. Seek the assistance of a CERTIFIED FINANCIAL PLANNER™ professional to help you establish a long-term plan that will give you confidence and clarity about your future. Until then, I’ll see you on the jogging trail!

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It’s About More Than Numbers

Posted on May 10, 2021May 10, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

Too often we paint someone with a broad brush as to their contributions to the world solely based on the group in which they are a member. For example, medical doctors may specialize in a field that allows them to focus on a specific area of the human body. These physicians are capable of providing you general advice and medical care but may also provide you greater, more detailed, information pertaining to a particular illness such as kidney ailments or cancer of the brain.

Wealth advisors are individuals who may specialize in certain areas of financial matters that a particular segment of the population needs. For example, many wealth advisors focus on corporate executives and their unique compensation opportunities. Other advisors may focus more on the intricacies of Social Security Benefits and less about long-term market investments.

To be certain, your life is more complex than simply working with numbers to reach your lifetime goals and dreams. It is vital that you consider the qualitative factors in your life as much, if not more so, than you do the quantitative factors. My case in point is the life of a lady we will call “Jane”. By all outward appearances, Jane had all that was needed to sustain her the remainder of her life and leave a legacy for her children to expand their wealth. A couple of years after her husband’s passing, we asked Jane if we could meet to discuss the important matters in her life. She assumed we were talking about her accounts and showed up with her Financial Organizer we provided when initiating the relationship.

Immediately, we recognized that Jane had not understood what we wished to discuss with her. After explaining the importance of happiness in her life, we asked her a few simple questions to initiate this subject. “What is one thing that happened recently that made you smile and one thing that was difficult?” She looked up at me and began to create a big smile on her face. She exuberantly stated, “I had the best time recently volunteering as a cancer patient attendee!” I asked her, “What of that process made you so happy?” She responded in a way that made me realize she had found a new purpose in life. “When John was dying, I had no one that understood, truly understood, what I was going through at that time in my life. By helping these terminally ill individuals live a more fulfilling life and knowing that someone understands the palette of emotions they are experiencing, helped me heal and find happiness again.”

We continued to discuss this wonderful opportunity for Jane to serve and offered her some qualitative advice. “Why don’t you establish a self-help group or lead others in the process of caring for terminally ill individuals that provides dignity, understanding and compassion?” This new form of serving her fellow man gave Jane the emotional support she needed to truly live again after the loss of her husband.

As wealth advisors that specialize in retirement planning, we place a significant amount of importance on helping clients understand, and navigate, the maze of life after the loss of someone special. We are proud of our technical competence and expertise. More importantly, we are most humbled that our clients know that we are here as a resource for more than numbers.

As humans, we are all different in some way. However, we all need emotional support, in addition to financial advice, to truly live a rewarding life. It is not all about the numbers unless you are talking about the lives you touched in deep, emotional moments that helped them see life in a better way.

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Important Retirement Considerations for Educators

Posted on March 12, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

Educators are challenged every day. Why would you want to make your retirement transition challenging? You have worked for 30 years educating individuals that have changed the world through your guidance. Mrs. Smith, my first-grade teacher, was the first motivational speaker I heard in my life. At six years of age, Mrs. Smith instilled in me, or perhaps I should say endowed in my mind, the mantra and belief that “I could be anything I wanted to be if I worked hard enough”. This wonderful lady may have known, but I certainly did not, that she was bestowing to me a lifetime adventure of learning and dreaming that would reward me in tremendous ways throughout my life.

Teachers are the influencers, supporters, and cheerleaders for their students. What does this information have to do with retirement planning? Everything! At a time in the professional life of a teacher when he or she is making lifetime decisions, inadequacy rears its ugly head. As specialists in retirement planning, we focus on a variety of pension platforms and one of the most comprehensive is the Oklahoma Teachers Retirement System (OTRS). This system is the pension plan that provides support for teachers, administrators and support staff in the field of education in Oklahoma.

Many people become confused and simply disregard provisions of the pension plan that would help them live a better life. The OTRS requires certain decisions for the participants to retire that are lifetime elections. Once the decision is made, even when life may go strangely awry, you cannot change your initial plan for retirement. How can you mitigate this risk? First, ask questions of the plan administrators, read the plan manual and familiarize yourself with the information and terms of the plan.

Second, seek out an expert to help you coordinate retirement, estate and income tax planning to equip you with the capability to enjoy your retirement years with potentially less worry. The OTRS provides a monthly benefit to qualified participants once the election to retire is filed. However, you may not wish to give total control of your future cashflow to the plan. What will you do if your health were to suddenly worsen immediately after retiring? The plan contains a provision that allows participants with 30 or more years of service to elect a Partial Lump Sum Option (PLSO) which allows the participant to rollover, or transfer tax-free, a sum representing 12-, 24- or 36-months of benefits to an Individual Retirement Account. Why would you wish to do this? You are in control of the distribution of the funds should an unexpected event occur!

Third, the timing of your notification filed with the plan of your planned retirement date is critical for the receipt of your first retirement benefit payment. For example, if you wish to receive continuity in your family’s income, and you plan to retire on July 1, 2021, you must file your Pre-Retirement Information Verification (Form 3) on or before April 1, 2021. This date is non-negotiable. To help you understand the strict interpretation of this required date, if April 1, 2021, was a weekend or holiday, you would not be extended any grace period to meet this deadline. Additional subsequent dates must be met to experience a smooth transition to retirement.

Each person’s retirement is unique. Do not rely on others’ comments or experiences to make important decisions for your future. A horror story from the past comes to mind. One of the educators I know came to me after filing his initial documents with OTRS. After we discussed it for a few minutes, he realized he had made a horrible mistake on his paperwork. Certain elections were not heeded, and life was not going to be as he had planned. However, we were able to resolve the issues for him in time to meet his statutory deadlines. His first retirement trip was exciting, and his cash flow was on time.

To enjoy your future years, and experience uninterrupted cashflow, the OTRS filing process requires attention and proper timing. Seek out a Certified Financial Planner™ or other retirement planning expert to help you through this tedious process. You should be planning your next trip to celebrate retirement, not worrying about your lifetime income source. Go ahead, book your trip and do not forget the sunscreen!