FPH Insights - December 2016Submitted by Financial Planning Hawaii on February 5th, 2017
Our Director of Marketing leads the FPH Team in an ideation session
Announcements, colorful commentary, and useful financial planning tidbits from John H. Robinson
FPH Website Facelift... In keeping with the trend in web design for professional sites to be highly visual with minimal text and few separate site pages, we have merged the "Client Access" page into the "Client Resources" page and have created a clean, crisp matrix of client services. This matrix may also be accessed simply by scrolling down the home page. Included in this matrix are six new links to important college planning websites.
New Planning Software... I am always on the lookout for great new apps. College Affordability's EFC Plus and Covisum's Tax Clarity software fit the bill, and I have incorporated both into my practice. EFC Plus analyzes each family's financial aid position, simplifies the financial aid process, and helps them realistically estimate and compare net college costs. Tax Clarity provides sophisticated insight into tax efficiency in retirement.
Massachusetts approves income tax deduction for 529 plan contributions...
On August 22, 2016, the MA legislature approved a measure permitting state residents to deduct contributions to the in-state 529 college savings plan, up to $1,000 per individual or $2,000 per married couple filing jointly starting 2017. (Source: Saving for College.org)
Book 'em Danno...The Manoa Innovation Center (where our office is located) was briefly transformed into the Hawaii DMV for the filming of an upcoming episode of Hawaii Five-O. Neither Alicia nor I was asked to be an extra in the filming, but I did bump into Detective Danny "Danno" Williams (actor Scott Caan) in the men's room.
This column is dedicated to demonstrating how the biggest financial planning mistakes and oversights often have nothing to do with investment selection.
At FPH, we provide all clients with a cloud-based platform (eMoney) that enables them to easily organize, centralize, monitor, and maintain all aspects of their financial lives. Included in this platform is a document storage vault that is a critical tool for helping us address important non-investment planning issues. Estate planning is one of these issues, and we urge all clients to provide us with copies of their estate planning documents to review and upload.
Recently, a client provided us with a PDF copy of their durable powers of attorney and wills for uploading to the Estate Planning folder in their eMoney vault. In reviewing the documents, I discovered that the documents were not signed and that there was a note indicating that the signed copies were held at the attorney's office. As it turned out, the attorney had retired and the firm that had taken over his clients could not locate the signed documents.
This "catch" serves to illustrate a common misperception that the act of drafting one's documents completes the estate planning process. Drafting the documents is merely the first step. Failing to properly implement the documents can render them worthless. Providing the documents to us for review enables us to catch mistakes and oversights and the eMoney Vault makes it easy to maintain and update these documents over time so that they are ready and available for implementation when needed.
Note: While FPH does not provide specific tax or legal advice, our financial planning role in the implementation process is to raise awareness of potential mistakes and/or oversights that may then be taken up with one's estate planning attorney or CPA.
Account Type Spending Order: Taxable, Tax Deferred, or Roth?
One of the hot topics in financial planning these days centers around enhancing portfolio sustainability in retirement through tax efficiency. At the heart of this discussion is the issue of account spending order. This topic is discussed in the following video from Vanguard:
Note that the Vanguard discussion does not mention the potential impact of taxable distributions on the taxability of social security. This is an important consideration. Our Tax Clarity software can account for this, and all readers are advised to seek tax guidance from their CPAs before implementing any strategy that may have tax ramifications.
The following articles represent timely ideas that apply to at least some segment of our client base.
IRS Provides Relief For Missing IRA Rollover Deadline, With Some Catches (Financial Advisor)
Kitces: Why Most Retirement Accounts Never Run Dry (Financial Planning)
John H. Robinson
Financial Planning Hawaii
2800 Woodlawn Drive, Suite 139
Honolulu, HI 96822
(808)564-0654 or email@example.com
Securities offered through J.W. Cole Financial, Inc. (JWC) member FINRA/SIPC. Advisory services offered through Financial Planning Hawaii and J.W. Cole Advisors, Inc. (JWCA). Financial Planning Hawaii and JWC/JWCA are unaffiliated entities.
Fee-Only Financial planning services are provided through Financial Planning Hawaii, Inc, a separate Registered Investment Advisory firm. Financial Planning Hawaii does not take custody of client assets nor do its advisers take discretionary authority over client accounts.
The information contained herein is general in nature. Neither Financial Planning Hawaii nor J.W. Cole provides client specific tax or legal advice. All readers should consult with their tax and/or legal advisors for such guidance in advance of making investment or financial planning decisions with tax or legal implications.