OWRS Newsletter – Issue 1 (Fall 2015)

O’Dell, Winkfield, Roseman & Shipp
IN THE BLACK
In The Black (adj): 1. describing a financial statement that ends with a positive assessment. The term
derives from the color of ink used to enter a profit figure on a financial statement.
VOL. 1 ISSUE 1 • WWW.OWRSFIRM.COM • FALL 2015
MEET THE
PARTNERS
YOUR LAST WILL
Why estate planning is
absolutely essential to
protect the family
PAGE 05
Meet the people behind
the company
PAGE 02
DON’T DIY
Here’s 30 times when
you shouldn’t try to do
things yourself.
PAGE 06
INTRODUCING O’DELL, WINKFIELD, ROSEMAN & SHIPP
It is with great excitement that we
introduce O’Dell, Winkfield, Roseman
& Shipp (“OWRS”), the result of our
ongoing professional collaboration
with experts in our field. Uniting four
individual firms under one banner
affords our clients additional resources
and an optimum level of service. As
in most collaborations, each partner
brings to the table a unique skill set that
will bring enhanced benefit to all clients.
While still functioning independently
in our respective regions, we come
together as a group to learn and share
DENVER
7887 East Belleview Ave.
Suite 1100
Englewood, CO 80111
(303) 780-7350
D.C.
new ideas, procedures, and strategies.
Through this assembly, we believe we
can better survey the vast and changing
financial landscape to provide cuttingedge tools and concepts available from
the world’s premier financial companies.
As a client, how will this affect you? It
will be positively better! Your assets,
investments and policies are unaffected
by this change. You will experience
better communications and enjoy
expanded resources. This partnership
unites a total of 20 financial advisers
from across the country with multiple
2275 Research Blvd.
Suite 500
Rockville, MD 20850
(240) 361-0363
CHARLOTTE
5960 Fairview Road
Suite 400
Charlotte, NC 28210
(704) 935-2550
areas of expertise, including Social
Security, Health Savings Accounts
(HSA’s), Investments, Life Insurance,
Pensions, and Estate Planning.
Our expansion to OWRS is a result
of our relationship with you. We
appreciate you and look forward to our
continued partnership as we move into
this next chapter. For more information
on OWRS please visit our new website
at www.owrsfirm.com.
We look forward to serving you as
O’Dell, Winkfield, Roseman & Shipp!
RICHMOND
1518 Willow Lawn Dr.
Suite 300
Richmond, VA 23230
(804) 372-7337
OWRS RETIREMENT NEWS
MEET THE PARTNERS
In addition to Kyle’s consumer advocacy, he is also highly recognized
among colleagues in the financial industry for his breadth of
knowledge, unique approaches to solving retirement challenges, and
reflections on the moral responsibilities of today’s financial advisor.
Besides his membership in the Million Dollar Round Table, he
belongs to the Independent Excellence Group, a think tank composed
of nationwide financial professionals who meet several times a year to
share new ideas, procedures, and strategies.
KYLE O’DELL
Managing Partner, Investment
Advisor Representative
Former president and founder of
Secure Wealth Strategies, LLC.
As the son of a celebrated surgeon and
member of a prominent medical family, Kyle O’Dell’s specialty
has been crafting financial strategies to meet the complex needs of
medical professionals for more than 20 years. Kyle brings to the firm
a passion and deep understanding of the demanding and challenging
lives of doctors.
Based in the Washington, D.C. area, Kyle spends most of his time
working with the military, federal employees, politicians, and
business professionals. His fifteen years of experience as a retirement
advisor focuses specifically on cutting-edge strategies which reduce
future income tax liabilities, grow clients’ wealth and provide lifestyle
security.
After 11 years with a division of Citigroup, Kyle became disenchanted
with promoting a limited group of financial products and left
corporate America to form a firm which has grown to national
prominence, O’Dell, Winkfield, Roseman & Shipp. This firm
represents a group of advisors who have had the privilege of working
extensively with many prominent groups and individuals in the areas
of Wealth Management, Retirement, and Income Planning.
JOSEPH E. ROSEMAN, Jr.
Managing Partner, CRPC®, ChFEBCsm
The firm’s expert in everything Social
Security, Joe Roseman, Jr. brings over
20 years of retirement income planning
experience to the firm. With over 567
different ways to file for Social Security,
did you know that there are wrong ways
to file for your benefits? Most Americans are not aware that how
they file for their Social Security benefits can dramatically impact
what they receive. As a leading strategic expert on Social Security,
Joe maximizes our clients’ retirement income from all assets, while
keeping a keen eye on Social Security optimization strategies.
KYLE WINKFIELD
Managing Partner, ChFEBCsm,
Investment Advisor Representative
Former president and founder of
The Winkfield Group
With over 20 years of industry experience, Joe has seen it all, especially
when it comes to the biggest retirement planning mistakes. During
the pivotal planning years, most financial planners focus on asset
accumulation and save the retirement talks for later down the road.
Best known for his unique ability to teach
the most creative financial concepts, Kyle Winkfield heads the
Washington, D.C. office of O’Dell, Winkfield, Roseman & Shipp, a
distinguished group of advisors who work extensively in the areas of
Wealth Management, Retirement, and Income Planning.
Unfortunately for most people, a focus on retirement should begin
much earlier in life, particularly when they are unnecessarily losing
their savings to the ups and downs of the market. While asset
accumulation is a good retirement goal, assets themselves are not
a solid retirement plan. With a focus on how assets are positioned,
what type of income streams can be derived from assets, and how
distributions from assets are taxed, Joe helps to ensure our clients’
assets are prepared for their retirement years before it’s too late.
Kyle is the best-selling author of the book SuccessOnomics with Steve
Forbes, a regular guest on WBFF FOX45, and was interviewed on
The Brian Tracy Show, which broadcasts on ABC, NBC, FOX, and
CBS affiliates around the country. You may have also heard him on
the radio when he hosted the Real Deal Financial Show, or read his
feature in ‘Portraits of Success’ in the Wall Street Journal. His advice
and insights have appeared in numerous publications, as you might
have read his articles on NASDAQ.com and The Huffington Post.
Kyle has been featured in several widely distributed publications,
including The Wall Street Journal, Clark Howard and Black Enterprise
Magazine as well.
Joe also has studied the Federal Retirement System CSRS/FERS.
You will often find him in a classroom educating Federal Employees
on their Retirement System or speaking at dinner engagements on
Social Security Optimization Strategies and how to implement tax
free retirement income strategies.
(c o n t i n u e d o n p g 3)
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YO U R R E T I R E M E N T I S O U R F OC U S
(c o n t i n u e d f ro m p g 2)
MEET THE PARTNERS
Beginning a career in finance as a personal banker with U.S.
Bancorp, Jeremy quickly ascended through the ranks but sought
a more well-rounded financial approach than what banking could
provide. He left banking for independent advising, focusing on
estate planning, where he discovered that most of his clients were
ill-prepared for retirement, often running out of money or forced
to drastically reduce their lifestyles. As such, Jeremy committed his
career to retirement planning and designing financial strategies that
maximize our clients’ lifetime wealth potential.
JEREMY SHIPP
Managing Partner, CLU®, RICP®,
Investment Advisor Representative
Former president and founder of
Harbor Wealth Advisors, LLC.
The resident academic and mathematician
at O’Dell, Winkfield, Roseman & Shipp, Jeremy Shipp brings over
15 years of mathematical validation, verification, and logic to the
sound financial and retirement strategies that we offer our clients.
There is not one financial strategy or concept we use that we cannot
verify and back up mathematically, thanks to him. A strategic and
creative thinker, Jeremy applies advanced analytics to our clients’
portfolios to determine the best course of action to achieve their
outlined objectives. He received his Bachelors of Science degree in
Mathematics from Marietta College, in Marietta Ohio.
Jeremy also spends a portion of his time working with families of
wartime veterans and their surviving spouses to obtain a much
deserved Aid & Attendance benefit from the Department of Veterans
Affairs to help pay for assisted living and nursing home costs. He has
been featured in Forbes Magazine for his efforts.
OWRS IN THE MEDIA (TV)
Live, on-air interview with Kyle Winkfield at WBAL NBC 11
Baltimore, The Importance of Life Insurance
Live, on-air interview
with Kyle Winkfield
at WBFF Fox 45
Baltimore, “National
Splurge Day”
Live, on-air interview with Kyle Winkfield at WBFF Fox 45
Baltimore, Life Insurance Awareness Month
Live, on-air interview
with Kyle Winkfield at WBFF Fox 45 Baltimore, “Christmas
in July”
Live, on-air interview with Kyle Winkfield at WBFF Fox 45
Baltimore, “Tell the Truth Day”
Live, on-air interview with Kyle Winkfield at WBFF Fox 45
Baltimore, “Back-to-School Budgets”
Live, on-air interview with Jeremy Shipp at WTVR CBS 6
Virginia, “The Importance of Life Insurance”
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OWRS RETIREMENT NEWS
OWRS IN THE MEDIA (PRINT)
“Family Finances: Lessons Learned”
“IS Retiring With a Mortgage Such a Bad
Thing?”
“10 Ways to Pay Off Your Student Loans
in One Year”
“4 Reasons Why You’re Too Old - Or Too
Young - For a Mortgage Loan”
“What Investments You Have That You
Don’t Even Realize”
“Mortgage Loans: Your Age Isn’t a Factor,
But It Influences Other Ones”
“What Is The Difference Between an Index
Fund and an ETF?”
“7 Wise Financial Habits to Learn From
Our Grandparents”
“What’s the Best Way to Invest My
Retirement Money?”
“7 Wise Financial Habits to Learn From
Our Grandparents”
“How to Use Your Paycheck to Plan Your
Retirement”
“Best Way to Invest My Retirement Money”
“30 Times You Should Have Asked for a
Financial Advisor’s Help”
“Home Ownership May Only Be a Dream
for Millennials Saddled with Student Debt”
“Back-to-School Budgeting”
“5 Financial Lessons Learned From the
Housing Crisis”
“How Retirees Can Prepare for Those
Unexpected Financial Emergencies”
“The Surprising Reasons Your Fixed-Rate
Mortgage Payment Could Rise”
“Retirement-Planner Conundrum: Is It
Time To Pull Away From the Market?”
“10 Do’s and Dont’s of Financial Planning”
“Tips for people behind in retirement
savings”
“8 Tips for Surviving the Stock Market’s
Record Drop”
“How to Play It “Safe” With Conservative
Mutual Funds”
“Home Ownership Down Among
Millennials With Student Loan Debt”
“Medicaid Annuities Offer Long-Term
Care Tools”
“Mutual Fund Fees: 7 Things To Consider”
“Haven’t Refinanced Yet? You Could Be
Wasting Hundreds of Dollars a Month”
“20 Questions to Ask Before Hiring a
Financial Advisor”
“How a Fed Rate Increase Could Affect
Your Retirement”
“Cancer Stricken Mom Looks to Secure
Son’s Future”
“How the Looming Fed Rate Rise Will
Affect Your Retirement”
“Major Retirement Mistake: Not Having a
Withdrawal Plan for Your Assets”
“When Advisors Have Advisors”
“Major Retirement Mistake: Not Having a
Withdrawal Plan for Your Assets”
“10 Companies You Should Invest in Before
2016”
“Financial Focus: Student Loans or
Retirement Savings?”
“The Risks of Buying Cheap Insurance”
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YO U R R E T I R E M E N T I S O U R F OC U S
HOW TO WRECK YOUR ESTATE
you becomes embroiled in a lawsuit, bankruptcy or divorce, you
and your “co-owner” are very much at risk. One of the best things about celebrities is that they live their lives
so publicly that, hopefully, the rest of us can learn from their
mistakes. When it comes to famous people who mismanaged
their considerable estates, regrettable stories abound:
#3
“Don’t worry. All of your money will go to the person
listed in your will.” Not so fast! Even if you have a will
designating your intended heir, he or she may not get the money
you have stashed in specific accounts. If you own an insurance,
brokerage or investment account which cites a beneficiary, that
other document will trump the value of your will.
Guitarist Jimi Hendrix left no will and no instructions. It took 34
years of court battles to come to some resolution, and, according
to biographers, relatives closest to Hendrix during his lifetime
didn’t get a dime. Attorneys got plenty.
Actor Heath Ledger failed to update his will after the birth of his
daughter, Matilda. His legal will left all of his assets to his parents
and sisters. Confusion and recriminations abounded until the
family (much to their credit) decided to gift the entire estate to
then two-year-old Matilda.
If, for example, you write out a will leaving your whole estate to
your cat BUT your former wife is still listed as the beneficiary on
your 401(k), your ex-wife will get the cash in that 401(k) account.
#4
“You don’t need a planner. You can do it yourself with
some help from an attorney.” Many people approach
estate planning as a piece-meal process, only addressing those
issues that appear important at the time. They consult an attorney
only if (A) legal documents are required and (B) they can’t find a
DIY (Do- It-Yourself) solution on the Internet.
James Gandolfini, the actor who played Tony Soprano, left
behind a much criticized will that reportedly did not protect large
portions of his hefty estate from probate and exposed his heirs to
millions of dollars in tax liability.
You Too Can Easily Wreck Your Estate... and, in doing so, you may
also compound grief issues and soil your legacy among family
members and friends whom you hold closest to your heart. Let us
spell out some of the most common examples of bad advice that
can cost you and your family so much.
Not good. Estate planning should never be a patchwork process.
The lapses or well-intended messes you leave behind may very
possibly impact the quality of your final days and compound the
tragedy of your departure.
Your estate plan should involve the entirety of your financial
profile. Only after your personal financial security is settled,
should you then plan to maximize the amount of wealth that you
pass on as a legacy to those whom you love the most.
#1
“Don’t worry! You’re too young to worry about a will.
You don’t own enough yet to protect.” Death, injury
and illness are not reserved just for the elderly. There are vital
reasons now to address your estate. Dying without a will may
subject your assets to a potentially very expensive and timeconsuming probate process. Your neglect also adds significant
stress to the hearts of your loved ones, perhaps in a time of nearly
unendurable grief.
Attorneys are often a vital part of this process but are not
equipped in many financial matters. You need a team led by a
financial professional.
Don’t compromise the quality of your later years. Don’t shortchange the people you love. Let’s meet and talk about your good
intentions.
Your plan should also include documentation to designate who
cares for your children in your absence, who cares for you if you
are incapacitated, and the quality and limits of your own medical
care in the final season of your life.
Sources: (1) “Six Costly Estate-Planning Minefields, and How to
Avoid Them.” Consumer Reports. consumerreports.org. 4/14/15.
(2) Goldman, L. “10 Celebrities Who Made Terrible Mistakes
Planning Their Estates. Business Insider. businessinsider.com.
12/7/10. (3) Fabio, Michelle. “The Battle over the Jimi Hendrix
Estate.” legalzoom.com. 12/1/09. (4) Davis, C. and Ambrose
M., “Heath Ledger’s Daughter to Inherit Entire Estate.” People
Magazine. people.com. 9/29/08
#2
“Let someone sign a signature card at your bank so that,
if anything happens, at least they can pay your bills.”
Not a good idea. Allowing someone else to “fill out a signature
card” on a financial account immediately makes him or her a
full co-owner of that asset. Not only do countless stories exist
about “loved ones” abusing such privilege, but, if either one of
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OWRS RETIREMENT NEWS
TIMES YOU SHOULD HAVE ASKED
FOR A FINANCIAL ADVISOR’S HELP
By Kyle Winkfield & Jeremy Shipp
proper allocations could fare
better than randomly selecting
options, sticking with the
default options, or reading a
magazine article and “doing it
yourself.”
*Hyperlinked digital version of this article available at owrsfirm.com
You can read books, listen to radio shows and discuss
strategy at the water cooler, but when it comes to making
financial decisions, you should not be applying generic
guidance directed at the masses and as such, “do it yourself.”
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5
When You Made A
Large Down Payment
on Your Mortgage: If this
made you feel more secure in
your home, then so be it, but
what a financial advisor would
have pointed out is what else
could have been done with
the cash. Your money could
have been earning interest
instead of being buried in dirt.
You’ll never get that money
back unless you ask the bank
(refinance), and at that point,
it’s on their terms.
While finding a financial advisor whom you trust can be
challenging, you should have one in your corner when you
are making major financial decisions. A properly trained
advisor can walk you through your options - the ones that
you know you have as well as the ones in your financial
blindspot. Almost anyone can call themselves an advisor, and
you should be wary of the salesmen who portray themselves
as such, as “eighty five percent of all financial advisors and
financial planners are really just brokers or salesman. Their
incentive is to sell you a product that makes them a higher
commission, not necessarily a product that maximizes
your chances of saving more.” These individuals can serve
a purpose in your overall financial plan, but when it comes
to receiving unbiased advice, you should seek a fiduciary,
an independent advisor not beholden to a specific financial
company. Fiduciaries are required by law to put your best
interest ahead of their own, no matter what, thereby legally
binding them to provide unbiased candid advice, regardless
of how it impacts their bottom line.
When You Refinanced
Your Mortgage to a
15 Year Loan: Sure, you
saved yourself some interest
payments, but why pay twice
as much to live in the same
house? If you want to get your
house paid off sooner, there
are more strategic ways to do
so without being obligated
to a higher payment. A
30 common mistakes that people make:
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When You Set Up Your Employer-Sponsored
Retirement Plan (401(k), etc): Upon enrollment,
most employer-sponsored accounts have default minimum
contributions and default investment options. While saving
is great no matter what, having a professional select the
savvy financial advisor could
have demonstrated several
strategies that would have
increased your home equity
without increasing your
monthly indebtedness to the
bank.
When
You
Paid
Cash for Your Car:
Everything that you buy is
financed, you’re either going
to earn interest on your dollars
or pay interest. An advisor
would have evaluated what
the most efficient decision
for this type of purchase
would be, as interest rates
and financing incentives often
make it cheaper to finance
than to pay cash.
When You Made Extra
Mortgage
Payments:
What you probably didn’t
realize was that the traditional
way of paying off your home
(extra payments) actually puts
you at more risk for losing
your home. If you have an
interruption in income, your
mortgage payment is still due;
the bank does not count extra
payments as being “ahead.”
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YO U R R E T I R E M E N T I S O U R F OC U S
While paying off your mortgage
eliminates some advantageous financial
strategies, it is a personal goal of many,
and an advisor could have demonstrated
cash flow management strategies that
would have built equity in the safety
of your pocket, so that you could have
written one large “extra” check to the
bank.
6
When You Decided to Max Out
Your 401(k): If you’re a bad saver,
perhaps maxing out all “easy” savings
options was the best plan. But if you’re
a good saver, you should have consulted
a financial planner who would have
discussed a variety of savings vehicles
for maximum future benefit.
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When
You
Cashed
Out
Retirement Savings to Pay for
College: Retirement savings are just that
- money saved for retirement. You may
not have wanted to send your child into
the world saddled with college loans, but
they have their entire lives to manage
their financial obligations, whereas your
retirement savings definitely have a due
date. There are multiple ways to finance
education without jeopardizing your
retirement; working with a financial
advisor on your college payment options
could have saved your retirement
lifestyle from self-sacrifice.
8
When You Rolled Your 401(k)
Into An IRA: When you have
an opportunity to roll out your
401(k) dollars without penalty, it
is advantageous to consider all reinvestment or distribution options. An
investment advisor who is a fiduciary
would have outlined all of your rollout
options based on your lifestyle and
retirement goals.
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When You Rolled Your Old
401(k) Into Your New One:
Money invested in a qualified plan
has limited mobility based on account
restrictions. When changing employers,
you had the option to rollout and reinvest your dollars into an array of
financial products. An investment
advisor who is a fiduciary would have
advised you on a variety of options
before you forfeited your opportunity to
strategically re-position.
10
When You Bought Investment
Property: What seemed like a
great idea on paper may not have held
water if you had consulted with an
investment advisor who would have
reviewed the real return on investment
(ROI) and presented you with other
investment opportunities that may have
been less risky.
11
When You Got Financial Advice
at the Water Cooler: Even people
working at financial companies can end
up on the wrong side of the balance sheet.
When you took advice from your buddy
at the water cooler, you were most likely
not consulting a trained financial advisor
with fiduciary obligations to give you
unbiased advice in your best interests.
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When You Drew Up Your Own
Legal Documents: What you
might have found out by now is that
when you took the easy (or cheap) way to
obtain legal documents, it could put you
on the unintended side of a judgment
in court. While most financial advisors
would have referred you to an attorney
for legal documents, they would have
also provided the financial guidance
to be dictated in said documents as
necessary.
13
When You Filed for Social
Security: Since there are over
500 ways for a married couple to file
for social security, a competent advisor
would have advised you appropriately
based on a retirement assets review, and
prevented you from making a knee-jerk
decision that could cost up to $100,000
over a lifetime.
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When You Opened an eTrade
Account: Do-it-yourself online
trading companies led you to believe that
you could be just as good as a trader who
is professionally trained, or better. When
seeking investment gains in the market,
working with a trained investment
advisor would have at least ensured that
other investment opportunities would
have been considered.
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When You Purchased a
Timeshare: It seemed like a great
idea at the time because you probably
won a free vacation or complimentary
upgrades, but if you’re like most, you’re
regretting this purchase. Any major
purchase should be discussed with a
financial planner who can point out the
pros and cons of such an investment.
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When You Purchased Savings
Bonds & CDs: A good financial
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OWRS RETIREMENT NEWS
30 TIMES YOU SHOULD HAVE ASKED
advisor will help you vet all of your
options, verses just the ones offered at
the bank.
making this decision could have ensured
that those “what if ” moments were
properly accounted for.
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When You Treated Your
Retirement Assets as a Checking
Account: When you borrowed from your
account with the intent to pay it back, life
kept happening and your account was
never made whole. A financial advisor
would have not only advised you on
establishing a liquid emergency account,
but would have also determined another
course of action that wouldn’t have
penalized your future lifestyle or cost
you penalty fees.
When You Cancelled Your Life
Insurance: Having a financial
advisor in your life would have ensured
that such a decision wouldn’t have been
made without a comprehensive needs
assessment featuring all pros and cons.
Unless the reason for which you initially
purchased the policy was no longer valid,
instead of canceling, you could have been
guided into a face value change or policy
type change.
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When You Said No to Umbrella
Insurance: When you declined
an Umbrella Policy, you were probably
thinking that the likelihood of calamity
striking wasn’t enough to justify the
expense. Unfortunately life happens and
the quickest way to screw up a financial
plan is to incur legal expenses that an
umbrella policy could cover. Having
spoken to an financial advisor when
When You Bought Because You
Qualified: It may have seemed
like a great idea at the time, but making
a major purchase simply based on a
financial institution’s determination that
one “qualified” is a bad plan. Consulting
with a financial advisor before having
made that major purchase would have
ensured that overall affordability was
considered in conjunction with your
financial needs and goals at the time.
When You Won the Lottery:
Those who had the fortune of
winning but had no experience in money
management would have been best off
consulting with a financial planner who
could have safely positioned the assets
such that they wouldn’t be misallocated.
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When You Bought that Variable
Annuity: Having an advisor who
puts your best interests first (fiduciary)
would have at least allowed helped you
analyze if that variable annuity was your
best and most efficient option at the time
of purchase, or whether could you have
gotten similar benefits at a lesser cost.
23
When You Put Your Kids
Names on Your Bank Account:
This seemed like a great idea at the
time, but a prudent advisor would have
explained how in doing so, you invited
your children’s legal liabilities into your
financial lives. They would have instead
advised that you make your account
payable or transferrable upon death,
such that your children would receive the
account balance without jeopardizing
your financial security in the meantime.
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When You Created Your Own
Retirement Strategy: Even a
heart surgeon has a primary care physician
to keep them on track year to year. When
you began planning for your retirement
and came up with a game plan, running
it by a professional who plans retirements
every day for a living would have pointed
out any pitfalls or unforeseen scenarios
that you missed.
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When You Inherited Assets: As
it is typically an emotional time
when you inherit assets, it would have
been advisable to receive an unbiased
3rd party opinion on how best to
manage them so that prudence would
have overruled understandable yet
judgement-clouding emotion.
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When You Became a Trustee:
When you became a trustee, you
became legally liable as a fiduciary to the
beneficiaries of that trust. Consulting
a financial advisor on all financial
decisions made as a trustee would have
protected you legally if the beneficiaries
ever determined that you did not act in
their best interests, as they can sue you
for both civil and criminal damages.
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When You Saved All of Your
Money in Taxable Investments:
Most people don’t consider the tax
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YO U R R E T I R E M E N T I S O U R F OC U S
FOR A FINANCIAL ADVISOR’S HELP
implications when investing. A good
advisor will help you consider all of the
angles when choosing investments.
have reviewed the return on investment
would have explained the inherent risk
(ROI) before jumping in. An advisor
in such a decision and offered options
could have analyzed your goals and
for diversifying your savings so that you
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potentially presented you with other
wouldn’t end up like most of Enron’s
investment opportunities that may have
employees.
When You Gambled Your
Retirement Savings: Before
making investment decisions that put
your money at risk with market loss, you
should have consulted with a financial
advisor who specializes in retirement
income planning, as the money that you
put at risk should never be the money that
you are counting on at retirement time.
been less risky.
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When You Invested in a
Business: What seemed like a
great business prospect may or may not
have panned out, but you should have
consulted with an advisor who would
Remember that time when you filled
When You Invested All of Your
Money Into Your Employer’s
your own cavity? Nope! We can all self-
Stock: When you made the decision
medical professionals for a reason - they
that your income and your savings both
have been trained to assess our individual
belonged in the hands of your employer,
health needs and provide appropriate
you would have been better off running
treatment. Personal finance is no different
that plan by an unbiased third party.
and while you can certainly self-assess,
We’ve all heard the phrase don’t put all
there is no danger in seeking the advice of
of your eggs in one basket, and this could
a professional. So while there is no crying
not be truer when it comes to the dollars
over spilled milk, make sure you don’t
in your savings account. An advisor
make the same mistakes twice!
diagnose, but we go to doctors and
UPCOMING EVENTS
Look for the upcoming December release of “What You Don’t Know About Retirement Income Will Hurt You,” a collaborative
book with well-known authors, Jack Tatar and Dan McGrath, featuring chapters by Kyle O’Dell and Kyle Winkfield.
Washington, D.C. area Events
Richmond, VA Events
10/7-8/15 ..............................Federal Employee Benefits Workshop | Adelphi, MD
10/20/15 ......................................Ruth’s Chris Dinner Seminar | Gaithersburg, MD
10/22/15 .......................................................Lunch & Learn with Leidos | Vienna, VA
10/22/15 ......................................Ruth’s Chris Dinner Seminar | Gaithersburg, MD
10/27/15 ............................................. Ruth’s Chris Dinner Seminar | Bethesda, MD
10/29/15 ............................................. Ruth’s Chris Dinner Seminar | Bethesda, MD
11/3/15 ............................................... Ruth’s Chris Dinner Seminar | Bethesda, MD
11/5/15 ............................................... Ruth’s Chris Dinner Seminar | Bethesda, MD
11/17/15 ............................................. Ruth’s Chris Dinner Seminar | Bethesda, MD
11/18/15 ......................................Ruth’s Chris Dinner Seminar | Gaithersburg, MD
12/1/15 ............................................... Ruth’s Chris Dinner Seminar | Bethesda, MD
12/8/15 ........................................Ruth’s Chris Dinner Seminar | Gaithersburg, MD
For more information regarding Washington, D.C. area events,
10/8/15......................Long Term Care & Estate Planning Workshop | Farnham, VA
For more information regarding Richmond events, email [email protected]
Charlotte, NC Events
10/27/15 S. ocial Security Optimization Seminar | 6:15 pm | Maggiano’s SouthPark
10/29/15 S. ocial Security Optimization Seminar | 6:15 pm | Maggiano’s SouthPark
1/20/16 ...........Federal Benefits Seminar | 8AM-1PM | 5950 Fairview Rd. Suite 110
For more information regarding Charlotte events, email [email protected]
Denver, CO Events
Public Workshops for Denver office .....................................................................TBD
For more information regarding Denver events, email [email protected]
email [email protected]
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OWRS RETIREMENT NEWS
GUIDING OUR PARENTS &
SENIOR RELATIVES
By Jeremy Shipp
“Wait, mom did what with her money?”
Such a question has been uttered
amongst siblings many times over, and it
will continue to be asked more and more
with the aging demographics of our
society. Too many times adult children
find out about an ill-advised financial
decision by an elderly mom or dad only
when it’s too late to do anything about.
I work with adult children every day
who tell me, “I just wish mom would
have asked me before she went and did
(fill in the blank).” So this month I want
to focus on ways to avoid some of the
most common financial pitfalls that I see
elderly Virginians making.
We have to start by talking. Period. We
have to open a dialogue and make it
okay to talk about money issues with
our family members, whether those
issues be good or bad. This is crucially
important as people get close to the third
phase of their financial lives, the spenddown phase. This is the phase that most
people reach when their expenses, often
medically related, start to outweigh their
income.
Make sure to help your parents avoid the
top 5 financial mistakes I see elderly folks
make.
Scams – Senior citizens are constantly
targeted by scam artists and slick
salespeople. A good scam artist can be
hard to stop, but open communication
can go a long way in confronting this
danger.
1. Being taken advantage of by junior
relatives – It’s very sad for most of us
to think about, but I’ve seen my fair
share of cases where mom or dad was
being taken advantage of by a junior
member of the family. Whether that
be a son, daughter, nephew, niece,
in-law, what have you, it happens far
too often. Making sure everyone in
the family is on the same page when
it comes to mom or dad’s well-being
is the only way this can be avoided.
2. Putting the house into the children’s’
names – A typical response I hear
when I ask adult children why mom
or dad’s house is in their name is,
”So the nursing home wouldn’t get
it.” While there is a shred of accuracy
to that statement, it does not lay
out the full picture or the financial
implications of such a move. The
main area of concern with such a
move is taxes. You see, when a house
is inherited by the children, it gets
what is known as a step-up in cost
basis. What that means is when the
children go to sell the house after
mom and dad have passed away they
will only owe long-term capital gains
taxes on the difference between the
sale price and the value of the house
at the time of mom/dad’s passing. So
if the house is sold shortly after their
passing, the children can usually
walk away with all the proceeds from
the sale and not owe any taxes. This
is not true, however, if the house is
put into the children’s’ names while
mom or dad are still living. In that
case, the cost basis of the property is
the price that mom and/or dad paid
for it originally plus any documented
improvements to the house, and
there is no step-up in cost basis at
mom/dad’s death. This could result
in a large and UNEXPECTED tax
bill for the children! If mom and dad
want to preserve the house in case
they need nursing care, they need
to consult with an elder law attorney
who is experienced in Medicaid
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YO U R R E T I R E M E N T I S O U R F OC U S
TO MAKE BETTER
FINANCIAL DECISIONS
planning. In many cases the attorney
can draft a specially designed trust to
hold the house and protect it in case
Medicaid is needed for long term
care, while still preserving the stepup in cost basis feature when the
house is ultimately sold. Of course,
you still have the 5-year Medicaid
look-back period with which to
contend …
child to pay bills and write checks
if needed, and the POD (Payable
on Death) will allow the money in
the account to pass directly to the
child and bypass probate. That way
the child is not a legal owner of
the account and therefore does not
subject mom and dad’s money in
said account to his/her own personal
liability.
3. Putting the children’s names on
bank accounts – This is usually done
so that the children can pay bills
and write checks if mom or dad get
to the point that they can no longer
do that themselves. What they do
not realize is that by doing that they
are inviting their children’s personal
legal liabilities into their own
financial lives. Once someone’s name
is on an account that person is a legal
owner of that account. Therefore,
if lawsuits, creditor problems, or
divorce come up for the child whose
name is on the account, mom and
dad’s money is at risk. A better way
to handle the titling for bank and
investment accounts is to use a POA/
POD tandem designation. The POA
(Power of Attorney) will allow the
4. Not having a plan to pay for long
term care – One of the biggest
problems I see is the lack of long
term care planning. 70% of people
over age 65 will need some form of
long-term care, and burying one’s
head in the sand will not change that
statistic. In the Richmond area, the
average monthly cost at an assisted
living facility is $3,500 - $5,000, and
for a nursing home that figure could
easily double. Most people know
the cost of long-term is high, really
high; but what most people don’t
understand is how to most effectively
pay for that care. If you already have
a long-term care insurance policy,
that’s great, and it will go a long
way toward easing that financial
burden. If you don’t, then you need
to look at what assets are available to
pay for the care and separate those
assets into buckets. The best and first
bucket of assets to use would be any
IRA/401(k) monies. In most cases,
the high medical costs associated
with long-term care will offset the
taxation of money being withdrawn
from the IRA/401(k). Think about
that for a moment. The individual
received a tax deduction for the
contributions to the IRA/401(k),
the money grew tax-deferred, and
now, because of the high medical
deductions, the money can usually
be withdrawn without generating an
additional tax for the individual. The
second bucket of assets to use would
be any other tax-deferred types of
accounts, usually annuities. The
last bucket that should be accessed
would be money in savings or
proceeds from a house sale.
Once an open dialogue is established
between parent and child, we can begin
to help our family members make wise
financial decisions by first knowing what
to look out for.
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YO U R R E T I R E M E N T I S O U R F OC U S
80% of Americans don’t have the foggiest
clue about retirement. That’s right. In a 2014
study done by the New York Life Center
for Retirement Income only 20% of those
surveyed received a passing score of 60%.
This is not good news for the 70 Million
people that are going to retire over the next
15 years.
WHAT WE DO
We go out into the world of finance to find
the best, cutting-edge products and solutions
to meet our clients’ specific financial goals.
As an independent firm, we are not restricted
in the products and services that we can offer
to our clientele. We feel that our professional
independence is critical to our ability to
serve our clients’ best interests.
The variety of options that we can offer as
a result of our independence is one of the
main reasons that prospective clients choose
to join our firm. Once they are educated on
all of their available options, they realize
what they were missing with their previous
investment firm. We feel that the financial
options available to a client should only be
limited to what is available within the world
of finance.
WHY WE DO IT
Most people spend the majority of their lives
trading their most valuable asset - time - for
money (in the form of labor). Why are we so
willing to sacrifice our most valuable asset
in pursuit of money, yet so apathetic when
it comes to preserving, securing, and safely
managing it? This mindset combined with
the disappearing traditional pension plan (all
but phased out with the Greatest Generation)
has our country heading for the biggest
financial crisis since the Great Depression:
The Retirement Crisis. The first wave of doit-yourself retirement planning is upon us
and most people are not getting a passing
grade (see above study).
WHY IT MATTERS
Can we as a country afford to be spectators
(or contributors) to the impending crisis?
Bearing the burden of millions of failed
retirement plans means more than just
higher taxes for you and me. The more you
know, the more you understand, the more
you can prepare yourself and the more you
can help others. The biggest challenge that
most of our clients face is that they want their
friends and family to get help, but they don’t
know how to have the conversation.
SPREAD THE WORD
Most of our clients are so happy with the
financial tools and education we provide
that they want to spread the word with their
friends and family, but they don’t know how
to have the conversation. So here are a few
ideas to make that conversation easier:
Owrsfirm.com. Our website is a great and
subtle way to share our firm with others.
People can learn more about what services
we provide, who we are as advisors, and
what national publications we’ve recently
been featured in!
Public Seminars. We typically hold regular
public seminars in our respective locations.
Grab some friends and have dinner on us!
Lunch & Learns. Want the seminar and
meal to come to you? No problem. Get
some colleagues together and we’ll bring
the lunch and information!
Ultimately, the best way to start a
conversation with those you care about is to
share why you decided to work with us and
what our planning has meant to you.
Whether that be making sure you don’t run
out of money in retirement, increasing your
retirement income, increasing your liquidity,
reducing your exposure to tax increases, or
giving you more control over your money,
it is important to talk about the results and
not the specific monetary vehicle(s) that are
getting you there.
Just like automobile models change every
few years, financial products are re-tooled
and adjusted based on market conditions
and government regulations, so the specific
vehicle(s) you are using may not be available
any longer. Products come and go, but
strategies and options are always available.
Need help having the conversation? Give us
a call!
O’Dell, Winkfield, Roseman & Shipp
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