June 5, 2018, 6:50 AM

Financial Planning and the Do-It-Yourself Mentality

By Brett Caldwell, CPA, CFP®

I can appreciate the do-it-yourself mentality as I’m constantly striving to learn and try new things.  Several years ago I bought an older home, built in the 1950s, that had seen better days.  I had some previous experience in construction, so I jumped at the opportunity to improve the house by painting, installing new tile and laminate flooring, replacing doors, fixtures, etc. until the house was just the way I wanted it.  Having boosted my confidence in my ability to tackle any task, I decided to try to save a few dollars and fix my car instead of taking it to the mechanic.  It was at this point that I learned some things are best left to those that have the knowledge and experience to avoid the costly mistakes in life.  After I thought I had fixed my car, I started driving down the street, and, luckily, I immediately noticed the heat gauge spiked to red.  It turns out, I had overlooked one important step in fixing my car which, if not caught, would have destroyed my car completely.

Many people feel that they either have the knowledge or don’t want to pay the price to hire a financial planner.  In some instances they may successfully navigate investing, budgeting, tax planning, estate planning and other important financial topics.  However, in many instances they may be overlooking important elements that could be extremely costly in the future.

Over the course of my career I have worked with many people who made past mistakes and paid a high price for them, even if they weren’t aware of it at the time.  One such example was a client who held only real estate in his retirement account without realizing that repairs and taxes could not be made with money held outside of that retirement account.  Additionally, he did not realize that when he turned 70 ½ that he would be required to start making distributions from that account each year or pay a 50% penalty on the funds that should have been distributed. This is extremely difficult to do if all you hold is real estate in the account.

Another common mistake I have seen too many times over the years is buying stocks when market prices are high, only to see the prices subsequently drop. People then may panic and sell when prices are low.  Often one of the most important services a planner can provide is to help remove emotion from the investing process and act as a check that helps moderate the client’s impulses.  Additionally, I have seen other instances where people make financial decisions without factoring in the tax implications of those decisions.

Also, while some folks might feel confident handling saving and investing during the accumulation phase of life (the equivalent of my renovating my house), many find that it is a whole different ballgame when it comes to the planning skills and knowledge needed in retirement (which could end up like my unfortunate efforts repairing my car).  At that point the function of the investment portfolio switches to disbursing funds to sustain the individual’s lifestyle.  New and different considerations of asset preservation, the sustainability of the nest egg over the duration of retirement and constructing a tax-efficient distribution strategy can be critical.

According to some studies, it’s been estimated that a good financial advisor can add the equivalent of almost 2 percent of annual arithmetic return to clients through helping them make good investment decisions.  Whether or not that’s the case, there can be substantial peace of mind that comes with knowing that your financial life is in order and you are on track to achieving your goals.

Disclosure: Modera Wealth Management, LLC (“Modera”) is an SEC registered investment adviser with places of business in Massachusetts, North Carolina, New Jersey, Florida and Georgia.  SEC registration does not imply any level of skill or training.  Modera may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements.  For information pertaining to Modera’s registration status, its fees and services and/or a copy of our Form ADV disclosure statement, please contact Modera or refer to the Investment Adviser Public Disclosure Web site (www.adviserinfo.sec.gov).  A full description of the firm’s business operations and service offerings is contained in our Disclosure Brochure which appears as Part 2A of Form ADV.  Please read the Disclosure Brochure carefully before you invest or send money.

This article contains content that is not suitable for everyone and is limited to the dissemination of general information pertaining to Modera’s financial planning, investing and wealth management services.  Past performance is no guarantee of future results, and there is no guarantee that the views and opinions expressed in this presentation will come to pass.  Nothing contained herein should be interpreted as legal, tax or accounting advice nor should it be construed as personalized financial planning, tax, investing, wealth management or other advice.  For legal, tax and accounting-related matters, we recommend that you seek the advice of a qualified attorney or accountant.  This article is not a substitute for personalized financial or tax planning from Modera.  The content is current only as of the date on which the presentation was given.  The statements and opinions expressed are subject to change without notice based on changes in the law and other conditions.



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May 7, 2018, 12:02 PM

Five Essential Financial Tips for New Widows

By John J. Ceparano, CPA/PFS, CFP®, M.Tax

The most important thing to have when you become a widow is a support team, both emotionally and financially. In this article we will talk about gathering a team of trusted advocates to ensure your finances are in order and help with your peace of mind.

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