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- Current
Financial Position - a snapshot of where you are today,
eg., assets,
net worth, liabilities, and cash flow
- Protection
Planning – financial protection in the event of death, disability,
accident and illness
- Investment
Planning – accumulating and
managing assets to maximize
your ability to reach your financial goals
- Tax
Planning – analysis
and planning to help you retain assets and minimize
taxes
- Retirement
Planning – accumulation and income strategies
to help you retire financially secure
- Estate
Planning – preservation
of assets while minimizing estate taxes, probate expenses
and estate administrative costs
- College
Funding – 529
plans, Educational Savings Accounts
- Charitable
Giving – Charitable
Remainder Trusts, Wealth Replacement Trusts,
life insurance as a gift or bequest, income tax charitable
deductions, etc.
Current Financial Position
One of the most important elements of financial planning is understanding your
current financial situation. Day-to-day financial decisions have long-term effects.
The impact of a death or disability, income or estate tax liability, asset allocation,
ownership status and control of assets are all inter-related.
For a greater understanding of your current financial position, utilize worksheets
to calculate your net worth and track cash flow. Personal finance tools like
Quicken or MS Money are also helpful.
For help in identifying your current financial position or in developing
a financial plan, click here to contact us.
Protection Planning
An important element of any sound financial program is minimizing your exposure
to financial risk. Health coverage, income protection, long-term care coverage
and life insurance should be evaluated.
Investment Planning
Risk management is the basis of successful investing. Risk is the
chance that an investment’s value or return will be lower
than expected. Investments with potential for greater loss are
viewed riskier than those with a lesser chance
of loss.
Investment risks differ with respect to long-term versus short-term.
In the long-term, a higher risk investment may offer a greater chance
of reaching a financial goal.
For example, a government bond guaranteeing a return of principal and
$100 interest after 30 days may be risk-free in the short term, since
the return will always be
$100 regardless of market fluxuation if the investment is held to maturity.
In contrast, common stock may have the earning potential of as much as
$200 and
as little as $0 and offer no protection of principal.
The long-term picture changes. Based on historical stock performance, stock risk
declines over the long-term. However, government bond risk increases, since their
long-term returns are frequently outperformed by other types of investments and
they may not always keep up with inflation and taxes.
The risk and return of any one investment should be viewed in relation
to your total investment portfolio. Holding just one or two accounts
exposes you to more
risk than being more widely diversified (investing in instruments which
behave differently to a given economic situation or time period). Cosey
Financial can help you determine level of risk and diversification appropriate
to your financial goals. Contact us today about developing or modifying
your
investment strategy.
Tax Planning
As Ben Franklin aptly remarked over two centuries ago, taxes are
one of the certainties of life. Working in tandem with your accounting
professionals, we use the provisions
of the tax code to our clients’ advantage wherever possible. For
example, income can come from earned (employment) or unearned (investment)
sources. It
can be taxed today, taxed later (deferred) or not taxed at all (exempt).
The greatest impact on our income taxes comes from how our assets are
held and our
income is received.
As we all know, the U.S. tax code is extremely complex and ever-changing. Many
types of assets (tax-exempt bonds, IRAs, annuities, cash-value life insurance,
to name a few) offer significant tax advantages. Working with a financial advisor
who understands the tax implications of your financial decisions will help ensure
that you are making those decisions with all the pertinent information, often
resulting in significant tax savings. For help in identifying strategies to reduce
your taxes or developing a comprehensive financial plan, contact us today.
Retirement Planning
The concept of retirement and how we prepare for retirement are changing. Retirement
can mean leisure time to pursue interests, spend time with family, or even changing
to part-time work. Whatever your plans may be, your retirement plan is a valuable
tool to help you prepare financially for what could be the most rewarding part
of your life.
Developing a strategy for a financially secure retirement is no
simple task. Whether your retirement contributions come from your
employer, from you, or from
both, an experienced professional’s knowledge and objectivity can
make this important task more manageable.
Estate
Planning
Reducing taxes is not the only reason to develop an estate plan. Whatever the
size of your estate is, a sound estate plan is the best assurance that your assets
will be distributed according to your wishes. It can also help protect your financial
security should you become incapacitated.
We will help you put together your own estate plan considering these elements:
• a will specifying who gets what and naming guardians for minor children
• durable powers of attorney naming whomever you choose to make financial
and medical decisions if you become unable to do so yourself
• coordination of beneficiary designations on retirement accounts, life
insurance policies, etc. with the rest of your estate plan, thereby enabling
those assets to go to the named beneficiaries regardless of your will
• tilting of assets coordinated with the rest of your estate plan, eg.,
property owned jointly with right of survivorship typically goes to the
survivor regardless of instructions in a will
• establishing a trust as appropriate (trusts can be used to manage investments
during your lifetime and beyond, distribute assets to heirs as you determine,
minimize estate taxes, maintain the privacy of your financial affairs,
and protect assets from lawsuits and seizures.
If you die without a will or other testamentary
document, the probate court distributes your estate according
to state laws.
Approximately a third of the states have adopted all or part
of the “Uniform
Probate Code” providing for the following structure for
distributing property if you die without an estate plan:
• If there is a surviving spouse and no surviving children or surviving
parent of decedent, all property passes to the spouse.
• If there is no surviving children but decedent is survived by a parent
or parents, the first $50,000 plus one-half the balance of the estate passes
to the surviving spouse. The remainder passes to the decedent’s
parents.
• If there is a surviving spouse and surviving children of both, the first
$50,000 plus one-half the balance of the estate passes to the surviving
spouse. The remainder passes to the surviving children equally.
• If there is no spouse and no children, the property is divided evenly
between your parents. If no parents are living, it is evenly divided
among the descendants of your parents, namely your siblings.
• If there is no living relative, the property reverts to the state.
Additionally, the probate process is time-consuming and expensive. Consult a
financial professional at Cosey Financial Services, Inc. to learn how to protect
your estate.
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