Michael Woloshin | How To Find the Perfect Financial Advisor

Hiring a financial advisor is a valuable investment, but it is often overlooked. The economy is a wavering entity. Things change all the time and it can be difficult to keep up with it all in addition to your, no doubt, demanding daily life. So, why not let trained financial advisors provide you with professional advice on how to make the most of your hard-earned assets?

The Financial Planning Standards Council (FPSC) strives to ensure that professional standards are followed and Canadians are well-served by top financial planning institutions and their advisors. However, by law there are no minimum education or experience requirements in order for someone to claim the title of financial advisor. So, it is extremely important that you do the necessary background work to avoid swindlers and find a trustworthy, sound investor to handle your account. Here is a five step guide to finding a financial advisor for residents of the Ottawa, Ontario, Canada area.

Step 1. Create a list of at least three financial planners to be considered. Obtain recommendations from friends and family members and perform a simple internet search to find some reputable national organizations. See what credentials are required of each institution's advisors and make sure that they must pass quality examinations before they are hired.

Step 2. Now that you know that the institutions you are considering are up to snuff, it is time to do some credential screening of the individual advisors. Make sure they have the proper accreditations and licensing. Also, try to find someone who is broadly educated over an array of financial issues. Ask the planners about the circumstances surrounding their typical clients in an attempt to find someone who has dealt with people similar to you.

Step 3. Find out what type of payment arrangement the advisor operates under. Some are fee-only which means that they simply charge a periodic fee. The fee may be either a fixed amount or a percentage of the value of your assets that are under their management. Others may receive commissions for selling particular investments to you. This may pose the threat of a conflict of interest and should be approached with extreme caution.

Step 4. Personally interview the prospects and obtain both professional references and current client references. Ask as many questions as you can think of, no matter how insignificant they may seem, and make sure that you are comfortably satisfied with the answers given. After all, you have a lot at stake and your peace of mind is essential to finding the right adviser for you.

Step 5. Pay attention to the questions and concerns expressed by the adviser during each interview. He or she should be interested in several aspects of your life and personality. He or she should want to know things about you like what you expect to receive by using his or her services, your goals and future plans for your investments, and your level of open-mindedness toward risk. Be wary of any planner who only seems interested in your assets or making a sale.

Michael Woloshin helps those soon to be retired, and those already retired, achieve financial independence. His years of experience have enabled him to recruit a team that is focused on creating customized income strategies for each client.

Article Source: http://EzineArticles.com/6143757

Strategies for Reducing Your Taxes

Michael Woloshin: The goal of tax planning is to arrange your financial affairs so as to minimize your taxes. There are three basic ways to reduce your taxes, and each basic method might have several variations. You can reduce your income, increase your deductions, and take advantage of tax credits.

Reducing Income

Adjusted Gross Income (AGI) is a key element in determining your taxes. Lots of other things depend on your AGI (or modifications to your AGI)-- such as your tax rate and various tax credits.

AGI even impacts your financial life outside of taxes: banks, mortgage lenders, and college financial aid programs all routinely ask for your adjusted gross income. This is a key measure of your finances.
 

Because your adjusted gross income is so important, you may want to begin your tax planning here. What goes into your adjusted gross income? AGI is your income from all sources minus any adjustments to your income. The higher your total income, the higher your adjusted gross income. As you can guess, the more money you make, the more taxes you will pay. Conversely, the less money you make, the less taxes you will pay. The number one way to reduce taxes is to reduce your income. And the best way to reduce your income is to contribute money to a 401(k) or similar retirement plan at work. Your contribution reduces your wages, and lowers your tax bill.

Increase Your Tax Deductions

Taxable income is another key element in your overall tax situation. Taxable income is what's left over after you have reduced your AGI by your deductions and exemptions. Almost everyone can take a standard deduction, and some people are able to itemize their deductions.
Itemized deductions include expenses for health care, state and local taxes, personal property taxes (such as car registration fees), mortgage interest, gifts to charity, job-related expenses, tax preparation fees, and investment-related expenses. One key tax planning strategy is to keep track of your itemized expenses throughout the year using a spreadsheet or personal finance program. You can then quickly compare your itemized expenses with your standard deduction. You should always take the higher of your standard deduction or your itemized deduction.

Take Advantage of Tax Credits

Once we've tweaked our taxable income, we are ready to focus our attention on various tax credits. Tax credits reduce your tax. There are tax credits for college expenses, for saving for retirement, and for adopting children.
The best tax credits are for adoption and college expenses. Not everyone is in a position to adopt a child, but everyone could take some college classes.

There are two education-related tax credits. The Hope Credit is for students in their first two years of college. The Lifetime Learning Credit is for anyone taking college classes. The classes do not have to be related to your career.

Increase Your Withholding

You can avoid owing at the end of the year by increasing your withholding. More money will be taken out of your paycheck throughout the year, but you will get bigger refund when you file your taxes.

Originally Posted:https://www.thebalance.com/tax-planning-basics-3193487

5 Tips to Make Your Money Last Longer in Retirement

With average life expectancies rising, one of the main concerns for working Americans reaching retirement is: How can we ensure that we don’t outlive our savings? Here are five tips by Michael Woloshin to make your money last:

Plan ahead

Only 18% of American workers feel “very confident” they’ll have enough money for a comfortable retirement, reports a 2017 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI).

To figure out how much you’ll need to save, begin with estimating how much of your current income you’ll need to replicate in retirement (a good amount for the average American is around 80%). After calculating your current saving and spending, factor in any anticipated changes (e.g., decreased expenses if you pay off your home). Also, remember to include costs for new hobbies and travels in retirement.

Use the modified “4% Rule”

Many people are familiar with the “4% withdrawal rule,” which assured retirees that by holding their annual withdrawals to 4% of their retirement portfolios it would allow their portfolios to last 30 years. However, that advice appears outdated and overly optimistic. A 2013 “Low Bond Yields and Safe Portfolio Withdrawal Rates” report by Morningstar found that the modified “safe” withdrawal rate is 2.8%, and a retiree would be more than 50% likely to run out of money withdrawing 4%.

Consider working a few more years

There are numerous reasons why some experts are advocating waiting a few extra years before retiring.Staying in a job allows you to continue growing your savings and gain returns on investments without needing to use them right away for retirement living expenses. It also can help you delay and boost Social Security and pension benefits. Delaying Social Security until age 70 is beneficial since you will receive an 8% gain every year after achieving full retirement age (FRA), usually 66 for most people today. You can either boost your own benefit or maximize your spouse’s benefit.

Buffer for long-term care costs

Costs for long-term care like a nursing home can be overwhelming these days, with the average nursing home costing around $80,000 per year.A 2016 Cost of Care Survey by Genworth found that the average cost for assisted living was $43,539, home health care was $46,332, and a semi-private room at a nursing home was $82,125. Many insurance policies for long-term care can be costly or have restrictions that may not help as much as they might suggest.

Consider adding an annuity

One of the best sources for fixed, guaranteed income just like Social Security or a pension is an annuity. Annuities aren’t investments; they are a transfer-of-risk insurance product against running out of income in retirement. Typically, retirees should consider allocating a portion of their savings into the right type of annuity to not stress their retirement accounts with too much risk.

Depending on the type of annuity (e.g., immediate, fixed, fixed-indexed or variable) monthly payments are based on your age and interest rates at the time it is set up. Not all annuities are created equally and you should know the differences between each and make sure they align with your goals.

Sources:http://www.kiplinger.com/article/retirement/T047-C032-S014-make-your-money-last-longer-in-retirement.html