Frequently Asked Financial Questions
What Makes Wise Choices Financial Different?
We are real people with many of the same needs and goals as our clients. We view our client relationships as very long-term commitments. We aren't here just to see you through your life, we are here for you, your children, and your grandchildren. We care about our clients financial goals and their life goals. We are extremely passionate about the work we do and community we serve.
We believe that your money is a small portion of your entire life picture. We are interested in more than your money, we are interested in you.
What Makes One Financial Planner Different From Another?
There are many different types of planners, also known as advisors.
There are investment advisors who focus strictly on growing the size of a portfolio.
There are income advisors, who focus primarily on generating income from existing assets.
Then there are holistic financial life advisors. These advisors focus on most, if not all, aspects of their client's life including finance, estate planning, insurance and Medicare planning, long-term care planning, tax planning, and real estate planning.
Should I Have An Emergency Fund?
The short answer is yes! The bigger question is how big should your emergency fund be?
We recommend starting with $1,500. Save your money until you have an account with $1,500, then save a minimum of 1% of every paycheck until you reach $5,000. Certain individuals may have different needs based on their specific situation.
How Much Does A Financial Plan Cost?
Every case is different. Some costs are based on time spent on the plan, some costs are based on amount of meetings over a plan. Some costs are based on complexity of the plan. Every trustworthy financial professional will be upfront and transparent regarding the costs associated with your financial plan and their fee structure.
What Is The Difference Between A Financial Planner And A Financial Advisor?
A Financial Planner is a professional who helps companies and individuals create a program to meet long-term financial goals. A Financial Advisor is a broader term for those who help manage your money including investments and other accounts. Many Planners and Advisors may actually do the same thing. Make sure you do your homework before hiring somebody to guide you on your financial journey.
How Much Does It Cost To Hire A Financial Advisor?
There are many different ways to engage a financial planner. Some planners charge strictly by the hour, some planners charge a flat fee for creating and implementing a plan and some advisors are fee based, meaning they may charge certain fees and may also receive commissions for products sold. At Wise Choices Financial, LLC, our first meeting is always no cost and not obligation, so our potential clients can be sure that we are a great fit for them.
Why Should I Hire A Financial Planner To Manage My Money?
A financial planner can help keep track of market fluctuations and reallocate accounts accordingly. Financial planners often assist their clients by keeping them from making emotion-based decisions.
What Questions Will My Financial Planner Ask Me?
What is your current situation?
Do you have any debt?
What are your short and long term financial goals?
What financial goals do you believe are beyond your reach?
When do you plan to retire?
What would you like to do during your retirement?
I Have A 401(k) With A Previous Employer, What Do I Do With It?
Consider moving your 401(k) to a self-directed IRA or work with a Professional Financial Planner to manage the account. Yes, Wise Choices Financial, LLC can help you with that. :)
How Much Money Should I Have To Work With A Financial Planner?
Even people who have debt and do not currently have savings or investable assets can work with a financial adviser to reach their financial goals and dreams. Depending on your goals, you can work with a financial advisor, even if you only have $5,000 to begin planning with.
How Often Should I Update My Financial Plan?
Financial plans should be reviewed at least once a year and updated as often as necessary based on changes in income, lifestyle and major life events.
How Often Should I Meet With My Financial Planner?
A minimum of once per year. We recommend more based on the complexity of the financial plan or changes in income, lifestyle, and major life events.
Do I Need A Lot Of Money To Have A Financial Planner?
Even people who have debt and do not currently have savings or investable assets can work with a financial adviser to reach their financial goals and dreams.
Depending on your goals, you can work with a financial advisor, even if you only have $5,000 to begin planning with.
What Is The Difference Between An Annuity and A 401(K)?
An annuity is a vehicle for securely investing assets for a period of time. A 401(k) is a section of the US tax code that denotes the tax status of the account. You may have an annuity within a 401(k) in some cases.
What Are The Pros And Cons Of Annuities?
• Growth in annuities is typically tax deferred
• Annuities pay a death benefit that may be tax efficient
• Annuities are generally considered safe (subject to the financial strength of the insurance company)
• Certain types of annuities offer guaranteed interest that is often higher that bank CD's
• Annuities are not generally counted as assets for college funding purposes (FAFSA)
• Annuities are contracts with an insurance company that may last anywhere from one year to many years. Typically during this time, funds held in an annuity have limited liquidity.
• Early withdrawals of cash from annuity contracts may be subject to surrender charges and other charges according to the annuity contract.
• There are many different types of annuities that can be structured many different ways. This can lead to confusion based on a lack of consumer understanding or marketing misinformation.
• Certain types of annuities may be subject to fees and other charges that may reduce the value of the annuity.
What Is Income Planning?
Income planning is calculating the amount of money needed to generate enough income to support a clients desired lifestyle throughout their retirement.
What Is Tax Planning?
Tax planning is working to structure and title assets in a manner that can control tax liability reducing or even eliminating taxes in some cases.
What Is Investment Planning?
Investment planning is structuring investments in such a way to take advantage of market fluctuations.
What Is The Fiduciary Rule?
The fiduciary rule requires anyone who advises on finances or manages money for a fee, to put the clients best interests above their own.
What Is A Fiduciary?
A fiduciary advisor is required by law to put clients best financial interests above their own.
Do I Need To Invest In Precious Metals?
It may be appropriate for some people to have a small portion of their portfolio in precious metals.
Do I Need Life Insurance?
Honestly, it depends since each family has different and individual needs. Life insurance is primarily thought of as a means to pay for burial and to replace household income of a lost spouse. Life insurance can have many more benefits and can be custom built to take care of someone's each individuals needs.
What Is Estate Planning?
Estate planning is structuring your assets to pass to your heirs as efficiently as possible with the lowest possible cost. Different states have different estate laws and estate planning needs vary from individual to individual.
Do I Need A Will?
A will is a set of instructions to the probate court. A will puts someone in charge of making sure that everything goes smoothly with settling your estate, even if you don't think you have anything, somebody has to be in charge.
If you die without a will, your state has a will for you. That is not necessarily a good thing. How much do you trust your state government to follow your wishes and to look out for the best interests of your loved ones?
So yes, you absolutely need a will!
How Often Do I Need To Update My Will?
Approximately every three to five years prior to age 65. Between age 65 and 75 every two years and every year after age 75. Here are a few examples of reasons that a will would need to be updated:
• You have a new address
• You have a baby or grandbaby
• Your name legally changes
• A family member or beneficiary passes away
• You get a divorce
Do I Need A Durable Power Of Attorney?
Absolutely yes! A Durable Power of Attorney is your written permission for a person of your choice to manage your financial affairs ONLY in the event that a doctor says you are incapacitated. Many people think that issuing a power of attorney means they are giving up control. In reality, they are maintaining control.
What Is Health Care Planning?
Health care planning takes into account current health, family health history, current lifestyle, future lifestyle and budget to structure health care insurance in the most efficient manner possible.