How to get the most out of working with your financial planner

Pink Block Woman is on the left facing a Yellow Block on the right.

Communicate, communicate, communicate.

This is the first rule of working with a financial planner.

(It is also, by the way, the first rule of estate planning.)

If you can only remember one thing about how to have a good relationship with your financial planner, it’s a good one thing to remember.

But considering the amount of time, effort, sometimes uncomfortable introspection, and cost it takes to work with a good financial planner, it’d behoove you to figure out how to make the most out of that relationship. Yes?

Behold one financial planner’s thoughts about how you can do just that.

Ideally, the First Step Is: Hire the Right Planner at the Right Time

It’s going to be really hard to milk all the value out of the relationship with your financial planner if you hire one that you don’t jibe with very well.

I mean “jibe” in a very broad sense. You need to like their personality, their philosophy of investing and planning, and their process. If you don’t like one of those things, the relationship will likely always feel a bit like a pebble in your shoe—you can deal with it, but you’re never fully comfortable.

You have to like their “story.”

When I first changed careers into financial planning, back in 2010, I was hired into a firm with the idea that I could succeed the owner in a few years, as she was looking to sell the firm. After a few months of working at the firm, I had all sorts of anxiety about this plan.

(Spoiler alert: all those anxieties coalesced into me not buying it. Which is why I now live in Bellingham, WA, and work with women in their mid-career in tech as opposed to living in Norfolk, VA, and working with federal-government retirees.)

At that time, I had the luck of talking with a well-respected thought-leader (let’s call him Michael) in the industry about this “to buy or not to buy” choice. I mentioned that one thing giving me pause was that the retiring advisor was an “active investor.” She chose individual stocks and actively managed mutual funds, which she sold out of and bought into over time. By contrast, I have always been a passive investor: just “own the market” by way of index funds and keep costs low so that I keep as much of the market returns as possible. I don’t try to “beat the market.”

Michael told me that shifting from active to passive investing would be a hard transition to make in the firm. The clients had been told/taught/sold an active investment “story,” and I was proposing changing that to a passive story. Changing stories is really really hard.

What does this mean for you? I believe you need to make sure, before hiring a planner, that the “story” they’re telling is one that you already agree with or could see yourself agreeing with. It’s going to be bumpy if you believe one story and they’re constantly telling a different one.

I have had relationships with clients that made me feel like a bad financial planner. It didn’t seem like these clients were getting much value out of our relationship. So, by that reasonable definition, I was a bad planner. For them. (And man is that a bitter pill to swallow for someone who considers herself in fact quite a good planner.)

Upon reflection, the usual culprit was that these clients simply didn’t fully buy into the investing or planning story I was selling. It wasn’t my fault. It wasn’t my client’s fault. I mean, except to the extent that neither of us identified early enough that I just didn’t offer what they wanted or needed.

Ask Yourself These Questions

When you’re on the hunt for a financial planner, interview several. I’ve written several articles about which questions you should ask when interviewing a financial planner. There are innumerable other such articles on the interwebs.

After the interview, ask yourself these questions:

Do I trust this person? Enough, at least?

Trust will definitely grow with the relationship. But starting from a position of distrust or cynicism is, IMO, a big red flag.

Do I feel comfortable (enough) talking with this person?

Personal financial planning is pretty intimate work. It’ll be way easier and more enjoyable if you like your financial planner. You don’t have to be friends. But feeling friendly is important.

Do I agree with how this person approaches financial planning and investing?

The first step here is figuring out what the planner’s approach is.

You can ask them questions directly, when interviewing them, of course.

But before you even get face to face, consume their content. This is one reason why I write so much. I have blogged consistently for nine years. I post on social media (mostly LinkedIn) all the time. I dedicate a lot of effort to the firm’s website. I want my story, Flow’s story, to be so obvious and accessible that only the people who like that story ask to work with me.

All financial planners tell a different story. Some slightly different. Some radically different. If one planner’s story doesn’t suit you, just continue looking! There are plenty of financial planners (even if sometimes maybe you don’t know how to find them).

“At the right time” = Are you ready to do the work?

Working with a financial planner will require work from you. Some of it is merely technical, but can still be administratively burdensome (“roll your old 401(k) into your new 401(k)”). Some of it has real behavioral implications (“reduce your monthly spending by $500” or “work with this estate planning attorney to ensure your estate planning is up to date”).

This is great stuff! This work will put you in a much stronger financial position! But only if you do it. If you don’t, then you’re wasting your time and money with your planner.

I recently watched a webinar about the transtheoretical model of change. I am, of course, still mostly ignorant about it, but it seems a helpful framework for evaluating whether you’re ready to get real value out of your work with a planner. The stages of change are:

  • Precontemplation: Not ready to change
  • Contemplation: Getting ready to change
  • Preparation: Ready to change
  • Action: Making changes
  • Maintenance: Sustaining changed behavior

If you’re not ready to change, maybe don’t hire a planner yet, because they won’t be able to do much for you.

Show Up As You Would in Any Relationship You Care About

Your relationship with your financial planner is, to a large extent, just another interpersonal relationship. You probably know what makes interpersonal relationships work:

  • Show respect to the other person
  • Appreciate the other person
  • Care about the other person
  • Be responsive
  • Be honest
  • Make an effort
  • Express your needs

I owe this to my clients, as their planner. And I believe they “owe” it to me. Yes, yes, they’re paying me a fee for my work and the roles and responsibilities in the relationship are different. It’s not the same as your relationship with your husband, for example.

But, I can work with clients who pay me a fee and show up in the relationship, or I can work with clients who pay me a fee and don’t show up in the relationship. Give you one guess which type of client I’m going to gravitate towards.

Communicate communicate communicate.

Give your planner feedback. Let them know what you need that you’re not getting. It makes it so much easier for me. I appreciate this feedback!

Respond promptly when your planner asks you something. If you don’t know the answer or can’t do what they’re asking you to do, simply let them know! Just don’t leave a void of communication, which the planner (if they’re anything like me) can fill with all sorts of unsettling stories that almost always turn out to be untrue.

Some of my best relationships are with clients who have, in no uncertain terms, told me about something that was lacking in the relationship. Sometimes even about an explicit mistake I made. I apologize, fix the process, and if necessary, make the client whole. The client feels heard and respected and is also more confident in our work going forward (it seems, at least).

We run annual client-feedback surveys to try to get more of this insight out of our clients, but you needn’t wait for any official “tell us what you think” requests. Tell them what you think when you’re thinking it!

There really is no downside. If you have something critical to say, then either the planner addresses that issue in a way that satisfies you (yay). Or they don’t. In which case you’ve just found out that this maybe isn’t the right planner for you after all. Not pleasant, but still a step in the right direction.

Ask Your Planner How to Get the Most Out of Working with Them

I imagine most planners would agree with what I’ve already said. I asked some colleagues how they would advise potential clients to get the most of working with a financial planner. (Please note that I circulate in comprehensive-planning-forward, emotionally attuned professional circles, which is a small part of the overall industry. If you ask, say, a stockbroker this question, I imagine you’re going to get very different answers.)

Here’s a smattering of their answers:

Come to the quarterly meetings and ask questions. Decide on an allocation [balance of stocks, bonds, cash] and stick with it. Ignore the news. Provide data when the planners ask for it. Under the markets are efficient and if the client hears something, it is already incorporated in the markets.

For retirees: Let your advisor manage your investments. The ability for an advisor to monitor flows into and out of a portfolio is one of the most under-appreciated aspects of what advisors do for clients, particularly when considering risks associated with cognitive decline and elder abuse.

The ability to put aside their ego and what they think they know, to explore with curiosity what they don’t know.

Bring your life partner, especially if you generally avoid talking about $ together.

I feel like the clients who I see make the most progress are the ones who are most engaged. They come to meetings to listen with few distractions, ask questions, and reach out proactively for guidance around decisions … instead of informing me after.

Show up, ask questions, listen, ask before acting.

The clients I work best with are the ones that come to the meeting with questions or ask questions as we’re discussing things in the meeting. They also come with updates; when asking questions about selling rental properties, they have the rent and other P&L numbers. When they have questions about investments, they have a rough idea of how much cash leftover they have each month/year.

What I think is valuable in the relationship isn’t necessarily what you think is valuable. I’ve certainly had clients for whom I thought I wasn’t providing much value who have then expressed profuse thanks for my work. Some clients who exclaim, “Please don’t fire me!” after not communicating with me for many months.

So, perhaps I’ll end with a final piece of advice:

Figure out for yourself what would make your work with your financial planner feel most valuable to you. And then communicate, communicate, communicate that to your planner.

What could you do to get more out of your relationship with your financial planner?

Protect Your Parents from Scammers.

A blurred Block Woman is next to a tall yellow block with side tufts of hair and a shorter blue block with white hair.

A couple weeks ago, I almost-not-really got scammed.

A man called me from Capital One’s fraud department to confirm that I had not, in fact, made some purchases. (No, I didn’t buy anything from Turkish Air…but that does sound kinda fun, now that you mention it.)

My guard went up pretty quickly because I’m aware (because of both my age and my profession) that scammers try to get personal information from you on the phone in this way. But it was only mildly up, so I spoke with the man for a few minutes, getting increasingly anxious. He pushed on, quashing any minor protestations of suspicion. When he finally asked me to go get my credit card so I could give him a piece of information from it, I knew it was a scam and said I’d be hanging up now. He abruptly did the honors himself.

It rattled me. Why did I spend any time on the phone with this man? I know the rules: Financial institutions (banks, credit card companies, brokerage houses, Social Security, the IRS, and on and on) will never call you and ask for information. And yet I, a cognitively healthy, informed person had not just immediately hung up. I had spent several minutes actively trying to figure out if it was a scam or not. The longer I’m on the phone, the more vulnerable I am.

If I didn’t recognize it immediately as a scam, what did this mean for my older loved ones? I mean, my parents and my aunt are all in their 80s and really healthy…but they’re still in their 80s and stuff just slows down. (Hey, Mom and Dad…wassup. Erm…you’re still great, even with your 80-year-old brains.)

This started me thinking about “What advice can I give them that is extremely easy and simple to execute that won’t require any judgement in the moment?”

I settled on advising them to say this every time a financial institution calls: “Where are you calling from? Thank you. I’m going to hang up and call back.”

Then go find the institution’s phone number (from a statement, the back of the credit card, or by typing in the URL of the website itself and finding it on the website; you can’t just search for the website because scammers can manipulate search results) and call the institution yourself. I also told my loved ones, “And you can always call me if you have any questions about what’s going on or what you should do.”

I shared these thoughts on LinkedIn, and it clearly hit a nerve. Many people reposted it. Many people shared their concerns about their own loved ones being scammed.

But what got me is that many people also shared other advice for how to deal with this situation differently or how to deal with other situations (An email! Malware on your computer! Someone at the front door!). A friend also observed that her mother would never use the script I suggested because she’d consider it rude and the mother was raised to avoid being rude at all costs.

So, while clearly people liked my specific advice, it also clearly wasn’t sufficient. But I remain committed to the idea that, whatever the solution is, it has to be simple, easy, one-size-fits-almost-all-situations, and reflexive. We can’t expect anyone to be making judgments in the moment about whether it’s a scam or not.

Why This Is So Important

You want your parents to have health insurance so that medical needs don’t bankrupt them, right? You want them to have car insurance so that if they get in an accident, they don’t need to pay out of pocket to replace an entire car or in case someone sues them for $100,000, right?

These are examples of potential economic devastation wrought by a couple different risks.

Getting scammed is a risk that can be just as disruptive and economically devastating. A big problem, it seems, is that we have no way to “offload” that risk onto anything like an insurance company. (If there is such insurance, lemme know!) So, we are left only with making sure it never happens in the first place.

From $5,000 in digital gift cards that your parents might be persuaded to buy and then give to a scammer, to unknowingly giving access to their entire bank account, and possibly their investment accounts. (Anyone else see The Beekeeper? That’s what I’m talkin ‘bout. Alas, I am not remotely as effective as Jason Statham.)

We have to take this seriously.

Stay Abreast of the Scam “Landscape”

The book Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents about Their Finances provides a lot of resources to help you and your parents stay up to date on current scams and how to protect yourselves:

I was going to also include the Consumer Financial Protection Bureau here, because the book mentions it, and it is reputed to be successful in helping people recover money if they’re scammed. I just don’t know what shape it will have (if any) once Elon Musk/DOGE/President Trump are done with it. Which is just so uncaring and horrible for our vulnerable loved ones.

The book has an entire chapter dedicated to “Talking to Your Parents About Scammers,” that would be a very practical how-to resource for you.

Make a Plan with Your Loved Ones

My first draft of this blog post had all sorts of specific advice about how to help your parents and other vulnerable loved ones protect themselves against scams. But there’s just so much (too much) advice out there! The blog post got longer and longer, and the longer it got, the less useful it got.

Ultimately, the best advice will really depend on the type of scam and the type of person. You know your loved ones—their finances, their personality, and their habits—better than I.

So, my advice to you is:

Take this seriously. Talk with your loved ones about it and about why it’s important to create a plan to protect themselves. Work with them to create a plan that will work for them.

  • Is it a specific script they can always say on the phone?
  • Is it a rule that they always call you before responding to any communication about finances?
  • Is it requiring your confirmation for them to move any money over, say, $500 out of their accounts?
  • Is it a rule that they never ever click any links in an email? (I could definitely benefit from following this advice, too. It’s just so ingrained!)
  • Is it a rule that if something “weird” happens on their computer (which we know could be malware), they call you before doing anything with it?
  • Is it turning over management of certain accounts to you, so they can’t move money out of it?

And then, much as you (should) revisit your financial plan regularly (say, once a year), you should revisit this issue with your loved ones regularly. People forget. Scams evolve. The world changes.

I’m not an expert on this matter. But I am enough aware of human behavior to know that whatever the plan is, it has to be simple, easy to follow, and not require judgment in the moment. It needs to be muscle memory, basically.

Even if you’re not a big-time caregiver (yet?) for your loved ones (you’re not accompanying them to medical appointments or coordinating in-home nursing care, for example), this is a kind of caregiving that you can—and should—start early. An ounce of prevention and all that.

Do you worry about vulnerable loved ones? Do you want to work with a financial planner who can help you consider your total financial picture (which is usually way bigger than you think)?

Unsexy Finances for People Solving Important Problems

A dark gray Block Woman stands in front of a black background wearing a light gray head scarf.

I’m thinking of changing my firm’s tagline to “Unsexy finances for people solving important problems.”

A friend of mine pointed me to this LinkedIn post:

And it got me a’thinkin’.

(FWIW, I don’t know this Ben chap from Adam. His post simply struck me.)

In tech, yes, there’s a tendency towards optimization, towards complexity, towards sexiness.

The “sexy” problems, the “sexy” solutions: they get all the media, all the headlines, all the clicks, just as Ben Casnocha mentions above.

But the important problems? Not so much. Why? Well, that’s above my paygrade. But if we truly valued “important” over “sexy” in this society, teachers would get paid a heck of a lot more.

The same thing goes for personal finance.

Everyone is attracted to sexy (complicated, optimized, conversation-worthy) answers to financial questions. But you know what I think? Sexy finances are a distraction.

I think your finances should enable you to focus wholeheartedly on your life, not distract from it.

Yes, there are some aspects of personal finance that are unavoidably complicated. The Internal Revenue Code makes sure of that. But much of the complexity is of our own making, and we can undo it or avoid it with our own hands.

Wouldn’t you like to understand your finances, know that your finances are taken care of, and then put them out of your mind because you’ve got more important problems to solve?

I want to help those people who are solving important problems rather than seeking meaning in their finances. And I think unsexy finances are the way to do it. Personal finance can be challenging. It can be (it is!) important. But it shouldn’t be sexy.

There are a lot of important problems that need solving out there. Important problems in the workplace, like the biotech problems mentioned in the LinkedIn post. (Hell, I’ve got a client right now working on cancer cures, as the LinkedIn post mentions, and it’s simply awesome to witness.)

Also, problems like:
“How do I raise my children while also pursuing a career I care about?”
“How do I protect people in my community or country?”
“How do I carve out time to create art while living in a really expensive place?”
“How do I care for my aging parents who live in a different state?”

I can’t solve almost any of them, but I can help support the people who are. I want to help you tell the difference between “unavoidably complex” and “nope, we can just keep this simple.” I want to help you get through the unavoidably complex things as easily as possible.

No matter if you work with me, another planner, or rock it DIY-style, my advice is the same: keep your finances unsexy, and reserve all that sexy-time energy for the important problems in your life.

What important problem are you solving?

Why You Might Want A Professional to Manage Your Investments

Block Woman wears a green visor or eyeshade while sitting next to a desk.

Or “Why just putting all your money in the S&P 500 isn’t enough.”

(Okay, probably isn’t enough. I’m not allowed to say much that is definitive about investing.)

Recently I spoke with a woman who asked, “Can you tell me why I want a financial planner to manage our investments? We just put everything in the S&P 500.”

I acknowledged that, yes, an S&P 500 fund can be a great place to put a lot of your money. Good job! I then proceeded to quickly trip and fall down a rabbit hole (it’s really hard to not do this when talking about investing) describing just a single tactic we can use to improve our clients’ investments beyond picking good funds. (It was the concept of asset location, if you’re curious.) She almost immediately responded, “Oh, I didn’t know about that.”

Whiiiiiich prompted me to write this blog post!

Because while I am happy to observe that many people, especially in the tech industry, have drunk deeply of the “low cost, broadly diversified” waters, I have also observed that many of these same people aren’t aware that way more goes into managing investments well. As a result, they simply aren’t aware of the ways in which an investment professional can be valuable.

I believe that most people can benefit from having someone manage their investments. Call me biased. (‘Cause I am.)

In my opinion, there are two reasons to hire someone to manage your investments:

  1. You don’t want to manage your investments…but you want them to be managed. (Enter stage left: Meg)
  2. A dedicated professional—someone who has been educated in, trained in, and experienced in managing investments, strategizing about how investments interact with other parts of your financial life, and managing human behavior—can do a better job than you.

Let’s dig in.

Reason #1: You don’t want to do it yourself.

Let’s assume for a minute that you have all the knowledge, time, and self-awareness you need to manage your investments well (assumption to be revisited later).

Maybe, just maybe, you want to do other things with your time, energy, and brain power.

Maybe managing your investments isn’t fun, while other things really are.

Maybe your life is busy enough with job and family and obligations, and piling Yet One More Important Thing on top of that fills you with anxiety.

Maybe you’re in a couple, and you think it’d just, well, work better if someone else did this stuff for you both, instead of one or the other of you either taking on the task for the whole family.

Wouldn’t it be nice to develop a relationship with a financial planner, a person whom you trust to have the skill and integrity to do well by you, and then know that they will take care of it all for you?

Hell, I’m a financial planner myself, and I’m already looking forward to my newly hired financial planner taking over investing our portfolio. Because that’s just one more piece of my brain I can free up for other things, including just sitting there, staring at the wall…but contentedly staring at the wall, not in some sort of anxious, paralytic panic.

So, yes, maybe you can do a perfectly good job managing your own investments. It is entirely reasonable to simply choose not to.

Reason #2: An investment professional can likely do better than you can.

What I don’t mean by this is that I can pick better stocks or mutual funds or ETFs than you can.

In a meaningful way, that part of investing has been commoditized. Whether you use a roboadvisor (ex., Betterment), invest it yourself at Vanguard or Schwab or Fidelity, work with a different financial planner, or work with me, you’ll likely end up with very similar funds. This simply reflects the broad acceptance that no one can beat the market, reliably, over a long period of time. The best bet is to “own the market” at low cost and then Don’t Touch It.

But my, there is So Much More to investing than just “security selection.” That’s the easy part! Thirty years ago, maybe it wasn’t: before ETFs existed, and most funds were actively managed and expensive. But nowadays, you have easy access to inexpensive, broadly diversified funds of all sorts.

I’ve seen a lot of ways in which we help our clients better manage their investments.

Remember the above assumption that “you have all the knowledge and self-awareness you need to manage your investments well”? Now we’re going to test that. I’m going to describe below many of the ways in which I (and many other financial planners) improve our clients’ investments.

Do any of these strike you as, “Oh, didn’t know about that. Wouldn’t have thought of that. Yep, I’ve been suffering from that for a while, and not doing anything to fix it.”? If so, then that is a good reason to hire a professional to manage your investments.

We make sure you’re invested in the right thing.

This is a big topic. It’s probably the most important category of investment work we do for our clients.

You might not know what you’re invested in. We make sure you do.

If you’ve been investing for a while in a 401(k), IRA, and a taxable investment account (or several), all while not really having a strong grasp on investing principles, you can easily default your way into a pretty interesting portfolio. (Yes, “interesting” as the universal euphemism for “f*cked up.”)

The most common “interesting” thing we see in new clients’ portfolios is that they are absolutely dominated by tech stocks, both individual tech company stock and tech-heavy funds.

Clients have never thought about the fact that they own few to no:

  • Small and medium size companies US companies
  • Companies outside the tech industry
  • Companies outside the US
  • Bonds

Sometimes, all it takes is pointing this out, and the client is all, “ooohhh…that’s probably not ideal, is it?” (And to be fair, sometimes I point it out, and the reaction is, “….and?”)

You might not know *why* you’re invested in what you’re invested in. We make sure you do.

I want to know why you own the investments you do.

Most of the time, the answer is the equivalent of shrugged shoulders. “…’Cause? I dunno.”

There are a lot of reasonable investment portfolios out there, even for the same person. But that doesn’t mean any portfolio can be reasonable for you. You gotta know why you’re investing in order to know whether a portfolio is right for you.

Once we figure out why you’re investing this money (your kid’s college in 17 years? retirement in 10? to buy a home in two?), then we can make a plan for investing that is targeted at those goals.

Maybe your existing investments are already doing that job. In which case, great, we don’t have to change much, if anything.

Maybe they’re not. In which case, not as great, but fixable!

In practice, this means we make a sell/keep/donate decision for each holding you already own. That way, each investment that remains in your portfolio is a deliberate part of your portfolio, not there because of inertia.

Make sure cash actually gets invested.

Having too much cash that should instead be invested is common.

Usually, you have a ton of cash in your bank account (or in your stock plan account, from selling RSUs) that you simply have no plan for and therefore…just sits there. And sometimes you did in fact move the cash into the investment account…but then don’t invest it.

You know what gives you a better chance of growing your money than letting it sit as cash? Investing it. Crazy, I know.

We regularly scan our clients accounts for extra cash that could be invested…and then pull it into their investment accounts and invest it.

We manage risk.

I’m using “risk” to mean the chance you won’t have enough money for your goals when your goals come due.

So, how do we manage risk? First, we start by identifying your goals and, importantly, how long you have until those goals start and how long they last. You want to buy a home in five years? We’re going to invest that money way differently than for your goal to retire in 20 years and live off of your portfolio for the ensuing 40 years.

We then choose a reasonable balance of:

  • stocks (high growth potential but high chance of losing money in any given year)
  • bonds (lower growth potential but also lower such chances)
  • cash (lowest growth potential but guaranteed to not lose dollar value)

in your portfolio. Say, 70% stocks/30% bonds/0% cash if you’re 10 years from a retirement that could last 40 years.

Okay, that’s the initial risk-management step.

The ongoing management usually involves “rebalancing” your portfolio. As your investments grow or fall in value, that 70%/30% can easily become 80%/20% or 60%/40%. Rebalancing means we’d buy and sell things to get it back to 70%/30%.

Rebalancing conveniently reinforces the investing best practice to “Buy Low, Sell High.”

We try to minimize taxes across your lifetime.

Our goal is not to try to minimize your taxes in any given year. It’s to minimize the taxes you pay over your lifetime. And yes, sometimes that can mean opting in to higher taxes this year to have even lower taxes in the future.

Here are some of the tactics we use to minimize your taxes:

  • Asset location: Putting certain investments with certain characteristics in certain types of accounts with complementary tax characteristics. (Learn more about asset allocation and how we implement it.)
  • Tax loss harvesting: When the stock market tanks (March 2020, anyone?) this can be an easy way to get a tax break for that year (and possibly for the next several). That said, we might choose to not tax loss harvest if we don’t think it’ll help lower your taxes over your lifetime, even if it helps now.
  • Tax gain harvesting: Sell at a gain in low-tax-rate years, and then immediately re-buy the investment. Now, admittedly, usually when people have low-tax years, we focus more on Roth conversions, or doing nothing in order to preserve eligibility for free or reduced-premium health insurance. But it’s a possibility we evaluate each year our clients have low-income/low-tax-rate years.
  • Replace tax-inefficient investments with more tax-efficient investments: Usually we find tax inefficiency in certain mutual funds, held in taxable accounts.
  • Identify and help you donate “appreciated securities” (investments that have grown) to charity. If you have investments in taxable accounts that have gained in value, it’ll probably save you taxes to donate those investments instead of cash.

We provide pretty pretty reports.

Reports can help you more easily understand what your portfolio looks like and how it’s performing.

We get the administrative work actually done, not perpetually hanging over your head.

The administrative side of managing your finances…well, I don’t need to tell you, it can really suck sometimes. So. Many. Lumbering. Bureaucracies.

It’s our job to help you get through them, sometimes even to get through them on your behalf.

We help you to:

  1. Open the necessary accounts
  2. Set up ongoing contributions to your accounts from your paychecks or bank accounts
  3. Roll your old 401(k) into your IRA. How many old 401(k)s you got out there, just..sittin’ there?
  4. Roll your IRA into your current 401(k) (to enable a backdoor Roth IRA contribution)
  5. Convert your IRA to a Roth IRA (aka, a Roth conversion)
  6. Make your annual IRA contribution. In the correct amount. To the correct IRA. And only when you’re eligible to do so. Including the ever-popular backdoor Roth IRA contribution.
  7. Change investment selections in your accounts that we don’t manage for you but that we advise on, notably, 401(k)s and HSA.
  8. Change beneficiaries on all your accounts, when necessary.
  9. Move your taxable investment account into your trust (i.e., “fund” your trust).

We help you behave in a productive way vis-a-vis your investments.

Pretty much all industry surveys say that clients don’t hire financial planners for behavioral or emotional coaching.

At the same time, we financial planners are all “It’s a super valuable thing we do for our clients!”

So, I mention it here…hesitantly.

In a nutshell, when an investment (stock, fund, etc.) is going up up up, all of us humans naturally think that it’ll simply continue to go up up up. So, hodl! And maybe even buy more?

The role of the financial planner is to say yes, it certainly is tempting, isn’t it? Whoo! That stock, it’s on a tear! Now, let’s revisit your Investment Policy Statement, which tells us why we’re investing and how we’re investing to achieve that goal. Are these changes you’re proposing consistent with that plan? If not, tell me more about why would you want to vary from that plan? If yes, sure, let’s discuss further.

And we’ll do the same thing the next time your portfolio drops a bunch in value, or your company stock, which you own tons of, goes down in value.

It’s not that we planners are special human beings devoid of emotion. It’s that we (ideally) have been trained to have processes that take us out of our emotional brains and into our rational ones when managing investments.

We do all of this, over and over.

There is great value in doing all of this work once, to set up a good investment portfolio.

There is at least as much value in revisiting this regularly, to ensure than the plan is still the right one, and the investments are still serving the plan.

Financial planners (should) have a process for this. At Flow, we incorporate an investment review in each Annual Renewal Meeting. Nothing should ever get too far off track without us noticing it.

So, girls and boys, that is why you might want to have a professional manage your investments.

Do you want someone to do all this for you…and your investments? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

Should You Roll Your Old 401(k) into an IRA? Maybe. What Else Might You Do?

Pink Block Woman looks at plastic toy dog on its back with a green question mark above it.

Do you have an old 401(k)? Or possibly four?

The best time to make a decision about an old 401(k) is shortly after leaving the company. The next best time is—say it with me!—now.

What can you do with your old 401(k)?

  • Keep it there, i.e., do nothing.
  • Roll it into an IRA.
  • Roll it in your new job’s 401(k).
  • Roll the pre-tax part into your IRA and the after-tax part of it into your 401(k).
  • If you have company stock inside it, roll that to a taxable account.

Once you get to a certain age (> 59 ½ years old) and stage (retired) of life, the plan is to start taking money out of your 401(k) to spend, not just to move it into a different retirement account. So, that’s technically another option. But for people still in their earning years, this is generally a bad idea.

How do you decide what to do with your old 401(k)?

Choose Between a 401(k) and an IRA

The first step is to figure out if you want your money in an IRA or 401(k). If you want it in a 401(k), then you can decide whether to leave your money in its old 401(k) or roll it into your current 401(k).

401(k)s and IRAs operate by different rules, which can affect you meaningfully. Your specific life circumstances can make either an IRA or 401(k) a more appropriate place to hold your money.

Take a look at the advantages of each kind of account (no promises that it’s a complete list; this stuff is complicated) and see if any of them would be particularly important to you.

Advantages of 401(k)s over IRAs
Advantages of IRAs over 401(k)s

You can often take loans from your current 401(k) (not from old 401(k)s or IRAs).

401(k)s have higher protection from creditors than do IRAs.

If you have any pre-tax money in an IRA, you cannot get the full tax benefits of a backdoor Roth IRA contribution (which requires a $0 pre-tax balance).

You can withdraw money from your 401(k) if you leave the associated job after turning 55, without penalty. You usually have to wait until age 59 ½ for IRAs.

The fee you pay your financial advisor might increase if your IRA balance—but not your 401(k) balance—goes up.

You won’t be required to take Required Minimum Distributions from your 401(k) starting at age 73 as long as you’re still working. You will, from an IRA. (I know, I know, this is a Very Long Time From Now.)

You usually have a broader selection of investment options in an IRA. (This can sometimes be a “con,” what with analysis paralysis and some very inappropriate investment options available to you.)

You can withdraw money from a Roth IRA more easily (tax- and penalty-free) than from a Roth 401(k).

You can take penalty-free withdrawals to buy your first home, or to pay for qualified education expenses. Rules are different for a 401(k).

You can get more value from your financial advisor: Here at Flow, we can manage money in an IRA more easily as an integrated part of your total managed portfolio, which can open up some tax-optimization tactics (ex., asset location). We can also help with account administration (ex., setting beneficiaries, taking required minimum distributions, Roth conversions, etc.).

Your Choices for Your Old 401(k)

For each choice, I discuss pros and cons. When I’m evaluating each choice, I’m thinking about simplicity, fees, investment options, features, protections, and ease.

Keep it there, i.e., do nothing.

The pros? You don’t have to do anything! Also, possibly it’s a really great plan (low expenses, broadly diversified investment choices, good customer service and website interface). A lot of big tech companies’ 401(k)s are like this.

Also, 401(k)s can provide benefits that IRAs don’t, like higher protection against lawsuits.

Cons? If it was a “meh” kind of plan, leaving it there keeps your money in a “meh” place. And you’ll want to check with your former employer’s HR to see if you’ll be restricted in any way now that you’re a former employee. Does your access to the website or customer service change? Are you charged more fees now that you’re no longer an employee?

Also, you now have to keep track of one. more. account. One more account you have to manage investments in, manage paperwork for, set beneficiaries for, etc. This might not seem like that big of a deal when you have only one old 401(k) or when there’s not much going on in the rest of your life. But as life goes on and you start collecting a trail of 401(k)s from all former employers and you’re got career and family and health and friend demands on your time and energy…simplifying your financial life is gonna get real important, real quick.

Lastly, you might not be allowed to leave it there. Maybe your old employer gets acquired or goes out of business or changes the 401(k) providers. If the balance is too low (< $1000), they can just cash it out and send you a check. With balances under $5000, they might forcibly roll it into an IRA. Not ideal!

My “favorite” story about a client who didn’t roll a 401(k) over when he left his job: He didn’t just leave it there for a little bit, he left it there for over 10 years, during which time the company went through some changes, and the 401(k) plan provider changed…twice? I think. He had a vague notion that he had money in this 401(k) but didn’t have many details. We eventually tracked it down…to the state’s unclaimed property division! It is proving challenging to extract it.

Roll it into an IRA.

You can roll your 401(k) into an IRA at Schwab or Vanguard or Fidelity, or a “roboadvisor” like Betterment or Ellevest.

Pros? You can do this every time you leave a company and their 401(k), so instead of having a trail of 401(k)s, you have one 401(k) (your current one) and then one IRA (into which you have rolled all your old 401(k)s).

In an IRA at a regular ol’ “custodian” like Schwab, Vanguard, or Fidelity, you have access to the “universe” of investment options. Pretty much any stock or fund you can think of. Now, this “pro” can easily turn into a “con” or “information overload” or “analysis paralysis” or “what the hell am I supposed to invest in?” That’s where roboadvisors (or target-date funds) can come in really handy: they more or less do all the investing choices for you.

As a financial planner who manages her clients’ investments, I find it valuable (on behalf of my clients) to have more money in IRAs because that gives me more opportunity to use an “asset location” strategy to maximize after-tax returns over their investing lifetime.

Cons? If you roll your money into a pre-tax IRA (i.e., not Roth), you have made it impossible to do a backdoor Roth IRA contribution.

If you are working with a financial advisor, putting more money into your IRA might increase your fees. (This happens in my firm. Not immediately, and not always. But it’s generally in that direction.) Now, in my opinion, if you’re getting value in return for your fees, this isn’t a problem, but I think it’s important to be aware of how much you’re paying so that you can make that assessment.

Lastly, rolling 401(k)s into any other kind of account anywhere is often an exercise in bureaucratic pain. Sorry. It just is. Financial institutions apparently hate to lose your money (strange!) and so often make it really hard for you to move your money away.

Roll it in your new job’s 401(k).

The biggest pro here? Again, simplicity. Having only one 401(k) at any given time. I can’t emphasize enough how valuable it is to “fight for simplicity” in your finances.

Also, if you end up leaving your job after you turn 55, you can start withdrawing without penalty from that job’s 401(k). You cannot, and this is the point, do the same with old 401(k)s. (Penalty-free withdrawals from 401(k)s usually start at 59 ½. You have to work a lot harder to get such access to your money in an IRA before that age.)

If you stay in your job, you won’t be required to take Required Minimum Distributions from the 401(k) at that job. (Now, this isn’t relevant until you are 73 years old. So, uh, we’re talking long-term planning if you’re our typical client.)

Lastly, though I don’t like seeing people take loans from their 401(k) (that money is for retirement, woman!), it is actually a possibility. By contrast, money in an IRA or an old 401(k) can’t be borrowed.

The cons? The bureaucratic pain of moving your 401(k) anywhere, as mentioned above. Also, maybe your new 401(k) isn’t that great. Maybe it’s expensive or has a crappy user interface that makes it hard for you to access or understand how your account is invested or get tax paperwork or or or.

(If you’ve just been laid off, you likely don’t have a new 401(k) yet. So, you might keep the 401(k) where it is for now, with the plan to roll it into your future job’s 401(k).)

Roll the pre-tax money into your new job’s 401(k) and the after-tax money into your Roth IRA.

This is starting to be the “icing” of personal finance, instead of the essential “cake,” but it is kind of a cool thing to do, so let me mention it.

Let’s say that you don’t want to roll money into your pre-tax IRA because you want to maintain your ability to do a backdoor Roth IRA contribution.

You might still want to roll your Roth money into a Roth 401(k). (Yes, you can send your pre-tax money one place and your Roth/after-tax money another place.)

Why?

The rules that govern when you can withdraw what money from Roth accounts without penalty or tax are very complex. Oftentimes the rules are the same no matter which kind of Roth account you own, IRA or 401(k). But! Roth IRAs do give you some access to tax- and penalty-free withdrawals that Roth 401(k)s don’t, especially before you turn 59 ½ (the magic year after which you can withdraw from retirement accounts penalty-free).

It’s more complicated than that, so in general I think it’s just helpful to remember that Roth IRAs are slightly better than the 401(k) equivalent for getting money out of them.

Roll Your Company Stock into a Taxable Account and the rest of your 401(k) into another Retirement Account.

This strategy is called “Net Unrealized Appreciation.” It is pretty rare, is only relevant when you own company stock in your pre-tax 401(k), and usually only makes sense if that stock has grown a lot in value. In fact, I’ve only ever seen it for people who have worked at one of the “old school” tech companies (ex., Microsoft) for many years.

It involves rolling that stock into a taxable account, paying ordinary income taxes on the original purchase price of that stock, and rolling the rest of your 401(k) into an IRA all normal-like (which isn’t a taxable event).

This can get complicated, so I mention it here only to put a bug in your ear just in case you end up with a 401(k) chock full o’ highly appreciated company stock.

I was tempted to write something like “Don’t sweat the details too much” because I hate how stressed out everyone gets about what should be little items like moving a single old 401(k) to a new home. But good lord if I haven’t seen enough horror stories of old 401(k)s gone wrong to know that attention to detail will actually save you a bunch of hassle in the future.

And on that note, good luck!

Do you want help dealing with your old 401(k) (and all future old 401(k)s) from someone who will take a holistic look at your life and finances? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

What Clients Really Care About (from our 2023 and 2024 Client Feedback Surveys). Do You Agree?

Two Block People on either side of a piece of wood for a table with a multi-colored puff ball above them.

After two years of annual client-feedback surveys, I have learned two important things:

  1. I suck at writing client-feedback surveys.
  2. Talking with a financial planner who really knows and cares for you is extremely valuable. Maybe the most valuable.

As for #1, let’s say only that I am thankful for clients who, as it turns out, run customer-feedback surveys for giant tech companies and are experts in the matter, and furthermore are willing to share their thoughts after year one’s sub-optimal effort.

Moving on…

As you read below about what clients get out of meeting and talking with us, I’d love for you to take a moment to imagine what it could be like for you to have someone (a financial planner) in your life whom you could meet with and talk with in this way. Would you love it as much as our clients do? If so, what is holding you back from working with a planner?

The not-well-made-but-still-useful 2023 survey and the 2024 survey gave us many insights, but the biggest one across both surveys was: Clients value meeting with us. A lot. (Most clients, most of the time.)

From 2023’s survey, we learned that clients want meetings more proactively scheduled between their Annual Renewal Meetings. We had been proactive about scheduling that one, lynchpin meeting every year. But we often then left it up to them to reach out when they wanted to meet mid-year. (Turns out, wanting to meet and getting around to scheduling a meeting are two very different things. As a result, some clients weren’t meeting with us as often as they wanted.)

So, in 2024, we made a simple but surprisingly powerful change: In our annual meeting, we scheduled not only next year’s annual meeting but also a mid-year meeting with the client.

Usually, that mid-year meeting is six months out. If there is something specific going on in a client’s life that needs sooner or more frequent conversations, we schedule meetings accordingly. Clients now always have at least one meeting with us on the calendar, which you know is reassuring! (Well, almost always, because I can’t guarantee anything.)

From 2024’s survey, we learned that, out of many different things we do for clients (tax return review, open enrollment advice, email reminders, etc.), clients value the meetings, or perhaps more accurately, the conversations with us the most.

Why do clients get out of these meetings? The meetings can (paraphrased from the survey responses):

  • Remind clients of The Big Picture
  • Provide accountability
  • Answer tough questions
  • Give peace of mind
  • Provide reassurance that someone is looking at all this finance stuff and that the plans are on track (or that we’ll tell you if they’re not!)
  • Help you navigate big life events (like having your first child)

What Does This Mean for How We Serve Clients?

Happily, I don’t think we need to change much in order to honor the feedback we got from clients. We’ve worked hard over the last several years to find a cadence of meetings and a focus for our meetings each year that serves both our clients and us well. (As it turns out, serving one well is often synonymous with serving the other well.)

The cadence of:

One Big, Comprehensive Annual Renewal Meeting
+
One Mid-Year Check-In Meeting

is good for most of our clients most of the time.

Some clients, some years, need more meetings. Either their lives or their finances are going through something challenging or complex (Having a baby! Moving! Going through an IPO! Buying a home!), and we simply need to talk more frequently. Cool. That’s the nature of the work. It waxes and wanes.

You’d like to think that “finances! So objective! So number! I can certainly just create a well-defined process and calendar around this, press Start, and off we go, in perpetuity.”

And yet. And yet.

One of my favorite ideas is that my job as a financial planner is “to be there when you need us.” Hell, it’s even on our website!

The challenge? “When you need us” is pretty unpredictable. So how do we run our business so that we can reliably “be there for you when you need us”?

I need two things to be able to honor this value:

  1. the time to meet with you
  2. enough of the the right energy to meet with you

To get both of those things, I think the solution is:

  • Have few enough clients. Fewer clients = lower level of recurring work = I have space in my calendar and a sense of “spaciousness” for those higher-need situations.
  • Having a personal practice like meditation. This helps me show up for you in a way that is grounded, receptive, and curious.

We already do those two things (though I benefit from continually reminding myself of their importance). So I won’t be making any dramatic changes based on these survey results.

Sure, there are some tweaks to further refine how we work with clients. I can’t imagine that will ever go away. But we seem to have gotten the most important stuff right, and I want to continue to enable me and the rest of the team at Flow to continue to do that.

Other Things Clients Value

Lest you think that the only thing clients get out of this work are our sparkling conversational skills, clients also called out that they value:

  • Us following up with them to make sure their tasks get done
  • Quick responses
  • Attention to detail
  • Knowing that they can reach out to us any time about pretty much whatever
  • The personal updates in our quarterly client newsletter (Everyone always wants to know about Janice’s cows, Yerim’s and my dogs, the family trips, and sometimes the not-so-pleasant updates, like scary health diagnoses!)

I’ve only done feedback surveys for two years now, so there’s a lot we haven’t asked clients about. But it was interesting (and helpful and reassuring) to see this trend already just two years in.

I’m looking forward to exploring more aspects of our client relationships and service and value in future years and see what else we can unearth from our clients. The goal is always to identify what our clients want and need, not what I think they want and need, to be happier with both their relationship with us and with their lives and finances.

Would you find it valuable to work with someone who deeply knows you and your finances and who is committed to being there for you when you need her? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Not “CAN I retire early?” but “HOW do I retire early?” Making a Retirement Plan When You’re Still Young.

Block Woman gazes at a wall calendar with a beach scene and a date circled on the calendar page.

“When can I retire?”
“Can I retire when I’m 55?”

Our clients, many in their 30s or 40s, ask us such questions all the time.

The thing is, if all you do is ask me about the “when” of retiring, I can’t tell you anything useful. Why? Because there are two other huge variables that we need to look at:

  1. How much you’ll spend during your retirement (which dictates how much money you need when you start retirement)
  2. How much you will save between now and retirement (which influences how much money you will have when you start retirement)

Those are the three basic levers you have to push and pull when making a plan for your eventual retirement:

  1. When
  2. Spending in retirement
  3. Saving/growing your wealth between now and then

You know that old product development saw? Good, cheap, and fast…pick any two.
You can apply the same logic to retirement planning.

You get to pick two of the variables listed above. The other is simply a result of those two choices.

So, if you ask me “Can I retire early?” I will likely say, like the language pedant I was raised to be, “Sure you can!”

But the more interesting question is: How do you retire early? That “how” gets into the trade-offs you have to make, the priorities you have to choose.

Please note: Retirement planning, when you get close to and in retirement, can get really detailed. If we were discussing retirement at that stage, I’d be looking at questions like “Do you live entirely off your investment portfolio? Do you buy annuities? Do you use a bucketing strategy?” By contrast, in this blog post, I’m addressing the question of retirement planning when you’re still many years—and many life events—away.

What Do You Even Mean, “Retire”?

If you come to me when you’re 40 and ask, “When can I retire?” the first thing I’ll probably do is explore a bit more what you mean by “retire.”

For a lot of people, it does not mean you want to stop working forever. It’s more of a “financial independence” goal than a “retire” goal. It’s often because people don’t really like their work life and cannot fathom doing it for another few decades.

This can open up conversations about changing the direction of your career sooner rather than later, not just grinding through another 10, 20 years of your current career that you actively don’t like, just to reach the point of not having to work anymore.

This is one of those cases where the question you ask (“Can I retire early?”) might not be the right one. But it’s a helpful start to an exploration of what your true question really is.

It’s also possible that you’re not chomping at the bit to get to retirement as soon as possible, but you do want to have an idea (any idea!) of your retirement trajectory. As a client once asked (I paraphrase): I’m saving all this money. But what does it mean? What kind of retirement is this setting me up to have?

The Limitations of Planning for Retirement 20 Years Ahead of Time

I’m gonna go on the record right now and say that multi-decade projections of any sort, but specifically here, of saving and spending levels, are utter bunk. I know, totes controversial. I’m over here, stirring it up, making waves…yelling into the void.

Try to remember what your life was like 10 years ago. Feel it, see it, imagine it. Looking forward from that perspective, could you have imagined half of what has happened since then, and what your life looks like now?

I know I couldn’t have. When I was 38, I never would have spent $25k to take my family to Europe (I mean, aside from the fact that my kids were 4 and 1 at the time). And yet I did that earlier this year, with pleasure. Nor had I any concept of starting my own firm as a financial planner and enjoying this work so much that I can see doing it for decades more (which enables me to continue to earn and save, and delay the age at which I need to draw on my retirement portfolio).

That said, in order to plan, we have to have some sense of our destination. And so we make our best guess with the information we have now and make a plan around that. Time passes. We are that little bit closer to the goal, we gather more information, and re-do our guess. That guess is now a little more accurate, and we can make a little more accurate (and reliable) plan for your retirement. But it’s iterative, over time.

Because of the “make a guess, let time pass, reevaluate” nature of the work, I don’t see merit in getting hyper specific. But I do encourage you to revisit this high-level retirement projection regularly, as you draw closer to retiring. We do it once a year for some clients, less frequently for other clients.

Solving for “When,” Spending Level, and Savings

The way I look at it, you have three variables that determine your retirement projection, more specifically, three variables that you have control over. (You can’t, by contrast, control stock market returns or inflation.)

  1. When do you want to retire?
  2. How much will you spend in retirement?
  3. How much will you save each year between now and retirement?

As I hope you can see, you can combine these variables in an infinitude of ways.

Are you most concerned with retiring by the age of 50 and spending a lot on travel once retired (and we guess that results in yearly spending of $200k/year)? Great! No problem. That means we’ll calculate how much you need to save and grow that bucket of money between now and that target retirement age.

Or are you more concerned with enjoying life (which costs $150k/year, leaving you with $80k/year to save) over your whole life (your kids are young and under your roof for only so long, after all), and you are willing to work as long as it takes? Great! That means we’ll calculate how many more years you have to work (in other words, your retirement age) so that you have enough years to save and grow your money.

For those of you who remember high school math somewhat fondly, you might recognize the problem: “If you have three variables, you need three equations to solve the problem. With only one equation, you can’t solve the problem.”

In this retirement projection, we don’t have three equations, we have only one. That singular “equation” is your one big, beautiful path to retirement. So, we have to simply assign values to two of the variables. Now we have only one variable to solve for, which we can do! (Ha ha! Remember kvetching in highschool math about “When am I ever gonna need this?” Looks like you shouldn’t have besmirched the good names of Gödel, Newton, and Euclid after all!)

We can easily run this calculation 100 different ways, to help you get a handle on the possibilities. (Yay, software.) But in all cases, you need to tell me the value for two of the variables, and we can see how that affects that third variable.

The Hardest Thing to Know: How Much Will You Spend in Retirement?

Of the three variables at play here, the least intuitive for our clients is how much you’ll spend in retirement.

Your easiest (and not unreasonable!) guess for how much you’ll spend in 20 years is simply what you spend now (adjusted for inflation).

There are, however, a few major spending categories that you can adjust, to make your guess… reasonable-er:

  1. Subtract from current spending:
    1. Childcare. This is a huge expense with a known end date.
    2. Housing. If you have a mortgage now, will it be paid off in retirement? That would leave “only” property tax and insurance (and, of course, ongoing required maintenance and optional upgrades).
  2. Add to current spending:
    1. Health insurance and care. Do you currently have health insurance provided by your employer? Will you need to get your own health insurance when you retire? If you retire before you’re eligible for Medicare (and can’t get on a spouse’s plan), then you will. If you move to the Affordable Care Act, either the insurance or your out-of-pocket expenses will likely be way higher than it is now. Even with Medicare, you’ll likely need to buy supplemental health insurance or Medicare Parts B and D.
    2. More leisure spending. You will, after all, have more leisure.

I honestly wouldn’t try to get more nuanced than this. It would provide precision without accuracy (which can be dangerously reassuring), given how far in the future this spending will occur.

I know I haven’t given you the exact equations or spreadsheet or software tool or all the assumptions (inflation rate, growth of investments) you need to actually solve this “equation.” That was on purpose. There are plenty of free calculators online. If you work with a financial planner, they’ll probably use industry-specific software with a lot more knobs and buttons.

I think it’s more important to understand the mental framework of creating a retirement projection so far in advance. Only once you understand that do all the calculations and tools become actually useful to you.

Which two variables are most important to you?

How would it feel to understand how you’re progressing towards your eventual retirement? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

Top 11 Reasons that People Reach Out to Us for Financial Planning Help

1 pink and 1 blue block women sitting across a white table from each other

Do you recognize yourself in any of these situations?

While everyone’s finances are complicated (if nothing else, because their lives are complicated), there’s actually a fairly short list of reasons that people reach out to us, to work together.

I hereby present to you the most common reasons that people want to work with us. In no particular order:

  1. I have a giant pile of company stock. I know I’m supposed to do…something. But I’m paralyzed.
  2. Um, my company just filed to go public. I haven’t done anything to prepare. Halp!
  3. My company is probably going to go public soon. I have a ton of options (RSUs, stock) in my company, and I want to do the right thing.
  4. I just went through an IPO. Now I have a lot of company stock, and more coming, and OMG what am I supposed to do? I don’t want to get killed on taxes.
  5. I make way more money and have way more money than anyone in my family ever has, and I have no idea how to handle it.
  6. Finances have gotten too complicated. I don’t know how to confidently manage them any more. I’m afraid I’m doing something wrong.
  7. I have all this cash. Like, a lot. Too much.
  8. We had a giant tax bill last year, and I don’t want to go through that again.
  9. I need to leave my job. I need to not work for a while. I am burned out. But that’s scary and I have no idea how to do it. What about health insurance?
  10. I’m getting married, and we need help joining our finances and learning how to manage them together.
  11. I want to retire early.

(An aside: Before writing this list, I thought about it for a while. Then I wrote down all these reasons, thought and wrote some more, then counted them, and ta da! An exact 10! It’s as if the gods wanted me to have a clickbait-worthy title for this blog post. Then I thought of an 11th. Dammit.)

Our work together ends up addressing waaaaay more than these reasons, of course. Financial planning is, or at least should be, a remarkably comprehensive endeavor. Just look at how we run our Annual Renewal Meeting if you want some flavor. It’s just that no one has ever scheduled our short intro call because they wanted to talk about, oh, their estate planning documents or disability insurance coverage. (Which are super important! Make sure you have that stuff done!)

Are you dealing with one of these situations yourself? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

Use Asset Location to Pay Less in Taxes and Get More Money out of Your Investment Portfolio

Block Woman surveys scattered piles of coins placed on a grid of squares

What if you didn’t have to save more than you already are, if you didn’t have to change what you invested in…and you could still get more money out of your investment portfolio? Pretty nice, eh? Well, you can.

May I introduce asset location.

Asset location is an investment strategy that puts certain types of investments into certain types of accounts based on the investment’s tax characteristics and the account’ tax treatment. The goal is to create larger after-tax returns for your investments. “After-tax” is the money you can actually spend. Pre-tax numbers are simpler to understand…but not as useful.

Vanguard estimates that proper asset location can increase after-tax return by 0..05 to 0.3% each year. Sounds…kinda small. But if you compound that over years, and talk about it in dollars and not percentages, it can sound…kinda big.

In this post, I’ll describe a lot of the nitty gritty of asset location, and I’ll end with how we use it here at Flow for our clients’ investment portfolios.

This Is the Icing, Not the Cake.

You do not need asset location to be a successful investor. It is icing on the investment cake. That cake’s ingredients?

  • Broad diversification. Owning not 1 stock or 10 stocks, but 1000 stocks.
  • Low cost
  • An appropriate “asset allocation” for the amount of time until you need the money. That is, the balance of stocks and bonds in your portfolio. Yes, we’re talking asset ALLOcation vs. asset LOcation. Sorry about that! I don’t pick the names!

(You can learn more about our beliefs about what constitutes good investing, in this blog post.)

To boot, the younger you are and the smaller your investment portfolio, how much you save is usually more important than all those things. 

But if you’ve already got the cake, and you’ve got the personal wherewithal to ice the cake, or if you’re working with a financial planner whom you’re paying to ice the cake, then yeah, let’s do this thing.

The Rules of Asset Location

Here are the rules that govern asset location:

Rules based on tax-efficiency:

  • Put your tax-efficient investments in your taxable accounts.
    For example, a total US stock market index fund. “Tax efficient” means your investment doesn’t produce much investment income (interest, dividends, capital gains distributions) during the year.

  • Put your tax-inefficient investments in an IRA or 401(k) (or other tax-protected account).
    For example, a taxable-bond fund.

Rules based on growth potential:

  • Put low-growth investments in a traditional IRA or traditional 401(k) (or other pre-tax account).
    For example, a total US bond-market fund.

  • Put high-growth investments in a Roth IRA, Roth 401(k) or HSAs (or other after-tax or tax-free account).
    For example, an S&P 500 fund.

One more rule that doesn’t fit neatly above: Put international-stock funds in taxable accounts. These funds typically pay foreign taxes, and if you hold them in taxable accounts, you can get a foreign-tax credit for those taxes paid, reducing your US taxes. If you hold them in a tax-protected account, you can’t get that credit.

Put ‘em together and what have you got?

Bippidi boppidi…oh wait, no.

You get a decision matrix like this:

Why Does Tax Efficiency Matter?

If you were retired, it’s possible that having investments producing income throughout the year wouldn’t be a bad thing. You’ll need money to live on, after all! You can use that investment income (interest, dividends, fund distributions) as that income.

But if you’re still working, your job provides all the income you need (god willing). You don’t want to have to pay taxes on income you don’t need. So, we want to minimize taxable income coming from your investments.

Which means we put tax-efficient investments in an account where you do pay taxes, because those investments won’t create much taxable income. And we put tax-inefficient investments in accounts that are tax protected, because regardless of how much income your investments create, you don’t owe taxes on it.

Why Does Growth Potential Matter?

Because we want to minimize the bucket that the government can take taxes out of and maximize the bucket that you own 100% yourself.

Let’s say you retire and have a $1M portfolio. The after-tax size of your portfolio varies depending on how much of your portfolio is in a pre-tax IRA vs. a Roth IRA. The bigger your Roth IRA is relative to your pre-tax IRA (for the exact same total portfolio balance!), the more money you will have to spend.

In this chart, you can see that when the $1M is split evenly between a Roth IRA and a traditional IRA, your after-tax portfolio is worth “only” $840k. (We’re assuming a marginal (i.e., top) tax rate of 32%.)

But let’s say you used asset location over many years, putting your high-growth investments in a Roth IRA and your low-growth investments in a pre-tax IRA. As a result, your Roth IRA is worth $600k, and your traditional IRA $400k. In this scenario, your after-tax portfolio would be worth $872k. Same $1M total portfolio…but a bigger Roth bucket gives you more money to spend.

Follow these rules gently, not obsessively.

These are guidelines. You can get a lot of the benefit of asset location by adhering only loosely to these rules.

You don’t have to put all your stock holdings in a Roth or even taxable account. It’s okay to have some in a pre-tax IRA! Just get a good chunk of your stock holdings (especially if they’re tax inefficient) in your Roth IRA to increase your lifelong tax savings.

Balance Optimization (Icing) with Simplicity

Asset location is easy enough to do, at a high level.

The more narrowly defined your investments, the more exacting you can get in your asset location…but at the cost of portfolio simplicity. So, I’m not sure you should get that exacting.

For example, a high-level implementation of asset location would mean getting most of your stock investments into a Roth IRA and most of your taxable bond investments into a traditional IRA.

In contrast, let’s say you break your portfolio down into individual stocks, commodities, micro cap US stock funds, small cap, mid cap, large cap, both growth and value, equivalent complexity on the international front, private-company stock, cryptocurrencies, etc. You now can pick the best account for each of those 10+ types of investments to go into. That’s harder to set up in the first place and harder to maintain.

I recommend getting most of the value of asset location with the least amount of setup and maintenance required. Asset location is optimization enough unto itself. I don’t believe you need to optimize the optimization.

The Challenges of Asset Location

An asset-location strategy is a multi-year (-decade) commitment. As with pretty much any investment strategy, there are challenges that you should really think about before you commit to it.

Each Account Will Perform Differently.

I used to work at a financial advisory firm that did not use asset location. They invested all of a client’s multiple accounts the same.

If the client’s target asset allocation was 90% stocks/10% bonds, then by gum, their taxable account was 90% stocks/10% bonds, their pre-tax IRA was 90% stock/10% bonds, their Roth IRA was 90% stocks/10% bonds…and all the spouse’s accounts were also 90% stocks/10% bonds.

I asked the lead advisor one day why they didn’t use asset location. He explained (I paraphrase) that a lot of clients couldn’t handle the fact that each account would perform differently than the others, and that their spouse’s accounts would also perform differently than theirs.

Your all-bond pre-tax IRA would grow 3% in a year, and your spouse’s stock-heavy taxable account would grow 16% in one year. Or one loses 3% while the other loses 20%. That doesn’t feel good.

Asset location is a portfolio-level strategy, not an account-level strategy. That means you have to be prepared for each individual account to perform differently. Your focus should be on The Total Portfolio. How did all your accounts perform together?

Big Money Movements In and Out of an Account Can Create a Challenge.

Let me tell you a story about difficulties we ran into when implementing asset location in a client’s portfolio.

We were managing this client’s Financial Independence (aka Retirement) portfolio, which consisted of a taxable account, a traditional IRA, and a Roth IRA. The portfolio’s asset allocation was 85% stocks/15% bonds. As prescribed by the basic asset location rules, all her bonds were in the traditional IRA.

Then we helped her roll that traditional IRA money into her 401(k) so that we could do a backdoor Roth IRA for her. Now, with her IRA emptied out, her asset allocation was…100% stocks. Eeek.

We needed more bonds. How to get them? We had two types of accounts to put them in: her Roth IRA and her taxable account.

I didn’t want to put them in her tax-free Roth IRA, as that’s the account where I want to put our “growthiest” possible investments.

That left her taxable account. But in order to buy more bonds, I’d have to sell some of the existing stocks, creating a taxable gain. She’s mid-career as a director at a big tech company. She’s earning a bunch of money, at a very high tax bracket. I really don’t want to create capital gains taxes if possible.

In her case, thankfully and coincidentally, around the same time, she received a gift from a family member of a bunch of a single stock. Whenever a client has a concentration in stock like that, we create a diversification strategy. In this case, part of that strategy was to use the sales proceeds to buy bonds.

You can perhaps see how, if she didn’t have the luck of that big gift, we likely would have ended up doing something “suboptimal” in either her taxable account or her Roth IRA in order to achieve the more important target of getting bonds back into her portfolio (i.e., getting her asset allocation back on target).

This same thing can happen when you do a big Roth conversion. Before the conversion, you have all sorts of pre-tax money, and you can hold bonds there. After the conversion, you have less pre-tax money and more Roth money. How will you make sure that the portfolio’s asset allocation is still on target?

It Makes Your Investments More Complex.

One benefit to investing all your accounts the same way is that, if you put more money into an account or take money out of an account, it’s easy to figure out how that account should be invested with its new (higher or lower) balance: The exact same as it was before. Was it 90% stocks/10% bonds before? It still is.

If you use asset location, every time you add a lot of money to or take it out of an account, or every time you do your annual “rebalancing” of your portfolio, you have to figure out how to change the asset allocation in each account to ensure that the total portfolio’s asset allocation is still correct (remember, the asset allocation is more important!), while still obeying the basic rules of asset location.

Tax Laws Can Change, Undercutting the Value of Asset Location.

The value of asset location comes from the fact that you have to pay taxes on investment income and withdrawals from pre-tax accounts. The higher the taxes, the bigger the value of asset location.

As tax law changes, asset location could become less valuable. (Of course, it could go the other way, too.) Certainly, if tax rates fall, asset location becomes less valuable. Already, the value of putting real estate investment trusts (REITs) in tax-protected accounts (IRAs, 401(k)s, HSA) isn’t as great as it used to be, because now you can get some tax benefits by holding real estate in a taxable account.

What We Do at Flow

At Flow, in our clients’ portfolios, we follow the good ol’ 80/20 rule: we want to get 80% of the benefits of asset location with 20% of the work (and complexity).

Here’s our focus:

  • Roth IRAs and HSAs get stock funds.
  • Pre-tax IRAs get taxable-bond funds.
  • Taxable accounts get everything else.
    • If we need more bonds in the client’s portfolio, we’ll often use tax-free (aka, muni) bond funds in the taxable account.
    • We use broad market index funds, so all our stock funds are tax efficient, whether they’re here in the taxable account or in the tax-protected Roth.

This strikes me as a good balance of simplicity and tax optimization. Other advisors with good investment philosophies and implementations do it differently. As I’m fond of quoting:

“There is no perfect portfolio. There are many perfectly fine portfolios.”

Do you want your investments managed in a way that balances optimization with your ability to understand what’s going on? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

What It’s Like to Work with Flow: The Annual Renewal Meeting

Two Block figures face each other across a tabletop that has 3 pieces of white paper on it.

Most people have no idea what working with a financial planner is like.

Every prospective client I speak with has questions about what it’s like to work with us at Flow. While nothing can replace the actual experience, I hereby swear to write as much as necessary to paint that picture! No word left unturned!

Let’s start with our Annual Renewal Meeting.

Why? Because it is the keystone of our ongoing relationship with you, year after year.

Did you notice that we call it a Renewal Meeting, not a Review Meeting? That’s on purpose! Yes, we review the last year so we can celebrate your accomplishments and progress. More importantly, we renew your vision, your energy, and the plan to bring that vision to life. I think that’s exciting!

How You Can Use This Post

While I’m writing this primarily for those of you who might want to work with us at Flow, I can see it being potentially useful for several groups of people:

You are looking for a financial planner. You can judge whether Flow might be a good fit for you, and you can use our description to help evaluate other planners and their services.

You are already working with a financial planner. You can see if we’re providing something for our clients that you’re not getting from your planner (and would really like to get). Or maybe it’ll simply reassure you that your planner is great or “thank goodness they’re not like those Flow weirdos.”

A Disclaimer (Naturally): Things Always Evolve

After over eight years in business, I have tried a lot of different ways of doing things. Many things. Many ways. So, it’d be foolish to imply that the way I approach the Annual Renewal Meeting now is definitely the one I’ll still be using in five years. But I also have experimented enough to know that the current way is good and sustainable and I’m in no rush to change it.

(I wrote an article for an industry blog explaining why I moved to the Annual Renewal Meeting from my previous approach.)

Why You Should Care about the Annual Renewal Meeting

If I had to choose a single reason that the Annual Renewal Meeting is important to you, I’d say: It forces you (and your partner) to set aside meaningful time to sit with, think about, and talk about your life and finances.

Left to our own devices, most of us won’t do that. Sure, we’ll low-key worry about our finances all the time, but we won’t have an actually helpful, organized conversation about it. Why would I do that nonsense? Amorphous anxiety makes me feel alive, alive I say!

Isn’t that a ringing endorsement of working with a financial planner? “Work with me! I’ll…schedule time on your calendar!”

But of course, you know how important that actually is sometimes. Having sat with enough clients in this way for years now, I find it kinda beautiful to observe what often comes out of this time and focus, especially with a third party (i.e., me, in case that wasn’t obvious) who really cares about you being happy and fulfilled.

But wait! There’s more!

You are more confident and comfortable, because now you know what’s actually going on across your entire financial life. How has your net worth changed, and why? How are your investments performing? Are you on track to max out your 401(k) by year’s end? How much cash do you have?

You now know what you need to change, instead of just stressing over what might need to change. Your life and finances change over the course of a year. Someone needs to figure out how you need to change your finances in response. That’s us. We’re the someone.

You know which top one or two priorities to focus on. You’d be overwhelmed if we just gave you an undifferentiated list of all the stuff you need to think about and do to improve your finances.

You can get excited about what comes next! Most of us get trapped into thinking about only the demands (and joys!) of the now. We neglect to look ahead to what we can build our lives into. The Annual Renewal Meeting is your chance to do that, along with someone who’s an expert not just in personal finance, but in your personal finance. (Again, me. That expert is me.)

Behind the Scenes: How We Prepare for the Meeting

Of all the hours spent on the Annual Renewal Meeting, the vast majority of them are spent behind the scenes, us beavering away, invisible to you. You’ll see the results of that work in the meeting, and I thought it might be helpful to see how we do that work.

#1 Understand the Big Picture

We want to start with a strong handle on the Big Picture of your financial life, kind of like looking at the picture on the boxtop of a jigsaw puzzle. When we start at that Big Picture level, we better understand how the details fit in, and we can more usefully discuss any issues you bring up.

To build that picture for ourselves, we look at:

  • Your Written Plan (your statement of financial purpose, goals, and net worth)
  • Your answers to our pre-meeting questionnaire
  • Notes from last year’s Annual Renewal Meeting and meetings since then
  • Recent email conversations
  • Our “Future Meetings” document (a “dumping ground” Google doc where we record thoughts throughout the year as we think of something that might be important for you)
  • Tasks previously assigned to you or us

In all this prep, we use a “past/present/future” framework to try to create a unified picture of your life. We want to understand what has come before (and what we can learn from it), what’s happening now (that’s the only stuff we can change), and what might happen in the future (that we should start thinking about and maybe planning for).

We’re regularly building a list in the backs of our heads of: What are your strengths? What are the opportunities for you to improve? What are the most urgent and/or important things for you to focus on?

#2 Review the Financial Planning Technical Stuff

We review a long list of technical things in your financial life. This part is probably more along the lines of what you’d expect of a meeting with a financial planner. Maybe you’re interested in the specifics, or maybe you glance over the list and think, “That’s cool. Looks like you know what you’re doing. Carry on!”

Would you benefit from reviewing these parts of your financial life, as we do for the Annual Renewal Meeting? 

  • Education funding: Investments, savings rate, account balances for your kids’ education
  • Cash flow/Savings rate: For financial independence (retirement), shorter term goals
  • Paystub review: 401(k) and HSA contribution status, anything … peculiar on your paystub
  • IRA Contributions: Eligibility for IRA contributions (direct Roth, backdoor Roth) and a plan for when to contribute and how to fund the contribution
  • Cash cushion: Cash you have vs. cash you need, a plan for the “too little” or “too much,” interest rate
  • Company stock: Concentration in your total portfolio, sales strategy, upcoming expiration dates, options-exercise strategy
  • Your child’s age: If they’re turning 16, auto insurance and liability insurance; if they’re turning 18, preparation for them becoming legally independent (like HIPAA release)
  • Your age: Changes to your contribution limits for your 401(k), IRA, or HSA; eligibility for withdrawing penalty-free from retirement accounts
  • Withdrawal rate/dollars: If you’re living on your investment portfolio, both historical and projected
  • Coast FIRE analysis: If we suspect you might be close to or in Coast FIRE (Don’t know what that is? More or less no one does. Read the linked blog post. It’s a powerful concept!)
  • Estate planning: Documents (like a will and power of attorney), beneficiary designations (reviewed every other year)
  • Insurance: Life, long-term disability, homeowners or renters, umbrella liability, auto, etc. (reviewed every other year)
  • Taxes: Check in on your relationship with your CPA, revisit any parts of our tax-return review that warrant it, and several more tax-related topics:
  • Tax strategies for an unusually high or low-income year: IPO years (high income/tax rate!) or sabbatical/layoff years (low income/low tax rate!) give us fleeting opportunities: charitable donations, Roth conversions, selling investments at a gain, etc.
  • Charitable giving: How much you are giving vs. how much you want to give, how you’re donating the money (credit card, stock, directly to charity vs. Donor Advised Fund, etc.)
  • Net Worth: Change from last year, explanation for change, and whether that change is acceptable or you need to change something
  • Account consolidation: Opportunities to simplify your financial life by reducing the number of accounts you have—either bank accounts or investment accounts

#3 Review Investments

Accounts We Invest for You

We can do the most for the investments we manage for you. We look at:

  • Your Investment Policy Statement (a document that states what we’re investing for and the high-level strategy for investing). Does it need to change due to changes in your life?
  • Your actual investment portfolio. How closely is your portfolio abiding by the strategy in the IPS? Has it veered away from it? What changes do we need to make to bring your portfolio back to target?
  • How much cash is in your portfolio (more of an issue for clients living on their portfolios). Do we need to generate more?
  • Special investments you own, like company stock or other concentrated stock positions. How concentrated are you?

We send this review to you several days before the meeting, with a video explaining our review and any changes we recommend.

Why do we do this part ahead of time? Because usually you just want to know that we’re paying attention to it and to know generally what’s going on in your portfolio. Beyond that, we’ve usually found that clients don’t have many questions. So, I’d rather use the meeting time for you to talk, instead of me droning on about your investments.

Accounts We Don’t Invest for You

We don’t (usually because we can’t) manage certain accounts for you, for example, 401(k)s, HSAs, education 529 accounts, and company stock plans. We do, however, still make sure they’re invested appropriately for you:

  • Are your investments low-cost enough?
  • Is the account invested with an appropriate balance of stocks and bonds (i.e., your “asset allocation”)? Do you need instructions for how to “rebalance” it?

If it’s an HSA, we look to see if you have been withdrawing money from it to pay medical bills. Yes, I know that’s the whole purpose of this account, but usually clients are better off using it as a retirement account that they don’t touch for many years.

And sometimes clients have “play” accounts: accounts that they invest on their own, usually in individual stocks, crypto, or other “gambles.” The only thing we monitor here is the size of the account. Has it grown to be too large a part of your total investment portfolio?

#4 My “Woo” Preparation

All the prep I just described is essential. There is no Annual Renewal Meeting without it. And by itself, it’s enough! You can have a good, even great, meeting with it.

I have found two practices that make me even better at running an Annual Renewal Meeting:

#1 Five to ten minutes of savanasa-like rest after reviewing all these details. Savasana (translated as “corpse pose”) is the final pose of any physical yoga practice. It looks a lot like just lying there, eyes closed. ‘Cause it is. It is an opportunity for your body to integrate all the benefits of the physical practice you just finished.

As a financial planner, I take a similar short period of quiet and reflection (I might even close my eyes!) after all the heavy Brain Work. And this savasana helps me just sit with all that information, integrating it at some unconscious level. I have found that I emerge from the savasana with a better understanding of what is truly the most important thing for you.

#2 Five-minute meditation right before the meeting. This tames the Monkey Mind a bit. With a calmer mind, I can simply be more present with you. I am more likely to truly “hear” you.

Told you…kinda woo.

The Actual Client Experience: What Happens in The Meeting

So far, I’ve told you nothing about your experience in this Annual Renewal Meeting. It’s been all “me me me.”

What do you experience, as a client? Behold:

Before the Meeting

We ask you to give us some information:

  1. Fill out a questionnaire
    You can see our questionnaire here. (We have a slightly different questionnaire for our clients who are living off their investments.)
  2. Provide a recent paystub
  3. Make sure that all your financial accounts are up to date in our financial planning software

We can still have a useful meeting even if you provide us with nothing (I know because this has happened not a few times). It’s just more useful when we get more input from you.

You should also receive an email with a short video review of your investments (as described above) in the week prior to the meeting.

During the Meeting

Here’s what we talk about in the meeting itself:

Check-in

Yeah, yeah, there are always the basic conversational pleasantries that make the world go round. I genuinely enjoy seeing dogs and cats and babies and seeing what you’re eating for lunch and hearing about your latest vacation or even the latest chaos at work.

This usually leads pretty quickly and naturally into you talking about what’s on your mind and heart, which will end up being the focus of the meeting.

strengths, opportunities, and priorities

We like to lay out early in the meeting our high-level assessment of your finances: 

  • Strengths: from a good savings rate to a lot of flexibility in your investment portfolio to demonstrated grit in your career or personal life
  • Opportunities for improvement: Could your cash cushion be usefully higher? Do you still need to get your estate planning documents drafted?
  • Priorities: Of all the parts of your financial life, what are the few that we think best deserve your time today and your work in the near future?
Review the last year

We review your answers to these three questions, which we asked in the client questionnaire:

  1. Tell us about one thing you’ve done in the last year that you’re proud of.
  2. Tell us about one thing you’ve spent money on in the last year that brought you joy.
  3. Tell us about one organization or person you gave money or other resources to that made you happy!

This discussion helps reinforce how to use money to bring joy and meaning to your life. Sounds pretty helpful for making financial decisions moving forward, eh?

This personally is one of my favorite parts of the meeting: it’s a celebration.

Review net worth

Net worth is one of the few metrics we track every year. We want to know how it’s changing and why. Did the stock market help or hurt? Did you save a lot? Spend a lot?

Over time, we generally like to see it go up. But not always! Depends on your plan.

Review goals

We review your goals (which we record in your Written Plan):

  • Have you accomplished a goal? (always fun to check those off)
  • What progress have you made towards existing goals?
  • Do you have new goals?
  • Have the priorities of your goals changed?
  • Are some goals not really important to you anymore?

This is not a complex process. It is, however, incredibly valuable. This part of the meeting, using the Written Plan as guide, provides a simple structure to make sure we’re still making financial decisions “in the right direction.”

What you want to talk about

Although I’m dedicating only a few sentences to it here, this is perhaps the most robust part of the. meeting. Depending on what you want to talk about, we can go deep technically and emotionally. We want you leaving the meeting with a deeper understanding of what you need to do and why.

What we want to talk about

This is the stuff that we prepared ahead of time.

Wrap up

We’ve just spent two hours talking about a lot of things; you’re not going to take all that with you. This wrap-up helps cement in both our minds the parts that you will carry with you.

We do three things:

  1. Schedule the next meeting. (It’s comforting to everyone to know this is on the calendar!)
  2. Agree to the work we each have to do after the meeting.
  3. “What are you taking away from our conversation today?” Your reflection here is another favorite part of the meeting for me. It’s such a satisfying window into your brain and heart.

After the Meeting

We send you an email, listing the tasks that we agreed to in the meeting, and provide full notes from the meeting.

I hope seeing “behind the curtains” of our Annual Renewal Meeting (the what, why, and how) gives you a better appreciation for the practicalities of working with us. Armed with such information, may your search for a financial planner be more informed and more confident!

Would you like the comfort and confidence that comes with such a thorough annual focus on your life and finances? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

Meg’s Musings: On Being a Financial Planner

Block Women is to the left of the image with a black background cutout overlayed a brown wood wall.

Back from several days in San Francisco—celebrating my wedding anniversary, admiring a friend’s potato-shaped dog, meeting with a handful of clients, enjoying the hell out of San Francisco, and generally “checking out” from the daily grind—it’s prime time for another edition of Meg’s Musings.

Technical, Behavioral…and Bureaucratic

In my profession, “real” financial planners know that in order to serve our clients well, we need two kinds of knowledge:

Technical. This is what almost all our education and training is targeted at. How does the tax code work? How much insurance of what kind do you need? Etc. Those letters after my name (CFP®, RICP®)? Those are almost entirely indicative of technical knowledge. You want facts? I got yer facts. Right here.

Behavioral. This is a more recent entrant into the canon of Good Financial Planning, but it’s a growing focus, and at least my entire professional community is on board. This is the work of acknowledging clients’ emotions, and using emotions and behavior to improve their lives and finances. (I also, as it turns out, have letters for this domain of knowledge! I just don’t usually use them. But if you like, you can imagine RLP® after my name. That stands for Registered Life Planner®.)

The longer I practice, and more time the federal government, state governments, and corporations have to “improve” things, the more I believe a third knowledge category deserves acknowledgment:

Bureaucratic. This is the category of knowledge that we must bring to bear when we actually want to implement all the strategic and tactical decisions my clients and I make. And I think it gets more obvious and important every year.

A fantastic example is the knowledge required to roll over an old 401(k). Most clients understand the technical and behavioral merits of doing this. But Oh. My. God. Have you tried to roll a 401(k) to another account at all recently? If you have, maybe you already know what I’m about to say. If you haven’t, just ask your friendly local financial planner.

From inefficient processes (“Really? You have to mail me a check? And then I have to turn around and mail that self-same check to the new 401(k) company?”) to outright mistakes (“What do you mean you deposited my old Roth 401(k) money into my new pre-tax 401(k)?”), it can be a nightmare. I have an entire blog post dedicated to avoiding common 401(k) rollover mistakes.

After years of observing and helping clients roll old 401(k)s into new 401(k)s or IRAs, we’ve accumulated quite a list of tips and tricks to help it happen, perhaps not quickly, but successfully and without giant mistakes.

That is, in my opinion, a tremendous value we financial planners can offer to clients, who might otherwise:

  • Not do it at all. Like the client who left their old 401(k) alone for over 10 years, resulting in the money getting sent to the state’s unclaimed property division, whence it is proving extremely difficult to extract it, or
  • Do it and something ends up wrong. Like the client whose after-tax/Roth money was deposited in the new 401(k)’s pre-tax account. Don’t worry, we resolved that. or
  • Do it, push through all the hurdles, actually do it correctly, but be uncertain and stressed out along the way.

Prior to “retiring” (to be a stay-at-home dad) back in 2016, my husband had worked for several years (as a software programmer) at a company that produced security software. He used to characterize his job—at first jokingly, and increasingly cynically over time—as writing code to undo the effects of the shitty code that other people had already written. Yes…there’s obvious value in undoing badness, but damn, wouldn’t it just be better if the shitty code never existed?

In that same spirit, this Bureaucratic Knowledge is one of those incredibly useful things we financial planners provide…that I really wish we didn’t have to. It’s just getting us back to Net Zero. It’s just undoing the negative value that institutions have created. It’s not creating positive value. But I’m at least glad that we have the expertise to help clients navigate the bureaucratic BS more successfully and less stressfully.

Clarity on what you truly want is a magic unlock. It’s worth (constantly) working on.

As I mentioned at the top, I recently spent several days in San Francisco, where I used to live, pre-children.

I still love San Francisco. I love walking its streets. I love taking MUNI and BART. I love the food (I packed two loaves of Acme bread in my suitcase to take home). I love the staircases and public parks.

And during many of my visits since moving out almost 15 years ago, I used to yearn to live there again. During this recent visit, I found myself enjoying all that San Francisco has to offer, but without that yearning.

I was trying to figure out why my reaction to San Francisco was so purely appreciative this time, not tinged with yearning. It seems linked to another experience I’ve had recently: on various occasions walking around downtown Bellingham (where I live) with either my mom or a daughter, I’ve observed myself feeling deeply contented. So deep and thorough was this contentment that it felt heavy, tangible.

I think I can attribute these pleasures to two things:

  • Getting older. I turned 48 earlier this year. Being that 80-year-old woman rocking on the front porch who doesn’t give one sh*t what other people think? #goals I have a working hypothesis that women, much as we are born with all the eggs we’re ever going to have, we are also born with all the f*cks we’re ever going to have. And, as with eggs, we shed those f*cks steadily over our lifetime until arriving at a point when we, ta da! have no more f*cks to give.
  • Working explicitly, for years now, to clarify what I truly value, and taking explicit steps to use my time and money to support those things. You know, the answer to, “If I were to die tomorrow, what would I regret that I never did?” And it doesn’t hurt (from this perspective, at least) that I had to deal with a diagnosis of and treatment for Stage 0 breast cancer starting in August 2023; that has a way of focusing one’s attention. 😑

(Yes, I’m also affluent, healthy, lucky, etc. And there are plenty of people who are all those things…and also unhappy.)

In the past few years, I’ve really started prioritizing What Truly Matters to Me over the usual stuff that it’s so easy to fall into. That has meant I finally took my daughters (and my husband) to a long-yearned-for trip to London and Paris. I planned a lot for it. I saved for it over a year or two. I arranged work so that I could really be present on my travel and not constantly peeping back into work. And it. was. amazing. Everything I expected and more.

I better carved time out of my calendar to attend my kids’ track and cross-country meets and other school events. To start working with a personal trainer. I’ve spent more of my money getting together with my brother’s family because his daughter is the only cousin my kids have, and they get along so well.

I’ve started caring less (I still care…just less) about how my business stacks up against other people’s businesses. I decided that my focus was going to be making enough money, serving my clients well, and enjoying the work as best I could (i.e., paying to outsource or delegate the work I didn’t).

All that is great! But what are the flip-side implications of prioritizing all those things? It means that I simply can’t afford to live in San Francisco right now. I’d have to change how I run my business or my family life in major ways in order to do so. I think that used to make me sad. But I think it used to make me sad because I it felt like giving something up without acknowledging what I was prioritizing or gaining in return.

And while San Francisco is a great city, and I certainly wouldn’t sneeze at the idea of living there again, living in a great city like that isn’t in my top 5 right now. The work I’ve done to figure out what my top 5 is has been long and difficult and, ultimately, has made me a much more content person.

(Disclaimer: Contentedness of course subject to change at a moment’s notice, but I am optimistic I’m on the right path.)

Perspectives on the Financial Planning Profession. We’re Out There!

While I was in San Francisco, I met up with a few clients to just Talk Life (okay, and the occasional options-exercise strategy).

I met one client for lunch at Duboce Park Café on an unimpeachably beautiful day. I’ve been working with him for…Oh, I could look this up, but it’s probably two or three years. (Hey, there, guy! Yep, I’m talking about you.)

While I’m going to paraphrase tremendously here, he observed that he doesn’t hear any of his friends or colleagues talk about their financial advisors in a way that sounds anything like his relationship with me. He also recounted a conversation he had with a friend who asked him if he was still going to therapy, and he responded, Well, kind of. “What do you mean, kind of?” I meet with my financial planner every few months. “????”

As much as I preen at being viewed as The Only Emotionally Aware Financial Planner In the World, I will share with you what I shared with him: More of us are out there! I might be rare in a gigantic financial services industry, in my efforts to center the work on The Human instead of on The Money, in my efforts to continually dig into what my clients want their lives to look like and then to make financial decisions that support that life and set of values. But I’m definitely not alone.

In just the 8.5 years since I’ve been running my firm, I’ve noticed an absolute explosion of interest in, attention to, and training and content to support advisors becoming more human-centric, more emotionally attuned, more aware of the impact of behavior on financial outcomes, etc.

But I also recognize that I’m at a slight advantage over my client in knowing the financial planning landscape, being a financial planner and all. For Regular Schmoes out there, looking for a financial planner, I imagine that for every exposure they get to a planner like me, they get 1000 exposures to advisors from the likes of <insert name of gigantic financial institution here>. And while I have never worked at said gigantic financial institutions and don’t closely know advisors who do, I’m just gonna go ahead and bet that the vast majority of them—perhaps through no fault of their own—have a more money-centric approach to financial planning.

If you’ve never experienced the kind of financial planning that I (or my close colleagues) practice, it’s probably impossible to imagine if you’re accustomed to the service at Big Name financial companies.

Maybe I am, maybe I’m not the right financial planner for you, but I’m happy to connect you with other financial planners who operate in a human-centric way. Reach out and schedule a free consultation or send us an email.

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Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

More Strategies to Save You Taxes In Case the Tax Cuts and Jobs Act Expires in 2026

A shadowy Block Woman views a yellow ball labeled with red initials TCJA almost fully hidden below the horizon of a blue and green sea.

Big tax changes are a’ comin’. Maybe. In our last blog post, I discussed one big strategy to take advantage of the possible expiration of the Tax Cut and Jobs Act: the fabled Roth conversion.

The TCJA went into effect on January 1, 2018. All of the TCJA’s changes to tax law will expire at the end of 2025—and tax rates and other rules go back to the pre-2018 levels—unless Congress renews it.

In this blog post, let’s cover a few more strategies that might end up being really helpful to have done if the TCJA does indeed expire. But remember, because we don’t know whether the TCJA tax laws will expire or be renewed, you only want to make moves now if you’ll still be okay regardless of whether Congress renews it or lets it expire. Don’t go bettin’ the farm on Congress doing or not doing something.

And as with the previous blog post, it’s going to be Very Helpful to have a competent CPA on your team to help model the tax impact of any of these strategies.

Exercising Non-Qualified Stock Options (NSOs)

Remember how (and if you don’t, go back and reread our last blog post) I recommended that you consider converting pre-tax money in your IRAs or 401(k)s to a Roth account, because tax rates are low now compared to what they will be if the TCJA expires? And we want to incur taxable income when tax rates are lower?

Well, the exact same logic applies to the idea of exercising non-qualified stock options (NSOs).

When you exercise an NSO, you immediately owe income tax on the “spread” between the exercise price and the value of the stock.

Let’s say you exercise one NSO at a strike price of $1 with a share price of $10 (be that the price on the stock market for a public company, or the 409(a) value for a private company). That gives you $9 of taxable income.

Most people aren’t thinking about just one option. So, let’s think about 10,000 NSOs. In the exact price scenario above, you’d immediately have $90,000 of taxable income.

Behold the tax brackets and tax rates below, which is what they are now, and what they will be if the TCJA expires. Imagine that you’re single and your salary + bonus is $500k/year. If you exercise NSOs now, that generates an extra $90k of taxable income, all of that will be taxed at 35%. If you exercise post-TCJA expiration, then a little of that $90k will be taxed at 33%, a little at 35%, and most of it at 39.6%. Which, let’s review, is higher than 35%.

If you look long enough at the chart below, you can see that in some income scenarios, you’ll actually have a lower top tax rate post-TCJA than now. You’d need to run the numbers for your own specific situation to make sure.

Source: fpPathfinder®

Consider doing this: Exercise NSOs now, especially in private companies, if it would generate taxable income in a lower tax bracket than post-TCJA expiration. If you have NSOs in a public company, I’m usually of the opinion that you shouldn’t exercise NSOs until you’re ready to exercise and immediately sell, and that having the right amount of leverage is a good tool for determining when to do that. That’s probably still more important than gaming tax rates.

Exercising Incentive Stock Options (ISOs)

Surprisingly, most people I talk with who have ISOs seem to know about Alternative Minimum Tax. (Someone out there has been doing some good employee education!) The understanding sometimes stops right there: this tax exists, it’s related to ISOs, and, uh…tax bad?

For a short primer/reminder on AMT, read this blog post, the section entitled “Mistake #3: Forgetting about Alternative Minimum Tax on ISOs,” from our friends at McCarthy Tax.

What’s important in this blog post here is that the likelihood of having to pay AMT when you exercise ISOs will go up dramatically if the TCJA expires. You can usually exercise some ISOs without triggering AMT because there’s an “exemption” amount of AMT income before the tax kicks in.

Let’s say you exercise one ISO at a strike price of $1 with a share price of $10. That gives you $9 of AMT-eligible income. That income will likely not be subject to any tax because it’s below the exemption threshold.

At the other extreme, let’s say you exercise 100,000 such options, for $900,000 of AMT-eligible income (and then you hold the shares for at least a year). Yeah, you’re likely going to have to pay AMT.

You want to be pretty clear on where the tipping point is from “I don’t owe AMT” to “I owe AMT.”

That tipping point is determined in large part by what the AMT exemption amount is. The higher the exemption amount, the less likely you will have to pay AMT on your ISO exercises. You can see in the table below that right now, you can incur $133k of AMT-eligible income (as a couple; $85k as a single person) before triggering the tax. That threshold will drop meaningfully if TCJA expires: drop by roughly $29k for married couples filing jointly and roughly $19k for people filing taxes as Single.

Source: fpPathfinder®

Okay, what are you supposed to do with those numbers? Let’s continue with the example just above.

You can incur roughly $19k more AMT-eligible income now than you would be able to under the rules if TCJA weren’t in effect (all else held equal in your tax situation). So, with $9 of AMT-eligible income per option exercised, you could exercise roughly 2000 more ISOs now without triggering the Alternative Minimum Tax bill, than if you were exercising under tax rules without the TCJA in effect.

So, yes, you still have to pay the exercise price on that extra 2000 options (i.e., $2000, in this example), but you don’t have to pay anything more in taxes. Pretty sweet, eh?

Consider doing this: If you’re sitting on some exercisable ISOs (most likely that means they’re vested, but it could also mean you have early exercise/83(b) exercise available to you for unvested options), exercise ISOs now, up to the currently-higher AMT exemption limit.

Yes, you’re still putting your exercise price money at risk…but you’re not putting any money at risk paying taxes. You have up until the end of the year to do this. And then again in 2025.

[Note: Paying AMT isn’t the end of the world. If you pay it, you now have an AMT credit in your tax return, and if you make sure to carry it forward onto all subsequent tax returns, you have a chance of using that credit up in future years, thereby “getting back” any excess tax you paid in your AMT year. But, you know, it’s still nice to avoid paying it in the first place, as receiving the credit back isn’t guaranteed and also $1 now is better than $1 in 5 years. If you want to learn more about the AMT credit, see this blog post, the section “Mistake #4: Forgetting about the AMT Tax Credit”]

Increase your ability to exercise ISOs without AMT by increasing your ordinary income.

The higher your ordinary income, the higher your AMT income can be before triggering the tax. (This fact is independent of this TCJA discussion.) And increasing your ordinary income—by pulling future income into this year or 2025—might be a reasonable strategy to pursue in and of itself because your tax rates might be lower now than later.

What are some strategies for increasing your ordinary income?

In the tech world, it’s usually if you have non-qualified stock options to exercise. As discussed above, the spread between the strike price and share price is taxable ordinary income in the year you do the exercise. So, exercise more NSOs. Pay taxes on those (maybe at a lower tax rate than you’ll have in the future?) and then exercise even more ISOs without triggering AMT.

If you have any self-employment income or any other income whose timing you have control over, you could also consider accelerating income earlier rather than in later years.

Delay charitable contributions

The primary reason you should donate to charity is that you want to give money to a deserving cause or person. If you want to keep on keeping on in your annual charitable contributions, I APPLAUD YOU.

But if you’re already going to donate, you might as well make it as tax efficient as possible, eh?

There are two reasons that delaying charitable contributions might save you taxes:

#1 You save more when tax brackets are higher. If you are currently at a 37% tax bracket (the highest current tax rate) for every dollar you donate to charity (and itemize on your taxes), you save 37¢, which means it costs you 63¢ to donate that dollar. If you are at a 39.6% tax bracket (the highest rate in a post-TCJA world), you save 39.6¢ for every dollar you donate to charity, which means it costs you 0.604¢ to donate that dollar to charity.

Purely from that perspective, it makes sense to donate money in years when you’re in a higher tax bracket.

If you think tax brackets could rise in 2026, maybe it’d behoove you to delay charitable giving until 2026, when you could “bunch” charitable contributions from 2024, 2025, and 2026 into 2026. That way you’d get the benefit of bunching (a strategy that can be useful no matter what the tax-rate regime) and you’d be saving taxes at higher tax rates.

I wrote a series of blog posts about creating my family’s charitable giving plan, and it covers tactics we employed to make it more tax efficient, like donating “appreciated securities” instead of cash and the just-mentioned “bunching” of multiple years’ worth of donations into one year.

#2 You’re more likely to itemize—and actually get tax benefits—if TCJA expires. Also changing if TCJA expires is the standard exemption: it’d go down a lot:

Source: fpPathfinder®

You also will be allowed to itemize much more of what are often people’s two biggest expenses: mortgage interest and state and local taxes.

Right now, you can itemize interest on mortgages only up to $750k. That’d change to $1M. (And in places like the Bay Area and NYC, it’s reeaaaaallll easy to get a mortgage that big.)

Secondly, right now you can deduct only $10k of your state and local taxes (known as SALT). Again, if you live in California or NYC, your state and local taxes are likely way more than that.

Thirdly, and probably less impactfully, is that you could once again deduct the fees associated with using an investment advisor. (Thought I’d throw that in there for, you know, self-promotion’s sake.)

Source: fpPathfinder®

So, now you have a lower standard deduction and you’re being allowed to itemize more things, meaning it’s easier to get to the point where it’s worthwhile to itemize deductions because they exceed the standard deduction.

Consider doing this: Delay your charitable contributions to 2026. Between potentially higher income tax rates at that point, and the increased ease of itemizing deductions over taking the standard deduction, this could save you meaningfully in taxes.

Please return to my first comment in this section: the primary reason to donate money is to help people or causes, not to save in taxes.

If you're high net worth, get more assets out of your estate.

There’s too much to think about here, for this one blog post. I would absolutely encourage you to talk about this with your estate planning attorney (and/or your financial planner) .

What’s going on? When you die, any money in your estate above a certain threshold will be subject to a federal estate tax of up to 40%. (Look here for details. Some states also have estate/death/inheritance taxes, but we’re not discussing those.) Right now, that exemption is $13,610,000 per person. If TCJA expires, it’ll drop back down to what is currently estimated at $6,810,000.

Source: fpPathfinder®

Which means that if you have $10M now and die, your estate won’t have to pay any estate taxes and your heirs get all your money. If you were to die in a TCJA-expired world, $3,900,000 of your estate would be subject to estate tax, and your heirs would lose a lot of money to estate taxes.

Maybe you don’t have $10M now. But, you do have $5M, and if you live another 20+ years, and that money is invested and grows, you will have a bunch of money when you die. And then your heirs could still miss out on a lot of money because of estate taxes.

In either case, the overarching strategy being widely discussed now is to move money out of your estate now, when you have that big ol’ $13,610,000 lifetime exemption available to you. You can move your money out of your estate in a variety of ways, from plain vanilla (like funding your child’s 529 college savings account) to more complicated (like family limited partnerships and Nevada Asset Protection Trusts…no, I don’t actually know how these work, I’ve simply spoken with estate planning attorneys who do).

There is so much more to this discussion. Way more information is necessary from attorneys far more knowledgeable than I. This mention is only an amuse-bouche.

The benefits of moving money out of your estate now are the more obvious: Possibly saving your heirs a lot of estate tax.

In my opinion, there are a couple of major downsides to moving money out of your estate now:

  • Complexity: Your financial situation is almost certainly going to get more complex, with more accounts or legal structures to keep track of, and possibly changes to how you access your money/get income. Simplicity is worth fighting for.

  • Reduced access/flexibility: Your access to your money is almost certainly going to be more constrained, and possibly just outright reduced. Moving money out of your estate more or less means that it’s no longer yours to control and use as you want.

    I believe that the younger you are, the more important this is to consider. With so many years of life ahead of you, life is nothing but Uncertainty. Flexibility is a powerful tool in such circumstances.

    As one of my favorite estate planning attorneys observed, you might want to retain all your money unencumbered because, who knows! You might want to emigrate to a different country, buy your own baseball team, start a business, or start a foundation. And who knows what kind of adult your three year old is going to turn into in another two decades.

If you’re 80 and have 10, maybe 20 years left, this decision is one thing. But if you’re 40 and have two young kids and have half a century of life unfolding in front of you? Putting any of your money out of your control is, in my opinion, a risky gambit.

To boot, who knows what estate rules will be when you eventually die (hopefully, decades from now, by which time Congress will likely have changed the rules another 10 times)?

Consider doing this: Talk with an estate planning attorney who is familiar with the strategies necessary to move money out of your estate. But do this well before the end of 2025, because they are going to be slammed by then! It’d be like trying to hire a CPA in March to do your taxes by April 15. By which I mean: Good luck with that, yo.

Blog posts like this actually make me a bit anxious. There’s so much finicky stuff to keep on top of! I can only imagine how thinking about this must affect people who aren’t financial planners.

Just try to keep in mind that these strategies are not the essence of personal finance. The essence of personal finance is: spend less, save more, and don’t do anything stupid (according to Dick Wagner). If you’re not doing those things yet, focus your effort there first!

Would you like to work with a financial planner who can help proactively identify opportunities like this and then figure out whether they’re useful for you and your finances? Reach out and schedule a free consultation or send us an email.

Sign up for Flow’s twice-monthly blog email to stay on top of our blog posts and videos.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.