Year-End Financial Planning

In this episode of Beyond Investments, Seth and Rick give the weekly market update and discuss the impacts of COVID. In Part 2, they discuss year-end financial planning.

What's In Your Financial Checklist?

By Frederick A. Fisher MS, CFP®

Rick Fisher, Ostrofe Financial Consultants

While many of us are spending more time at home due to COVID-19, this may be a good time to work on our personal finances. One way to start is to create a financial checklist to make sure we are addressing all important aspects of our financial lives. Though not in any order, the important thing is to address each item as appropriate.

A good place to start is with a budget. A realistic formalized budget can help build a solid financial foundation. This will help the household finances grow and keep financial goals on track. The key to an effective budget is ongoing monitoring and making realistic goals that can adapt to changing circumstances.

Next, have you set a goal for building an emergency fund? This fund can be used for unforeseen expenses. A reasonable goal is three to six months of basic living expenses. Depending on your budget, this may take a year or two to accumulate.

A retirement savings plan should also be toward the top of the list. This goal is more long-term than the emergency savings and will take decades to build. This will be vital for a comfortable retirement. Setting a realistic goal will depend on income, number of years till retirement, and expected cash flow at retirement. In order to achieve your emergency fund and retirement savings goals, it will be important to fund these as a non-discretionary expense, along with housing, food and transportation expenses.

One of the most neglected financial items on our checklist is life insurance on the wage earners. No one expects an untimely death but should a wage earner die it can leave a family financially and emotionally devastated. There are many tools to estimate how much is needed, and many types of insurance to fit almost any budget or goal.

Another often neglected item on a financial checklist is estate planning. Items like wills, trusts, and powers of attorneys are critical for proper financial management and protecting the family from unnecessary cost and delays in estate settlement. Using an attorney who specializes in estate planning is important; he or she will be able to recommend a plan that is appropriate and affordable.

The last item on our financial checklist is tax planning. Proper tax planning can save you money and prevent tax surprises, which can be costly and usually avoidable. From proper withholding, deduction tracking, and capital gains management, there are plenty of items that need to be monitored. This

financial checklist is just a start and can be expanded to include proper casualty insurance coverage as well.

Should you want more information on our financial checklist give us a call at 530-273-4425 and discover our beyond investments approach.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Frederick Fisher is a Registered Representative with, and Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Ostrofe Financial Consultants, Inc., a Registered Investment Advisor and separate entity from LPL Financial.

For questions or suggestions, contact Frederick at (530) 273-4425, or frederick.fisher@lpl.com, or visit ostrofefinancial.com. Branch address: 420 Sierra College Drive, Suite 200, Grass Valley.

Year End Tax and Investment Planning Can Help You Avoid Tax Surprises and Save You Money

By Frederick “Rick” A. Fisher, MS, CFP®

This article was originally published in The Union on November 19, 2017. Click to view the PDF.

As the holiday season approaches, many of us are planning for all the events that the season brings. This is always a very busy for all of us. In the midst of it all we often do not set aside time for one of the most important tasks of the year. One that if we made a higher priority, could potentially save us hundreds if not thousands of dollars each and every year. What I am referring to is year end tax and investment planning! Now is the time we should be taking a look at where we are year to date in our investment and tax goals.  

The items we need to check on are many, but I will focus on three: Retirement Plan Contributions, Charitable Deductions and Payroll Withholding Options. 

To illustrate, we will take the hypothetical case of the Smiths. Greg is a self-employed consultant, and his wife Jan is a nurse at the local hospital. Greg and Jan each make around $80k per year. They are both 52 years old, want to minimize their tax liability and maximize their retirement funding. 

Greg currently has as SEP IRA that he has funded for many years. However, some years he has not had the cash necessary to fully fund his SEP. Since the limits to fund the SEP are based on his self-employed income, which fluctuates year to year, the amount changes year to year. This year, he decided to track his income each month and then save 20% of that number, put it in savings so he would have enough to fully fund this year and subsequent years till retirement. 

In order to prepare for their year-end tax planning meeting with their CPA, they gathered information on year to date retirement plan funding and reviewed what they had given so far to charity. Greg had invested $15k in his SEP so far, and has another $5k in savings that is earmarked for additional investment if possible. Jan has been deferring 5% of her income into the hospital’s 401k in order to receive the full match of 5%. They have a goal of contributing 5-10% of their take home to a list of local charities. Upon review, they had to date donated $3k in cash and approximately $1k in furniture, clothing and books to a local Thrift Store. That calculates to 4%, so they made a list of donations they planned to make before the year end. Finally, Jan reviewed her latest pay stub, to see if her YTD withholding was just right per income projection. Their goal was to have the withholding cover her income, and to avoid having the government holding her money for the year. They reviewed these items with their tax professional and left the meeting confident that they were on track for the year and that they would not have any tax surprises come April. If you are not certain of where you stand regarding your financial and tax goals, contact your financial professionals for a year end planning review.

Frederick Fisher is a Certified Financial Planning Practitioner, and Insurance Agent with Ostrofe Financial Consultants, Inc. managing over $208 million in assets, with clients in 29 states.  Advisory services provided by Ostrofe Financial Consultants, Inc., a registered investment advisor.  Separate advisory and securities services may be provided by National Planning Corporation (NPC), Member FINRA/SIPC, and a S.E.C registered investment advisor.  Ostrofe Financial Consultants, Inc. and NPC are independent and unrelated companies.  Please consult with your representative to confirm on which company’s behalf services are being provided.  For questions or suggestions, contact Rick Fisher at (530) 273-4425, or rick.fisher@natplan.com, or visit ostrofefinancial.com.  Branch address: 565 Brunswick Road, Ste. 15, Grass Valley.

This item is historical and based on information that was current at the time of initial print.  It contains information that has changed.  Staff and business names may have changed.

Long-Term Care Insurance: Don't Grow Old Without It

By Frederick "Rick" A. Fisher
This article first appeared in The Union on Feb 21, 2016. Click to view as PDF.

“Medicare And You 2015” reported that 70 percent of Americans 65 or older will need long-term care in their lifetime. With the average cost of a private room at a nursing home at $240 per day, and the average stay for non-Alzheimer’s patients at just over two years, many of us will have to come up with over $200K for care. For patients with Alzheimer’s, that cost could easily double.

Unlike auto and home insurance which are pretty much mandatory, LTCi is still optional. However, if you look at it from a risk-reward standpoint, it should be the most desired insurance for Americans 50 to 70 years old.

In the 20-plus years that we have been offering LTCi, the biggest hurdle to purchasing this valuable insurance is the cost. Fortunately, in the last few years, the numbers of options to purchasing long-term care has increased. There are now products to fit almost any budget — to at least cover part of the risk.

Let’s consider the situation for two fictional couples.

The Thomases and Smiths are both in their mid-50s and in good health. The Thomases have a substantial net worth and a large number of liquid investments. Their parents both lived long, healthy lives without needing any long-term care. Their biggest concern is to pass on assets to their heirs.

A universal life insurance policy with a long-term care rider provided the Thomases with protection against an early death and a long-term care financial burden. By using a portion of their liquid investments, the Thomases converted $100,000 into $250,000 of death benefit and $400,000 of long-term care benefit.

The Smiths’ perspective regarding long-term care is different than the Thomases. Mrs. Smith’s father needed skilled nursing care in a long-term facility. With no insurance in place, the financial burden became overwhelming.

The Smiths could not plan to rely on their savings to cover any potential long-term care costs, so we focused on finding the right insurance product to fit their budget — and reduce their risk as much as possible.

By utilizing a traditional term LTCi policy with a reasonable annual premium, the Smiths successfully protected nearly all of the $240 average daily cost.

The moral of the story — get current information on the pros and cons of Long Term Care insurance relative to your specific circumstances. Research all the new options available. Long-Term Care insurance might be expensive. Being without long-term care can be devastating.

Call us for a consultation and let’s check your needs before it is too late!

Frederick Fisher is a Certified Financial Planning Practitioner and Insurance Agent. Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through Ostrofe Financial Consultants, a Registered Investment Adviser. Ostrofe Financial and NPC are separate and unrelated companies. For questions or suggestions, contact Rick Fisher at (530) 273-4425, or rick.fisher@natplan.com; branch address: 565 Brunswick Road, Ste. 15, Grass Valley, CA 95945.