Jul 182014
 

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How often should you review your 401K?

You should evaluate and review your 401k every 90 days because as the markets change, so will your returns in your 401k. It’s amazing to me how many people believe they can retire just because they have a 401k yet they never bother to look at it. That’s just like someone saying, “Well, I must have money in the bank because I have a checkbook.” It just doesn’t work that way.

Avoid these mistakes with your 401k

Just because you have a 401k doesn’t mean you’re on track to retire and achieve your dreams and goals. You might not be putting in enough money on a regular basis to help you reach your goals. Also, the funds allocated in your 401k might be underperforming.

Another mistake many people make is setting up their 401k just like another person who works with them. You should never do this because they could have different retirement and lifestyle goals than you. Also, they may be able to handle more volatility in their portfolio than you can.

The best way to set up your 401k

The best way to make sure your 401k is set up to work towards your goals and the lifestyle you want to have in retirement is to create a financial blueprint. By doing this, you are able to project what kind of rate of return your 401k needs in order for you to reach your goals.

How to consistently track and review your 401k

A financial blueprint will also help you track your 401k so you know the returns it is generating for you. Then you will know if you are really on track to achieve your retirement goals.

Once you set up these basic fundamentals, you will need to review your 401k every 90 days so you can make adjustments according to the changes in the markets.

The 401k that performs the best

The 401k that performs the best is the one where the owner was very active in it and updated it on a regular basis. I have encountered many situations where two different people set up their 401k’s exactly the same but the one that out performed the other did so because that person had a financial blueprint, stayed on top of it, tracked it, and made adjustments with the market’s fluctuations.

How to Create a financial blueprint

I would love to help you create a custom financial blueprint that will help you maximize and review your 401k. You can work with me and our entire team of specialists to build Your Financial House©. You can find out more about that process here. Then you can live confidently knowing you have a plan that is guiding you towards your specific dreams and goals.

Please send me an email here or give me a call at (205) 989-3498. I would enjoy talking with you.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Jun 062014
 

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Question about investing with HELOC

Today we answer a viewers’ question.

Joe writes, “Have you seen any retirees with paid for homes consider opening a home equity line of credit (HELOC), draw down say 50% of the line and invest same in the market.

The HELOC rates are at historic lows and the interest is deductible.  Could be a 5% plus pre-tax profit/ cash flow spread between the dividend income and interest expense.

Not sure that I want the risk and debt but curious if many people do same.”

With a home equity line of credit (HELOC), as long as you are making your payments, you are fine. The moment you miss a payment, however, all the legal agreement was on the side of the bank and not on the borrower’s side.

HELOC risks

In general we don’t recommend HELOCs for anyone because of four main risks.

  1. Interest rates risk
  2. Market risk
  3. Credit risk
  4. Regulatory risk

Banks and HELOCs

Banks like HELOCs as they have the lowest default rates because people don’t want to leave their homes. From a credit risk, however, they can pretty much put whatever they want into a HELOC agreement. 99% banks will reprice your interest rates once a year or renegotiate it. But if your payments aren’t consistent, they can accelerate this increased interest rates.

How HELOCs can change

In 2008 and the real estate market dropped, many people would go into the bank thinking it would be a rate adjustment only to find the bank wanted extra collateral. Then their HELOC becomes a totally different type of loan.

These four risks can work against can work against you singularly or in combination. Now we are not saying HELOCs are bad. What we are saying is that you shouldn’t borrow against your house to go speculating in the markets. HELOCs are structured for an intended purpose and if you deviate from that purpose, there is more danger than pick up.

More questions

Thank you, Joe, for your great question. We ask all our followers to send us your questions and we will do our best to answer them as soon as possible in an upcoming blog and podcast.
Retirees Investing with HELOC
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

May 152014
 

How do you know if you are ready to retire? There are several questions you can ask yourself to help you know. Retirement timing is different for everyone because each of us is unique. There are personality differences as well as financial differences. For most people there are relationship factors that can influence when you are ready to retire. Dependent parents, children, and other relationship can impact your decision to retire.

The good news is that there is a process to help you pick the best time for you to retire when you know you are ready. Retirement should not be just about how much money you have. It should also be about your quality of life, owning your time, hobbies, your values, your family, and other dreams and interests. We have these kinds of retirement discussions with our clients all the time. We would like to help you discover when the best time for you to retire is so that your quality and joy of life will increase.

Give me a call or email me here if you would like to discuss this further. I’d be happy to talk with you. Also, please comment below with your thoughts on retirement timing. I would value your insight and opinion.

Greg Powell, CIMA
President/CEO
Wealth Consultant
retirement

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

Dec 062013
 

Greg Powell, CIMAHow should you evaluate your portfolio in comparison to the record highs of the various stock market indices like the S&P 500 and the DOW? If investors gain a proper perspective on these indices, they can learn much about their investments and how to work towards achieving their financial goals.

Greg Powell, CIMA
President/CEO
Wealth Consultant

Sep 042013
 

Greg PowellKnowing whether you have enough saved for retirement and if it will last, can only ultimately be achieved with a complete financial blueprint. If you do not have a financial blueprint yet, we have a free online tool to help you get a better idea of where you stand.

Greg Powell, CIMA
President/CEO
Wealth Consultant

Jun 222012
 

06/21/12: Here’s a story of a couple in retirement who had a dilemma with generating income. This could happen to anyone. Could it happen to you?

Greg Powell, President/CEO and Wealth Consultant of the independent investment firm, fi-Plan Partners, tells how the couple got into this dilemma and how fi-Plan Partners was able to help them solve it.

Email Greg here if you have any questions or would like to talk further about your financial situation or call him at (205) 989-3498.

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