If you've already managed to set yourself up with financial professionals you trust—a competent investment adviser, an accountant and an attorney—congratulations. You're way ahead of most people when it comes to planning your future.
Unfortunately, you may still not be where you need to be.
Even if those advisers are very good at what they do, if they aren't talking to each other and connecting on your behalf, you're probably not getting the most from your team.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Instead, picture yourself at the center of a sturdy triangle.
At the top, there is a top-notch investment adviser—someone who does more than just transactions, who understands income planning and how taxes can impact your money long-term.
At the bottom left is a trusted accountant who not only does tax preparation, but also is truly knowledgeable about tax planning. There is a difference. While tax preparation happens once a year during tax time, tax planning happens year round. Typically things happen throughout the year that will affect the amount you have to pay in taxes come April. The goal is to reduce the amount of taxes paid by making deliberate choices throughout the year.
And at the bottom right, there's an attorney who can make sure your legal house is in order and you have the proper will or trust in place. Proper estate planning is critical, even though we find it rarely makes it to the top of anyone's to-do list.
There are those who shut down as soon as you use the term "estate." They say, "I don't have an estate; Bill Gates has an estate." In reality, everyone has an estate; they are just different sizes. Who's responsible for yours? You are.
All the corners of the financial triangle should connect to form a strong team. Even if you are working with each of these professionals, they may not be actively communicating with one another. When this is the case, the right hand doesn't know what the left hand is doing, and that can be to your detriment.
When I get together with clients or prospective clients, along with their accountants and attorneys, we each bring our knowledge to the table, and the clients are amazed. Prospective clients often become clients soon after these meetings because someone may have never brought these three important professionals together to form a comprehensive retirement plan for them.
Some advisers feel that if they teach their clients too much, those clients won't need them anymore. I find it to be the exact opposite. The more I educate them, the more value I bring to them.
I always ask people the seven questions every investor should know about their investments:
- Why do you have each investment?
- How do they work?
- Do you know what you're invested in?
- What fees are you paying?
- What are the tax advantages or disadvantages to each investment?
- What income might you expect from each investment either now or in the future?
- What is your exit strategy?
When I ask these questions, I get the same three-word response every time: I don't know.
You should know. This is your future. Your retirement. Your legacy.
Put yourself in the center of a financial triangle and set yourself on the path to financial independence!
Jeff Dixson is the founder, president and CEO of Northwest Financial and Tax Solutions, Inc. He hosts a weekly radio show, "The Jeff Dixson Show: The Retirement Coach," and is the author of "Winning the Retirement Game." As a financial adviser and insurance professional, Dixson believes in preservation of principal and using strategic financial vehicles to generate growth and income.
Securities offered through Madison Avenue Securities, LLC (MAS), member FINRA & SIPC. MAS and Northwest Financial & Tax Solutions are not affiliated companies.
Kim Franke-Folstad contributed to this article.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never OverlookThis estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
