Financial Advice

Contrary to what you may have been told in the past, financial planning is so much more than simply crunching numbers and filing taxes to the IRS. A comprehensive plan can uncover wealth, reveal new opportunities and show possible pitfalls. Financial planning is a diverse field — aimed to help you use your money to enhance your life and well-being.

While some financial advisors may focus on just the number crunching, at Platt Wealth Management we are interested in pursuing the entire financial landscape. We don’t stop at one facet or one event — we dig deeper. 

Our process is about seeing how each aspect of your plan functions unilaterally, but more importantly how they talk to each other and work together to depict the full scope of your financial life. 

This is what true comprehensive financial planning is all about: the ability to blend personal and financial goals that capture the broadest scope of your financial landscape.

What is comprehensive financial planning?

For us, comprehensive financial planning is always about moving forward. It doesn’t stop at one life goal or stall after a milestone — it continues to grow and build as you do. As you know, life is known for throwing unexpected curveballs, and a comprehensive financial plan is able to handle them with grace (and hit a home run in the process).

A comprehensive financial will:

• Foster a solid relationship with you and your advisor
• State your explicit goals and the steps to achieving those goals
• Consist of a synopsis of your current financial status and assets
• Be a unique plan perfectly tailored for you
• Be consistently monitored and adjusted as needed

Our 4 step financial planning process does just that. It gives you a roadmap that will outline your financial goals but also leaves space for growth, development, and change. The foundation of this process is the relationship between you and your certified financial advisor. Through that relationship, you and your advisor will discuss your goals and any concerns that you may have in-depth. 

With a comprehensive financial plan, you are able to create a ‘health plan’ for your finances. It is a detailed record of your goals, resources, risk, and timeline. All of these aspects of your financial plan are analyzed and put together to give you the best chance of financial success. 

How does a certified financial advisor deliver a comprehensive financial plan?

A comprehensive financial plan is best executed by a certified financial advisor — someone with intimate knowledge of the field and who is completely dedicated to your financial growth and development. A financial advisor paints the whole picture for you by helping you define your goals, analyzing your situation, developing and implementing your plan, and continually monitoring its health.

A certified financial advisor will take into account every aspect of your financial situation while developing a comprehensive financial plan. This can include, but is not limited to:

• Management and strategic investments
• Risk (ex: investments)
• Estate, Legacy, College, and Retirement planning
• Taxes
• Debt
• Insurance

By taking into account all of these specific areas, your finances have a greater chance of growing and succeeding. When these areas work and mold together, you will be better able to use each aspect of your financial life to your advantage. These areas all work together to form your financial life. 

What can a comprehensive financial plan do for you?

The advantages of having a comprehensive financial plan are countless: it better protects you, your family, and your assets. The beauty of a comprehensive plan is that it’s prepared for the unexpected detours that life throws your way.

They provide a realistic sense of where you are on your financial journey and concrete steps to get to where you want to go. It’s a step by step process that allows you to reach your goals and gives you the financial confidence you need to have a peace of mind.

A comprehensive financial plan also challenges you by requiring you to think more about your long-term financial goals and what current financial habits need to change to help get you there. Your certified financial advisor is there to help you develop these positive financial habits.

Throughout this process, you’ll develop a deeper, trusting relationship with your certified financial advisor.

A comprehensive financial plan with Platt Wealth Management

A comprehensive plan leaves no stone unturned. Not every financial plan is comprehensive. Unfortunately, more often than not, there are pieces of the financial puzzle that are overlooked and therefore put you, the client, in jeopardy.

At Platt Wealth Management, we analyze every puzzle piece so you, your family, and your assets are protected from any unforeseen financial circumstances.

If you are searching for a complete comprehensive financial plan from someone you can trust, look no further. At Platt Wealth Management, our certified financial advisors put client’s needs first and provide completely transparent services. Are you ready to take control of your financial health? 

Give us a call at (619) 255-9554 to set up a complimentary review or email us here. Let us help you succeed!

In almost every industry and nearly every aspect of life, it is common to seek out second opinions. They help you decide if you are getting the best value for the services that you are paying for. Second opinions are especially helpful when making important, life-changing decisions. You would get a second opinion regarding medical advice, so why should your finances be any different? A once over from a Certified Financial Planner, or CFP can keep you in top financial health.

If you aren’t sure about the state of your financial plans or its future, take the time to look around for other options. Remember, your financial plan should be specific to you and your business and be tailored to fit your unique goals. Your CFP should look at all parts of your financial life.

If you are debating whether or not you need a second opinion on your financial strategy, ask yourself the following questions:

A CFP can analyze if the advice you’re getting is in your best interest.

As sad as it may seem, not all advisors work with your best interests in mind. Some may simply want to receive a little extra commission on the products, tools, and annuities they sell you, which in turn can tamper with their advice. Unfortunately, it’s not uncommon to be sold on bad advice while the “advisor” gets a bonus. But how can you know for sure if the advice that you’re getting is genuine?

Make sure that your financial planner holds a financial planning designation (the most well-known being from the CFP Board). What is so great about a CFP professional is that they have gone, and will continue to go through, rigorous education — the learning process doesn’t stop after the CFP designation is earned.

Instead of solely searching out for a financial advisor, look for the term ’fiduciary’ advisor or Registered Investment Adviser. A person of one of these titles is legally obligated to put your best interests ahead of their own, unlike a broker-dealer. The ‘fiduciary standard’ is that of total and complete, honest protection. 

Last but not least, make sure there are no hidden costs or fees and be upfront with what is in your budget. It’s vital to know exactly how much you are paying for the services that you receive and a reputable advisor will respect that.

A CFP can give you a clear idea of how your portfolio operates.

If you don’t, it’s okay — you are not supposed to be an expert here. However, it is important that your financial advisor explains to you what is and isn’t important within your portfolio. Your financial choices can greatly affect both your short term and long term life, so it’s important to be educated on the basics.

Within your financial portfolio you should:

• Understand the tax-efficiency of your portfolio including asset location, asset allocation, and tax loss harvesting.
• Know the level of risk you have and how that risk intersects with and impacts your short-term and long-term financial goals.
• Be aware of your portfolio’s diversification.

Education of the client is at the core of a healthy financial plan and investment portfolio. At Platt Wealth Management, our ultimate mission is to empower our clients with the knowledge and education to help them understand how their portfolio works and the nuances involved to help keep it running.

A CFP can build a comprehensive financial plan.

Your financial plan should take into account your passions, goals, and pain points. Having a written plan is the first place to start as it will illustrate your goals and how your resources should be maximized in order to help you reach those goals.

Your financial plan should be a roadmap that includes:

• Where you are now and where you want to be
• A detailed timeline on how to reach your future goals 
• A backup plan for events such as fluctuating markets, health concerns, or career changes

What a second opinion from a CFP can reveal.

A second opinion will also help you evaluate the costs you are incurring from your current advisor. Is your current financial advisor discovering new ways to save you money? Is the service you are receiving coinciding with the level of fees you are paying?

If you are searching for an honest, trustworthy second opinion from a fiduciary advisor, look no further. At Platt Wealth Management, we put our client’s needs first and provide completely transparent, fee-only services. Ready to transform your financial future? Give us a call at (619) 255-9554 to set up a complimentary review or email us here.

Financial planning meetings are opportunities for both spouses to ask questions and confirm their financial plan.

During a marriage, many of the household tasks are divided. Finances tend to be one of these tasks. One person takes care of them, and the other pays little to no attention to it. In some cases, one spouse handles the daily money chores of buying groceries and clothes for the kids. The other manages the investments, including the retirement accounts.

There are a number of reasons why the non-financial spouse doesn’t deal with the money or investments.

In the US, money management is still considered to be included in the “male duties”. There’s no particular reason why men have to deal with the money, but it’s often the case. Over half of married women report leaving the dollars to the “dudes”. Surprisingly, millennials are most likely to do so.

Sometimes people never learn how to deal with their finances. Now they’re afraid, either of money itself or that they would make the wrong decisions. Some consider it all a numbers game, and they don’t enjoy dealing with numbers. Or they just find finance boring.

Whatever the reason, both members of a couple should attend the meetings with their financial planner.

When you attend the financial planning meeting, you get to know the financial planner.

Most fee-only fiduciary planners (like the ones at Platt Wealth Management) are looking for long-term relationships with their clients. They want to get to know their clients better to ensure the financial plan reflects the reality of the household.

Even if one spouse doesn’t manage the money for the marriage, they’re still one of the decision-makers in the household. Their questions and tastes should also be reflected in the plan. Good financial planners want to find a balance between risk and reward that satisfies the household. If one is very aggressive and can handle a lot of loss on paper, and one can’t, then the conservative spouse is in for a lot of sleepless nights!

In the past financial advisors sold products on commission, and they were interested in buying and selling stocks to generate those fees. That’s not how it works anymore, and financial planners specifically are focused on the plan and not the products.

Not only do fee-only planners avoid selling products, they don’t want to. They want their clients to be comfortable enough not to panic when the market drops. Whatever questions need to be asked so that doesn’t happen, they’re happy to answer.

Attending financial planning meetings together means a higher chance of success for your financial plan.

Honestly, there’s no use spending all the time and energy to come up with expenses and goals for a financial plan if you’re not going to implement the steps necessary.

Usually a plan requires some work on the client’s part to reach their goals. There may be things the planner recommends outside of the investments.

For example, one or both of you may need to max out your retirement contributions. Or change investments inside your 401(k). Or pull back on current spending to make sure that you have a comfortable retirement.

If you don’t accomplish these things, the plan won’t work. But in order for the steps to be carried out, both partners need to agree to them.

You may find that your idea of retirement or legacy is quite different from your spouse’s. It would be very helpful to know that ahead of time! Your planner can help you figure out what your mutual goals are so both of you commit to making them possible.

That can’t take place unless both of you are in the discussions. Neither of you wants to sacrifice for something the other person wants but you don’t. To make the plan work, you’ll need to come together as a team. One spouse avoiding the plan development isn’t the right answer.

Attending financial planning meetings together means both spouses will feel prepared if they find themselves alone.

The truth is, most women will have a period of time when they’re the only money manager in the household. Although women tend not to handle the finances in a heterosexual marriage, it’s especially important that they have a grasp on the overall financial picture. You may be used to having your husband deal with your money.

But what happens when they aren’t able to make decisions for you? Or you don’t want them to?

 No one gets married planning to split up later, but divorces do happen. The fastest-growing demographic for divorce is those over 50. In other words, it can happen to you. Which doesn’t mean it will.

It’s not just divorce that affects who manages the money. Given that women tend to outlive men, there’s a good chance you’re going to outlive your husband. He might also be incapacitated, even briefly, by an accident or something else.
Wouldn’t it be a smart idea to be prepared? Avoid struggling with the finances on top of everything else if something happens.

It would be a relief to have one thing you didn’t have to worry about because you already knew and trusted your planner. The easiest way to do that is to go to the meetings and develop a relationship with them.

Have you and your spouse scheduled your financial planning meeting yet? If not, please email us or call 619.255.9554. We’re excited to talk to both of you about planning for your future!

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

We put together a quick honey-do and tips list for February tax and romance deadlines.

It may seem contrary to think of Valentines Day and Tax Day at the same time, but for financial planners, it makes perfect sense. Whether you are single or together with someone, you want to have a feel-good plan for that romantic holiday, and the same goes for the IRS. If you want to have a smile for tax day, that means getting started on important deadlines now.

Tax deadlines and romantic tip #1: Get started early.

Although it’s not March yet, now that you’ve received (and/or sent out) your 1099s, consider getting your taxes done. Or as much as possible, if you’re waiting on K-1s or other tax reports that take longer to reach you.

The earlier you get your taxes done, the less likely it is that someone will file a fraudulent report using your tax ID and collect a refund. Here are some more tips on avoiding what’s called “tax identity theft”.

You can get started early for Valentine’s Day. Planning takes research, collaboration, organization and action.

1. Research and reconnaissance.

2. Gift shopping and wrapping. Rough draft of love letter.

3. Reservations and confirmations of scheduled events.

4. Final draft of love letter.

5. Enjoying time together.

Tax deadlines and romantic tip #2: Get the right data.

Your gains and loss report is an important component to your tax return showing the amount of capital gains tax that you may need to pay. As a reminder, tax is owed on the gain if you sold any securities: the difference between what you paid for it (basis) and the price you sold it.

If you sold at a loss instead, use it to reduce the amount of overall gain, and pay less in tax. If your losses exceed your gains by more than $3,000, you can carry them forward into future tax years to offset future gains as well.

A realized gain/loss report provides you with the information about the gains and losses you “realized”, which are what’s taxable. Your unrealized gains and losses are only on paper and won’t become taxable until you sell them.

If you held the security for at least one year before selling, you’ll be taxed at the capital gains rate. This tax depends on your income; those earning less than $78,750 (married filing jointly) pay no capital gains tax. Between $78,750 and $488,850 the tax is 15%, and for those earning over that amount it’s 20%.

Securities held for less than a year are subject to the short-term rate, which is the same as your marginal tax rate.

We also advise getting reliable data ahead of Valentines. Are you sure your romantic partner wants chocolate and a card? Do a little research. Listen closely to your significant other or get together with friends for a brainstorm. Find out what they really want to do. Make Valentine’s Day unique to you. From our own research, cards are out and vacations are popular.

Tax deadlines and romantic tip #3: Be generous.

Companies can capitalize Valentines affectionate glow. Bring in breakfast or pass out custom candied hearts with branded encouragements. If you want to show more love, let staff out early to spend time with family and friends. Go big by increasing your company contributions to employee corporate pension plans.

Employer contributions for partnerships and S-corps are due by March 15 (unless your business is filing an extension).

Checks must be received by April 10th if mailing to PWM. Checks should be made payable to the custodian and reference the account number and tax year in the memo section.
If mailing directly to the custodian, it must be received by April 15th.

Wires and ACH contributions must be in the account and posted by 1:00 pm PST on April 15th. Clients should not wait until the last minute to send in the wire or ACH due to the volume of requests. The custodian may not be able to post the contribution until after the deadline.

April 15 is the deadline for C-corps and sole proprietorships, unless you file an extension. In general, the contribution is due by your filing date.

Otherwise, if you’re filing extensions, the due dates are September 15 and October 15, respectively.

If you would like to open a new corporate pension, please give us a call. You will need to get new account paperwork to us by March 27th.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

For those who are compensated partially or mostly in equity – as opposed to simply earning a salary – it’s important to plan for vesting, exercise, and sale. The tax code regarding equity compensation is fairly complex. Which means stock options provide opportunities for investors if the planning is managed correctly.

Equity compensation is an important component of your financial plan.

Similar to selling a business, you want to plan for these eventualities instead of allowing circumstances to determine your actions. That way you’ll take advantage of the opportunities that are open to you, in the time frame when they’re most tax-advantaged.

Equity compensation is just as important an asset as a house or other investments. It should be analyzed and folded into a comprehensive plan just as other assets are.

Because your equity compensation is in one stock, it creates a diversification problem if you don’t have a financial plan. If your investments are spread out among different accounts, it may be difficult to judge how much of your wealth exactly is concentrated in one stock. Developing a financial plan will help you gauge where you need to diversify.

In addition, many of the advantages of these types of strategies are embedded in the tax code. Developing the right strategy includes taking the opportunities provided by the tax code while marrying the shares with the investment plan. A financial plan with a qualified CFP® professional can help you achieve tax-advantaged wealth.

Equity comp isn’t just for startups, though it certainly applies to them as well! There are large firms all across the US that pay senior executives in equity. Whether the company is large or small, or the compensation itself is large or small, a financial plan that includes these assets is more of an asset to you, especially in regard to your retirement planning.

Type of Equity Compensation: Stock Options/Restricted Stock Units/Employee Stock Option Plans

Tax treatment varies across all these forms of equity compensation. Stock options may be Incentive (ISOs) or Non-Qualified (NQSOs). The timing of vesting, exercising, and selling the shares all must be done within certain limits to ensure their benefits are maximized.

Depending on the amount of these types of stock options, they may result in a concentrated position for the investor. Including these in the financial plan allows the financial planner to coordinate the asset allocation for the portfolio.

The plan will also take taxes into consideration. If you sell your $1 million in revenue accounting firm for its expected 1.2 times, your bank account isn’t going to balloon by $1.2 million once you take taxes into account. You’ll end up with substantially less with a cash payment upfront.

Equity Compensation Strategies: Net Unrealized Appreciation (NUA) and 83(b)

NUA strategies involve a tax-advantaged strategy for taking appreciated employer stock from the company’s retirement plan. The difference between the cost basis of the shares and the stock price at distribution is the net unrealized appreciation. Ordinarily the immediate sale of the stock results in an ordinary income tax on the difference. This can be significant for highly appreciated stock.

When the employee takes a lump-sum distribution with an NUA strategy, net unrealized appreciation is excluded from income. Tax is deferred until the company securities are sold. At which time they’re taxed at the long-term capital gains rate, instead of ordinary income.

This strategy has to be balanced against the risk of holding these securities long-term for a concentrated position.

Including the analysis in a financial plan will show the difference between taking the ordinary income hit while diversifying, and having a concentrated position for some period of time. But selling later at capital gains rates instead.

The 83(b) election is an opportunity to pay taxes on the value of shares when granted.

This may be especially valuable for startups, when the fair market value is likely to be lower. Otherwise the shares are taxed when vested.

If the company’s shares are growing, it’s best to pay taxes at grant. However, if the company’s shares decline, then it would have been better to pay at vesting instead.

Minimize the Risk of Concentrated Equity Holdings

Depending on how much of your compensation is in the equity of your company, you may be able to diversify away from this position in other accounts. Such as your regular taxable account or even your retirement account. Your financial plan will show how much needs to be peeled off from company stock over time in order to achieve the portfolio’s target allocation.

However, some firms require that their senior people maintain a certain amount or percentage of the portfolio in company stock. Or, you may be new to financial planning and simply have allowed the shares in your company to accumulate to this point.

Whatever the reason, your portfolio may be concentrated in one stock. A good financial planner can help you minimize the effects of holdings and take into account the cost of hedging. If possible, the planner may be able to set up a 10(b)5-1 plan that allows the regular selling of company stock, for certain officers of a company.

Equity Compensation: 10(b)5-1 Plans

At the top of the organization chart, there’s a tension to be managed. Ensure that the leaders of the company have sufficient “skin in the game” so that they’re incentivized to grow the stock as much as possible. Also make sure each officer can maintain a  sufficiently diversified portfolio.

Because the stock sales of certain eligible executives can be made public, it’s key for a healthy business to ensure that these sales don’t tank the stock price. It also protects the execs from accusations of insider trading. They can show that the stock sale was made in accordance to a plan filed with the appropriate regulators, for the purposes of diversifying their own portfolios.

The instrument for this is the 10(b)5-1 plan, named after its section of the tax code. Including it in the financial plan means that the stock sales will not adversely affect any other financial moves.

It also allows the planner to ensure that the portfolio’s targeted allocation will be reached in a certain period of time, by the scheduled sale of a concentrated stock position.

Executive Deferred Equity Compensation Plans

As with so many of the equity compensation strategies discussed here, timing and concentration of stock are key factors in deferred comp strategies. Technically 401(k) and pensions are deferred compensation plans too, but they are qualified plans administered by ERISA. Here we are referring to nonqualified plans for executives only.

The company sets aside a guaranteed amount of income for the executive, usually with provisions to pay out early if they’re disabled or die prematurely. It’s a good retention strategy to keep key employees at the company. Certain conditions must be fulfilled in order for the executive to claim the compensation at retirement.

However, as they’re not subject to ERISA, these plans do carry the risk that all the assets in the plan may be lost. Employees who are counting on this money at retirement could end up with an unpleasant surprise. That’s why it’s key to consider this as part of a financial plan, so that you understand the risks and know how much you can contribute without jeopardizing your retirement. These are usually utilized only by execs who have already maximized the tax-advantaged 401(k), FSA and HSA possibilities.

Equity Liquidity Events

When the company is merged, acquired, or sold, the senior executives often find themselves awash in liquidity. This is where a financial plan can be extremely important in order to avoid spending down the largesse, or even being taken advantage of by savvy salespeople.

Use a financial plan to manage or optimize a liquidity event.

A comprehensive financial plan is tailored to your specific financial goals. Managing a liquidity event properly can help you achieve those goals. It may even allow for new or bigger goals to be set, depending on the size of the event.

If you have kids to put through college, a liquidity event could be your answer. You might be able to prevent your children from taking on too much student debt. Most financial planning software systems contain recent data for costs for most colleges and universities in the US. There are tax-advantaged accounts that can be utilized as well (529 and 529ABLE accounts.)

Or you may be thinking about legacy planning, and a financial planner can help you do that in a tax-efficient way. There are a number of ways to set aside money for charitable purposes. Planning this in advance allows you to take advantage of the opportunities still left to investors in the tax code.

If you’ve identified a potential need for medical cost planning in the future, money from the event may be set aside in a specific vehicle for this purpose.

And so on; the money can protect against some “holes” identified in the household’s needs.

Your financial planner may also recommend the services of a trusted estate planning professional, who can set up the appropriate trusts and legal concerns. Especially in California, it’s important to keep as much out of a probate estate as possible.

Is equity compensation an important part of your financial life? Email us to discuss creating a financial plan today.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.