- ‘Advisor’ vs. ‘Adviser’: What’s the Difference?
The terms “advisor” and “adviser” are often used interchangeably, leading to confusion about whether there’s a meaningful difference between the two. At first glance, these words appear to be simple variations in spelling, but their usage and implications can vary depending on context. From legal and professional designations to stylistic preferences in writing, understanding the… read more…
- Ask an Advisor: When Do I Have to Take RMDs from the 401(k) That I Inherited from My Wife? She Hadn’t Turned 72
I am 74 years old (I was born Feb 2, 1948). My wife and I both worked for Aetna, but have retired and have 401(k)s from work that are with Vanguard. I received her 401(k) as a spousal inheritance and maintain it in a separate account. I plan to take RMDs on her account but… read more…
- Ask an Advisor: Our Long-Term Care Insurance Now Costs $500 Per Month. We’re in Our Mid-70s and Have Paid $72k in Total. Should We Cancel Our Policies?
My wife and I bought long-term care policies 25 years ago when they were relatively cheap. Now, our premiums have increased for the third time to over $500 per month and will rise again in six years. I figure I’ve already paid about $72,000 in premiums. Now, in our late 70s, I’m trying to decide… read more…
- What Is a High-Yield Corporate Bond?
Corporate bonds, which are a type of debt security, function as a tool for corporations to raise capital. A high-yield corporate bond offers higher interest rates than a typical corporate bond because it carries a higher risk of default. The “high yield” refers to the greater interest or coupon rate that investors receive as compensation… read more…
- Here’s How to Help Your Child (or Grandchild) Buy a Home
Saving for a down payment can be a significant obstacle for first-time homebuyers. If a child or grandchild is struggling to become a homeowner, you may want to help them out with the assets you’ve managed to accrue. A recent report from J.P. Morgan outlined several techniques that can help parents and grandparents lend a… read more…
- Ask an Advisor: I’m 5 Years Away From RMDs But Recently Lost 30% of My 401(k). Should I Stay Aggressive to Regain My Losses or Rebalance?
When I retired in September 2022, my 401(k) was invested aggressively (90/10 split between stocks to bonds) and lost approximately 30%. I left the 401(k) invested in mutual funds in hopes it would gain back some of the losses. A year later it has gained back approximately 20%. I’m not required to take RMDs for… read more…
- Ask an Advisor: What Should I Do With the Annuity I’m Inheriting? Take a Lump Sum, Roll it Over or Defer Payments?
I recently learned that I am the beneficiary of an annuity in the amount of $54,845 from a friend. I was given choices on how to receive the money: lump sum, roll it over or defer the payments over a certain number of years. I don’t have anything saved for retirement and I don’t know… read more…
- Personal Representative vs. Executor: Key Differences
Personal representatives are tasked with managing estates when people die, either according to the terms of their will or the state laws that govern certain successions. An executor is a type of personal representative who’s specifically designated in someone’s will to carry out their final wishes and distribute their assets. A financial advisor can be… read more…
- What Financial Advisors Have to Say About the ESG Controversy
Environmental, social, and governance (ESG) investing has become a fiercely debated trend within the financial sector. While some view ESG factors as crucial considerations, others argue these criteria are politically motivated and detract from returns. Financial advisors say that personal values, such as ESG, can guide a viable investment strategy. However, they add, investors focused… read more…
- Are Trust Distributions Taxable?
Dealing with trusts and their tax rules can be confusing, especially with different types of distributions and varying tax brackets for beneficiaries. A financial advisor can help you manage these details and understand how they affect your situation. Here are some key details to consider. How Trusts Work Trusts are intricate legal arrangements used for… read more…
- Ask an Advisor: I’m 49 With $500k in Savings But ‘I’m Concerned’ About Retirement Income and Annuities Are ‘Too Expensive.’ What Are My Options?
I’m 49 years old and I’ve had a steady job for over 15 years now as a government contractor. I plan to retire at around 65. I have $500,000 in savings between my 401(k), IRA and individual savings accounts. I’m renting, I don’t have any debt and I have a small family of three. I’m… read more…
- What Is GDC for Financial Advisors?
A gross dealer concession (GDC) gets paid to a brokerage firm when a financial product is sold by a salesperson or financial advisor on commission. These products include securities like stocks, bonds or mutual funds, as well as insurance products like annuities or long-term care. A percentage of that GDC will also get paid to… read more…
- Ask an Advisor: Is it Better to Work With an Independent Advisor or One From a Large Firm?
Is it best to work with an advisor who’s independent or part of a large firm? I am not investment savvy and I’m entering retirement. I need to make sure I hire someone or a firm that is going to help and maybe is somehow insured. -Sharon That’s a great question, Sharon. I’ll provide some… read more…
- Family Offices and Ultra-High-Net-Worth Families
Does your wealth management strategy feel inadequate? In the complex world of wealth management, ultra-high-net-worth families often find themselves needing more personalized and comprehensive services than traditional wealth advisory firms can provide. This is where the concept of family offices comes into play. Family offices are private wealth management advisory firms catered particularly to ultra-wealthy… read more…
- Ask an Advisor: I’m 67 with $750K in a 401(k). How Can I Preserve This Money for the Rest of My Life?
I am in a quandary about how to invest $750,000 that’s in my 401(k). I’m 67 years old, retired and I have not started taking Social Security yet. What is the best way to preserve this money for the rest of my life that doesn’t have high fees? -Terry As you know, the big challenge… read more…
- AUA vs. AUM: How Do They Differ?
Assets under management (AUM) refer to assets on an advisor’s platform that they can directly manage and execute trades for, either on a discretionary or non-discretionary basis. In contrast, assets under advisement (AUA) are assets the advisor provides guidance on but cannot trade due to logistical limitations, such as 401(k) accounts. Here’s an overview of… read more…
- Can Financial Advisors Accept Gifts From Clients?
The financial advisory industry has rigorous rules that apply specifically to the acceptance of gifts from clients. These regulations help uphold a transparent and ethical financial advisor-client relationship, which can minimize potential conflicts of interest. Financial advisors who dismiss these rules may face repercussions, including fines and license suspensions or revocations. Here’s what you need… read more…
- Finding a Financial Advisor as an American Expat Overseas
Living abroad introduces new layers of complexity to personal finance, especially when managing investments, taxes and retirement across borders. An expat financial advisor can help address issues that are unique to Americans living overseas, such as FATCA compliance, foreign income reporting and where to bank. An advisor may also offer insight into cross-border estate planning… read more…
- Where Airfare Increased the Most Year Over Year – 2023 Study
Finding a flight at a reasonable price is easier said than done, whether for summer travel, family visits or trying to book ahead of holiday surges. However, data shows that what you pay largely depends on where you live: Flight prices at some airports are increasing much more than others. To track where people and… read more…
- Which Professional Do I Need for the Tax Calculation of a Roth Conversion? A CFP, Financial Advisor or Tax Preparer?
Which professional do I need for the tax calculation of a Roth conversion? A CFP, financial advisor or tax preparer? I’ve reached out to tax preparers before but they seemed to have no idea what I was talking about. My income right now is very low so I would like to take advantage of this… read more…
- What Is a Trade Signal?
Investing in the financial markets can be a challenging endeavor. Trade signals are one tool that traders, investors and financial advisors use to navigate the complexities of the markets. These signals, which can indicate when it might be profitable to buy or sell a security, can help investors and financial professionals make informed, objective decisions. … read more…
- Ask an Advisor: I’m Selling My House and Netting $400k to Pay Off My Retirement Home. Do I Have to Pay Capital Gains Tax?
I am selling my house and the price is $504,999. After paying off this house I will net $400,000. Do I have to pay a capital gains tax as I’m planning to pay off my retirement home with the money I netted? – Thomas Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be… read more…
- Ask an Advisor: How Do I Pay Off $31K in Credit Card Debt in 2 Years? I Have $14K in Cash and $9K in Retirement Savings
I am 37 years old, married with three children. I have a credit card debt of $21,000 with a 24% interest rate. I also have a time-limited, no-interest credit card balance of $10,848 that is due September 2023. I have $14,000 in liquid cash and $9,000 accessible in a retirement plan. My net income is… read more…
- What Are the Qualified Charitable Distribution (QCD) Rules?
An individual retirement account owner aged 70 ½ or more may be able to withdraw money from the account tax-free and use it to support favorite causes with a qualified charitable distribution (QCD). However, a number of rules govern QCDs, including age requirements and restrictions on the types of retirement accounts. A financial advisor can… read more…
- Ask an Advisor: Is it Wise to Convert 10% of My 401(k) into a Roth IRA Each Year to Avoid Taxes and RMDs?
Is it wise to start converting my 401(k) into an IRA (and then Roth) by 10% per year in order to avoid having to claim too much income each year when converting and also avoid RMDs as much as I can? – Cathy Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be… read more…