Category Archives: 401k Management

401k Management Redwood City, 401k Management Menlo Park, 401k Management San Mateo

50 Things: What a Professional Financial Advisor Does for You

William Smith, Horsemouth LLC

If you live in or around Menlo Park, Redwood City, San Mateo or the San Francisco Bay Area and Peninsula, contact Gosho Financial Group today to talk about our world-class service with a personal touch to assist you with a smart 401k plan.

FINANCIAL PLANNING

1. Cares more about you and your money than anyone who doesn’t share your last name.
2. Guides you to think about areas of your financial life you may not have considered.
3. Formalizes your goals and puts them in writing.
4. Helps you prioritize your financial opportunities.
5. Helps you determine realistic goals.
6. Studies possible alternatives that could meet your goals.
7. Prepares a financial plan and/or an investment policy statement for you.
8. Suggests creative alternatives that you may not have considered including the best way to claim Social Security.
9. Reviews and recommends life insurance policies to protect your family.
10. Assists you in setting up a company retirement plan.
11. Assists in preparing an estate plan for you.
12. Reviews your children’s custodial accounts and 529 plans.
13. Helps you determine your IRA Required Minimum Distribution.
14. Provides reminders about key financial planning data.
15. Checks with you before the end of the year to identify any last minute financial planning needs.
16. Guides you on ways to fund health care in retirement.

INVESTMENTS

17. Prepares an asset allocation for you so you can achieve the best rate of return for a given level of risk tolerance.
18. Stays up to date on changes in the investment world.
19. Monitors your investments.
20. Reviews your investments in your company 401k or 403b plans.
21. Reviews your existing IRAs.
22. Helps convert your investments to lifetime income.
23. Refers you to banking establishments for loan and trust alternatives.
24. Suggests alternatives to increase your income during retirement.
25. Records and researches your cost basis on securities.
26. Provides you with unbiased investment research.
27. Provides you with personal investment analysis.
28. Determines the risk level of your existing portfolio.
29. Helps you consolidate and simplify your investments.
30. Can provide you with technical, fundamental, and quantitative investment analysis.
31. Provides introductions to money managers.
32. Shows you how to access your statements and other information online.

TAXES

33. Suggests alternatives to lower your taxes during retirement.
34. Reviews your tax returns with an eye to possible savings in the future.
35. Stays up to date on tax law changes.
36. Helps you reduce your taxes.
37. Repositions investments to take full advantage of tax law provisions.
38. Works with your tax and legal advisors to help you meet your financial goals.

PERSON-TO-PERSON

39. Monitors changes in your life and family situation.
40. Proactively keeps in touch with you.
41. Serves as a human glossary of financial terms such as beta, P/E ratio, and Sharpe ratio.
42. Provides referrals to other professionals, such as accountants and attorneys.
43. Shares the experience of dozens or hundreds of his clients who have faced circumstances similar to yours.
44. Helps with the continuity of your family’s financial plan through generations.
45. Facilitates the transfer of investments from individual names to trust, or from an owner through to beneficiaries.
46. Keeps you on track.
47. Identifies your savings shortfalls.
48. Develops and monitors a strategy for debt reduction.
49. Is a wise sounding board for ideas you are considering.
50. Is honest with you.

Learn more about how a CFP can assist you.

If you live in the San Francisco Bay Area, contact Gosho Financial Group today to talk about our world-class service with a personal touch to assist you with a smart 401k plan.

– William Smith

*Carol Gosho, Principal, Gosho Financial Group with Securities offered through TD Ameritrade Institutional, Member FINRA/SIPC.

 

 

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How Well is your 401k Really Performing?

A very popular retirement vehicle is the 401k. In fact, as of April 2014 there were more than 638,000 401k plans in place with nearly 89 million Americans participating (according to the American Benefits Council).

If you are one of the large number of people using a 401k as your primary retirement investment vehicle, you must learn how to determine the actual performance of your 401k, and do so regularly. Then you’ll be able to have some assurance that your investment choices are working. However, it is not as simple as looking at the end value of your investments for the specified timeframe and comparing it to the figure at the beginning of that period. You could be misled doing it that way.

There are multiple factors that go into the 401k performance evaluation equation. Specifically, you need to know:

  1. How much you contributed in the given period (e.g., 12 months)
  2. How much your company matched (e.g., 100% match of first 5% invested)
  3. What dividends and capital gains were received
  4. How much a mutual fund actually grew in value.

Let’s take a look at two simple scenarios to understand how these 4 factors work together:

Exhibit A

As you can see in these two scenarios, the return on investment (ROI) is quite different even though the market value is the same. The percentage return for Scenario A is 22% while the return for Scenario B is 11%. Even though the portfolios have the same market value, the person in Scenario B contributed more money to the investment, lowering the rate of return.

Once you know the real return on your holdings, you can compare it with a benchmark such as the Standard and Poor’s 500 to see how your investment mix is faring against a broad market index. Of course, this comparison alone won’t be the sole determinant for whether you are receiving an appropriate ROI from your 401k. Your long-term investment goals, age, and risk tolerance also play a part.

So, we hope this information helps you to understand the real ROI in your 401k. It’s crucial that you know that before you take additional steps such as changing your investment mix, or making contribution adjustments. If you have any questions or want further information on this topic, please contact us.

In an upcoming post we will look at determining what your target percentage return on your investments should be in order to retire as planned.

 

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10 things 401(k) plans won’t tell you

Elizabeth O'Brien, MarketWatch, The Wall Street Journal

In 1980 62% of private-sector employees with retirement benefits had a lifetime pension vs. 7% in 2008. The employee is now responsible for providing her/his own retirement income and usually has no idea what to invest in or when. Nor does s(he) know how much is needed to generate retirement income.

MarketWatch, The Wall Street Journal, Feb. 23, 2013– “10 things 401(k) plans won’t tell you”

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