Dealing with the Loss of a Spouse

Contributed by: Sandra Adams, CFP®, CeFT™

Whether you have time to prepare for it or it is sudden, the loss of a spouse is one of life’s most traumatic events. For most, it means the loss of one’s soul mate and life partner, one with whom so many past memories and future goals and dreams are woven.  If you have recently lost a spouse or know someone who has, it is an understatement to say that there is an initial feeling of being overwhelmed – there is so much to do at a time when you feel the least capable (and the one with whom you’ve always shared the decision making duties in the past is no longer there to help you). There seem to be lots of people around but you are feeling numb, lost, and alone. 

To make things a little easier to handle at this time, you can break things down into things you really need to do now, things that need to be done soon, and things that can be done later. 

There are very few things that need to be done immediately/now (see my previous blog: Dealing with Death: A Financial Guide). We often encourage clients at this time to do only what is absolutely necessary and leave any bigger decisions for much later when you find yourself in a better place where you can think more clearly and confidently. This space we provide is called the Decision Free Zone – it gives you permission for yourself (and others) to not make any big decisions until you are comfortable moving forward in this time of transition.

Starting soon, it’s important to make sure you are taking care of yourself; eating well, trying to get enough rest, exercising, and trying to stay social. Support groups and counselors can be extremely helpful during this time. You will also need to meet with your professional advisors to make sure needed details and changes are taken care of on financial accounts, legal documents, etc. You will work with your financial planner to determine your income and budget needs for yourself going forward during this transition period, determine how cash will flow, etc. Decisions during this time can take months to years to refine and complete.

Later (and depending on the person this can be a few months or a few years since your spouse’s death), you will be able to look forward and visualize your new life and future. You will be able to work with your advisor to create a Bliss List that will include new goals and a plan for your “new normal.” You will determine: how you want to live your life going forward; what makes you feel joyful and fulfilled; and what is on your bucket list that is left undone? 

The devastation that you feel with a loss of a spouse seems insurmountable. With time, self-care, and the help of your financial planner who can hold your hand through the painful transition, for as long as it takes, you will be able to get through this! If you or someone you know has suffered the loss of a spouse and could use our guidance, please contact us at Sandy.Adams@centerfinplan.com.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Opinions expressed are those of Sandra Adams and are not necessarily those of Raymond James. Raymond James Financial Services and its advisors do not provide advice on tax or legal issues, these matters should be discussed with the appropriate professional.

Maximizing your 401k Contributions: Nuances to Save you Money

Contributed by: Nick Defenthaler, CFP®

When we’re first starting our careers, we’re always told to at contribute at least the minimum needed to get the full company match in our 401k plans (typically between 4% and 8%, depending on how your plan is structured).  “Never throw away free money!” is a phrase we use quite often with children of clients who are starting their first job out of college. What about, however, those who are well established in their careers, and are fully maximizing 401k contributions ($18,000 for 2017, $24,000 if you’re over the age of 50)? They shouldn’t have to worry about not receiving their full employer match, right? Well, surprisingly, depending on how your 401k plan is structured at work, the answer could actually be yes!  

Let me provide an example to explain what I’m referring to:

Let’s say Heather (age 54) earns a salary of $400,000 and elects to contribute 10% of her salary to her 401k.  Because Heather has elected to contribute a percentage of her salary to her 401k instead of a set dollar figure, she will actually max out her contributions ($24,000) before the end of August each year.  Let’s also assume that Heather receives a 5% employer match on her 401k – this translates into $20,000/yr. ($400,000 x 5%). If Heather does not have what’s known as a “true up” feature within her plan, her employer would stop making matching contributions on her behalf in August – the point at which she maxed out for the year and contributions stopped. In this hypothetical example, not having the “true up” feature would cost Heather nearly $7,500 in matching dollars for the year!

So how can you ensure that you’re receiving the matching dollars you’re fully entitled to within your 401k? 

The first thing I would recommend is reaching out to your benefits director or 401k plan provider and asking them if your plan offers the “true up” feature.  If it does, you’re in the clear – regardless of when you max out for the year with your contributions, you’ll be receiving the full company match you’re entitled to. 

If your plan does not offer the “true up” feature, and you plan on maximizing your 401k contributions for the year, I’d strongly suggest electing to defer a dollar amount instead of a percentage of your salary. For example, if you’re over 50, and you plan on contributing $24,000 to your 401k this year and you’re paid bi-weekly, it might make sense to elect to defer $923.07 every pay period ($923.07 x 26 pay periods = $24,000). By doing so, you’ll ensure you maximize your benefit by the end of December and not end up like Heather, who maxes out before August and potentially loses out on significant employer matching dollars.  

Subtle nuances such as the “true up” 401k feature exist all around us in financial planning and they can potentially have a large impact on the long-term success of your overall financial game plan. If you have questions on how to best utilize your employer’s 401k or retirement savings vehicle, please don’t hesitate to reach out to us for guidance.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

Examples are hypothetical and are not representative of every employer's retirement plan. Not all employers offer matching 401(k) contributions. Please contact your employer's benefits department or retirement plan provider for terms on potential matching contributions.

Mobile Check Deposit Coming to an Investor Access App near You!

Contributed by: Clare Lilek

The Raymond James Investor Access mobile app continues to get more convenient for its users. As long as you have the most up-to-date version of the Apple or Android application, you can now use it to deposit checks into your Raymond James accounts. You can deposit a check into almost any retirement and brokerage account that is linked to your Investor Access—only SIMPLE IRAs, pledged, and minor accounts are not included in this feature. You simply choose the destination of the account, enter in the check amount, and then snap a picture of the front and back of the check and the check will be deposited to your account!

Deposit limits correspond to the monetary size of your Raymond James relationship. See this handy chart below to know your daily deposit limit:

Helpful Tips and Exceptions

• Checks you can NOT deposit include:

  • Fee payments

  • Foreign Checks

  • Rollover Checks

  • Account Starter Checks

  • Please send any of these above types of checks to us, and we can deposit them for you.

• IRA Contributions

  • You can deposit these checks using the mobile check deposit

  • During January up until tax day, you will be able to choose your contribution year (current or prior year)

  • The app will not let you contribute over the allowed amount

• 3rd party checks are available for deposit

If you have any questions on using this new feature, check out the FAQ page from Raymond James.

The mobile check deposit feature on the Investor Access App is for your convenience. If you don’t have Investor Access, you can enroll here. When in doubt, however, feel free to send your checks our way and we will deposit them in the correct account on the day we receive them. We are always happy to help you with our friendly and traditional in-person service – let us know how we can help you!

Clare Lilek is a Challenge Detroit Fellow / Client Service Associate at Center for Financial Planning, Inc.®

Saving for Education for a Future Grandchild: Roth IRA vs. 529 Plan

Contributed by: Matthew E. Chope, CFP®

Congrats – you have a new grand-baby on the way! During all the excitement, the reality of the future may set in: future education expenses. “Where is one of the best places to save for our unborn grand-baby?” This very question was asked by a couple in their mid-50s a few weeks back. They have modest income, earn about $100,000 a year, and are currently funding retirement based plans at work. Furthermore, they take advantage of the full match by their employers and benefit from a deduction at the 25% bracket. The folks that asked the question will most likely not be in the 25% bracket during their non-working years of retirement. So, they likely are correctly benefiting from the personal tax arbitrage within their income brackets now vs the expected future. These folks are working towards being on track for retirement by 68 which is a little longer than most trying to achieve such a goal. But they are doing OK with that timeframe and are working as long as they need to. They also have some limited discretionary income remaining ($200-$300 a month) to save for this new goal of potential education for future grandchildren.

Why a Roth IRA might be better than a 529 Plan in this situation:

• In this case, while both vehicles provide tax-free growth, the Roth IRA can help provide added flexibility.

• There is no impact on the FAFSA (Free Application for Federal Student Aid) calculation with the Roth IRA (there is generally no impact with a 529 if a grandparent is the owner of the account, but if the owner is changed to a parent, that could have a negative impact just about the time you don’t want it to!).

• There is generally more investment flexibility with the Roth. There are more investment options offered and 529s are limited on the number of trades allowed on an annual basis.

• Probably one of the largest benefits for the Roth IRA is that you don’t have any tax or tax penalties if the grandchild decides not to go to school, or if the money is needed for an emergency or for your retirement safety net instead.

College saving is never one size fits all. Please contact us with assistance in helping to determine the most suitable college savings strategy to help implement for your family. We are always happy to help!

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc.® Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions.

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The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Mathew Chope and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. Investments mentioned may not be suitable for all investors. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Webinar in Review: Stock Option Optimization

Contributed by: Emily Lucido

If you have non-qualified stock options, restricted stock units, or incentive stock options but don't fully understand them, you're not alone. What exactly are stock options? Why do employers offer them? How do they factor into your overall financial game plan? In a recent webinar hosted by Nick Defenthaler, CFP®, he answers all these questions in a simplified manner and discusses what it could mean to be offered a stock option from your employer and how to go about maximizing them.

Employee stock options can be an incredible add-on to employee compensation. Typically, those that are eligible are people within a higher level executive position at their workplace, or are with a startup firm. In most cases, employers use stock options as a way to attract, retain, and motivate employees which can then potentially drive up the company stock price.

What is vesting?

One very important part of stock options is the vesting schedule. Every company has a different structure for vesting. The vesting schedule can depend upon a variety of things including the company you work for, as well as, your position at the company. The chart below represents a three year vesting schedule:

In the above example, each year, you receive 33% more of the stock options, ultimately leading you to year three where you end up with 100%, having access to all options (which is where the incentive to stay with your employer comes in). So, if you were to leave the company in year two, you would only end up with 67% of options vested.

What are the most popular forms and how do they function?

• Non-Qualified Stock Options (NSO)

  • A written offer from an employer to sell stock to an employee at a specific price within a specific time period

  • With NSO’s the market price has to be greater than the exercise price for the option to have value

    • Can be seen as a more risky form of equity compensation

  • Tax implications: when you are granted or “given” stock options, there is no tax

    • If you exercise those options there could be a taxable event if there is a gain

    • The gain is taxed as ordinary income, as a form of “compensation”

• Restricted Stock Unit (RSU)

  • Similar to NSO’s, RSUs are a written offer from an employer to sell stock to an employee at a specific price within a specific time period

  • Main difference: As long as the company stock has value there will be value in your stock option. It is not determined by the market price as NSO’s are

    • Can be seen as more conservative form of equity compensation

  • Tax implications: Same as NSO’s - when you are granted or “given” stock options, there is no tax liability

    • Tax is due upon vesting

    • Also taxed as ordinary income, as a form of “compensation”

    • In most cases, we recommend selling the shares of RSU once they vest, in order to reduce risk and to diversify

An important note when thinking of stock options and whether to exercise or not:

“Don’t let the tax tail wag the investment dog.”

• Simply put, don’t let taxes be your only reason for deciding whether to exercise or not

• If you choose not to exercise because you are worried about the tax implications, the stock could easily go down in price, losing the potential gain you could have made

Overall, stock options have many benefits to them and can be extremely valuable when used effectively. There are many more opportunities you can take advantage of, so take a moment to listen to the webinar below as Nick goes into more detail on what you can do to effectively manage your portfolio when considering your stock options.

Emily Lucido is a Client Service Associate at Center for Financial Planning, Inc.®

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This information does not purport to be a complete description of employer stock options or employer stock option planning strategies, and should not be construed as a recommendation. This information has been obtained from sources considered to be reliable but we do not guarantee that it is accurate or complete. Opinions expressed are those of Emily Lucido and are not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

5 Steps for When You're in the Retirement Home Stretch

Contributed by: Laurie Renchik, CFP®, MBA

It’s the home stretch! Important retirement decisions during the five to ten years before you leave the workforce can easily create more questions than answers. Dropping to the bottom line, one way to describe retirement readiness is getting in step with financial and lifestyle matters before you stop working. 

What to do? Start with the big picture and think about what the ideal retirement looks like for you. Maybe you have already dropped to the bottom line and have a preferred timeframe in your sights. Either way, below are five steps to help.

Five Fundamental Steps to Help Guide Decisions Leading Up to Your Retirement Day:

1. See When You Can Realistically Retire
   It’s not a simple decision. Start with getting a general idea about out how much money you’re likely to spend each year. Some expenses drop off like payroll taxes, retirement savings, and potentially mortgage debt. Additional expenses may surface like extended travel, bucket list items, or higher than average health care costs.

2. Make a Plan to Pay Off Your Debt
   While you are still working, review all outstanding debt. Personal loans, student loans, and credit cards tend to have higher interest rates. Make a plan to pay these off before you retire. Now is also the time to find the balance between putting “extra” on the mortgage and funding retirement accounts. Your financial planner and CPA can help with these decisions.

3. Run the Numbers to Understand Where You Stand Today
   This is your opportunity to see how close you are to your potential retirement goal and what changes you might need to make. An annual review with your financial planner will help chart progress, identify gaps, and create solutions.

4. See How Retirement Age Affects Social Security Benefits
   Some people are inclined to begin receiving Social Security as soon as possible, even if it means reduced payouts. For planning purposes the best decision depends on many variables including health, wealth, tax situation, and life expectancy. Understanding the impact to your retirement plan is a big part of making the decision when to draw those benefits.

5. Keep Your Plan on Track
   Now that you are hitting the final stretch it is time to give your retirement savings all that you can.  Ramping up for the next ten years will make a big difference. 

You are almost there! Candidly thinking through your options and taking your plan to the next level is sure to help you hit your retirement mark in good stride. But if you need help along the way, please reach out to us or your Financial Planner for guidance.

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc.® In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie is a member of the Leadership Oakland Alumni Association and is a frequent contributor to Money Centered.

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Opinions expressed are those of Laurie Renchik and are not necessarily those of RJFS or Raymond James. Every individual's situation is unique; please consult with a financial professional before making any investment decision.

The Flexibility of a Roth IRA

Contributed by: Kali Hassinger, CFP®

Whether it’s a 401(k) or 403(b), many employers provide employees with the option to defer their income and help save toward retirement. Although these are essential savings tools, it’s important to be aware of and understand other retirement savings options as well.  With a Roth IRA, your money is given the same opportunity to be invested and grow over time without taxation, with the additional benefit of being tax free at withdrawal! With a Roth IRA, however, the funds invested are already taxed, so there is no immediate tax benefit. Roth IRAs do provide additional advantages and flexibility, which can make them very attractive additions to your retirement savings.

Use of Contributions

Because you’ve already paid tax on the funds invested, Roth IRAs can allow you to take out 100% of your contributions at any point, with no taxes or penalties. Generally, contributions are assumed to be withdrawn first. Earnings, on the other hand, are subject to penalty if withdrawn prior to age 59 1/2.

First Time Homebuyers

Roth IRAs can be beneficial to young investors thanks to an exception which allows the account holder to withdraw funds prior to age 59 ½ without paying the 10% penalty tax.  After the Roth IRA has been established for 5 years, the account holder is able to withdrawal up to $10,000 if the funds are used toward his or her first home purchase. This means that a couple, if they both have established Roth IRAs, could use up to $20,000 toward their first home purchase.

Required Minimum Distributions

Roth IRAs do not have required minimum distributions (RMDs) during the lifetime of the owner, unlike other tax-deferred savings (like traditional IRAs, 401(k)s, 403(b)s) which require the owner to begin taking distributions at age 70 ½.  An inherited Roth IRA will, however, require the beneficiary to take annual distributions, but these withdrawals are still tax fee.

Conversions

Since Roth IRAs can be beneficial for long term tax planning, the IRA has placed income limits on who can make contributions. If your income is above this threshold, however, you may be able to work around those limitations by completing a back-door Roth conversion. This process is essentially opening and funding a traditional IRA with a non-deductible contribution, but then immediately converting the funds from that account into a Roth IRA. 

Whether you’re just starting out or getting close to retirement, a Roth IRA could be a beneficial addition to your retirement savings. By simply understanding all of your options, you can be more equipped to help achieve your long term financial goals. Please contact us if you have questions about this type of retirement account and how it could benefit your financial plan, we’re here to help!

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Kali Hassinger and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investments mentioned may not be suitable for all investors. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

The Last Day for 2016 IRA Contributions is Coming Soon!

Contributed by: Jeanette LoPiccolo, CRPC®

Just like last year, the 2017 federal tax return deadline doesn't fall on the usual date of April 15. With the 15th falling on a Saturday and a holiday on the 17th, income tax filings for the 2016 tax year and federal tax payments are due on Tuesday, April 18th, 2017.

The last day to make a contribution to an IRA for any tax year is when taxes are due.

So, April 18th, 2017 is the last day to make a contribution to your individual retirement account for the 2016 tax year. Even if you file for an extension on your tax return, the deadline for 2016 IRA contributions is still April 18th.

Individuals who are 50 or older can contribute up to $6,500 to an IRA during a tax year, whereas younger savers can contribute $5,500. Making a contribution to an IRA before the tax deadline is a great way to catch up if you didn't maximize your IRA contribution during the last calendar year. 

Contributing to your retirement account is not just a smart decision for your future. Making a contribution to a traditional IRA can potentially reduce taxes you owe or result in a larger refund for the 2016 tax year. 

In addition, did you know that the Saver’s Credit is available to some taxpayers who make IRA contributions? While not everyone reading this blog may be eligible for this deal, you may have a friend or family member who is. You can pass along this info because helping others save money feels good too, right? 

It’s called the Retirement Savings Contributions Credit (aka the Saver’s Credit). Nick Defenthaler, CFP®, wrote a great blog about it.

Want a quick example of how the Saver’s Credit works? Jill, who works at a retail store, is married and earned $37,000 in 2016. Jill’s husband is finishing college and didn’t have any earnings. Jill contributed $1,000 to her IRA for 2016 before the 4/18/17 deadline. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $36,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.

For more information, check out the IRS website link here.

If you have any questions or want to contribute to your retirement account, please feel free to contact us or your CERTIFIED FINANCIAL PLANNER™ professional.

Jeanette LoPiccolo, CRPC® is a Client Service Manager at Center for Financial Planning, Inc.®

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This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Opinions expressed are those of Jeanette LoPiccolo and are not necessarily those of RJFS or Raymond James. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax issues. You should discuss tax matters with the appropriate professional. Links to third party websites are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Sources:
irs.gov
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If Tom Brady was your Financial Planner

Contributed by: Timothy Wyman, CFP®, JD

What if Tom Brady, one of the all-time great quarterbacks, was your financial planner? Just imagine, what if he decides that after leading his team to a comeback victory in this year’s championship game that he is done with football and becomes a financial planner instead?  And, he accepts you and your family on his client roster.

I have heard Tom Brady discuss keys to his and his team’s success many times. He speaks of preparation, trusting the process, and being associated with high integrity teammates and organizations. My sense is that financial planner Tom Brady would apply much of the same to his financial planning advice. 

Prepare yourself for a successful retirement or financial independence.

Put a plan in place taking into consideration your current realities and where you want to go (the end zone). Identify how you will make first downs as you continue to strive for the goal line; save the correct percentage of income, utilize tax advantaged accounts such as 401k’s and 403b’s, invest for growth but don’t take unnecessary risks until you’re 4th down and 8 in the 4th quarter. This preparation occurs year round – not just when it is convenient.

Tom Brady would also be a financial planner stressing the importance of trusting the process. 

If you have a plan in place that reflects your personal goals, you practice it Monday through Saturday, and then trust it on game day.  My sense is that Tom Brady would be one of the best at closing the gap between what financial markets return and what investors actually gain due to less than ideal investment behavior. Tom would be a master at behavior finance because he would give his clients the courage and confidence to trust the process and continue to trust it during games. I can picture him in the huddle with ten other professionals – the fans are going crazy – the clock is winding down and Tom calmly says, “We’ve been through this before, we have prepared, we have planned for this, now let’s go win the game.” Maybe just as important, I am quite certain Tom Brady wouldn’t say, “Let’s abandon our process – for this last quarter of the game let’s switch to the Air Raid offense and hope we are right.” Financial planner Tom Brady would most likely instill discipline in his practice for the benefit of his clients.

If Tom Brady was a financial planner, I feel he’d want to be associated with a firm that espoused the same values as him rather than being the largest in size or in the market.

He would want an organization that has history and owners that shared his passion for excellence. He would want to be associated with an organization that put his interests first, not a commissioner or Wall Street.

Lastly, if Tom Brady was a financial planner he would share and celebrate in your success. The accomplishment of goals such as attaining a successful retirement or perhaps winning a football game on a specific Sunday are unique and not everyone will experience either. Tom would be on the podium with you – thanking all that had a hand in reaching the goal – shedding a tear or two before he got back to the office to prepare for his next client.

Until Tom Brady announces his career change, please feel free to let us be your Tom Brady. Our financial planners and entire team are here to help you prepare and can’t wait to celebrate your success.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc.® and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Opinions expressed are those of Timothy Wyman and are not necessarily those of RJFS or Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Raymond James is not affiliated with Tom Brady. This content is hypothetical and has been provided for illustrative purposes only.

The Connection between Home Renovations and Financial Planning

Contributed by: Nick Defenthaler, CFP®

About two months ago, my wife and I decided that it was time to take the plunge and finish our basement.  As I’m sure many of you can relate to, our 18 month old son’s toys have quickly taken over our living room. What was once a peaceful area for us to relax and watch some TV, has literally turned into a mini-jungle gym! We wanted more room for his play area as well as give us some extra space for entertaining friends and family. Home renovations are a pain. We’ve all been there. They’re expensive, stressful, and can often time end up being a money pit. After much thought and months of saving, however, we decided it was the right time to move forward with our project.

I think it’s important to note that I am NOT a do-it-yourself kind of guy. The extent of my handyman skills are changing lightbulbs and hanging a picture. I think acknowledging this as a weakness is extremely important. Since I know home improvements are not my forte, we’ve elected to delegate this work and hire a professional to make sure our project was done properly and to our liking. Even if I had the expertise to do some of the work on my own, I know I wouldn’t want my spare time to be consumed working on the basement. I’d much rather spend that time with my family and friends. 

We spent several weeks interviewing different contractors to determine who we felt would be the best fit for our project. Many things were taken into account throughout this process. Referrals from friends and family, quality of work, level of comfort and cost, just to name a few. We probably met with five contractors who all wanted the job, and who were all fairly close in price. Jack, the contractor we ended up hiring, was not the cheapest, but he wasn’t the most expensive. We decided to move forward with him because we gained a level of trust with him and knew he did quality work for mutual friends and family members. Jack won me over when I called him about five times within two days, asking him what probably seemed like simple, and more than likely, dumb questions. To Jack’s credit, however, he never lost his patience with me or made me feel silly for asking them. He was willing to make sure my mind was at ease, knowing this was not something I was an expert in. Although the process has been stressful at times, Jack has kept us in the loop the entire time, been extremely honest and overall, has done a phenomenal job building out our basement to how we had envisioned. 

As our basement is in the final stages of completion, I couldn’t help but take a step back and realize how many similarities existed with our home renovation and how we work together with clients at The Center. Over our 30+ year history, in my opinion and experiences, the clients that have the most potential success are those who realize that investing and financial planning is not an area of expertise or something they want to spend free time on. They value delegating, have the desire to hire a professional they trust and know we will be with them throughout each step of life to help them achieve their personal and financial goals. One of the best pieces of advice I was ever given was to always identify and accept the things you are not an expert in, and hire a professional to do the work right for you. I firmly believe those who find the most success in life are masters at this. By doing so, it allows us to focus more energy on the areas we are truly passionate about. Time is hard to come by, why not try to spend more of it on the things that create more meaning and happiness for us and our family? So give us a call when you’re ready to delegate, we’re always here to help and answer your questions!

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick is a member of The Center’s financial planning department and also works closely with Center clients. In addition, Nick is a frequent contributor to the firm’s blogs.

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Any opinions are those of Nick Defenthaler, CFP®, and not necessarily those of Raymond James.