Compass Wealth, LLC
Investment Advisor Representative
Robert H. Chapman, CPA, PFS, CMA is an Investment Advisor Representative at Cetera Investment Advisors, LLC. He specializes in total wealth strategies for business owners and individuals. Rob’s credentials as a CPA/PFS (Personal Financial Specialist) allow him to offer clients specialized financial planning, tax strategies and planning, estate planning, retirement planning, investment management and risk management.
Robert and his colleagues at Compass Wealth are committed to maintaining the highest standards of integrity and professionalism in their relationship with clients. They strive to know and understand not only their client's financial situation, but who they are as a person as well. Robert and his firm can provide clients with very focused, quality information, as well as appropriate advice to help them reach their goals. Utilizing a team approach, Compass Wealth coordinates the areas of investment management, budgeting and cash flow, risk management, tax planning, retirement planning, estate planning, and college funding. Being an independent financial adviser means the firm places their clients' interests, needs and desires above that of the office. Independence is vital to servicing their clients.
Robert holds a B.S. in Business Administration from the University of Vermont, specializing in accounting. He earned a CPA certificate in New York and the Personal Financial Specialist (PFS) designation offered by the AICPA. Rob has been a Paladin Honor Roll Advisor with the Paladin Registry for twelve consecutive years, beginning in 2004.
In addition, he has been a Top Representative with Cetera Financial Services for eleven consecutive years, beginning in 2005. In 2011, Rob was named a Money Doctor with the American Institute of Certified Public Accountants (AICPA, where he frequently responds to questions posted online from consumers regarding their financial planning issues).
BS, Business Administration, University of Vermont
Registered Representative, Securities offered through Cetera Financial Specialists LLC (doing insurance business in CA as CFGFS Insurance Agency), member FINRA/SIPC. Investment Adviser Representative, Advisory services offered through Cetera Investment Advisers LLC. Cetera entities are under separate ownership from any other named entity.
There is no penalty for borrowing from your 401(k), but there are other negative consequences, such as the loss of compounded earnings on the funds you removed. You will pay yourself back with after-tax dollars, and you will pay tax again when you withdraw those funds again someday.
You can take an early distribution from your 401(k) and avoid the additional 10% penalty if the funds are used for qualified education expenses (tuition, fees, books, etc.). This will be taxable income to you in the year it is withdrawn.
A cash-out refinance, when mortgage rates are so low, is a good option. The interest may be tax deductible, and you might also actually lower your monthly payment, depending on the terms of the new loan.
Don't rule out student loans which typically have low rates and can be deferred until after graduation.
Typically, the only reason a bank will add co-borrowers to a mortgage is when the primary borrower(s) cannot meet the income requirements for the loan. Without full-time employment, it is unlikely that a lender would process your daughters' applications. Even if they are included in the property title, adding them to the mortgage is unnecessary.
It sounds like they are already well on their way to establishing good credit. Taking on this mortgage would substantially increase their debt-to-income ratio, and could hinder their chances of assuming additional debt, such as the car loan you mentioned or even a mortgage of their own.
Yes, this would fall under the 60-day-rule of a rollover and would qualify as non-taxable on your income tax return, provided you replace the full amount of the distribution within 60 days. It is reportable: you will receive a 1099 for the distribution. Be sure to indicate it as a rollover to ensure exclusion from taxable income.
If you are at least 70 1/2, you can direct an IRA withdrawal be sent directly to a qualified charity. The benefit of the qualified charitable distribution (QCD) is that the withdrawal is considered non-taxable. This is a favorable tax situation, particularly for those who will only qualify for standard deduction on their personal tax return.
Additionally, a QCD can satisfy some or all of your annual required minimum distribution (RMD). If you are in a situation where you don't require the income from your RMD, divert the funds to the charity of your choice and skip paying tax on the withdrawal.
Contact your pension administrator and request a change in direct deposit. They may email you a form or direct you to their website where you can download the form on your own. If you follow the directions, provide accurate routing and account numbers, and submit the information as directed, it should be a seamless transaction.