Advise Finance, LLC
Certified Financial Planner
Rose was born and raised in China, but educated in the US. Consequently, she enjoys the best of both worlds. She aims to incorporate that philosophy into her practice and provides her clients with the same privilege. Rose was the first American Certified Financial Planner(tm) practitioner who ever won the annual international financial plan competition twice (2014 & 2016), sponsored by the Global PlanPlus Award. Additionally, Rose has been frequently interviewed and quoted by major financial media sources, such as The Wall Street Journal, Kiplinger, Forbes, US World News, Reuters, CNBC, Chicago Tribune, and InvestmentNews. You can see a clip of her interview with the local TV, WBIR, about teaching kids of financial literacy.
Besides having the general knowledge of financial planning, Rose has two other distinctive designations: 1) RICP®--Retirement Income Certified Professional, which gives her the expertise to help retirees during the retirement in issues such as safe income withdrawal, Social Security and Medicare planning, long-term care, etc, and 2) CDFA®--Certified Divorce Financial Analyst, which allows her to assist attorneys and clients to achieve the best possible equitable settlement and at the same time to avoid typical financial and tax pitfalls. Rose Swanger is passionate about promoting financial literacy. Her personal goal is to help Americans get their financial houses in order, one community at a time.
BS, Medical Technology, Georgia State University
MBA, Financial Planning, California Lutheran University
Advise Finance is a marketing name for securities and advisory services offered through Royal Alliance Associates, Inc., Member FINRA/SIPC and a registered investment advisor. This communication is strictly intended for individuals residing in the states of TN,MD, and VA, where the RR is registered to conduct securities business. No offers may be made or accepted from any resident outside the specific state(s) referenced. IMPORTANT CONSUMER INFORMATION : A broker-dealer, investment adviser, BD agent, or IA rep may only transact business in a state if first registered, or is excluded or exempt from state broker/dealer, investment adviser, BD agent, or IA registration requirements as appropriate. Follow-up, individualized responses to persons in a state by such a firm or individual that involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without first complying with appropriate registration requirements, or an applicable exemption or exclusion. For information concerning the licensing status or disciplinary history of a broker-dealer, investment, adviser, BD agent, or IA rep, a consumer should contact his or her state securities law administrator.
Advise Finance, LLC
I hear you--the tax pain. Fret not!
First of all, have you maxed out 401(k)s, assuming you both use the traditional 401(k)s? If you have, congratulations! That’s at least $36K you don’t have to pay income tax.
Secondly, I would recommend you continue to do either a non-deductible traditional IRA or two-step conversional Roth. Either way may not help your current tax deductions, but they will help you cushion retirement funds for sure.
Thirdly, fund the HSA if you have a high deductible healthcare plan. It has triple tax benefits: upfront tax deduction, tax-deferred growth, and tax-free withdrawal for qualified medical use.
Lastly, if you have fund all three vehicles, you may want to consider annuities or permanent life policies for tax savings and low risk as you asked. On the other hand, a seasoned financial planner (CFP®) may be able to help you design a medium-risk but a higher potential growth than the CD and tax-efficient portfolio for your investment. Best!
Going into the retirement without debt is admirable. Not only does it offer you peace of mind, but it’s also easier to budget the monthly cash flow. To prioritize such goal, I would prefer you negotiate the debt into a smaller amount and use your monthly income ($3K) to pay the debt off in a period of time. I understand you want to have a clean slate at the beginning of your retirement, but once the money is used to pay off the debt, it’s gone. What will happen if you have other contingencies? Talk to a financial professional, CFP®, who can review your budget and offer some better suggestions. Best!
According to the Social Security website, it advises people to apply three months ahead. However, you must be the one to specify which month you want to receive the first check. This is done when you fill out your initial application for Social Security, whether you do this online or in person. If you are uncertain as to the month that you will attain a certain age, make sure to ask.
Get ready for plenty ramen noodles ahead. Jokes aside, I admire your thinking and planning ahead. Advancing for further education helps boost income, but the initial hurdle to overcome a big student loan is intimidating. So, here are some suggestions to consider after working with many resident/fellow physicians:
1) Continue your Roth contribution every year and use low-cost broad index funds. Try to have only a couple of funds if you have a limited amount as over-diversification does not help the return.
2) Have a budget to know your expense and keep an eye on your credit score. Having a high credit score will help you refinance later with the private lenders. Believe it or not, your high GPA in finance is your advantage in negotiating a lower interest rate from those private lenders who want your business.
3) As soon as you’re eligible for an employer’s sponsored retirement plan, sign it up and fully fund it. It will help your tax. Best to you!
Your withdrawal from the 401k and IRA will not impact your social security income, but it will affect how your social security income being taxed.
Because the 401k and traditional IRA are funded with the pre-tax money, when you take them out, you will need to pay ordinary income tax on it. When that happens, it will cause your AGI increases, and guess what else? It may cause your social security benefit to be taxed too. How?
When your provisional income exceeds the thresholds, up to 85% of social security benefits may be subject to tax. Provisional income is equal to AGI plus ½ of the social security income, plus other non-taxable interest (such as interest on tax-exempt bonds). Surprised by the last statement? The benefits of the muni may not help you during the retirement; it may actually jeopardize your income as in this case. You may want to talk to a CFP® or a RICP® for some investment review and better retirement income suggestions.
The threshold for social security benefits being taxed are (assuming you’re single): 1) If you have $25k or less provisional income, your social security benefit is safe. 2) If your provisional income is between $25k to $34k, up to 50% of your social security benefit is being taxed. 3) If your provisional income is above $34k, up to 85% of your social security benefit is being taxed.
Now, you see how your withdrawal from the 401k/IRA will impact your social security benefit being taxed. It may not be too late to work with a professional to see what other strategies for you to minimize that chance. Best!