Alliance Wealth Management
CEO and Founder
Given Jeff's unique interest in the financial markets and his excited to meet new people, being a financial advisor was the perfect fit for his career. He started his career as a financial advisor with A.G. Edwards & Sons in 2001.
In January of 2005, 4 years into his career, he was called upon to support Operation Iraqi Freedom. Anticipating his return, he attained the Chartered Retirement Planning Counselor designation between mission and duties during his downtime in Iraq.
As soon as he returned from Iraq, he resumed his career as a financial advisor. His goal was to provide financial guidance to people in all areas including: investments, insurance, taxes, and estate planning. In November 2007, he became a CERTIFIED FINANCIAL PLANNER™ practitioner, and a month after that, he formed Alliance Investment Planning Group LLC. Since then, Jeff created his own registered investment adviser named Alliance Wealth Management LLC.
With the hope of helping people make sense of investing and their personal finances, Jeff launched his own personal financial blog called Good Financial Cents and life insurance site Life Insurance by Jeff. With so many different options out there, Jeff hopes to ease the fog and help others make clear and smart financial decisions. He currently writes for Forbes, US News & World Report, and CNBC. In addition, he has been featured in major sites such as Huffington Post, Wall Street Journal, Reuters, Kiplingers, and Fox Business.
Jeff resides in Carterville, IL with his wife, Mandy, and his three sons Parker, Bentley, and Sloane and daughter Janella.
BA, Finance, Southern Illinois University
Assets Under Management:
This Investor Didn’t Know He Was Paying $5,500 Per Year in Investment Fees
Assuming you qualify for the maximum benefit based on your pre-retirement income, how much you will receive will depend on your age at the time you begin collecting benefits. If you retire at 62, the highest you can receive is $2,153 per month. At 65 it can be as high as $2,542. At 66, $2,687. And if you wait until you turn 70, it can be as high as $3,538.
However, there's no advantage to delaying collecting benefits past 70, since the delay no longer results in a higher benefit.
Disposable income is basically after-tax income. That means your gross income, less the amount paid for federal and state income taxes, FICA taxes and local taxes. So if you earn $100,000 per year, and you pay $10,000 in federal income tax, $5,000 in state income tax, and $7,500 in FICA tax, your total taxes are $22,500. That will leave you with a disposable income of $77,500.
Discretionary income also subtracts out your taxes. But it also subtracts necessary living expenses, such as shelter, food, and clothing. So if your disposable income was $77,500, and you paid $20,000 for housing, $10,000 for food, and $2,500 for clothing, your discretionary income would be $45,000. That's the amount of money that you would have available for savings, investments, and luxury spending. The word "discretionary" applies since this is the income that you have greater control over. That is, it isn't committed to mandatory expenses.
Probably not. You get points for paying off the old credit line, but then you lose them for having a brand new (read: untested) account. They should roughly offset. It's hard to know specifically how much effect this will have on your credit score, since the credit bureaus use complex algorithms to do the calculation. Then they tweak them from time to time, so you can't know for sure. But it should roughly even out to have no material affect. Good strategy anyway, zapping the interest! To my thinking that would be worth giving up a few points on your credit score.
You're going to have to sit down with your accountant and crunch numbers before you do. I see the benefit you're pointing to, that you could payoff a 5% debt with money that's only earning 1%. That would make perfect sense if the money were held in a non-tax sheltered account, since income taxes wouldn't be a factor.
With a 401k you have to consider the tax implications. Any money you withdraw from the account will subject to ordinary income tax. If you have a $100,000 mortgage to pay off, and you're in the 28% tax bracket, withdrawing $100,000 from the 401k will produce a federal income tax liability of $28,000. If you have a state income tax, it will be even more than that.
In order to payoff the loan then, you'd have to pull out enough money to pay off the mortgage PLUS pay the tax liability.
I don't know enough about your full financial situation to make a specific recommendation, but those are the facts. Please discuss this with your accountant to see if it makes sense. My guess is that it won't.
Since you're self-employed, one of the best ways is with a Solo 401(k) plan. It will enable you to save 100% of your income up to $18,000 (for 2016), plus 25% of your total income. If your business earns $50,000, you can save $18,000, plus 25% of $50,000, or $12,500. That will enable you to save $30,500 on an income of just $50,000. That's about the most generous retirement plan possible, and it will enable you to save a very large amount of money over the next 23 years.