The Financial Enhancement Group, LLC
Joe is the Managing Partner and Lead Advisor of The Financial Enhancement Group, LLC, an asset management and financial planning firm with four locations in Indiana that manages over $200 million for clients in 20 states.
At Financial Enhancement Group, Joe mainly works with clients and help them plan their financial journey, going through their trademarked Family Focus® process. He also creates and distributes the majority of the communications to the families they serve including their weekly radio show, newspaper column, and Market Carver newsletter. It is Joe's job to establish the firm's strategy and direction as well as help the management team run a process-driven firm. He is also actively engaged in the financial planning team and investment team.
Joe graduated from the College of Financial Planning and he formerly served as an Adjunct Assistant Professor at Purdue University. He taught the cap stone course for the Financial Counseling and Planning program for the past 7 years. He is a Charter Master Member of Ed Slott’s Elite IRA Advisor Group and has appeared on various national and local media outlets.
Joe writes a weekly column for The Herald Bulletin and is the host of a weekly radio show called “Consider This” that airs on 98.7 The Song on Saturday’s 9-10am, as well as three other stations throughout Central Indiana. He was the host of Food and Finance, one of the nation's first shows teaching money via a passion for cooking. Joe is on the board for the Indy chapter of the FPA and serves as the chairman of governmental relations.
In his personal life, Joe enjoys golfing, hiking, and cooking. He is also actively involved with local community charities and organizations.
Assets Under Management:
The Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.
In general its a brilliant idea! We always want to make our investmetn decsions in concert with our tax situation and well as near by objectives. You pay the tax rate on the amount that was converted - not what it was before the correction. One major change that impacts this decsion came December 22, 2017 wiht the new tax code. In the old days, you could recharacterize (send the money back to the IRA) even if the market went down. That is no longer an option so if the converted amount falls further you will still pay the taxes on the amount you converted. Knowing this strategy before a market corrects is important. Well done!
Certainly! It's called day trading of high-frequency trading. The issue isn't the trading but the taxation. If the account is an IRA it doesn't matter at all other than the trading cost. If it is not an IRA or Roth IRA then short term trading does have issues. You can sell at a gain and re-buy anytime but it will be a short term capital gain is loses preferential tax treatment. If you sell at a loss and buy back within 30 days the "loss" is not allowable as a short term loss on your tax return.
First and foremost, thanks for being charitable. The process from the 30,000 view is for you to identify the shares that you wish to transfer to your charity. As a general rule, you want to personally sell shares with the highest tax basis and transfers shares to charity with the lowest tax basis to get the most gifting efficiency.
You need to make certain that your charity has a brokerage account set up and ready to take possession of the transferred assets. They do not have to keep them upon arrival but they must both accept the assets in-kind and then order the sale of the securities.
You receive a full itemized deduction for the value of your gift – up to 30% of your adjusted gross income in any one year for appreciated securities and 60% on cash gifts – and yet pay zero in capital gains taxation. As an example, if you paid $10 for a stock that is now worth $100, you transfer the stock to the charity and they sell it. You get to deduct the $100, they get all the proceeds and the only money you paid taxes on were the first $10. A win-win scenario!
Keep in mind the 28% tax bracket has been eliminated in 2018. Your long term capital gains rate is most likely 15% but could be zero if you happen to fall into the 12% marginal tax bracket or below.
Congratulations on the education and the job. You are asking the right questions for certain, but I would add one caveat. I spent 7 years teaching financial planning to seniors at Purdue who were for the most part encouraged by parents to purchase a home as soon as possible. It took a lot of convincing, but I usually got them to understand that’s not always the best answer.
First rule is that if you don’t think you will live there longer than seven years then I would consider being part of the renting community. Yes rent goes up, but so do taxes and upkeep. Between the commission to buy and the challenges and expenses with liquidation, seven years seems to be the magic in how long you should anticipate living in an area before buying.
There was no mention of a spouse and many times you will meet someone who already has property or who doesn’t want to live in a place you bought on your own. Not always the case, but certainly a consideration. Kids would have a hard time fitting into the 1 bedroom place as well.
If you are single, your top marginal tax bracket is over 25%. Any money you take from your 403b will be met with a 10% penalty followed by taxation (and this is only on the federal level) of 25% or more and could be as much as 39.6%. It would be said to pull out a dollar to get $.50! That would pay a lot of increased rent over the years.
That's a great question and it would certainly be nice but the quick answer is no. All money that has been tax deferred will be taxed at some point unless left to a not-for-profit entity either with a qualified charitable contribution from your IRA at age 70.5 or greater or as a direct beneficiary upon your demise.
There are still opportunities to pay attention to in deciding when to make the conversion from the 401k to the Roth. 401k plans CAN (refer to the plan document) allow for Roth conversions with in the the plan, but they do not allow for re-characterizations should you change your mind. Thus we always prefer to transfer 401k assets that we plan to convert to an IRA and then do the conversion. When should you do this and when does it make sense?
If you live in a state with little to no income tax and plan on moving to an area with higher state taxes at retirement, the conversion today may make sense. The opposite is true if you live in a state with high taxes, today you may want to wait until you move to the Sunbelt of Florida or Texas before converting.
Another issue is to pay attention to your itemized deductions. For most people there isn't a great deal of fluctuation other than medical expenses. As we age it is not uncommon to see a large deduction available (pay attention to the percentage of AGI requirements allowed for deduction) and these expenses often put us in a lower tax bracket. When that occurs certainly consider the Roth conversion.