Opulen Financial Group LLC
Tom Cymer, a Certified Financial Planner, is the founder and owner of Opulen Financial Group, LLC since 2009. Having double majored in economics and psychology at the University of Massachusetts in Amherst, Tom is particularly well suited to crunch the numbers but also address the behavioral side of personal finance. Tom joined the nation's largest financial planning firm and achieved numerous awards including 1st year and 2nd year top achiever, Mercury award and the Centurion award. He later went on to become a mentor and trainer of new recruits as a P1 Certified Advisor Coach while maintaining his own practice. During his tenure there he achieved the Chartered Retirement Planning Couselor(TM) designation.
Tom defines true financial planning as a comprehensive, ongoing approach to managing all areas of his client's financial life that takes into consideration their income, expenses, investments and debt. He focuses on their short-term and long-term goals such as paying for college or retiring comfortably. He provides management of his client's taxes and financial risks such as disability and death, and finally, ensuring that they leave a legacy.
Tom brings a comprehensive approach to his planning which starts with goal development and progresses through every nook and cranny of his client's financial picture. Once a personal plan has been created and implemented, Tom provides regular quarterly review meetings that keeps his clients on track and progressing toward their goals.
Tom is a native of Warsaw, Poland having immigrated to the United States as a child. His family resides in New England and he has since settled in the Metro DC area. Tom is a member of the Financial Services Institute, past president of the Arlington Jaycees, and active with various chambers of commerce in the area. Tom is a strong believer in continuing his education and as such has since gone on to obtain a certificate in financial planning from Boston University as well as obtain his CERTIFIED FINANCIAL PLANNER(TM) designation. In his spare time Tom enjoys trips to the local wineries as well as traveling to tropical locations for some fun in the sun!
BA, Economics/Psychology, Umass Amherst
Assets Under Management:
All written content on this site is for information purposes only. Opinions expressed herein are solely those of Opulen Financial Group, LLC and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Fee based financial planning and investment advisory services are offered by Opulen Financial Group, LLC a Registered Investment Advisor in the State of VA, DC, MA and LA. Insurance products and services are offered through Tom Cymer Insurance. Opulen Financial Group LLC and Tom Cymer Insurance are affiliated companies. The presence of this web site shall in no way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any State other than the States of VA, LA, MA and DC or where otherwise legally permitted.
That must of been some degree you earned! Without knowing your details of income/interest rate on your loans/cash flow it is hard to give you a specific answer so this is a general thought. I would suggest you contribute to your 401k up to the maximum matched amount and then focus on putting everything above and beyond onto the loans. It sounds like you may be just starting out in your work life so some of my reasoning behind this would be:
1) Assuming you are just starting out you probably have a small 401k balance which means even if you earn a high rate of your return you will probably pay more in interest because you are paying it on a bigger balance. For example 10% ROR on 50k = 5k growth but 4% interest on 200k = 8k paid out (your net worth decreased)
2) We are at a high point in the market - equities are at all time highs. Knock off the loans and if we have a reset at some point in the next few years you may have more cash flow to dump into the market at a lower point.
3) Those high debt balances will impact many other aspects of your life - buying a house, having a family etc.. all that debt will bog down your cash flow making it difficult to do anything else.
Good luck and happy new year!
Tom Cymer CFP
President Opulen Financial Group LLC
At this point, your guess is as good as mine. The conversation I have been having with my clients is that it is way too early to tell which way things will go. Trump has already flip flopped on numerous issues and that will likely continue. For the time being. I have been suggesting that clients focus on their long term goals and understand that no matter who is the President, the market will go through natural cycles. If you are investing for retirement years from now, then focus on that and buckle up for what will likely be a volatile ride (up and down).
If you are investing for a short term goal, then you probably shouldn't have a ton of equities in your portfolio because the market can do some large swings in short time periods, no matter who our King...er President is. Keep in mind we have been on a bull run for a good part of 8 years and it is natural for the market to reset itself periodically. Some interesting research I came upon recently talked about what happens to the markets when a Republican beats an incumbent Democrat:
When Republicans Beat Incumbent Democrats
Since 1900, the Republicans have ousted the Democrats five other times (1920, 1952, 1968, 1980 and 2000). The post-election year performances were mostly negative: +12% (1921), -4% (1953), -15% (1969), -10% (1981) and -7% (2001). However, every subsequent year (i.e. the mid-term year) except 2003 was positive, with gains of +22% (1922), +44% (1954), +5% (1970) and +20% (1982). The lone loser was 2002, when the DIIA fell -17%. The mid-term year strength also tends to continue the following year (i.e. the pre-election year) as well: 1923 (-3%), 1955 (+21%), 1971 (+6%), 1983 (+20%) and 2003 (+25%).
Take this with a grain of salt - history doesn't always repeat itself and this is an area we have never touched on before.
Tom Cymer CFP
President- Opulen Financial Group LLC
You actually sound like a young me! I had my first brokerage account at TD Ameritrade when I was in college trying to figure how to make money in the markets.....and here I am doing the same thing today!
Anyways, most studies suggest that the majority of people (professional or regular) do not systematically beat the market on any consistent period of time. Most people actually trail market returns when they try to outperform by active trading. This is due to the the fairly unpredictable nature of the markets as well as costs involved both in transaction fees and taxes on short term gains. You are likely going to be better off buying those index funds and holding them long term even, as boring as that may seem.
With that being said - there is a certain level of excitement in having some "play" money in the market. At the very least you will hopefully learn from your investing venture and maybe even make a little money. My advice would to be to invest the majority of the money you have allocated, for the long term, in index funds and let them sit there. Then carve out whatever you are comfortable potentially losing for your trading endeavor. As far as trading platforms - etrade, TD Ameritrade are all pretty good and fairly inexpensive. For options trading (which involves substantial risk and I really suggest you open a paper trading account first) you can look at optionshouse.
Tom Cymer CFP
President Opulen Financial Group LLC
Sounds like you are well on your way to building long term wealth. It's really nice to have some discretionary money left at the end of the month. Since it sounds like you have a more than adequate cash reserve built up, I would suggest you focus on increasing your 401(k) and paying down the current student loan. Even though interest on your student loan is tax deductible (as long as your income is under certain thresholds) you will be taking on a ton of debt to pay for that MBA so eliminating your current student loan will make things that much easier down the road. Increasing your 401(k) is also great idea - saving $2K a year into your 401(k) is a good start, but you have plenty of room to kick that number up. Your 401(k) will also provide you with a nice tax shelter if you use the pre tax side - For example putting in $10K a year could lower your current year tax bill by $10K x 25% = 2,500 bucks depending on your tax bracket.
Being younger myself, I've noticed that several of my friends and younger clients who went out to get that MBA and took out the big loans had to defer things like buying a house until their income caught up to their education level and the loans got mostly knocked off. You will be in a great position to really crank up your savings if you can come out of your MBA program with a far lower debt load than that $75K. So once you get into your program I would even consider reducing your increased 401(k) contributions down to whatever the max match from your employer is and focus on knocking those loans off as quickly as possibly. I've also noticed that my younger clients go through a ton of life changes so in 3-5 years you may actually find a new employer that will contribute more to your MBA or even be able to negotiate more than a $6K contribution with this current one.
As far as using a brokerage vs the 401(k) - unless you are investing for something specific long term that you will need to use non retirement money for the 401(k) will provide you the best bang for the buck because of the pre tax nature of the contributions so I would suggest you use the 401(k) vs a regular brokerage account.
Tom Cymer CFP
Congrats on your good saving over the years! First let me suggest that given your situation you should probably sit down with a financial planner to work through the details and I don't think anyone on here can really answer this with any degree of certainty without doing a full financial plan for you. I will, however, try to point out a few other things you should look into and work through to further prepare for your retirement.
First let's start with your income needs vs what you will have coming in: Depending on your allocation and comfort for risk I typically suggest clients do not withdraw more than 4% from their portfolios, in particular in the early stages of their retirement. In your case you would likely be able to pull around $3K/mo from your $900K - combined with your pension that will put you at $7K. However, there are several problems you will need to work through before you pull the trigger:
1) Pulling only 4% from your $900K will put you well under your $7K needs when you factor in taxes on your 457 distributions as well as taxes on your pension.
2) You need to develop a withdrawal/distribution plan from your $900K and should have it stress tested against different market conditions to determine if it will be sustainable.
3) You should plan for the what ifs -
a) What if you or your wife die early - what are the survivor options on your pension and which should you elect?
b) What if one of you needs long term care or in home care. Will you purchase a long term care policy? Is it in your $7K budget?
4) Does your wife taking social security at 62 really make sense due to the permanent reduction in her benefit as well as impact it may have on a her having a part time job.
5) You need to consider how an increase in tax rates will impact the amount you need to withdraw from your portfolio.
These are just a few of the big issues I think you should work through - to say that you are ready I think would be very premature but I do think you are well on your way. Best of luck and again I strongly suggest you get some help and guidance to make sure your retirement will be all that you and your wife hoped for.
Tom Cymer CFP