Cereus Financial Advisors, LLC
David Haas is the owner of Cereus Financial Advisors, LLC is an independent, privately owned investment advisory firm, committed to helping clients make better financial decisions in all aspects of their financial lives. Families are their first priority and, like family, David and his team aim to build long-term relationships with all of their clients. Whether a client's primary goal is to save for retirement, college education, or a new home, clients can trust Cereus Financial Advisors to work to create an appropriate financial plan, one that is based on sound investment strategies.
As Certified Financial Planners™ and members of the Financial Planning Association, David and his team adhere to the highest standards of professional competence, ethical conduct, and clear, complete disclosure to those whom they serve. Their advice is independent, unbiased, and confidential.
David started his working career as an Electrical and Software Engineer in the instrumentation and telecom industries. After getting his MBA with a concentration in Finance, completing a financial planning certificate program, and attaining the CFP® certification, David changed his career to become a financial planner and following a few years working at another wealth advisory firm, started Cereus Financial Advisors, LLC.
In addition to experience and training in financial services, David’s prior professional experience involved electrical and software engineering in the instrumentation, telecommunications, and card services industries and includes multiple patents in technology. Let the discipline and analytical skills David learned in engineering help his clients plan their financial future.
Owner David Haas has undergone rigorous training and testing to become a Certified Financial PlannerTM (CFP®) and is an active member of the Financial Planning Association® (FPA®), the principal professional organization for CFP® practitioners. David has an extensive history of investing for many clients, including his own family. As a parent of two college-age students, he understands firsthand the importance of education planning.
MBA, Financial Management, Pace University
BS, Electrical Engineering, Rensselaer Polytechnic Institute
The court-appointed administrator is responsible for settling the deceased debts, paying any income or estate taxes, and then distributing assets to the heirs. Since your mom died without a will, the assets get distributed according to the state intestacy laws where your mom was a resident. The Surrogate Court office in the county where she lived is the place to go for more information as well as the place to get appointed as an estate administrator.
Before running down there and applying to be administrator, take a look at what she left and decide if there are more assets than debts. The estate administrator is held personally responsible to pay the debts by the court and when the deceased is intestate, will likely have to pay a bond. This is not worth anyone's while if there is no money or assets in the estate. The money in that bank account (as well as any other money which was paid from a joint bank account or an account payable on death or even life insurance) can be used to pay her debts. On the other hand, you cannot retitle any assets without having an administrator.
It is up to the estate administrator to decide if an estate account is necessary. If there are no debts or taxes due, then you can safely distribute the bank account to the heirs. But, creditors have a specific time period (up to 9 months in some cases) to present their claims, so its best to delay distribution until then. An estate account can hold the money until then. Since this sounds like a very small estate, you can probably do it without an attorney, but get help from the surrogate's court. It will not be a federally taxable estate unless the estate value was above $5,450,000 (in 2016), but states do have estate taxes and some states have inheritance tax, so it could be taxable in your state. Note that Real Estate, any investments or retirement accounts, and even life insurance owned by the deceased is part of the taxable estate. It doesn't matter if it was paid directly outside the will using beneficiary designations, its still part of the estate. If you have a taxable estate, you definitely should consult an attorney.
No, no, no.
You need that retirement savings. It is growing in a tax-advantaged way in your IRA. It would definitely be imprudent to pay off the second mortgage with an IRA distribution while paying taxes on the distribution AND a 10% penalty.
I don't know your whole situation, but at first glance, I think a smarter thing to do would be to refinance your first AND second mortgage together into a new first mortgage. If you really want the lower payments, you could choose a 30 year mortgage, but I would recommend a 15 year loan given your ages. Overall you might be able to lower your monthly payments and lock in a good rate.
As for the college, you have saved what you have saved. You really can't turn the college savings situation around when your daughter is an incoming Freshman (congratulations on that, by the way). I hope she is getting good financial aid and is attending a public university. The FAFSA excludes retirement savings as well as home equity from the formula and most public colleges and universities only require the FAFSA. Private college can sometimes include both home equity and retirement savings.
By the way, you are allowed to take an early distribution from an IRA to pay for your child's college without penalty. You would still owe ordinary income taxes on the distribution. But before jumping to do this, it has some significant disadvantage. First of all, you need that retirement savings for retirement. Making it up later will be really hard. Secondly the distribution becomes income which counts against you for the FAFSA in two years.
I have to add a disclaimer here: I don't know your full situation, so don't take what I have written as specific advice. You need to talk to a CFP® financial planner and he/she can create a specific plan for the best way to pay for college.
There are definite advantages to deferring Social Security Retirement benefits until Full Retirement Age (FRA). There are also advantages to defer even longer, to age 70. But you need income during this period of deferral and taking 401(k) distributions is one way to do it. Assuming this is a traditional and not ROTH 401(k), then any distributions will be fully taxable as ordinary income. So if you need a certain level of income, you will have to increase the income to deal with the effects of income tax.
This can be a very good strategy, but you should be careful that your tax bracket stays in one of the lower brackets. When you hit age 63, you need to be careful to manage your income so your Medicare part B premiums don't get increased once you hit age 65.
A CFP® Financial Planner can produce a comprehensive financial plan for you which shows you what your retirement income and spending looks like moving forward. It is important to plan so that you don't run out of money if you live to age 100 or even longer.
A commission of $6.50 for equity trades is really quite low. The leading discount brokerage houses are typically double or even more, so rest assured, this is good. You should look at any other fees which might be assessed, such as a maintenance fee. $2,000 might seem like a significant amount for you to invest, but it is a small account for most brokers and sometimes, brokers will charge fees for smaller accounts. If they charge you $6.50 for a trade, but $100/year as a maintenance fee, its really not a good deal for you.
Also, when you invest, you should try to have a diversified portfolio. With $2,000 to invest, I would suggest looking at an index mutual fund or ETF which can give you a broad exposure to the market at a low cost. This will minimize your risk of a single business or stock having a problem and going down precipitously.
There are many factors involved in deciding whether to roll over a 401(k) such as how old you are, the account size, what your investment choices and costs are in the old plan, and if you will have improved choices and/or lower costs in the new plan. A Certified Financial Planner or CFP® can help you evaluate your choices and help you make the best decision in your interest.
There can be bookkeeping advantages in consolidating old 401(k) accounts with a single provider. I hear stories about people forgetting about old 401(k) plans and then having trouble recovering the money. On the other hand, if you have an old employer account at a top provider, such as Fidelity, Schwab, or Vanguard, and you get regular statements in the mail and keep your contact information up to date, then there is little risk. Another option which some people use is to transfer the old 401(k) into the 401(k) plan at your new company. Most but not all plans accept incoming asset transfers. Note that 401(k) plans are not actually under company control (although the company is a fiduciary for the plan). The vested balance in your 401(k) belongs to you and even if the company goes bankrupt, it cannot touch the money. However, sometimes the company was paying for plan administration and they stop doing that, so more fees are taken out of individual accounts to do that.
While advisors like to be able to put you in an IRA under their management, some advisors will still help you with your 401(k) if you make a different arrangement for paying, such as a flat retainer fee.
In the past, target date funds have been a little on the expensive side and there have been problems with the glide path, or balance between asset classes as you come closer to retirement. Target date funds try to match what investors risk tolerance should be, based on how long before retirement. Unfortunately this is not the only factor which should govern your portfolio, so these funds are a rather blunt tool which often doesn't match what an investor's portfolio should really look like.The glide path on these funds is often set up to move investors into mostly fixed income by age 65, yet you might live another 30 years after 65 and might not even be retired. So, one individual should have a 60/40 (stocks/bonds) portfolio at age 65 and another should have a 20/80 portfolio.
Mutual funds and exchange traded funds are not FDIC insured. The only investments you can get with FDIC insurance, are low yielding CDs. This might make sense for a small portion of your portfolio, but with a longer time horizon, you need to take on some risk in order to get some return. When you invest, there are risks which can be mitigated, including the risk of any one poorly performing stock or bond from overly influencing the return in your portfolio. A CFP® financial advisor who you trust, is the best person to help you design a savings and investment plan to meet your retirement or other goals.