Duell Wealth Preservation
Owner and Founder
Gary Duell is the Owner and Founder of Duell Wealth Preservation, an Oregon Registered Investment Adviser firm. Gary and his team know Health and Life Insurance is more than protection and risk reduction, it is a financial tool that helps secure the future of their clients retirement and gives them the freedom to experiment with new ideas and realize the passions that they put on hold while they are building a career and raising a family. That is why they specialize in insurance and financial products that help provide financial security such as Life Insurance, Annuities, and Long Term Care.
Gary provides comprehensive financial plans and the appropriate insurance and investments to implement them, continuing ethics education classes for insurance agents, as well as public seminars. He is currently on the faculty of Portland Community College’s Community Education department to provide retirement education to pre & current retirees.
Gary was born in Garden City Kansas, moving with his family to Salem, Oregon at the age of 5. He graduated from Willamette University in 1974 with a double major in psychology and philosophy. There being a scarcity of philosophy jobs, Gary took a harrowing nine-month stint at Oregon State Hospital as a psychiatric security aide on the women’s maximum security unit. “One Flew Over the Cuckoo’s Nest” was filmed there during that time, which only added to the chaos. The experience prompted Gary to change careers. He graduated from Willamette U. again, in 1977, with an MBA. After 18 years with Farmers Insurance, first as an underwriter, then supervisor, and then as an agent, Gary left in 1996 due to the purchase of Farmers by British American Tobacco. In 1997 he completed the last series of courses and exams to get the Chartered Financial Consultant (ChFC) designation from The American College at Bryn Mawr PA.
Gary served a three year term on the Clackamas County Economic Development Commission and was chair of the Surface Water Management advisory committee. He was Treasurer on the Clackamas Community Land Trust board of directors and helped merge the CCLT with Proud Ground, their Portland counterpart. He is also a charter member, past President and current Treasurer of the Happy Valley Business Alliance. Gary loves what he does mostly because of the people he gets to work with. Many clients and friends have been made over the years.
B.S. in Philosophy & Psychology 1974, Willamette University
MBA 1977, Willamette University
Chartered Financial Consultant (ChFC) 1997, The American College
Gary Duell interviewed by Investopedia
As with virtually all answers to these questions, I have to plead "Not enough information". A correct and useful answer would have to take into account at least the following:
1. What's your retirement time horizon; at what ages will your salaries end?
2. What annualized rates of return (ROR) & inflation are you using to determine that you're "on track"? What evidence do you have that your (or your adviser's) assumptions are reasonable? What backup plan do you have if you're wrong?
3. Do you have a sequence of returns risk strategy? This is the risk of a major market correction right after you retire and begin drawing down your savings.
4. The latest research shows that your chances of outliving your money are minimized if you "floor" your basic inflation-adjusted budget and then, if you have investable assets left over you aggressively invest those for the long term. See retirementresearcher.com
5. What is your debt picture? If you have high-interest consumer or mortgage debt it might make more sense to pay that down, or off, instead of investing in today's frothy market.
The variable annuity (VA) might make sense if it's being used to strategically deal with #3 & 4 above. But I think, as part of a flooring strategy, laddered indexed annuities with income riders would be less expensive and more effective. However, in the absence of a comprehensive plan, and side-by-side comparison of the best alternatives, it doesn't make sense to just buy a VA.
Assuming you understand the differences between Traditional and Roth IRAs, here are the main risks assocated with Roths:
1. Tax Risk- Since Roth contributions are after-tax, and earnings are tax-deferred- and then tax-free if properly withdrawn -they work well if you expect to be in a higher tax bracket in retirement vs. when you're working. What if you're wrong and are in a lower tax bracket in retirement? Then you've forever lost the initial tax savings you could have enjoyed by instead funding a 401(k) or Traditional IRA.
2. Sequence Risk- Coupled with Tax Risk, Sequence Risk could compound the damage. Suppose you're ten years from needing your Roth funds and you decide to maximum fund the Roth with aftertax dollars. And you make this decision at the crest of a record bull market which then turns into a record, ten-year bear (declining) market. Not only have you permanently lost a tax deduction, you've lost principal to boot.
3. Miscalculation Risk- If you opt to only make Roth contributions, the resulting accumulation may be inadequate to fund your retirement due to the $5500 annual contribution limit ($6500 if over age 50), especially if your rate of return projections and accumulation goals are unrealisticly calculated.
4. Opportunity Risk- If you have a matched employer-sponsored retirement plan and you opt for a Roth instead then you're missing out on free money!
So, in the very least, you should fund your 401(k) or 403(b) enough to get maximum matching and fully fund a Roth IRA as well.
Is this your conclusion or your brokers? You would be remiss to give up a 100% first year rate of return on your employer's match. Suppose, for example, your monthly wage is $2000. If you contribute 3%, or $60, then so does your employer. You want to at least continue getting your annual match.
If you have the resources to set aside after-tax dollars in an investment account, why not max out a Roth IRA first? For 2017 you can defer up to $18,000/yr. into the 401(k) and also contribute up to $5500 to a Roth. The key unknown quantity, especially at your age, is whether you will retire into a higher or lower tax bracket. If higher, then you definitely want the Roth IRA. If lower, then max out your 401(k). If you can afford it, do all three! Nonqualified (not tax-deferred or tax-free) investment account income would be taxed in retirement as long term capital gains and/or dividends, which could be lower than your ordinary income tax rate. So, as a result, you would have three different tax buckets:
1. Taxable- the 401(k), in case you retire into a lower bracket
2. Tax-free- the Roth, in case you retire into a higher bracket or have one or more high-tax years in retirement
3. Low-Tax- the investment/brokerage account, to fund discretionary spending
Finally, whether your money is in a 401(k), investment account, or Roth IRA has nothing to do with rates of return. You could design portfolios in all three with identical projected rates of return.
BTW, I would be wary of expecting a 6.29% ROR over the next 10 years. Research Affiliates predict the odds of that are zero. But good for you for thinking ahead!
Yes. But, more accurately, you can buy them within your Roth IRA unless it is with a fund family that doesn't offer ETFs.
Of course you have the right to opt out. What that would do for you is ensure that you miss out on any matching contributions by your employer (if offered) and that you accumulate no retirement savings.