Anthony Capital, LLC
Dave Anthony, CFP®, RMA®, has been involved in the financial services field since 1998 and is the President and Portfolio Manager of Anthony Capital, LLC, a Registered Investment Advisor firm. Dave started Anthony Capital, LLC to provide unique and integrated wealth management solutions for his clients. Through the years, David has helped thousands of individuals with their financial and retirement plans. Prior to forming Anthony Capital, LLC, David worked at several of Wall Street’s largest firms.
As a fiduciary, Dave enjoys teaching and educating his clients about diverse and complex retirement planning principles and enjoys designing comprehensive retirement income plans that help his clients optimize all areas of their financial lives, including investments, insurance, health care, Social Security, pension, taxes and estate plans.
David received his bachelor’s degree in Finance and a minor in Economics, Personal Financial Planning, and Spanish from Utah State University. He successfully completed Boston University’s Retirement Management Program, and is a Certified Financial Planner™, and a Retirement Management Analyst™. He is the creator of FBIAS™: Fact-Based Investment Allocation Strategies.
David is seminar speaker and presenter on retirement income planning, investment management strategies, and veteran’s benefits. He is the host of "The Retirement Income Show with Dave Anthony, CFP®, RMA®" which is broadcast Monday afternoons from 2-2:30 and Sunday evenings from 8:30-9:00 on 560 KLZ , He is currently working on his first book on retirement income planning strategies.
Dave is also the owner of Side by Side Quotes.com, LLC, a independent insurance agency that offers side by side price comparisons for Medicare, long term care, annuity, life insurance, and disability plans. He feels that as a fiduciary, it is his obligation to act in his clients best interests and present unbiased and straight-forward insurance solutions.
When he is not helping his clients optimize their retirement incomes, you'll find him exploring the mountains, rivers, and lakes of Colorado with his wife and six kids. He is an avid white-water Kayaker, canyoneer, 14er, and advocate of all things adventure related. He is active with the Boy Scouts of America, having volunteered for multiple years as a Scout and Varsity leader. He is an Eagle Scout and enjoys coaching his kids various sporting activities.
BS, Finance, Economics, Personal Financial Planning, Utah State University
Retirement Management Analyst program, Boston University
Anthony Capital Income puzzle intro
Fact Based Investment Allocation Strategies
Annuity Questions--Should you buy and annuity?
Retirement Plan Smackdown: Long Term Care vs Life Insurance & annuity long term care
The big 50! Congratulations.....you are smart to plan out what to do with your excess investment monies and how you invest over the next 10-15 years will be very can make a big difference.
First off your saving choices are Roth IRA, Regular IRA, Non-Qualified account, or life insurance. Which one you should put your money in depends on your income now, tax bracket, and future projected income in retirement.
Some advisors say that you should "pay the tax now and contribute to a Roth IRA" but I only recommend that if you are in the under 25% tax brackets. If you are 25% or over, it usually makes sense to get the tax deduction now and then convert over at a hopefully lower rate when you retire. This way you can have your cake and eat it too.
The idea is to save a bunch of money into your tax-deferred accounts now, and then convert them over systematically once you retire, preferably before you start taking Social Security and at lower rates so you can maximize your income brackets.
If you saved over $1 million, then you're an accredited investor and there are other provisions of the tax code that may allow you to get other substantial tax benefits and convert your IRA over to a Roth IRA at 50 or 60 cents on the dollar.
Alternatively, most IRA accounts limit your ability to use margin, whereas with non-qualified account you can use much higher multiple to make (or lose) much higher amounts via leveraged strategies. If you have a good solid risk managed plan in place, that strategy shouldn't be overlooked.
An annuity is a powerful financial planning tool that when used for the right purpose, and in the right situation, can provide tremendous value to the annuity buyer. Annuities can add stability and security to an investor's portfolio when they are used in an efficient manner. Unfortunately, the vast majority of annuity buyers misallocate their resources when purchasing annuities and end up with an underperforming annuity that costs too much, pays too little, and is simply an inefficient use of their resources.
By definition, an annuity is a contract between you and a 3rd party (usually an insurance company) whereby in exchange for making a lump sum payment, the insurance company promises to do four things:
- Provide an income for a certain period of time,or for life
- Provide for accumulation, or asset growth
- Provide a death benefit
- Provide for long term care benefits
There are only two types of annuities: Fixed and Variable.
- Immediate annuities--start paying income right now (to start in less than one year)
- Deferred annuities--start paying an income later (anywhere from 1-50 years)
- Multi Year Guarantee Annuities (MYGAS)--pay a fixed interest rate each year for a certain period of time
- Indexed Annuities-increase in value depending on the performance of a baseline index like the S&P 500, Dow Jones, Gold, Real Estate, or even a negatively correlated index.
The key feature of fixed annuities is that the principal is FIXED--it is guaranteed by the insurance company. Gains are usually locked in each year, and you can mix and match different types of annuities to create a guaranteed income stream in retirement that is not influenced by interest rates, market fluctuations, or other typical market influences. These are good options for conservative individuals, and are not regulated as an investment, but an an insurance only product.
- With these types of annuities, the principal value "varies" based on the performance of the sub-account values that your money is allocated to. These are viewed as investments and are sold by individuals that are licensed to sell both investments and annuities. These are good for individuals that want upside appreciation, and can tolerate risk in their portfolio. This type of investment typically has higher fees and expenses because of the additional insurance costs that are prevalent because of the insurance component.
SHOULD YOU BUY AN ANNUITY?
- This depends on the problem that you are trying to solve. You money has a job to do, and you can choose to find the most efficient and effective way to get the job done, by allocating your scarce retirement resources in a comprehensive, coordinated plan that maximizes returns, reduces risks, and eliminates unnecessary fees, taxes, penalties, and surcharges, or not. This is where the misuse of annuities come into play.
- Insurance companies want you to believe that whatever your financial problem, whatever your worry, there is an annuity that can fix it, and that just isn't true. They are good solutions for some financial problems, but horrible solutions for other problems. Most investors haven't appropriately defined with their advisors what problem they are trying to solve, and therefore end up misallocating resources into an underperforming annuity and have been sold something without looking at the overall picture.
HOW DO I KNOW IF I NEED AN ANNUITY OR NOT?
- Define what problem you want your money to do for you (Income, growth, legacy, or long term care benefit.)
- Look at all of the available annuity options that can solve for those needs
- Look at annuity alternatives that do the same thing
- Determine how much money is required to solve the problem
- Compare fees, costs, expenses, taxes, performance, what-if scenarios
- Allocate resources accordingly
- Monitor your decision and make changes when necessary.
HOW CAN I GET HELP SELECTING AN THE RIGHT ANNUITY?
- You need to work with a professional. Someone who knows what you need, and can match you up with the right solution. In my firm, we like to look at prices and solutions from all available annuity providers, not just 2-3, and try to create the greatest benefit for you using the least amount of money.
Night and Day. An IRA is a covered by Title 26 of the US Code of Federal Regulations which means that it is a type of Qualified account. When you set it up, you qualify for an income tax deduction (if you meet the thresholds) for your contribution, and the earnings grow tax-deferred. The intent is that the monies are to be used for your retirement in your 60's, so the IRA imposes an early surrender penalty of 10% + income taxers if you withdraw the monies before then.
An annuity is not a qualified account. You get no tax deduction for setting it up, but the earnings do grow tax deferred indefinitely. If you're under 59 1/2, you'll have to pay a 10% penalty to withdraw funds (in most cases) and the income is taxed as ordinary income.
It is sometimes confusing because some people can buy tax-deferred annuities inside of a tax-deferred IRA account. The IRA account is the "vehicle" and the annuity is the product or gasoline that runs the vehicle.
You are limited as to how much money you can put into an IRA account, but there is no limit to how much you can contribute to an annuity.
Annuities and IRAs are powerful financial planning tools. I have clients that have maxed out the total allowable 401(k) and IRA contributions ($53,000) and still have money left over. In this case, they'll purchase investment-grade annuities with low fees and expenses to grow their tax-deferred savings even more.
It depends on what type of bond you are purchasing. Typically, larger term bonds have a longer duration and therefore are more prone to interest rate risk when rates rise. That being said, if you own an individual bond, even though you may have a 10 year bond with a duration of ten, and if rates rates rise by 1% your bond price decreases by 10%, you will still get PAR VALUE at maturity. Not so with a bond mutual fund. This is why I 100% prefer individual bonds that have a defined maturity date over bond mutual funds every day of the week.
The advisors who have never traded individual bonds will say that you are taking on too much risk and you won't know which bonds to pick, etc. Hogwash! You can very easily buy 40-50 bonds, and spread your risk out across multiple sectors, asset classes, and time frames to generate a nice 5%-7% annual return portfolio. Actually, if you do this the right way, you want rates to rise because people who bought the wrong kind of bonds and who don't know what they're doing get all crazy and start jumping off the cliff like scared lemmings. Then sell their bonds and a loss, and if you've staggered your portfolio with money maturing each year, you are picking them up at a substantial discount and value. Brilliant!
So, YES you should invest in bonds, but get the right individual bonds from the right advisor that can help you put these things together. More income + less risk + greater returns. Fantastic.
Why on earth is a 26 year old male putting $300/month into a $295K death benefit policy??
The fact that you are even asking this question means that you've been sold something by an agent with no follow up or follow through on how to properly manage that policy. A properly designed whole life insurance policy can be one of the more powerful advanced financial planning tools that exist, but if you are concerned about the cash value, and it is obviously not worth $9,000, then you've been sold something that may not be the most "efficient" use of your $300 at this time.
I'd take another look at your pot because right now it is very expensive!
Case in point:
If you need the $300K death benefit, then get a 20 or 30 year convertible TERM plan for $14/month. Invest the $286/month difference into your ROTH IRA for the next 30 years. At 10%, you'll have $646,000. At 12%, you'd have over $1 million.
Max out your 401(k) and other tax-deferred retirement plans first and then look to put the excess cash into a properly designed whole life or universal life policy to be your own banker. You probably aren't putting in enough to make much of a return above and beyond your policy fees and expenses so you are mis-allocating resources. Do the future 56 year old you a favor and rearrange things now to have more later. It could be worth $1 million!