North Capital, Inc.
As a Director at North Capital, Daren's primary responsibilities have included developing the firm's international partnerships, and assisting with the launch of North Capital's own robo-advising platform, Evisor. Daren is also responsible for new-client outreach, as well as maintaining current client relationships, including their portfolio management and planning needs.
What Daren likes best about working in financial services is the combination of people and quantitative skills that is required. As a financial advisor, Daren gets to use his aptitude and interest in math, as well as apply his teaching background, and people skills on a daily basis. This fulfillment drives Daren when he is at work. In his current position, he is fortunate to be surrounded by such qualified individuals whom he learns from every day.
Prior to joining North Capital in 2014, Daren taught in Canyon's School District and at the University of Utah. Daren earned his BA in Spanish Education with a minor in Business Management, and subsequently his Master of Science in Finance, both from the University of Utah. He holds a Series 65 License.
MS, Finance, University of Utah
BA, Spanish Education, University of Utah
Assets Under Management:
Introduction - Daren Dearden, North Capital
Generally, you can plan on .55% of the original loan amount. Once you have 20% of equity in the home, you will no longer need the PMI.
Defined benefit pension plans are becoming far less common, due to the high cost to employers. Generally, when you retire, you start receiving your benefit. It is a set amount, and continues until you die. Some pensions offer a survivor clause, whereby you can take a reduced amount, in exchange for the payments continuing for a surviving spouse. The benefit amount is usually based on your average salary, years of service, etc.
A definent contribution plan is like a 401(k). You, and in some cases your employer, contribute a certain amount each paycheck. At retirement, the amount you receive, and for how long, isn't certain as it is with a defined benefit plan. Rather, you will draw down on the sum of your account, for as long as it will last. Many people solicit the help of a financial advisor to determine how much they can afford to withdraw annually, so that the sum can sustain itself throughout the rest of their life.
In a defined benefit plan, the obliger (the employer) assumes all market risk - whether the value of the funds goes up or down, they are obligated to pay the same amount to the retired employee. In a defined contribution plan, the employee assumes all market risk - if the value of the account goes up or down, the amount they can afford to withdraw in retirement will fluctuate accordingly.
Your ability to tolerate risk, personally, is your risk tolerance. For example, would you be okay with extreme volatility in your portfolio, if it was for the sake of greater long-term returns? Some people would agree with this statement; their risk tolerance is relatively great. However others might disagree, and say they would prefer stability, even if it meant lower returns; their risk tolerance is relatively low.
Risk capacity is a function of your actual ability to take risk. Someone who is several decades away from retirement has a greater risk capacity than someone who is only a couple of years from retirement. Someone who has a high net worth has a greater risk capacity than someone with very limited funds. Risk capacity has to do with the amount of risk you can afford to take; would a 20% market downturn affect you dramatically? Or do you have enough funds that you could survive such a dip? Or, do you have enough time to recover from such a dip, before you'll need to access the funds?
One reason to start a Roth IRA is because there are no RMDs (required minimum distributions). This means that, unlike a traditional IRA, you can leave the full amount in the account to keep growing, as long as you don't need it. Many people are forced to withdraw from their IRA, and pay taxes on the distribution, even though they have other assets to live on, because of RMDs.
Another reason is that the growth in a Roth IRA is tax-exempt. Even though you are only 7 years from retirement, it could be several decades before you had to tap into the funds you contribute to a Roth IRA. This is because you could choose to spend down these funds last, thereby leaving them in the account to grow, tax-free, while drawing down on your other tax-deferred assets.
When you retire, you will likely want to roll the funds from your 403(b) into a Traditional IRA. At that point, you could convert some of the funds to Roth, if you haven't started one already.
First of all, you are smart in looking to transfer the account to another qualified retirement account, as you would be penalized from withdrawing the funds. I would suggest doing a direct rollover to an IRA. Besides your rollover from your 401(k), you can contribute up to $5,500/year to this account. As long as you are below the income limit (61K for single, 98K for married), your contributions are tax-deductible.
However, you might want to consider contributing to a Roth IRA rather than the traditional IRA that you roll your 401(k) into. While you can't receive the tax-deduction now in a Roth, the account will be tax-exempt, meaning you'll pay no taxes when you begin taking distributions at retirement. Furthermore, contributions to a Roth IRA can be withdrawn at any time, without penalty, so you have access to the money if you need it in an emergency.