Picket Fence Financial
Kirk Kinder, CFP® (Certified Financial Planner) is the founder and President of Picket Fence Financial. He originally hails from Flint, Michigan where he spent the first eighteen years of his life. After eighteen years of winter and mosquito season, Kirk attended the University of Miami, Florida. However, after one year of school at UM, Kirk was offered an appointment to the United States Coast Guard Academy in New London, Connecticut, which he accepted. Kirk claims he left the warm weather and relaxed atmosphere to see if he could endure the rigors of a service academy and to serve his country, but most people think he was temporarily insane. Either way, Kirk spent the next four years of his life at the Academy where we traveled extensively, including a cruise to Europe on the Eagle, and performed a million push ups.
After graduating, he was stationed aboard the USCG Cutter Rush, a 378 foot ship, based out of Honolulu, Hawaii. The newly minted Ensign patrolled the waters from South America to the Bering Sea in Alaska conducting drug enforcement ops, search and rescue missions, and fisheries regulation. He even worked with the Russian Border Guard (the old KBG fleet) in the first joint operation in the Pacific since the end of the Cold War. After serving two years in Hawaii, Kirk was sent to Coast Guard Headquarters in Washington DC where he pushed a lot of papers and slept in a bed each night that didn’t move. However, Kirk still experienced some exciting events such as running with the Bulls in Pamplona and bicycling 3,500 miles across America for charity.
After his commitment was up, Kirk left the Coast Guard, but not before he married his beautiful sweetheart Michele. Kirk and Michele had a chance meeting at the 1996 Olympics in Atlanta as Kirk was on his way from Hawaii to DC. They dated for 3 years before marrying in October 1999. Since that time, Kirk and Michele had two daughters – Caroline and Shayla. For employment, Kirk worked for the Motley Fool where he served as their Director of Member Services. The Fool’s approach of exposing Wall Street’s dirty secrets appealed to Kirk. They shared a common belief that financial planners entrusted with other’s money should have their client’s interests at heart. After leaving the Fool, Kirk worked at a fee-only financial planning firm in Palm Harbor, Florida. There Kirk finished his studies for the Certified Financial Planner designation. Kirk then started Picket Fence Financial with offices in the Baltimore/DC area and Tampa/Clearwater, Florida vicinity. Kirk also has a Masters degree in Personal Financial Planning from the College for Financial Planning – the organization that manages the education requirement for the CFP.
Kirk has been quoted in several financial publications including the Wall Street Journal, Kiplingers, Investor’s Business Daily, Standard and Poor’s, and Bloomberg Wealth Manager to name a few. Kirk has also been featured on the local Fox, ABC and NBC affiliates in Baltimore and Tampa Bay. He has served on the Board of Directors of his local Financial Planning Association, is a member of NAPFA, and is a board member of his local Rotary.
US Coast Guard Academy
MS, Personal Financial Planning, College for Financial Planning
Assets Under Management:
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About Kirk Kinder, CFP
I am taking a different approach than the other advisors here. I think your goal should be to pay under 1% for all costs: advisor fees, trading commissions, investment products, and miscellaneous fees. Many options exist now to keep your costs in check like robo-advisors and advisory firms that charge under 1%. Costs are the one area you have total control over, and it has been proven that costs have a substantial impact on returns. The other reason to focus on fees is the yield on bonds is historically low. If you pay more than 1% in fees, and the yield on a 10 year Treasury bonus is 2%, you are losing most of your return on bonds to your advisor.
The 1% cost was fine in the 1990s but investors can do better today.
Good luck as you return to school. I hope the degree helps you advance your career. As far as using your IRA for health insurance, your options are limited. First, you cannot borrow from your IRA. You mentioned borrow in your question, but I assume you mean withdraw without the 10% early withdrawal penalty. Assuming that is what you meant, then you are still quite limited. The IRS allows you to withdraw from your IRA to pay health insurance if you are unemployed and received 12 weeks of unemployment benefits. You can also withdraw penalty free to pay for unreimbursed medical expenses above 10% of your adjusted gross income. Those are really your only options.
For you, I doubt you are receiving or received unemployment benefits since you are going back to school. If I am wrong in my assumption and you were on unemployment for the 12 weeks then you might be able to avoid the penalty. Since you are going back to school, your adjusted gross income might be low so you could pay for the health insurance premiums above 10% of your adjusted gross income with penalty free distributions from your IRA. That might be your best bet.
Just remember that the distribution increases your adjusted gross income and is taxable even if the penalty is waived. Also, I wouldn't be a planner worth my salt if I didn't remind you that you should look for all other methods to pay for insurance before tapping your IRA. The IRA is a long term savings vehicle and isn't tax friendly if used before 59 1/2. It really should be your last resort.
I usually recommend staying away from crowdfunding. Many of these investments are opaque and don't have the same due diligence requirements as publicly traded securities. Crowdsourcing is so new and new outfits pop up all the time trying to grab assets. If you really want real estate investments, you can buy a real estate investment trust (REIT). It isn't as tax efficient as outright ownership, but you have a diversified investment with properties around the entire U.S. If you still prefer an actual property, then you could look at some local real estate investing groups as there are opportunities to invest with professionals who have been in real estate for years.
Either way, make sure you do your due diligence. For crowdsouring, see how many projects they have funded. Find out how long they have been in business. Understand the liquidity of the investment, and remember that this is considered an alternative investment. I never recommend more than 10% of your investable assets in alternatives as they are usually less liquid (higher risk) and less transparent.
First, I am sorry to hear about your cancer diagnosis. I am sure this is a difficult time for your wife and you. I commend you on taking the steps to help her financial future during such a trying time.
To your question, I would not annuitize the contracts. What many people forget about annuitizing an annuity is that the asset becomes the insurance company's once you annuitize. This means that when you pass away, the asset is theirs. You can certainly add riders like a 10 year guarantee payout or even a joint payout (in some cases), but that reduces the payout substantially. I would just take the RMD from the accounts.
As a fee-only planner, I think the biggest advantage is removing the conflict of interest that exists with commissions. Clients tend to see how our advice can be more objective. I would alert you to be wary of fee-based advisors. Often, fee-based advisors can still generate the vast majority of their income from commissions so a fee-based advisor isn't free from the commission conflict like a fee-only planner is.
Good luck to you as you progress through school.