Raymond Russo

Personal Finance, Retirement, Investing
“Raymond Russo, Owner of Virtuoso Capital Management, provides financial planning strategies that use existing laws and product designs, and a deep understanding of client needs and objectives to orchestrate successful planning of personal & bus. economies”

Virtuoso Capital Management

Job Title:

Owner, CEO


Ray Russo has been a successful wealth advisor for 30 years. Ray is a licensed agent for securities, life, health, and disability. He is also a licensed Investment Advisor Representative and former Real Estate Broker. In his tenure as an advisor, he was responsible for training and development of over 3,500 agents, preparing them for a career in financial services. First and foremost, Ray feels most at home in his role as a consultant/trainer/teacher. He is the CEO of Virtuoso Capital Management, a Registered Investment Advisor (RIA).

Ray is a solutions oriented financial planner and Fox Business News Online contributor who is one of the few in the industry that has not only financial services experience, but business and real estate experience as well. Ray has been an entrepreneur since he was 22 which give him a unique perspective when dealing with clients, especially those that are self-employed. His primary purpose when working with individuals, couples or businesses, is to be certain they understand all that is involved in the planning process, and how to use their assets (both tangible and non-tangible) to support their ultimate goals.

At the end of the day, that results in plans that are more thoughtful, comprehensive and in true alignment with carefully thought out objectives. Generally, Ray is always attempting to look for inefficiencies in each unique situation, be they tax, expense, income, investment or insurance inefficiencies, always with an eye toward protecting assets from an increasingly intrusive government and litigious society.

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    Investing, Choosing an Advisor, Starting Out
Will any Financial Advisor meet with me?
71% of people found this answer helpful

Of course there is! While it is true there are some snobby practitioners in the industry, there are many that will give you their time. There have been more than enough times when I've worked with clients with meager means, but with the right mentality and desire went on to be millionaires. So it will be with you if you keep up being a good saver/investor. 

Allow me to give you a bit of advice regarding your 401(k). Most people in my industry like qualified plans (401(k)s, IRAs, 403(b)s and the like) because they represent the low hanging fruit and are easy to close sales. They are not, however, the best investments for the long term. Here is why:

1) They have typically been among the most expensive ways to invest. New rules have finally made expenses more transparent, but not necessarily less expensive.

2) While there are some good 401(k) platforms, most have a very limited range of investment options. That gives you little room to reallocate to what is going on in the market.

3) If you ever leave your job and one day want to move your 401(k), there is always the remote possibility that you could catch the old plan in the middle of a provider change, whereby your money will be stuck for as much as 90 days until the audit is done before the change is implemented. This may or may not be an issue, unless it actually happens and you need your money now, as in, you bought a first time home and you need your money to close escrow.

4) There is often not enough of a match to justify the investment. Allow me to put a perspective on this. Let's say you are a farmer with 1000 acres of land with which you want to plant and grow corn. So you go to the supply store for corn seed, and on the counter are two boxes of seed. One says free corn seed and the other has a price. So you say to the person on the other side of the counter, what's with the different corn seeds? Why is one free and the other I have to pay for? The clerk then says, well, the free one really isn't free. You can have your seed for free (the front end tax deduction), but we will charge you on the full harvest of the corn and at a price we alone will dictate in the future. Or, you can choose the other seed, the price for which will be known in advance as it is right now, and you will never have to pay for it again. Which would you choose? You see, that is the carrot and stick approach of our government. They give you a tax deduction on the front end (the carrot), only to tax you on the fully compounded and inflated dollars in an unknown tax bracket (the stick) in the future. I ask this question of all my clients, are taxes going up or down in the future? Everyone says up! Even with Donald Trump who is talking about lowering taxes, you are only 23 years old and by the time you retire, I would be willing to bet you won't be so lucky. There are other ways to invest your dollars where you get more freedom and flexibility, as well as tax free distribution with returns that rival the markets. After all, the S&P index has only averaged about 3% since the year 2000. Not very good when you consider the risk you are taking. 

5) A 401(k) cannot be stretched. This, while not a very important item for you now, can have dramatic impact on your legacy. This is an important topic to discuss, but not enough room here to do it.

6) Other than investment options, there is no flexibility in these plans. You must wait till you are 59 1/2 to get at the money without penalties. What if you want to buy a piece of real estate for investment purposes? In your plan, you have to take out $2 to use $1. The other goes to taxes and penalties. There are exceptions for first time home buyers and for hardship situations, none of which is being addressed here. In general, just know that anytime you get in bed with the government, there are always tons of red tape, i.e. rules and regulations. There are consultancy firms that specialize in qualified plans for the simple fact that all the rules associated with them are so convoluted and voluminous, that most in the industry do not know all the rules and often provide erroneous advice regarding them. 

For now, here is what I recommend:

1) If your company has a plan with enough investment selections, by which I mean a couple hundred at least, then perhaps you can petition your company for a better plan. There is a federal regulation called 404C, which requires employers who provide plans to provide an adeqaute education. If that isn't being done, the employer is subject to liability, often leading to litigation. This is reason enough to provide adequate options for the plan, by the employer.

2) If that doesn't work, and even if it does, check the plan document or call HR and ask if "In Service" distributions are allowable. This means that you do not have to terminate employment to self direct any part of your plan balance into a self directed account with better options and/or safeguards. It, along with better and more plentiful investment options, help mitigate the risk to the employer. More and more companies are doing these sorts of things for that very reason.

3) If you plan to stay with the plan, limit your contributions to the company match. The reasoning is that if you get a dollar for dollar match of say 100% of the first 3%, then limit your contribution to 3%. This way, it's your employer contributions paying the taxes, not yours. If it is not a dollar for dollar match, you will just have to come up with an approximate formula that addresses the basis of what I just said. Then, look for other ways to invest the money you were putting into your 401(k) when and if you were over doing it.

4) Again, if you are planning to stay in the 401(k), utilize the loan feature that may exist in your plan, when and as needed. Check with your HR department to be sure if loans were made available when the plan was set up. This is a little known, little understood and under utilized part of a 401(k). The money in your plan has never been taxed, so taking the money out in the form of a loan to buy a car, for example, is a much better way to finance a car. For one, it is like getting a discount on the purchase price by the amount of your tax bracket. The payments you make, including interest, is simply paying yourself back to enhance your retirement, and since it's a loan, the money you receive is not taxed. It beats paying a finance company interest which once gone, is gone forever. Keep in mind that any loan outstanding, if and when you might transfer that money to a new employer 401(k) or self directed investment, either requires that loan to be paid off first, or may be able to be transferred to a new plan, depending on a number of factors. Most often, the loan will get paid off before transfer and thus a tax and penalty will have to be paid. The only way to know for sure is to check with the new carrier or investment company. Generally, you can borrow up to 50% of the amount in the plan and is payable on a 5 years basis. The money can be used for any purpose at all.

The thing about planning is, that there is always more to the story. Each person has a unique set of circumstances, and as such, the advice people like me provide are going to be different for each client. This is an ever changing industry with respect to taxes, and product innovations and design. Seek help from someone competent, or call me at 818-300-4446. I will be happy to assist. That is the least I can do for a fellow New Yorker.

Peace out!


April 2017
    Financial Planning, Real Estate
What is the best way to buy a new property while converting a home to a rental?
67% of people found this answer helpful
March 2017
    Annuities, Asset Allocation, Bonds / Fixed Income
Should I replace my fixed income with an annuity in my portfolio?
67% of people found this answer helpful
January 2017
    Personal Finance, Starting Out
If you had to give a young adult one piece of financial advice, what would it be?
60% of people found this answer helpful
April 2017
    Financial Planning, Investing
Is my 457 deferred compensation rollover invested appropriatly?
50% of people found this answer helpful
March 2017