Fruition Advisors LLC
Certified Financial Planner
Alison Davies established Fruition Advisors LLC in 2013 after working with an independent investment advisory firm since 2010. She has a comprehensive knowledge of financial planning and investment management issues, having worked closely with individuals and families to find personalized solutions for simple to complex financial challenges.
Alison is a CFP® (Certified Financial Planner™). This mark is the gold standard of the financial planning industry and indicates that Alison has fulfilled the rigorous experience, examination, and ethical requirements in order to receive this designation.
Alison also holds a Certificate of Completion from the Professional Sequence in Personal Financial Planning Program at the University of California, Berkeley Extension, a Series 65 license from the Securities & Exchange Commission (SEC), and she is a member of the Financial Planning Association (FPA) East Bay Chapter.
As a comprehensive financial planning firm, Alison and her team's goal is to completely understand each client’s unique financial circumstances. Their approach is to carefully analyze clients’ financial situations, provide individualized recommendations for clients to meet their financial objectives, and monitor progress. Alison's emphasis is on realistic goal-setting and the promotion of long-term financial health. She believes that everyone deserves peace of mind and security when looking toward their financial future.
Prior to entering the financial industry, Alison earned a Bachelor’s degree in American Studies from Williams College in 2000 and a Master’s degree in Literature from the University of California, Santa Cruz in 2005.
BA, American Studies, Williams College
MA, Literature, University of California, Santa Cruz
Professional Sequence in Personal Financial Planning, University of California, Berkeley Extension
I have two paths to answer your question.
1. If the sibling passes away before the parent passes away, then the parent's will or trust should be updated to reflect the parent's wishes.
2. If the sibling passes away after the parent passes away, then the estate could distributed several different ways. First, the estate could be probated according to the will or distributed according to the trust. Second, the estate could be distributed "per capita", meaning each share is equally divided per head. The assets would then go to the surviving beneficiaries. Third, the estate could be distributed "per stirpes", meaning each share is equally distributed per branch of the family. The assets would then flow through to the deceased beneficiary's children.
Bottom line is that the parent likely decided on a distribution plan when putting together their estate plan, however simple or complex.
It is often difficult to talk about money in families before the parents pass away, but I always encourage clients to have these conversations if possible to avoid confusion and disagreement when it does come time to distribute an estate.
Cost-wise it makes more sense to buy if you plan on getting a car and using it for the longer term, but if you are interested in having newer cars more frequently, leasing might make sense.
Since you don’t have a preference for a new car, I’ve found that a cost-effective way to go is to get a lease return at a dealer, about 2 years old at about half the sticker price of the new model and certified by the dealer, or a pre-owned car older than that also certified by the dealer. I don’t think the time and effort shopping around for a used car not held by a dealer is necessarily worth it, unless that activity is something that might be enjoyable for you. I would also recommend that you try to bargain them down no matter what the offered price is, and pay cash up front. Even though interest rates on loans are low and you can get a long term if you have good credit, with a mid-range car purchase it is generally better to pay cash if you have it available.
This is a question that I get frequently from clients, and they are not always elderly folks. Many people want to have a large chunk of change earning decent interest with no market risk, and at their fingertips if they need to access it. I did the research and found that online savings accounts offer the highest interest rates, along with other perks and often no fees. Two of the best high-yield savings accounts that I found were at Synchrony Bank (see https://gosyf.com/2qC74c6) and CIT Bank (see https://bit.ly/2HWpHMn). Please note I am not affiliated with either bank and these recommendations are unbiased. Both accounts currently offer a 1.55% APY, are FDIC insured, and don't charge any fees to open or maintain the accounts. While your grandmother may not be as comfortable with an online account as one at a brick-and-mortar bank, perhaps you or another trusted family member could handle it for her. Hope this helps!
Your question has a left-brain (logical), right-brain (emotional) answer.
The left-brain side of things is that it depends on the interest rate you are paying on your mortgage, regardless of whether you refinance or not. If that interest rate is lower than the interest rate you can reasonably earn over time by leaving the money in the investment account, it is worth it to keep the debt and earn a return on the money in the investment account. Despite recent interest rate hikes, we are still in a favorable interest rate enviroment for consumer debt, e.g. mortgages. For example, if you are paying 4% on your mortgage and could earn 6% in your investment account, mathematically it makes sense to stay put and pocket the extra 2%.
The right-brain side of things is that since you were instructed to leave your inheritance in the investment account, depending on who made that request could carry a fair amount of weight. If it was the person who left you the inheritance, it could mean a lot to abide by their wishes. If it was an investment advisor who has skin in the game to keep you invested, and therefore earn fees, then you should discard advice from anyone acting in their own best interest. Your right brain also may give you peace of mind and the ability to sleep at night with your mortgage paid off, and that liberation can be invaluable.
Hope this is helpful and best of luck deciding what it right for you.
First off, congratuations on being a super saver at a young age. You are right that the magic of compounding interest will especially work to your advantage the more you save now.
Here's how I would approach your situation, with the goal of maximizing the return on retirement savings while socking away money for a down payment:
- Contribute to your 401(k) up to the 6% match since the match is a 100% return on your investment
- Contribute to a Roth IRA with a $5500 annual contribution, if you qualify (the 2018 single filer income limits phase-out starts at $120,000 for modified adjusted gross income or MAGI, ineligible at $135,000)
- If you can't do a Roth IRA, contribute to a Traditional IRA with a $5500 annual contribution
- Make sure your emergency fund has 3 months of living expenses in it
- Put the rest into a savings account for the down payment (depending on how long you estimate it will take to save for the down payment, you could consider short-term CDs)