Golden Trail Advisers LLC
Mike Sedlak, founder and managing member of Golden Trial Advisers, LLC. advises executives, business owners and individuals on their financial planning and investments. Since 1998, Mike has worked on cases with people at all stages of their financial lives, from establishing savings targets and investment portfolios to developing business and estate transfer strategies. Mike is an investment analyst by training. He sets investment policy at Golden Trail Advisers, including holdings acceptable for model portfolios.
Mike has a high level of education and credentials in the financial services industry. He has broad designations such as his MBA from Northwestern's Kellogg Graduate School of Management. Mike has specific designations such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), and Certified Exit Planning Advisor (CEPA). Mike also has securities licenses through the supervisory level. Mike is a recognized authority on estate planning from a financial planning perspective. He has taught an "Advanced Estate Planning Concepts" course for the Exit Planning Institute, a national organization for advisers.
Mike's depth of financial education and experience enable him to advise clients on a broad range of financial issues. One specialty is the transfer and use of wealth for the next generation. In addition, for clients who own a business, Mike is experienced and credentialed as a CEPA adviser to guide business owners through the transfer process (including estate tax minimization). For business owners, transferring or selling the business can be the most important financial decision in their lives.
Mike has held top leadership positions in volunteer organizations including the YMCA (head of Southwest Adventure Guides) and the Rotary Club of Hinsdale (President, Vice President and Board Member). Mike lives in suburban Chicago with his wife and two children.
MBA, Business, Northwestern University
BS, Business Administration, University of Illinois at Urbana- Champaign
#Life and Long Term C
To add to what has been said, you would set up an irrevocable trust if you want the money to be out of your name. With a revocable trust, the money still would be in your name. Two reasons for making a trust "irrevocable" woud be estate planning or asset protection.
Before you set up an irrevocable trust, be sure you won't need the money in your name later for another purpose. As my fellow professionals pointed out, you cannot change terms or get back the money you put into an irrevocable trust.
Another difference is that an irrevocable trust needs to do a tax return each year that it generates income. That can be costly, time consuming or both.
Hope this helps your understanding.
All else equal, stock prices over the long run correlate with earnings. S&P 500 earnings have grown about 6% plus inflation annually. We would expect earnings to continue growing as companies add more products and more markets, reduce expenses, etc. That doesn't mean all companies will grow their earnings equally or the pattern of growth will be a straight line. However, since we would expect higher earnings over time, we would also expect stock prices to increase.
That said, markets respond to all kinds of news and information, especially in the short run. Why? Market participants want to get the edge on the competition and buy if they think prices will rise and sell if they think markets will fall. News and information that looks like it will hurt earnings would likely hurt stock prices.
Hope this helps.
If the amount of money in your IRA is small, you will have one less thing to keep track of if you roll it into your 401k. If it is large, you might benefit from having a separate strategy for your IRA.
Another benefit of keeping an IRA is that it is easier to get money out if you need money then from my 401(k). So, it is also good to have a fund outside your company plan.
I agree with my colleague that there are a number of unknown factors. The return will depend on how you invest it and level of expenses, not whether it’s in an IRA or a 401k.
Good luck with your decisions.
Your question sounds easy, but there are a number of considerations.
The main priority is to determine the amount of after-tax (Roth) versus pre-tax (e.g. traditional IRA or 457) you want to invest. With the increase in standard deductions, the value of Roth / after-tax retirement accounts has increased. Money in a Roth IRA grows tax free and is withdrawn tax free. If you do not need the tax benefit of putting away money pre-tax, a Roth is a great place to have some money.
If a tax deduction is still important to you, you want to make sure you put money into a pre-tax retirement account. That can be either a traditional IRA or 457 plan. What some people do is add money to both pre-tax and after-tax retirement accounts. Note that there are income limits if you are eligible for participation in a 457 plan and want to make a deductible contribution to an IRA - so you might be better off putting all of your pre-tax money in your 457.
The next priority (if you want to invest after-tax money) is to find out if your 457 accepts after-tax (Roth) deposits? If so, you could put everything in your 457 and keep life simple. If the plan rules allow, some of your 457 money could be pre-tax and some could be after-tax. If you determine that you want to put some money into an after-tax retirement account and your 457 does not hold after-tax deposits, you would need to set up a Roth IRA. You could start a Roth IRA without doing a rollover or conversion. Just add money to it when you want to invest.
If you want to move your SIMPLE IRA to your 457, you would have to go through one extra step. Money in a SIMPLE IRA can only be rolled into another SIMPLE account. In any case, you should ask your financial planner to change your SIMPLE to a traditional IRA. That will get it positioned for the future and there is no downside or tax implication.
Your other question was whether to convert your SIMPLE IRA to a Roth IRA. Doing so would increase your income (and taxes) and might not be worth doing.
Good luck with your decisions.
1.55% compuunded would become about 1.562% for the year. If you leave the money in all year, you would have about $7.81 at the end of the year. But if you take out the money each month, the annual rate equivalent would be very close to 1.55%. So, the monthly income on an investment of $500, would be about $0.646 per month, or about $7.75 per year.