Verium Planning and Asset Management
Owner, Principal and Chief Planner
John Kageleiry is the owner, principal and chief planner for Verium Planning and Asset Management. John helps people plan effectively for retirement and other financial needs and act as the main support in reaching their goals. He brings with him over 15 years of financial services and planning experience to best support the people who choose to work with Verium.
Verium is a new generation advisor that charges a simple flat fee annually for the planning and guidance help we provide. This saves you money which helps you meet your goals more easily.
John's practice reflects the values he holds and what he believes works best: honesty, simplicity, discipline, low costs and optimism. He works as a Fiduciary so his clients' needs must always come first. The name of his company, Verium, is a mix of 2 latin roots and means “a place of truth”. These are values John believes in and will serve people well.
John started down this path working for a very large financial services company right out of college and worked for them for 6 plus years. He returned to financial services after a 7 year period working in commercial real estate. He worked another 8 years helping people understand and plan for their long term financial needs as Retirement Relationship Manager. Going forward John sees a firm that will remain relatively small but be able to provide for the most important financial concerns people have.
John lives in Dover, NH with his wife Lin (who is an NP) and their 2 kids. He grew up in Dover but have also lived in Boston, San Francisco and New York City, where he and Lin met. He studied at the University of New Hampshire and graduated with a B.A. in Communications and a History minor. He is currently enrolled in the Boston University Financial Planning program and expect to sit for my CFP designation in early 2017.
BA, Communication, Minor, History, University of New Hampshire
Assets Under Management:
Flat annual fee
As noted in the other responses, it's the $64 question. But to set this in context, no one knows what part of the yield curve will do what if/when rates do rise. Remember, the Fed only sets the very shortest of rates, the markets set the rest. Surprisingly, the yield curve has flattened since interest rate hikes by the fed started. So again, no one knows how this will pan out. I would respectfully add that a 5% loss in bonds is a bad year. That's a bad week for stocks. At some point, stocks won't like rising rates if we see them.
If you are seeking diversification outside of bonds, then you may want to consider alternative vehicles. Some examples would be commodities, managed futures, and other "trend" based approaches. Depending on the ETF or fund you choose, these approaches have been shown to be non-correlated to both stocks AND bonds. The research on this is fairly compelling. But that approach requires a patient long term outlook.
All that being said, I think it unwise to toy with your allocation in response to concerns that may or may not be born out. Make sure the allocation you have makes sense within your long term plan and goals and rebalance when possible.
I can see my colleagues have addressed many parts of this question but I was curious about something, why high yield dividend stocks? Do you have a preference for dividends versus a total return on your assets? I'll try to fill in some blanks.
Depending on what you mean by safe, no stock is safe on it's own, even one with a big dividend. If that company falters in their business, then the stock will probably drop, possibly wiping out years of expected dividend value. Furthermore, companies that are having difficulties may elect to cut or eliminate that dividend. That frequently sends the stock even lower. Also worth noting, higher dividend stocks are more adversely affected by rising interest rates.They act a bit like bonds.
To avoid concentrating your assets in one asset class, high dividend equities have a broadly diversified portfolio that matches your long term needs and goals. If it's income, you need to simply withdraw the amount that you need, as long as it is not excessive. This is a total return approach and does a great job of lowering your risk and giving you reasonable odds of reaching your goals.
If you don't have a comprehensive financial plan, it's difficult to know what shape you are in financially and subsequently, what your investment approach and income approach should be.
Regarding the fees, it sure sounds like it. As the previous advisor noted, banks aren't a good place to invest. In fact, what few people realize is that when you do invest at the bank, you have actually left the bank and gone to a broker dealer associated with the bank. No more friendly local bank, just a salesperson hoping to sell you something.
If either your wife or yourself aren't quite confident in your abilities to manage your investments, consider working with a Fiduciary advisor. This means the advisor must put your needs first and work solely in your best interest. That would have avoided big commissions on the investments she has been making (Really? 4.5% for an index fund?). You could even seek an advisor to consult on an hourly basis to review the holdings and get a plan for a different, lower cost approach.
There really is no defensible reasons to pay these fees when the marketplace for your investments is very competitive on costs and services offered. Reducing costs is the very best first step to making your investment dollars work harder for you. It equates to more money for you with a minimum of fuss.
99% of the people out there who try their hand at day trading lose money, sometimes a lot. When you consider the costs-commissions, bid/ask spreads, and other frictions, it becomes very difficult to make money on any consistent basis. Furthermore, the frequency with which you trade is a major obstacle to good returns. This is substantially supported by academic research. There is an old adage applicable here; How do you make a million dollars day trading? Start with 3 million.
While today's financial and political climate may be a concern to you, as to many others, I would still encourage you to think about the following items: Have you done actual written financial planning, ideally with a professional? If not, you should, and if yes, see how on track you are with more typical investment approaches. Buying and holding a well diversified portfolio that serves for goals and needs is a good probability bet to reach your targets. And don't forget to rebalance these holding which helps you manage your risk.
By doing these basic things, you simplify things and give yourself very few decisions to make over the years. When you day trade you got tp make lots of decisions constantly. That will typically lead to bad consequences.
That’s a great question, one which many people struggle with. The short answer is “it depends.” The previous responses touch on a range of issues you should be considering from the importance, or less importance of fees themselves but also whether you have the best selection of investment choices in which to invest. You should also consider whether having an advisor for your assets may be helpful outside the plan. All things to consider but I would submit there is another important set of considerations you should think about.
What many people miss on this topic is what rules does the plan and the IRS have when you leave your money in the plan.
First, what are the withdrawals that are available? Believe it or not many plans (rough estimate of between 30 and 40%) allow a full payout only. This means if you want anything, everything must leave the plan. This surprises many people and clearly limits how useful the plan might be to you. Other plans will only allow a certain number of withdrawals per year, which again crimps flexibility. Furthermore you are required to have 20% withholding in Federal taxes on withdrawals regardless of what tax bracket you are in, which could create an over-withholding in taxes. This last point does not apply to RMD’s, only ordinary withdrawals.
Regarding RMD’s if you want to take that from a specific fund in your plan it may or may not allow that. Some plans also do not send RMD’s automatically so if you aren’t on your toes you could forget and be subject to a 50% penalty from the IRS. No one wants that but it happens.
Howabout how your beneficiaries are treated? Many people mistakenly think that by naming their spouse they have addressed this issue but they may miss a very important point. If your spouse inherits your plan a few things can go wrong. First, while infrequent, a plan’s rules can elect to pay that account assets out, fully taxable, if it is not rolled over or otherwise removed from the plan within a certain timeframe. Secondly if your spouse inherits the account and if you have started RMD’s, then the calculation that applies to that RMD will create a distribution approximately 40% greater. This is due to the fact the IRS requires the single life table (not the Uniform Life Table used on the account owner) to be used on all inherited 401k’s and other deferred compensation plans like 403b’s. So if the spouse may not even need the RMD they will be required to take an even bigger RMD whether they like it or not. This creates excess taxes and speeds up the drawdown of the account. And if your beneficiary is non-spousal (think kids or siblings) the rules can be murky still and are generally less accommodating than for spouses.
And finally what happens to your spouse if you pass away? While you may have been confident and competent to handle your account your spouse may not be. This situation is more often perilous when the inheriting spouse is a novice and has no real knowledge of what they should do. This makes them very vulnerable to people without their best interest at heart. They can end up in expensive, complicated or illiquid investment products. This can cause a lot of financial chaos and stress. Having a trusted advisor you are already working with for an IRA will make that transition more comforting and easy for that surviving spouse.
So by rolling over your account the issues mentioned here now go away. But again, it depends what is most important to you and your loved ones.
So when deciding whether to roll over your plan, there are many things to think about. When pondering that question make sure you understand all the implications and rules that the plan and the IRS have for your assets when they stay in your old 401k. These plans are great for saving money but they might be a bad place for your money when you need it or when you pass away.