Bloom Asset Management, Inc.
Jack K. Riashi, Jr., CFP® has been with Bloom Asset Management since 2002 and has been an active member of the firm’s Investment Committee since inception, which is responsible for setting investment strategies and selecting approved securities for client portfolios. He provides a wide range of financial expertise including personalized investment management, asset allocation, and comprehensive retirement planning. Jack has been featured as a financial expert for the Detroit News' Money Makeover series and has been a frequent guest on WXYZ-TV Channel 7 Action News providing financial advice and market observations. He has also contributed numerous articles for the firm’s website, MoneyTalk and MoneyWatch newsletters. Jack has also been selected as an HOUR Detroit Five Star Wealth Manager each year since 2011, an honor he works hard to achieve.
Jack has been serving clients in the financial service industry since 1987, holds the designation of Certified Financial Planner (CFP®) and is an active member of the Financial Planning Association. He is a graduate of Wayne State University with a bachelor's degree in finance and has been a featured speaker at many Bloom Asset Management seminars.
As a CERTIFIED FINANCIAL PLANNER™ practitioner, Jack has met rigorous education and ethical requirements and has gained extensive knowledge in the areas of financial planning, risk management, investments, income tax planning, and retirement and estate planning.
In his free time, he enjoys spending time with friends and family and is an avid golfer and cyclist. Jack is also very actively involved in his Church and has contributed his expertise in financial planning and goal setting to the Church’s Finance Committee over the years.
BS, Finance, Wayne State University
Assets Under Management:
This is one of these life events that call for a detailed overview of your situation. The successful sale of your company is a real achievement. It appears this sale put you in a strong financial situation and may afford you the chance to live very comfortably for the rest of your life and the life of your family if you plan appropriately. At this point, I would not worry so much about the stock market reaching all-time highs as I would establishing a game plan for the rest of your life. The game plan includes mapping out whether you plan to never work again, how much income you will need, and making sure you have retained the services of a competent CPA, financial advisor, and an attorney to name a few. This team of professionals will be helpful to you going forward.
Depending on your goals and objectives, and more specifically, your annual income needs, you may not have to have as much exposure to riskier assets like stocks than you think. There are a number of ways you can invest this money that will help sustain your standard of living for the rest of your life. You could establish a globally diversified investment portfolio that includes a number of asset classes like stocks, bonds, cash, or even annuities, which I do not particularly care for. In other words, you could take some of the money and generate a lifetime stream of income that will last the rest of your life using an immediate annuity so you are not entirely dependent on market returns. Again, I do not believe you need to take as much risk as you think necessary given the size of your assets, but this depends on your long-term income needs. You could live another 45 years plus so you want to be sure that any strategy considers a long-term life expectancy.
It may also make sense to interview at least three to five financial advisors before making a decision to hire one. You want a firm that will work with you and guide you prudently. You do not want to use a firm that wants to sell products as your solution(s). Be very careful and obtain referrals from other professionals. Please visit the CFP web site--CFP.net and try to find fee-only advisors.
Take your time and do not make any quick decisions. This is a time for personal reflection and goal setting.
I wish you the best of luck!
I'm sorry to hear you are losing your job. Are you planning to look for another job? Six months is a long time and you may be able to secure another job potentially, or at least work on it.
You have done an excellent job of accumulating retirement capital given that you have $1.4 million in your IRA. It is always a good idea for everyone to have a cash reserve of at least 12 months of living expenses. Some say less than that, but I generally like to be even more conservative and say twelve months is safe. You have about $52,000 in cash right now, current cash balance and $14,000 in mutual funds you can sell to raise more cash. The amount of cash you need depends on your living expenses and what you plan to do after you lose your job. If you desire new employment and believe you can secure another job, then you might not need to build as much cash as you think. You will need to cover health care expenses, for both of you since you are ten years away from Medicare. You are also some years away from applying and collecting Social Security benefits.
In the end, you have to determine your monthly spending while you have a job and when you do not have a job. There is a way to receive distributions from your IRA before age 59 1/2, but I'm not sure I would recommend doing so. Again, this all depends on whether you desire to seek new employment. You did not mention any retirement plans in six months.
You may want to consider sitting down with a competent financial planner that can help you develop a sound plan for your situation. They would provide more insight regarding your current and future plans.
Best of luck to you!
It sounds like you have had a plan in place for some time, which is great! Being able to retire at age 55 is quite an amazing feat these days so congratulations. You certainly want to make sure you have sufficient resources to fund your retirement spending, which includes paying for health insurance/expenses. As you indicated, it will be ten years before you can enroll in Medicare and twelve years before applying for SS benefits. Therefore, you want to make sure your resources, including everything even future SS benefits, are enough to last throughout your lifetime.
With respect to your 401(k), I would certainly continue contributing up to the amount of your employer match since that is free money. If you have outside investment money (outside of your 401k), then you can use those monies to help fund your spending. Of course, if you retire at age 55, then you can legally withdraw from your 401(k) without penalty. This is important if you do not have taxable assets. If you do not have taxable assets, then you want to keep the 401(k) open and withdraw from that. Otherwise, you would have to pay an early withdrawal penalty if you withdraw from an IRA before age 59 1/2. I normally recommend that investors roll over their 401(k) into an IRA. The benefits of this are twofold--1) you can expand your investment choices at a firm like Schwab or Fidelity, and 2) you have expanded beneficiary options.
Congrats again on your retirement plans and best of luck to you as you move on the next phase of your life!
The most common types of investments include mutual funds, Exchange Traded Funds, and even individual securities such as stocks and bonds. Since the account is tax-deferred, which means the gains and/or income are not taxable until you withdraw the funds, it may be wise to use more tax inefficient investments for these types of retirement accounts. Unless this is your only investment account, I generally avoid using individual securities for IRAs because you can't take capital losses in IRAs. You can take capital losses in taxable accounts so they would be preferable for individual securities.
Hope this helps you!
Congrats on your new job! That is very exciting. Best of luck to you!
You actually have several options:
1. You can transfer your previous 401(k) to your new employer, but you will have to find out if you are immediately eligible to enroll in their 401(k). Some companies require new employees to wait up to a year before they can enroll in a new plan. If that is the case, then you can still retain your previous 401(k) with your old company, and then once you are able to enroll in your new employer's plan, transfer your previous one.
2. You can perform what is called an IRA rollover of your old 401(k) plan. You would establish an Individual Retirement Account at a brokerage firm. It would be preferable to establish an IRA at a firm like Charles Schwab or a Fidelity Investments because their investment platforms are so extensive and trading costs minimal. The IRA would open the door to a wider array of investment choices, much wider than any 401(k) plan. However, some companies can offer broker windows that allow participants to purchase securities/funds outside the plan's normal 401(k) platform of selected investments.
You should review the investment options of your new company's plan to see if their options are adequate enough. Unfortunately, not all 401(k) plans are the same. Some 401(k) plans are better than others. I have seen some plans with below average investment options, i.e., not having sufficient asset classes, or having too many in the same area, etc. If the new 401(k) does not have sufficient options, then I like the flexibility of having an IRA that I can control or where I can invest in funds or asset classes that may not be part of an existing 401(k) plan.
Lastly, if you decide to roll over your previous 401(k) account, then please be careful where you open your IRA. I would strongly encourage you to consider using a discount brokerage firm that will not sell you products such as annuities that may not fit your goals but will fit the firm or broker's goals.
I hope the above was helpful to you. Good luck on whatever you decide!