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Author: Kelsie Joos

What to Look for in a Financial Advisor

Posted on by Kelsie Joos

Finding the right financial advisor is a crucial step in securing your financial future. Here are a few things to consider from Commas advisor Josh when searching for a financial advisor:

1️⃣ Align your needs with their services. Make sure your advisor’s offerings match your financial goals.

2️⃣ Understand how they’re incentivized and how that impacts you.

3️⃣ Take your time to find the right fit, and don’t hesitate to interview a few advisors to ensure a strong rapport.

“I think one of the first things you should consider is: Are the services that they are going to offer you aligned with what you need? A lot of financial advisors do a lot of different things. Some do financial planning, some focus only on investments, some sell products, like insurance. Those are all technically financial advisors but what are you looking for and just making sure that you understand your own goals and expectations going in and that the advisor you’re ultimately going to work with is aligned with that.

Another thing to look for in an advisor is: how are they incentivized? How are they getting paid? And then taking that a step further: what does that mean for you? If your advisor is getting paid on a commission to sell a product, not to say that that’s bad, but you just have to consider that their incentive is going to be to continue to sell products. If your advisor is getting paid for a financial planning fee, they’re probably going to be more incentivized to continue working on that financial plan for you into the future.

Finally, and honestly the most important thing is just finding someone you’re comfortable with. Someone you can trust. That might take a couple meetings to figure out. You might have to interview two or three different planners or advisers to figure out who is the best fit and I think that’s fine. Actually, as much as I would love for everyone to just come in and say they want to work with me right away I would encourage people to ask around because not everyone is a great fit for every advisor so I think just having a conversation or two with someone and getting a feel for, “Can I be comfortable, can I trust this person, do we have a good rapport?” Because at the end of the day you know you want it to be something where it’s a weight lifted off your shoulders.”

2023 Year-End Financial Planning Moves to Consider

Posted on by Kelsie Joos

As you prepare to say “goodbye” to 2023 and “hello” to 2024, here are a few smart financial planning moves to consider:
 

1. Make 2023 Contributions to IRAs (Individual Retirement Accounts)  
When? Before you file your taxes. 
 
If it’s part of your financial plan, consider “maxing out” your IRA by 12/31. This means contributing the maximum allowable contribution: $6,500 if under age 50, and $7,500 if age 50 or above. If you don’t have the cash flow to contribute by 12/31, don’t worry! Just make sure you do so before you file your taxes next year. 

2. Make 2023 Contributions to HSAs (Health Savings Accounts)  
When? Before 12/31. 
 
If it’s part of your financial plan, consider “maxing out” your HSA by 12/31. This means contributing the maximum allowable contribution: $3,850 for individual coverage or $7,750 for family coverage. Be sure to include any HSA contributions made by your employer when calculating your eligible contribution amount. If you are not contributing to your HSA via payroll deductions, you have until you file your taxes to make the contribution.

3. Make 2023 Contributions to 529 Education Accounts
When? Before 12/31. 
 
For clients living in and contributing to 529s in states with a state income tax deduction for contributions (like Ohio), be sure to contribute to those plans before 12/31 to claim this year’s deduction. 

4. Perform Conversions from Traditional IRA to Roth IRA  
When? Before 12/31. 
 
For those that are planning to do the Backdoor Roth strategy, make the conversion from Traditional to Roth IRA by 12/31 in order to take any applicable tax in the current year. As a Commas client, your advisor will perform the Backdoor Roth Conversion for you on accounts that we manage! 

5. Take your Required Minimum Distributions from Retirement Accounts 
When? Before 12/31. 
 
If you own a Traditional IRA or 401(k) and you have reached the age of 73, you must take your Required Minimum Distribution by 12/31. If you forget to take the distribution by the deadline, you may be subject to a 50% penalty on the shortfall.

If you inherited a Traditional IRA after 2019, you are not required to make distributions from the account for the 2023 tax year; however, you can still make voluntary distributions and might be better off doing so. Taking voluntary distributions could help reduce the tax spike that would potentially occur in the year you are forced to empty the account (10 years after the death of the original IRA owner).

As a Commas client, your advisor will make sure that you’ve taken distributions from the necessary accounts that we manage!

6. Donate to Charity  
When? Before 12/31. 
 
Donating to charity is an incredible way to support your community. It could also be a smart way to avoid capital gains taxes. Additionally, if you itemize your taxes instead of taking the standard deduction, charitable donations could enable you to deduct even more! 

7. Review Your Estate Plan 
When? Once annually. 
 
If you already have estate documents in place, review your documents to confirm that they are still up to date and consistent with your current wishes.

If you do not have estate documents in place, contact your advisor to learn more about your options.

Check your beneficiaries on your accounts at least annually. A beneficiary will receive the funds in your account if you pass away. To check your beneficiaries on accounts that Commas manages, log into Betterment, navigate to Settings, and click Accounts. 

8. Line Up a Tax Specialist for Filing your Taxes 
When? By January. 
 
Consider working with a tax professional, such as a CPA or EA, for your tax preparation. Not only will working with a tax professional make sure your taxes are filed accurately and on time, but it will save you time and reduce stress. If you’re interested in working with a tax professional and want a referral, please reach out to your advisor.

9. Planning for 2024! 
When? Before 12/31. 

Annual contribution limits are increasing in 2024 for various financial accounts:

  • Reach out to your advisor with any questions you have during your employer’s open enrollment period.
  • Contributions for many employer-sponsored retirement plans (like 401(k) and 403(b)) are increasing from $22,500 to $23,000 per year. Catch-up contributions will remain $7,500 per year.
  • HSA contributions are increasing from $3,850 to $4,150 for individual coverage and from $7,750 to $8,300 for family coverage.
  • IRA contributions are increasing from $6,500 to $7,000 per year. Catch-up contributions for those over the age of 50 are still $1,000 per year.

What Comes After a Financial Plan?

Posted on by Kelsie Joos

At Commas, we’re here to guide you through every step of your financial journey. The support doesn’t stop when we create your plan, we’re here to help you take action and implement our suggestions.

“At some financial planning firms, they create a beautiful financial plan for you and then send you on your way. Here at Commas, we’re going to be with you every step of the way from creating that plan, explaining that plan, and then implementing that plan. So, as we move accounts move lump sums, set up monthly contributions, whatever it might be, we’re going to be with you every step of the way.”

Navigating Equity Compensation

Posted on by Kelsie Joos

Commas advisor Jordan tells us that navigating equity compensation is all about making decisions that will give you the greatest likelihood of achieving your long-term financial goals. There can be a lot of complexity around taxes and what to do with the company stock, but he distills it down to three steps to focus on.

“Equity compensation is when people get paid in company stock. And when that happens there’s a lot of complexity around taxes and what to do with that stock, but really you want to distill it down to a few things.

First is how do I make sure that I have enough cash on hand to pay any taxes that are associated with exercising and liquidating the company stock that I have.

Then, you want to set up a plan to make sure that you’ve got some money to pay for any short-term goals. A lot of clients I work with want to use the equity that they received to buy a house, or to fund a sabbatical, or to go on a trip, and so you want to make sure that you have money available to do those.

The third step is thinking about your long-term wealth. So are we able to take some risk and to continue to hold on to this stock in order to grow our wealth over time or do we want to pull some of the risk off the table by selling the stock and making sure that we’re able to achieve our goals? It’s all about making decisions that will give you the greatest likelihood of achieving your long-term financial goals.”

What Does Josh Love About Commas?

Posted on by Kelsie Joos

Commas advisor Josh loves working at Commas because of the opportunity to work with clients who are traditionally underserved by the industry. We’re actively seeking professionals who might share this same passion. Visit our Careers page to apply for open positions. 

 “Commas enables me to help a wide variety of clients and maybe people that weren’t traditionally getting good financial advice from other firms or other parts of our industry. I’ve always been passionate about the fact that everyone deserves personalized advice and a personalized plan, and Commas enables me to do that.”

Emergency Funds

Posted on by Kelsie Joos

Prepare for the unexpected! 💡 An emergency fund isn’t just a financial cushion; it’s your lifeline when unexpected curveballs strike. Building this safety net for yourself grants you peace of mind and allows you to #moneyconfidently.

“When we think about having an emergency fund, we generally recommend having anywhere from 3 to 6 months of your fixed expenses. Things like your rent, your groceries, your utility bills. The things that you have to pay every single month. If you’re a one income household, we recommend closer to 6 months.

If you’re two income household, we recommend closer to 3 months, but anywhere in between is completely fine. We then recommend that you have that in a high yield savings account. This is very similar to a traditional savings account, except you’re earning up to 4% or 5%, as it stands right now. Much better than the pennies that you’re earning in your traditional savings account.“

What is a Fiduciary?

Posted on by Kelsie Joos

A fiduciary advisor is required to act solely in their client’s best interest. Commas advisor, Josh, tells us that this means when you #usecommas, you can trust that the advice you receive is made for the betterment of you, not the advisor.

“Fiduciary is a major buzzword in our industry right now but I think a lot of people don’t necessarily understand what that means. Fiduciary is someone who is obligated to act in the best interest of clients. Surprisingly, not all financial advisors are fiduciaries. They might not be obligated to act in the best interest of a client, which is pretty shocking.

One thing that we pride ourselves on at Commas is that we are fiduciaries, so we are always going to be doing what’s in the best interest of our clients, giving the advice that makes sense for them, not necessarily what makes sense for our bottom line. We’re always going to be acting as a fiduciary so you can trust that the advice we’re giving is in the best interest of the client.“