Financial planning is not for the faint of heart. With some much “advice” floating around, how do you get out the junk and focus in on what is valuable to your situation? Here are some of the best financial planning tips our fiduciaries have.

WHAT IS FINANCIAL PLANNING? defines Financial Planning as: The devising of a program for the allocation and management of finances and capital through budgeting and investments.

Building wealth is a choice. You can choose to sacrifice and save while living within your means or you may spend like there is no tomorrow with the hope that an inheritance or social security will save you. Unfortunately, this is a recipe for disaster as is financing your life with debt.  As you can see in the graph above from the US Federal Reserve Board, household debt has been rising for many years but has skyrocketed in the last two decades. This includes mortgage debt, but also student and motor vehicle loans as well as credit card debt. This clearly shows that many people are not planning adequately and are just living in the moment. In the long term this will not serve them, or our country, well.

It probably comes as no surprise that health and life expectancy are higher for those who take the time to build a financial plan. Financial planning for your retirement has been shown in studies to help reduce blood pressure, muscle tension, digestive problems, depression, and anxiety.  It also helps minimize the stigma of shame that goes along with a lack of financial funds to support yourself toward the end of your life. Understanding that your well-being is symbiotic with your wealth management will change the course of your life forever.


The first step in successful financial planning is understanding what is in your financial investment strategy. Let’s assume you have saved $500,000 for retirement, that you are in good health and you are still working.  How do you know that what you are invested in is right for you?

This is something you’ll want to review with your advisor and should include components like your goals, risk tolerance and time horizon until retirement. Whether you’ve saved $50,000 or $500,000 for retirement, most investors are looking to protect their hard-earned money, not take on greater risk. Too often stockbrokers or financial advisors place older investors in funds with a degree of risk not aligned with their time horizon and risk tolerance. This advice is critical in determining whether the path you’re currently on is adequate to get you to where you want to be in retirement.

The value of this advice can only be gauged over several years, but it’s up to you to be actively involved and provide clear expectations. While many investors will change financial advisors for what they consider to be sub-par performance, what they should be more concerned about is the total costs their portfolio is incurring year after year. Let’s examine in depth the nature of investments whose fee structure hurts your investment portfolio the most and why you likely will want to steer clear of these products.


Many financial services companies are not independent and are only able to sell products their brokerage or parent company makes available to them. In other words, they cannot offer truly “independent” advice and it’s wise to avoid working with firms like this when there are literally thousands of options available to you.

This also translates into higher costs because many times these firms’ proprietary funds cost more and don’t perform as well as their peer group. Unfortunately, they are typically an investment much better for the house than for you the investor. Here’s why:

Dependent on the types of shares, mutual funds have many different kinds of fees built into them. Some are disclosed at the time of the onboarding of a new client, but some only show up in the fine print of the prospectus- a legal disclosure document that is delivered at or before the time of purchase. The various fees can be buried amongst hundreds of pages, and you don’t often get the true picture of what your total costs are without some analysis. A great way to see the true cost of your mutual funds is to visit, but here are a few of the fees you should watch out for.


  • Disclosed Fees – These are known fees that financial advisors directly tell you that they are charging. Typically, these are in a range of 1%-2%. These are things like the management or wrap fee as well as the up-front commission and expense ratio. Typically, these costs are revealed to you in your onboarding meeting.
  • Undisclosed Fees – These are fees that are charged to the client but typically only made apparent to you through the prospectus. These fees can include administrative costs, marketing fees, 12b-1, transaction and redemption fees, trading costs and tax inefficiencies.

Another vehicle that is potentially even more costly is the variable annuity. From insurance charges to investment management fees and surrender charges, a variable annuity can average anywhere between 3% to 8% a year in fees. Also, your contract value is 100% exposed to the market risk associated with the underlying investment strategy chosen by your advisor. In our opinion, there are very few reasons why any financial client should be placed in a variable annuity given the astounding costs and risk associated with the product.

Here at Strategic Wealth Designers, we believe in mitigating risk and fees in a portfolio. A variable annuity is not safe or low in fees, so we would not ever recommend that asset option to one of our clients, as it would not fit our independent fiduciary standard of service. In lieu of mutual funds we would suggest purchasing exchange traded funds (ETF’s) or straight stocks because of their lower fee structure.


Knowing when to make a change to a new financial advisor is easy if you know what the problems are. To start with, no one would stand for paying outlandish fees – if they only knew they were paying them. Unfortunately, most individuals go through their entire lives overpaying for financial investment service advice and are never even aware of it. To be clear, all financial advisors are paid for their advice- which is only fair.

If you’re a professional, it’s unlikely that your boss or clients ever asked you to work for free. You are paid for your expertise and it works the same way in the world of financial investing. Where it gets tricky is figuring out when you’re paying too much and the long-term effect it can have on your retirement. Let’s look at an example above and assume the average rate of return is 7% over a 30-year period.

In the graphic you can see that Bob and Sherry are 60 years old. They have saved $300,000 for retirement and let’s assume one will live to the age of 90. If they receive an average rate of return over that 30-year period, their money will grow from $300,000 to $1,000,000. But if they save just 1% in fees, their money would have grown from $1 million to $1.4 million.  Having that extra $400,000 would be very helpful for long term care planning or to pass additional money on to beneficiaries.

This example only considers the distribution phase of retirement planning. It’s very possible that those working full-time and still accumulating assets are paying even greater fees on their investments because they have less to invest.


For the vast majority of investors, the defined benefit pension funded by an employer has been replaced with a defined contribution retirement plan that is funded personally. These are typically known as 401(k), 403(b) or thrift savings plans, and hopefully an employer matches a percentage of the contributions to the plan. By and large, investors are now responsible for planning their own retirement, with plans that they don’t fully control the funds in.

Employers have a wide range of retirement account options they provide their employees. Some employers offer stock options which can be very lucrative if you are working at a company like Amazon or Tesla. Many offer a set retirement plan, from a set provider with limited retirement options that you can choose from.

Understanding when you should rollover your 401K to an IRA or ROTH IRA is very important. If you are holding a dormant 401K, which is a retirement account with an employer you are no longer working for, it is typically wise to rollover that 401K into an investment you have full control over. You will have greater options outside of the employer’s retirement plan and can potentially reduce the fee structure of your investment strategy as well. When retirement is imminent, it’s time to shift your investment portfolio from the accumulation phase to the distribution phase.


The strategy that brought you to retirement typically will not be what successfully navigates you through retirement. At Strategic Wealth Designers, we’ve never met anyone who retires and wakes up the next day happy with a 30% lifestyle reduction. All of your working years focused on the accumulation phase- growing, saving and building as much wealth as possible, while typically being pretty aggressive. When you retire, you enter a new phase where you must be more conservative, but most people don’t want to have to reduce their lifestyle.

You’ve worked hard for your assets, and when you retire it’s time your assets worked hard for you. You are now in the distribution phase of life. Your financial portfolio should mitigate risk and have a firm financial foundation to keep your assets safe. You can set a target date for your retirement, but you can’t control the market or life’s landscape when that date comes. Proper financial planning can remove the uncertainty.

There is one simple investing rule that can help to keep you on the proper financial investment path your entire retirement journey.


Building the proper financial plan should be based on a life expectancy of 100 years. Not everyone will get there but centurions are more and more common with advancements in modern medicine. It’s better to have extra financial assets left over than to run out of money when you’re alive and healthy in your 80’s.

Simple Math:

100 – Your Age = Percentage of your portfolio at risk

100 – 62 (You) = 38% of your investment portfolio at risk

When you retire, a big loss hurts you much more than a big gain helps you. In March, when COVID-19 shut everything down in the United States we saw people coming into our office from other financial service firms who were down 30 to 40%- not for the year but for their entire life savings! This is why your financial plan in the distribution phase should be built with safety nets in place. See graphic below:

Safe assets are rock-solid, can’t-lose-money-ever financial holdings.  Think Cash, CD’s, Savings Accounts, Fixed Annuities or Fixed Indexed Annuities.  These investment types aren’t considered sexy, but they are necessary for the foundation of your portfolio to withstand a situation like we have seen in the pandemic of 2020 or the financial crisis of 2008. If you are 62, then 62% of your portfolio should be in positions like these.

The other 38% of your portfolio is where you can take greater risk in the stock market, or with commodities or even doing some real estate flips. To be sure you are getting solid advice on how to properly allocate your portfolio, be sure you seek out an Independent Fiduciary Financial Advisor.


In our recent blog post, ‘What is a Fiduciary Financial Advisor?’ we examined why it is important to work with an independent fiduciary for your financial planning goals.  Fiduciary is a big word that simply means doing what is in the best interest of the client first, as governed by the SEC. Keep these things in mind when meeting with an advisor:

  • Who do they work for? Are they independent or tied to a brokerage house?
  • Fiduciary? Are they acting in your best interest or merely operating under the suitability standard? The easiest way to tell is just to ask them
  • Commission or fee based? Advisors who earn commissions on a sale may be incentivized to sell their own products or the one that pays them better. Ask how they get paid.
  • Transparency- fiduciaries must discuss decisions and all relevant information/facts with the client

2020 brought about a new law requiring all brokers and financial advisors to operate in a fiduciary manner, but there is no requirement for an advisor to work independently. There is a key distinction when working with a financial advisor of this type. Be sure to look for an independent financial advisor so they are not tied to the products and services that their big box brokerage houses require them to offer. Learn more by clicking the link above to read the entire blog.

2020 Tax Blowout Sale


Stimulus payments due to the coronavirus pandemic have created historic federal budget deficits and added trillions to the national debt. For 2021 and beyond, this points to an increase in taxes, and potentially a significant one. Forbes recently noted how the wealthy have been moving their assets into a position of protection from potential tax increases in the coming years. Here are some tax planning tips to consider.

Look at this graphic below reflecting the top marginal federal tax rates throughout our country’s history.  During World War 2 in the 1940’s, tax rates were at their highest levels of up to 94%, but as you can see tax rates have historically been much higher than the 37% top marginal rate we “enjoy” today. That’s why we say from a historical standpoint, taxes are on sale right now. If you haven’t considered discussing your tax strategy with a fiduciary financial planning advisor before, now is the time.

A retirement plan should be built to withstand risk and volatility, but it also should take into consideration the tax landscape over the course of your retirement years. Proper tax planning could help you save tens of thousands of dollars over the course of retirement. Many CPA’s do excellent work, but typically only look at tax implications in a single year. Make sure to involve your financial advisor in the process to look at tax planning over the duration of retirement.


Time to talk about the elephant in the room: Social Security liabilities.

As both CBS WKYT in Lexington, Kentucky and FOX 59 Indianapolis recently highlighted, the Social Security Trust Fund was scheduled to be depleted in 2034. After that point, continuing tax income would only be sufficient to pay 79 percent of scheduled benefits. Because of the millions of layoffs and the reduced number of people paying into the system in 2020, Social Security is now facing this expected shortfall up to 3 years sooner. If you are living your life expecting social security to fully fund your retirement, you may be in for a very rude awakening.

Let’s explore the historical creation of Social Security vs. where the United States currently stands.


Social Security was passed into law in 1935 so that those who were 65 or older could receive benefits starting in 1940. In those days, the average life expectancy in the United States was only 62 years, so clearly, the program was never intended to be used as a retirement plan. Fortune recently highlighted the fact that 42% of Americans have less than $10,000 saved for retirement. Unfortunately, spend now and figure it out later is a recipe for financial ruin that Social Security won’t correct.

The New York Times notes that life expectancy increased further in 2019 with people living nearly 79 years on average in America.  We now have over 50,000 centurions living in the United States. In 1935, President Roosevelt couldn’t have conceived of citizens living to 100 and drawing Social Security for nearly four decades when he signed the program into law.

Social Security is absolutely a key component for those in or near retirement in , but it should be considered an add-on to a well-built financial plan, not the cornerstone of your retirement. Save early, build your wealth portfolio to a million+ by saving more than you spend each month. Do that and Social Security becomes a nice complimentary piece to the investment portfolio puzzle.


Choosing the right financial advisor to navigate your portfolio could be a decision remembered for generations to come.

Here’s a recap of some of the things to consider when looking for the right wealth manager:

  • Work with an Independent Fiduciary Financial Advisor- this means they’re free to use asset allocation from all financial resources
  • Demand Transparency – If the advisor will not disclose all of the fees they are charging to you face to face, move on to a financial planner who will.
  • Find a Distribution Specialist- A fiduciary financial advisor who works with clients in or near retirement as their primary client is a specialist for your investments. You’re entering a different phase of life and your investment portfolio needs to do so as well.
  • Keep things Simple – Wealth Management doesn’t require scatter charts and a thousand-page financial plan. Keep things simplified to a one-page blueprint that clearly shows your financial assets all on one page.

If your portfolio has taken a hit in the volatile world we live in right now, don’t let it happen again in the future.  Take time to reposition your financial investments into an asset allocation structure that mitigates risk when the next big crisis occurs.

If you are within 10 years of retirement, keep this in mind:

  1. This won’t be the last stock market rollercoaster.
  2. Time in the market is always better than timing the market.
  3. A big investment loss near retirement will hurt you more than big gain will help you
  4. Reduce the risk and exposure you have to the market in your retirement plan
  5. Don’t try to be a day trader buying or selling from every financial headline you read.
  6. Talk with a financial planning advisor who works in your best interest
  7. Retire confidently by keeping the six points above at the center of your financial investment strategy!


Planning for retirement can be daunting, so it’s no wonder that some choose to enlist the help of a financial advisor.



What is a financial advisor? Do I need one? Are fiduciaries worth the expense? How can a financial advisor help with retirement? Will they be careful...