The Retirement Handbook

The Retirement Handbook  (click to download)

Retirement is coming soon, and you should be excited. However, you might have so many questions and concerns about retirement that you’re more nervous than anything else.

We get it.

At Warren Street Wealth Advisors, we’ve helped countless people, from families to business owners, plan for their retirement and reach their financial goals. We put together this Retirement Handbook to help you on your way to a successful retirement.


 

1. Have a Plan

Nothing else on this list matters if you don’t have a personalized financial plan.

Having a plan not only lays out the destination, but it shows you the steps you need to take along the way. It’s your roadmap to a successful retirement.

2. No Seriously, Have a Plan

Having a plan is half the battle. 

You can be tax savvy and an investment genius, but if you don’t have a plan for retirement or any financial goal, chances are you’ll miss the mark.

3. Say “Goodbye” to Debt

Excess debt is the biggest destroyer of retirement dreams. 

If you have excess debt, then formulate a plan to eliminate it as soon as possible. It’s not the end of the world, but it might be time to roll up your sleeves and get to work.

Imagine how rewarding it will be once you have freed yourself from excess debt.

4. Budget it Out

Targeting your annual expenses is key to understanding if you have enough money to retire.

It’s no fun to build a budget. We get it.

However, knowing where your money is going on a monthly basis may help you identify where you can save. Get rid of the stuff you hate and keep more of the things you love. Love your bowling league? Keep it. Hate your cable or phone bill? Shop it around or eliminate it all together.

Not sure where to start with your budget? No problem. Download our retirement toolkit and utilize the Budget Template to help get you started.

5. Build Up Emergency Savings

We’re always optimistic about the future, but sometimes life takes surprising and difficult turns. Wise financial planning means being prepared for those situations.

Having cash available can help you through some of these hard times. Maybe the car breaks down or you need to find a new job. Having six months of cash on hand in a savings account can help out and keep you prepared for life’s ups and downs.

6. Save ’til it Hurts.

401(k). 403(b). 457(b). IRA. SEP. Simple. Deferred Comp. Roth.

Max it out.

Are you putting money aside for the long term? Does your employer have a 401(k) program? Do you have a personal investment account you contribute to?

Whatever it is, make sure you continue to think long-term for that beautiful retirement you’ve been dreaming of.

7. Wait Until Full Retirement Age to Take Social Security

There are all kinds of articles out there about what to do about your Social Security. Let us boil it all down: you don’t have to take it at 62!

When we build a financial plan, we calculate all options for optimizing Social Security, no matter how many times we do it, one thing becomes clear every time: it’s usually best to wait until your full retirement age to take Social Security.

There is also plenty of evidence to support wait until age 70 too as the 32% increase in benefit can be worth the wait. It’s ultimately your decision, and we suggest weighing your options before committing to collecting a 25-30% reduced benefit at age 62.

8. Have a Plan

Yep. Said it again.

If you’re not sure where to start with your financial plan, that’s OK. We can help.


 

Schedule a free consultation to talk through your finances and take the first step toward building a confident retirement.

Warren Street Wealth Advisors LLC. is a Registered Investment Advisor. The information posted here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

The Retirement Handbook: Southern California Edison Edition

 

The Retirement Handbook: Southern California Edison Edition

Retirement is just around the corner, and you should be excited. But some of us have many questions and concerns about retirement causing us to feel more nervous than anything else.

We understand these feelings.

At Warren Street Wealth Advisors, we’ve helped hundreds of Southern California Edison retirees navigate this crucial time. In the process, we’ve learned about SCE’s retirement and employee benefits programs inside and out. We’ve put together our Southern California Edison Retirement Handbook as a guide for you.


 

1. Have a Plan

Nothing else on this list matters if you don’t have a personalized financial plan.

A personalized financial plan is the roadmap to your comfortable retirement. You can know your benefits inside-out and be clever about taxes and investments, but if you don’t have a roadmap for navigating your retirement, you’ll never feel confident along the way.

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2. Seriously, Have a Plan

Having a plan is essential for any major life transition, and navigating your retirement with wisdom and confidence is certainly part of a major life transition!

OK, let’s move on…

3. Plan to Retire Around October

If you are grandfathered into the old SCE pension formula, then you should plan to retire around October. This will allow you to choose which year’s plan rate provides you with the better benefit (Learn more HERE).

It’s important to know that you have a choice, review your options, then decide whether to retire on December 1st or January 1st – whichever projection pays the higher benefit.

If you are not grandfathered, retiring at the end of the year is still a great idea, especially if you need to take a large distribution pre-59 ½.

You are not forced to take your final distribution at retirement. You can wait until January 1st, request your final distribution, and then take a direct payment to avoid penalties using the “55 rule” if you are 55 years or older. This will also allow you to defer the income tax to the following year’s tax return.

This might seem complicated, but it’s a normal process for our clients who retired early.

4. Retire After 55 But Before 59 1/2 Without Paying Penalties.

Here’s a scenario we see all the time: you’re 57. You want to retire. You don’t want to wait until 59 ½ to do it. But you know that there’s a 10% federal tax penalty and a 2.5% California state tax penalty if you take the money out of your IRA before 59 ½. So are you stuck? Nope.

There are a lot of moving parts to this process, but we can take advantage of IRS rules like 72(t) distributions or the previously mentioned “55 rule” to ensure our clients do everything possible to avoid paying penalties.

5. Take Advantage of Your Medical Subsidy

Did you know that you are eligible for a retiree medical subsidy? The most common subsidies are 50% and 85%. When you retire, Edison will pay either 50% or 85% of your current medical insurance premium as a “continuation benefit” in retirement. Simply put, what you pay today is what you’ll pay in retirement. Of course, this is as long as you reach your required benefit milestone.

Unsure what your benefit is? You can call EIX Benefits to ask what benefit you have and at what age you’ll receive it. Call 866-693-4947.

Medical expenses are a huge cost for retirees, knowing what portion is covered by your employer is critical to planning a successful retirement.

6. Say “Goodbye” to Credit Card Debt

If you have credit card debt, then it’s time for a plan, a budget, and some hard work.

Debt can be intimidating, but you can pay it off! One of our favorite things is a client freeing themselves from the stress of mounting credit card debt. You may just need some help and a plan.

7. If Eligible, Plan for Your Sick Time Payout

Your sick time payout can be a significant amount and can be a boost into retirement, especially if you’re retiring early. You can run a pension projection online that will include a calculation of your accrued sick time payout . This will provide  you more clarity about how much money you’ll start with when you retire, and it could help bridge the gap to 59 ½.

8. Build and Keep a Budget

We get it: it’s no fun to build a budget, but it’s the first step to discovering what retirement will look like.

Get rid of the stuff you don’t use and keep what makes you happy! Not sure where to start? No problem, use our Retirement Tool Kit to make it easy.

9. Build Up 6-Months Worth of Emergency Savings

We’re always optimistic about the future, but sometimes life takes surprising and difficult turns. Wise financial planning means being prepared for those situations.

We recommend that you save at least 6-months worth of living expenses in case of an emergency. Need $4,000/month to live? Then have around $24,000 in savings & checking. Now, you’re prepared for the ups and downs that life can throw at us at any age.

10. Weigh All Your Options on Social Security

There is a lot of information out there about what to do with Social Security. Let me boil it all down: you don’t have to take it at 62! When we build a financial plan for a client, we calculate all options for optimizing Social Security.

It’s ultimately your decision, we suggest weighing your options before committing to collecting the 25-30% reduced benefit at age 62.

11. Invest for Retirement

Max out your 401(k). Diversify your investments. Consider hiring a pro.

Make sure your investments are retirement ready. Do you have too much cash? Too much of a single stock? If you have ESOP shares, are you getting the most tax efficiency with them?

If you’re unsure, then having a team on your side can help you get the most out of your plan and make sure your investments match your goals and objectives.

12. Have a Plan

You didn’t think this was going to end without one more reminder, did you? If you’re not sure where to start with your financial plan, that’s OK: we can help.[/emaillocker]


 

Schedule a free consultation to talk through your finances and take the first step toward building a confident retirement.

Warren Street Wealth Advisors LLC. is a Registered Investment Advisor. The information posted here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

The Retirement Handbook: El Segundo Refinery Edition

The Retirement Handbook: El Segundo Refinery Edition

Retirement is just around the corner, and you should be excited. But some of us have many questions and concerns about retirement causing us to feel more nervous than anything else.

We understand these feelings.

At Warren Street Wealth Advisors, we’ve helped many El Segundo Refinery employees navigate this crucial and confusing time, so we put together our Retirement Handbook: El Segundo Refinery Edition.


1. Have a Plan

Nothing else on this list matters if you don’t have a personalized financial plan.

A personalized financial plan is the roadmap to your comfortable retirement. You can know your benefits inside-out and be clever about taxes and investments, but if you don’t have a roadmap for navigating your retirement, you’ll never feel confident along the way.

2. Seriously, Have a Plan

Having a plan is essential for any major life transition, and navigating your retirement with wisdom and confidence is certainly part of a major life transition!

OK, let’s move on…

3. Make Sure Your Retirement Timing is Correct

Eligibility for annual bonuses, vacation days, or vacation payouts should all be considered as you decide when to retire from the company.

Properly timing your retirement date could give you access to more vacation days or eligibility for an annual company bonus. This could all add up to a healthy sum and this should be looked at prior to deciding upon a firm retirement date.

4. Want to Retire Early?

We see it all the time. You’re 57, you want to retire. You don’t want to wait until you’re 59½ to do it, but you know that there’s penalties if you take the money out early. So are you stuck?

Some companies have provisions in their plans that allow flexibility around taking withdrawals which help getting around penalties.

At WSWA, we use these rules to help our clients avoid penalties.

5. Budget for Medical Expenses

Make sure you are budgeting for medical coverage in retirement. A quick call to your benefits department can give you a projection of what your retirement medical benefit would cost in retirement.

A spouse may have a better or more affordable medical plan if they are still working. Be sure to examine all of your options.  

6. Say “Goodbye” to Credit Card Debt

If you have credit card debt, then it’s time for a plan, a budget, and some hard work.

Debt can be intimidating, but you can pay it off! One of our favorite things is a client freeing themselves from the stress of mounting credit card debt. You may just need some help and a plan.

7. Build Up 6-Months Worth of Emergency Savings

We’re always optimistic about the future, but sometimes life takes surprising and difficult turns. Wise financial planning means being prepared for those situations.

We recommend that you save at least 6-months worth of living expenses in case of an emergency. Need $4,000/month to live? Then have around $24,000 in savings & checking. Now, you’re prepared for the ups and downs that life can throw at us at any age

8. Build and Keep a Budget

We get it: it’s no fun to build a budget, but it’s the first step to knowing what retirement looks like.

Get rid of the stuff you don’t use and keep what makes you happy! Not sure where to start? No problem, use our Retirement Tool Kit to make it easy.

9. Weigh All Your Options on Social Security

There is a lot of information out there about what to do with Social Security. Let me boil it all down: you don’t have to take it at 62! When we build a financial plan for a client, we calculate all options for optimizing Social Security.

It’s ultimately your decision, we suggest weighing your options before committing to collecting the 25-30% reduced benefit at age 62.

10. Invest for Retirement

Max out your 401(k). Diversify your investments. Consider hiring a pro.

Make sure your investments are retirement ready. Do you have too much cash? Too much of a single stock? If you have ESOP shares, are you getting the most tax efficiency with them?

If you’re unsure, then having a team on your side can help you get the most out of your plan and make sure your investments match your goals and objectives.

11. Have a Plan

You didn’t think this was going to end without one more reminder, did you? If you’re not sure where to start with your financial plan, that’s OK: we can help.


Schedule a free consultation to talk through your finances and take the first step toward building a confident retirement.

Warren Street Wealth Advisors LLC. is a Registered Investment Advisor. The information posted here represents opinions and is not meant as personal or actionable advice to any  individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

Rate Watch 2018 – July

Rate Watch 2018 – July

We are only a couple month away from the August segment rate announcement. Where could rates land for SCE grandfathered pension holders as we head into the fall?

Welcome to another edition of Rate Watch as we track the interest rate that is vital to the grandfathered pension at Southern California Edison. If you’ve missed any of our previous articles, you can find them here:

Rate Watch 2018 – May & June
Rate Watch 2018 – April
Rate Watch 2018 – March
Rate Watch 2018 – February

June’s posting puts us 2 months away from August’s rate which is typically used by Southern California Edison for the grandfathered pension plan. If you are eyeballing retirement soon, then it is essential to understand where the rate is now and where it could be going. Here is the latest:

chart

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

July at 4.60 puts us nearly 25 points above the current plan rate and would drive your current lump sum value down if you took your pension in 2019.

Nominally, nothing has really changed month-to-month, but there has also not been much going on that would drastically press the rates higher over the time period. The most important thing to note would be inflation slowly on the rise as we continue to be in an environment of historically low rates.

For those in the grandfathered pension plan and who believe they are on the brink of retirement, it is more important now than ever to begin putting a plan in place and seeing what your retirement looks like. Knowing how your assets weigh against your liabilities, how much you might need every year in retirement, and if you have the assets to accomplish everything you want are important answers to have before you have your final day of work.

If the official rate was announced today, then it may make sense to take your pension in the current plan year due to the fact that as rates increase, lump sum values decrease.

If you are just unsure of what your retirement looks like, then feel free to contact us for a free phone call or meeting. We have helped 100’s of SCE employees retire and numerous grandfathered pension holders weigh their options out to give themselves the best possible outcome and start to retirement.


WSWA Team Compressed-19-squareJoe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors

 

 


Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented. 
Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. 

 

Case Study: Minimizing Taxes, Maximizing Social Security

Case Study – Minimizing Taxes, Maximizing Social Security

Learn how we helped an individual client get their desired income level in retirement all while minimizing their tax liability and maximizing their Social Security.

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Blake StreetBlake Street CFA, CFP®
Founding Partner
Chief Investment Officer
Warren Street Wealth Advisors

 

 

Blake Street is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented.

Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy, and results of your portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

 

Case Studies: An Introduction

Case Studies

With each case study, we hope to show the value we deliver to clients through comprehensive financial planning and keeping the client first, always.

People ask us: “what makes Warren Street different?”

We like to mention that we are a true ensemble practice. That means you don’t just get one advisor, you get a team of advisors that each work on their core competency to deliver the best possible client experience.

With the team approach, we can collaborate to deliver the best possible set of answers for our clients when it comes to their financial planning or investment needs.

Every Friday, the team gets together to discuss recent client questions or planning issues, and we present the client, their goal, and the current hurdles in the way, then we discuss them at length to then produce the best possible course of action.

The most important rule of Case Studies is that everything must be in the best interest of the client when it comes to all facets of the financial planning or investment process. From tax implications all the way to behavioral finance, we want to make sure that everything is done with the client’s best interest at the center of it all.

With that, we wanted to start sharing some of our most interesting and technical cases to display what we bring to the table for our clients.

Stay tuned for our first case in the coming week where we tackle maximizing income, Social Security, and managing tax liability for a retired client.


Blake StreetBlake Street CFA, CFP®
Founding Partner
Chief Investment Officer
Warren Street Wealth Advisors

 

 

Blake Street is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented.

Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy, and results of your portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

 

Rate Watch 2018 – May & June

Rate Watch 2018 – May & June

Heading into the summer, what do segment rates look like and how could that impact grandfathered pension holders?

Welcome to another edition of Rate Watch as we track the interest rate that is vital to the grandfathered pension at Southern California Edison. If you’ve missed any of our previous articles, you can find them here:

Rate Watch 2018 – April
Rate Watch 2018 – March
Rate Watch 2018 – February
Rate Watch 2018 – January

The IRS posting in June will give us the segment rate for May 2018, which puts us at only a couple readings away from the official rate announcement for the grandfathered pension in the fall. Let’s take a look at where rates are at currently:

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

You may have noticed that we skipped April , but the reading from March to April was actually flat at 4.43. At that time, we still consider it early to make a decision based off of rates, but we have seen a larger move from April to May.

May’s number of 4.58, 3 months away from the official SCE rate announcement, begins to move the conversation towards retirement in the current plan year. A nearly quarter percent increase paints a much stronger picture for grandfathered pension holders to retire in the current year versus 2019 granted that they are retirement ready.

Interest rate increases were driven by a strong 10 year Treasury rate and inflation slowly on the rise. Coupled with the Fed continuing to monitor the economy, small increases in the rate across the summer are plausible as we head towards the fall.

As always, if the official plan rate for Southern California Edison grandfathered pension holders increases, then the value of their pensions decrease. It is imperative to weigh the current year plan value versus the following year plan value when it comes to your retirement. While your pension value shouldn’t be the only variable when it comes to deciding if you’re ready for retirement, it is one that should be taken into account and can make a difference.

Are you worried about your retirement plans or concerned with how to handle your pension or 401(k)? Maybe you’re just unsure on how the transition to retirement works. We’ve helped countless Southern California Edison employees plan for retirement, and we can help you plan too.

Contact us for a free retirement planning session or portfolio analysis. Our free session over the phone or at our office gives you the opportunity to get your retirement questions answered and learn how we help our clients reach their retirement goals.


WSWA Team Compressed-19-squareJoe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors

 

 


Joe Occhipinti is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented.

Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy, and results of your portfolio.Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

 

Practice with Genene Dunn: Trust Basics

Hunsberger Dunn LLP

 

 

Warren Street Sits Down with Partner Genene Dunn 

At Warren Street, we want to ensure we are continuing our education to give our clients a financial edge. This applies to all aspects of their overall financial picture.

We recently had the opportunity to sit down with one of the partners of the law firm Hunsberger Dunn, LLP, Genene Dunn. During our conversation, we had the chance to talk with her about estate planning, and specifically, building a trust.

Here are some of the issues we discussed, our key takeaways, and some of the nuances we learned regarding trusts and avoiding the probate process.

Who needs a trust and what does it do?

A trust’s primary objective is to avoid probate for the client. Period.

The threshold for probate is $150,000 of real assets, which are defined as physical assets that have value due to their substance. Real assets can be things such as: precious metals, commodities, real estate, land, machinery, or oil, so estate with $150,000 in real assets or more without a trust is subject to probate.

Genene gave the example of $500,000 in real assets with no trust. In this instance, you can expect to pay approximately $26,000 in fees.

Going through probate, both the lawyer and the personal representative (administrator), the person named by the court to handle the estate, are paid according to the fee schedule below. This is why probate can be so expensive.

Chart

Not only is probate an expensive process, but it is lengthy as well. The probate system in Orange County is significantly backed up, it could take up to a year to complete the process.

If you have real assets in excess of $150,000, it might be time to start thinking about building your own trust and avoiding the probate process all together.

How do I handle creditors when the trustee has passed?

If the deceased person had debt in their names, then these become debts of the trust.  They do not become debts of the beneficiaries.

When handling credit card collections, the collectors have 4 months after the announcement of the death of the trustee to file for a claim for their debt. An announcement of death can be placed in the local newspaper of the trustee. If the credit card companies do not file their claims through the appropriate process within this 4-month window, their claim becomes void and does not need to be paid by the trust.

If there is real property inside the trust, such as real estate, Genene suggested to continue paying the bills that “keep the lights on”, such as utilities and house maintenance services (pool cleaning, gardening, etc.). The reason for this is that the property may eventually be sold and you want it to remain presentable to a prospective buyers.

What about my 401(k) or other outside accounts?

Genene will sometimes gets asked about placing a 401(k) or retirement account inside a trust. This is something that is probably not recommended as these types of accounts have listed beneficiaries. Probate can be avoided if the beneficiaries are named and appropriate forms are completed.

On the other hand, non-retirement or brokerage accounts can be placed inside the trust to then be distributed according to the wishes of the grantor, the person who established the trust.

Another interesting topic was Transfer on Death (TOD) bank accounts. If a TOD is in place, then you can present your bank branch with a Death Certificate, which typically can take 10-12 days to process, before being allowed access to funds. However, if they accounts are held in trust, there would be no delay since a spouse is typically the co-trustee and would be able to act on the account immediately upon death. If there is not a Transfer on Death established or a trust account, then the assets would be subject to probate.

Special Needs Beneficiaries

One of the most interesting things we learned from our conversation was with regard to children or beneficiaries that have special needs. Some of these people receive assistance from the government for their condition, and they can become disqualified from that assistance if they have an interest in the assets of a trust.

It is imperative if you have someone in your life with special needs whom you want to ensure receives assets from your estate, that a special needs trust is established and that it is set up correctly to avoid disqualifying them from government assistance in the future.


 

As we had mentioned earlier, the main objective of establishing a trust is to avoid probate and the wasted time and expense associated with it. A trust usually runs between $2,000-$3,000 depending on the complexity, but the amount of time and money saved by going through the process can be 8-10x the cost of the trust itself. Not to mention not having to waste time in an Orange County probate system that is already significantly backed up.

If you are concerned about your current estate planning situation, including your current assets, trusts or other aspects of your plan, please feel free to contact us to discuss.


Joe OcchipintiJoe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors

 

 

 

 

Joe Occhipinti is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented.

Warren Street Wealth Advisors and its representatives are not attorneys and all information herein should be verified via qualified legal opinion. 

Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy, and results of your portfolio.Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

 

Rate Watch 2018 – April

Welcome to another edition of Rate Watch as we track the interest rate that is vital to the grandfathered pension at Southern California Edison. If you’ve missed any of our previous articles, you can find them here:

Rate Watch 2018 – March
Rate Watch 2018 – February
Rate Watch 2018 – January

Rate Watch 2017 – August

The third rate of 2018 begins to paint a new picture of where rates have the potential to go in the fall of 2018. The latest comes after increased Fed conversations on future rate hikes and an increase in March. Let’s take a look at the most recent numbers:

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

March’s value of 4.43 gives us the first reading higher than the current official plan rate of 4.36, a 0.07% change. With the Fed announcing an increase in rates by 0.25% to a range of 1.50-1.75%, the sixth rate hike since 2015, is said to be one of many by the Fed in 2018. They continue to point to strong economic outlooks and labor conditions as reasons to pencil in future hikes, but we will have to see how the market reacts.

This also brings some new thinking for grandfathered pension holders because this could produce a situation where the following year’s interest rate will be higher than the current value, and increases in interest rates will produce a smaller lump sum payout for grandfathered pension holders. The inverse is true for rate decreases; however, it looks like that could be a less likely scenario should this trend continue.

Remember, if you are planning on retiring as a grandfathered pension holder, then you have a choice on when you want to set your commencement date and pick which rate produces a more favorable outcome.

I think we’ve become a broken record at this point by saying this, but it is still a tad early to make any huge decisions, but the fall will soon be upon us. As always, this is only one metric to look at as you think about retirement, but it is an important one.

Developing a financial plan on how to approach retirement and maximize your benefits is important, so make sure you are working with someone who is familiar with Edison’s benefits and knows how they work.

Worried about your retirement plans? Concerned with how to handle your pension or 401(k)? Maybe you’re just unsure on how the transition to retirement works. We’ve helped countless Southern California Edison employees plan for retirement. Contact us for a free retirement planning session or portfolio analysis.


Joe OcchipintiJoe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors

 

 

 

 

Joe Occhipinti is an Investment Advisor Representative of Warren Street Wealth Advisors, a Registered Investment Advisor. Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the strategies or options presented.

Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy, and results of your portfolio.Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Nothing in this commentary is a solicitation to buy, or sell, any securities, or an attempt to furnish personal investment advice. We may hold securities referenced in the blog and due to the static nature of content, those securities held may change over time and trades may be contrary to outdated posts.

 

Welcome: Justin Rucci

Welcome Our Newest Wealth Advisor

Welcome our newest Wealth Advisor, Justin Rucci, CFP®


 

J RucciJustin Rucci, CFP® joins Warren Street Wealth Advisors after spending 5 years at Ayco, a Goldman Sachs Company.

Rucci graduated from the University at Albany, State University of New York with a degree in Finance & Economics and is a CERTIFIED FINANCIAL PLANNER™.

As an advisor with Ayco, Justin spent his time with a variety of clients focusing on matters such as: cash flow & retirement, investments, employee benefits, health care, insurance, and tax & estate planning. In joining Warren Street, Justin hopes to strengthen his relationship with the community and create an impact with his clients.

Growing up on the East Coast, he enjoys exploring new areas of the West Coast and photographing the journey along the way. Always in pursuit of new adventures, Justin considers Angel’s Landing in Zion National Park as his most exciting hike he’s completed.

Join us in welcoming Justin to the Warren Street Team! We are excited to have him as we continue to always serve our clients in their best interest and help them reach their financial goals.