Monthly Archives: June 2016


Notepad with What is a Certified Financial Planner Question

Imagine you are seeing a doctor for the first time. You certainly expect him or her to have a medical license. If they have a particular specialty, then you also expect them to have received board certification. These two items demonstrate a competency to diagnose and treat your health issues, and give you the confidence you deserve.

Now take that same perspective and apply it to your financial planning and investing decisions. You probably do not want just anyone involved in decisions about your money. This is precisely why we encourage you to work with a CERTIFIED FINANCIAL PLANNER ™. But what is a certified financial planner, and why does it matter?


The CFP® certification is a prestigious designation that signals a commitment to using the financial planning process. In order earn the certification and remain certified, individuals have to meet very specific requirements, including:

  •      Education – The CFP Board approves various personal financial planning curriculums at a number of colleges and universities. The individual must complete the program at one of these institutions and earn a bachelor’s degree from a regionally accredited college or university.
  •      Examination – The CFP Board offers a comprehensive exam, which must be successfully completed by the individual.
  •      Experience – Before individuals can use the CFP® mark, the CFP Board requires individuals to acquire three years of financial planning related experience or a limited two-year structured option.
  •      Ethics – The CFP Board maintains a code of ethics, which the individual must ascribe to voluntarily. What this means is the CFP provides financial planning services as a fiduciary and acts in the client’s best interest.

When you work with a CFP® professional rather than someone who does not have the certification, you will likely feel more confident about the decisions being made about your money. You can benefit from an objective, third-party perspective to actively plan and manage the financial aspects of your life.

Now that you know what a CFP® is, you will be glad to know we have two CFP® professionals on board here at Guidant, including our President and Senior Wealth Strategist:

You can reach out to these individuals with any questions you may have by calling (847) 330-9911.
– The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Comparing IRAs: Traditional vs. Roth IRA

Individual retirement accounts, or IRAs, are some of the best savings vehicles available. Due to their significant tax benefits, you gain the advantage of compounding, which helps you potentially earn more on top of the money you put in. IRAs are also independent of any workplace retirement accounts, like 401(k)s, so you never have to worry about transferring the money if you change jobs.

In 2016, they also share the same annual contribution amount: up to $5,500 per person, or $6,500 for individuals who are 50 and older.

Still, an IRA comparison reveals there are major differences between a traditional IRA and a Roth IRA. Let’s take a look at these differences, so you can decide which may be the best option for you.

Traditional IRA vs. Roth IRA

When you own a traditional IRA, your money is not taxed before you contribute. The earnings are tax-deferred, which means you pay no taxes until assets are taken out of the account. Once you turn 70-1/2 years old, you can no longer make contributions to the account and you must begin taking required minimum distributions (RMDs) each year. There are penalties for failing to take RMDs.

Traditional IRAs come with another potential tax advantage. As long as you do not have access to a retirement plan at work, you can claim a full income-tax deduction for your contributions each year. In 2016, single filers who do not have access to a workplace retirement plan and earn $61,000 or less can take the full deduction, or a partial deduction for up to $71,000 of earned income. If you have a plan, then the limits for a partial deduction are $98,000 to $118,000; or $184,000 to $194,000 if your spouse has access to a plan but you do not, and you file jointly.

Now, with a Roth IRA, your money is taxed before you contribute. The earnings grow tax-free forever after that. Withdrawals are not taxed, either, as long as the account is five years old and you withdraw once you turn 59-1/2. If you withdraw before then, you could pay a 10% penalty on the earnings. You do not have to take RMDs; in fact, you can leave the money in the account forever, as long as your earn money. (Here are some mistakes to avoid if you decide to leave your IRA to your heirs.)

Something that is unique to the Roth IRA is the income threshold. If your modified adjusted gross income exceeds a maximum of $132,000 in 2016, then you earn too much to contribute to a Roth IRA. The limit for married couples filing jointly is $194,000. If your income surpasses these amounts, then you may want to consider a traditional IRA or, once you retire, rolling over after-tax 401(k) contributions to a Roth IRA.

If you have any questions about which IRA is the best fit for your financial plan, then please feel free to reach out to our financial advisors and wealth managers at (847) 330-9911.


– The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Can You Transfer a 529 College Savings Plan?

529 on College Books – Piggy Savings Bank

A while back, one of our client’s sons received a generous scholarship (well deserved, at that) to attend a local, private college. The parents had been planning for this moment for years, evident in the amount they had saved in their 529 college savings plan. Yet with the help of the scholarship, their child no longer required all of the money in the 529. The couple wondered what they would do with the money that was left over.

Of course, the funds in a 529 plan must be used for higher education expenses, so any withdrawals from the account for an unqualified purpose would really stick it to the parents – with a whopping 10 percent penalty from the IRS.

Thankfully, 529 college savings plans can be transferred, and very easily.

How to Transfer a 529 Education Savings Plan

If the original beneficiary of the savings account does not need all – or any – of the money for college tuition, then you can simply name a new beneficiary. This can be one of your other children, a grandchild, a cousin or other relative. You can even transfer the account to yourself.

In the case of our client, they simply named another one of their children as a beneficiary on the 529 account. Once that child was headed to college, the money that was left over from the first child could be used for the next child.

The best part about transferring the money from a 529 college savings plan is you take advantage of the tax-free compounding, by leaving the funds in the account for a longer period of time.

If you are thinking of starting a 529 savings plan or you have questions about how it fits in with your financial plan, head over to our section on financial planning or reach out to us for more information.

– The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.Workbook. Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing