series: take charge: your money. your life. · series: take charge: your money. your life. taxes:...

Series: Take Charge: Your Money. Your Life.

Taxes: The Start of Your Financial Plan

Paula S. McMillan, CPA/PFS, CGMASenior Advisor, Stearns Financial Group

Personal Financial Planning Section & 360 Degrees of Financial Literacy Tax | Retirement | Estate | Risk Management | Investments

• Paula is a Senior Financial Advisor with Stearns Financial Group, Paula also has Big Four and largeregional accounting firm experience, as well as Fortune 500 experience in the financial servicesindustry. She has traveled extensively throughout the U.S., Europe, Asia, Africa and the Middle East toserve clients with an international consulting firm. She uses this wide lens in working with clients withvaried backgrounds and aspirations.

• Paula serves on the AICPA’s PFS Credential Committee and the Society for Financial ServiceProfessionals’ Foundation Board. Paula is a retirement and distribution specialist. This includeshelping owners transition their businesses successfully.

• Seeing a need for greater financial empowerment for women Paula founded and chairs the NCACPATriad Women’s Initiatives Group and actively participates in Financial Focus for Women to encouragewomen to better understand and grow their finances to achieve financial independence. Paula is also an active member of the Greensboro Estate Planning Council and NAPFA.

• Paula has been published and quoted in national and local publications, including AICPA’s The TaxAdviser, Kiplinger’s and The Business Journal. She created two AICPA podcast series on retirementplanning and financial empowerment for women. She is a TEDx presenter on the topic of Retirement:Longevity and Security. Paula regularly speaks to professional organizations, industry organizations,professional firms, civic organizations and businesses on the topics of Social Security, RetirementPlanning, Financial Empowerment for Women and Financial Wellness.

When Can I Retire? Will I Have Enough?: Looking ahead to 30 years of inflation, taxes andvolatility, with no paycheck, I help people maximize outcomes and gain peace of mind.

Paula S. McMillan, CPA/PFS, CGMA, CFP®


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When Can I Retire? Will I Have Enough?


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Inadequate Savings for Retirement


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People are Living Longer –Good News. Bad News.


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Takes the puzzle pieces of your financial life…


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and organizes them, so your finances work together.


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When Can I Retire? Will I Have Enough?


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Fear andProcrastination


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FINANCIALLIFE

PLANNING

Current FinancialPosition

Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

SUPPORTINGDOCUMENTS

TAX RETURN

Retirement Planning


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

SUPPORTINGDOCUMENTS

TAX RETURN

Retirement Planning


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Grab Your:• Federal and State Tax

Returns• W-2 or Pay Stub

• Account Statements

• Debt Statements

• Social SecurityStatements

Let’s get started!


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

Retirement Planning


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A high income won’t necessarily lower your stress. Taking control of your spending will. - Rachel Cruze, Financial Author

Bucket your savings and asset allocation


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Stocks are great – except for the red dots

The volatility of the indexes could be materially different from that of a client’s portfolio. The indexes do not reflect fees and expenses and are not available for direct investment.


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Diversification and the average investor

The volatility of the indexes could be materially different from that of a client’s portfolio. The indexes do not reflect fees and expenses and are not available for direct investment.


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

Retirement Planning


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Do not save what is left after spending, but spend what is left after saving.- Warren Buffett, CEO of Berkshire Hathaway

Automate savings and investing


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One salient example

Cost to future retirement: $29,273.90


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Save early and save often

Account Growth of $5000 invested/saved annually. The above example is for illustrative purposes only and not indicative of any investment. Thethree largest account values in this example assume a 6.0% annual return and the smallest account value assumes a 2.0% annual return.Compounding refers to the process of earning return on principal plus the return that was earned earlier. Source: J.P. Morgan Asset Management,Long-Term Capital Market Assumptions and J.P. Morgan Asset Management Guide to Retirement 2018. SFG cannot guarantee projections or that estimates will actually be met. Investing involves risk, including possible loss of principal. Please see our disclosures at the end of this document.


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Consistent Chloe

Quitter Quincy

Late Lyla

Nervous Noah

Avoid lifestyle creep

Model Assumptions include a pre-retirement investment return of 6.0%, a post-retirement investment return of 5.0%, inflation rate of 2.25%, retirement age of 65/62 for primary earner/spouse respectively, and a 30 year retirement timeframe. The savings rate is the percentage of current householdincome you should save annually going forward if you have $0 saved for retirement at the starting age based on the salary provided. Householdincome is assumed to be gross income. Savings rate assumes you would like to maintain an equivalent lifestyle in retirement. The chart is for illustrativepurposes only and must not be relied upon to make investment decisions. Source: J.P. Morgan Long-Term Capital Market assumptions via J.P.Morgan Asset Management Guide to Retirement 2018. SFG cannot guarantee projections or that estimates will actually be met. Investing involvesrisk, including possible loss of principal. Please see our disclosures at the end of this document.


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

Retirement Planning


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A good financial plan is a road map that shows us exactly how the choiceswe make today affect our future.- Alexa Von Tobel, CEO of LearnVest

Term vs. Whole Life

Umbrella Insurance

Disability Insurance

Long-term Care Insurance

Insure what you can’t control –potential large risks


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

Retirement Planning


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A good financial plan is a road map that shows us exactly how the choiceswe make today affect our future.- Alexa Von Tobel, CEO of LearnVest

Wills

Durable Powers of Attorney

Healthcare Powers of Attorney

HIPAA Authorizations

Living Trusts (when necessary)

Critical estate planning documents


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FINANCIALLIFE

PLANNING


Tax Planning

Investment Planning

RiskPlanning

EstatePlanning

SUPPORTINGDOCUMENTS

TAX RETURN

Retirement Planning


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The Carter family

• Save 10% to their 401(k)

• Net worth ~$410,000

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129

}$135,000 $96,000


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The Carter’s current trajectory

-3000

-4000

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-1000

0

1000

2000

3000

4000

Based upon the levels of income and spending in theBase Case, your portfolio assets will be depleted.


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Cash investments are assumed to grow at 0%.Assets invested at an assumed 5% annual growth. Past performance is no guarantee of future results.

$96,000 in annual pre-tax spending with 3% growth.$135,000 in combined salaries for 27 years, $51,720 social security at age 67 with 2% growth.

SFG cannot guarantee projections or that estimates will actually be met. Investing involves risk, including possible loss of principal.Please see our disclosures at the end of this document.

What if the Carter family spends $3k less annually?

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

Based upon the levels of income and spending in theSpending $3,000 Less scenario, we’re short.


$93,000 in annual pre-tax spending with 3% growth.$135,000 in combined salaries for 27 years, $51,720 social security at age 67 with 2% growth.

SFG cannot guarantee projections or that estimates will actually be met. Investing involves risk, including possible loss of principal.Please see our disclosures at the end of this document.

. Personal Financial Planning Section & 360 Degrees of Financial Literacy Tax | Retirement | Estate | Risk Management | Investments

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And what if the kids put some skin in the game?

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

Based upon the levels of income and spending in thePutting Some Skin in the Game scenario, it works.


$88,000 in annual pre-tax spending with 3% growth.$135,000 in combined salaries for 27 years, $51,720 social security at age 67 with 2% growth.SFG cannot guarantee projections or that estimates will actually be met. Investing involves risk,

including possible loss of principal.Please see our disclosures at the end of this document.


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1) Financial Stability2) Physical Strength3) Sound Mind

Interconnected, So Plan for All Three!

For Success Now - and In Retirement


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Stay high on life. Hug more.


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When asked to dance, always say “yes”.


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Teach someone something. We’re all in this together.


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Plan for Your Future TODAY!


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Where to Turn for Help?


A CPA Financial Planner and a CPA/PFS are trusted advisors who…• Strive to operate at the highest professional level, acting in the clients’ best interest.

• Integrate advanced tax planning concepts with the entire financial and investment plan.

• Adhere to high standards as required by the Code of Professional Conduct and the Statement on Standards in PFP Services

• Are regulated by state boards of accountancy.

41 Personal Financial Planning Section & 360 Degrees of Financial Literacy Tax | Retirement | Estate | Risk Management | Investments

http://www.aicpa.org/research/standards/codeofconduct/pages/default.aspx

http://www.aicpa.org/InterestAreas/PersonalFinancialPlanning/Resources/PracticeCenter/ProfessionalResponsibilities/Pages/PFPexposuredraft.aspx

www.aicpa.org/pfp | Consumer


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http://www.aicpa.org/pfp

360 degrees of financial literacy 360financialliteracy.org


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http://www.360financialliteracy.org/

Personal Financial Planning Section & 360 Degrees of Financial LiteracyTax | Retirement | Estate | Risk Management | Investments

Connect with 360 Degrees of Financial Literacy on social media for tips, insights and motivation to keep your finances on track.

Facebook - www.facebook.com/360FinancialLiteracy

Twitter - @360Finances

Instagram - @360Finances

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Questions?

•Past performance is no guarantee of future results. All investment strategies have the potential forprofit or loss. This material is not financial advice or an offer to sell any product. This report is forinformational purposes only. The statements contained herein are solely based upon the opinions of Stearns Financial Group and the data available at the time of publication of this report, and there isno assurance that any predicted results will actually occur. Stearns Financial Group reserves theright to modify its current investment strategies and techniques based on changing marketdynamics or client needs. This report contains no recommendations to buy or sell any specificsecurities and should not be considered investment advice of any kind. In making an investmentdecision, individuals should utilize other information sources and the advice of their investmentadvisor. Information was obtained from third party sources which we believe to be reliable but arenot guaranteed as to their accuracy or completeness. Stearns Financial Group is a registeredinvestment advisor. SEC registration does not constitute an endorsement of the firm by theCommission nor does it indicate that the adviser has attained a particular level of skill or ability.More information about the advisor, including its investment strategies and objectives, are fully described in the firm’s Form ADV Part 2, which is available by calling (336) 230-1811, or can be found by visiting www.stearnsfinancial.com.• SFG-19-48

Paula S. McMillan, CPA/PFS, CFP®, CGMASenior Financial AdvisorStearns Financial [email protected]


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http://www.stearnsfinancial.com/

mailto:[email protected]

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