Tag: Minnesota

Financial Planning for Retirement: Steps, Plans, and Rules

Posted on by Colette Nichol

Financial Planning for Retirement: Steps, Plans, and Rules

By Michael Urch, CFP, Senior Wealth Manager of 360 Financial

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products.

 

Tips on Essential Financial Planning for Retirement

Financial planning for retirement is crucial for anyone who wants a successful retirement.

Surprisingly, some people spend more time planning their annual vacation than they spend planning their retirement. We want to make sure that our clients have a plan in place and that they are confident that they will be able to retire knowing they will not run out of money.

Financial Planning Topics Covered:

  1. How to Plan for Retirement
  2. How to Save for Retirement
  3. Top 5 Retirement Planning Tips to Maximize Your Employment Benefits
  4. How to Invest for Retirement
  5. Why Diversification Is Important
  6. Why You Need to Know Your Risk Profile
  7. Working with a Fiduciary Financial Advisor
  8. Tax Planning and Retirement
  9. Estate Planning and Retirement
  10. Common Questions about Financial Planning for Retirement:
  11. Work with a Financial Advisor Online or In Person

How to Plan for Retirement 

There are two essential financial summaries to put together at the beginning of retirement planning. 

1) A net worth statement. This is a summary of all of the things you own (assets) and all of the money you owe (liabilities). It is a snapshot of your financial resources available for retirement.

2) A cash flow statement or budget. This is a summary of the annual income you expect to receive in retirement from social security and other sources, as well as your annual retirement expenses. (+)

Generally, you will have more expenses than income in retirement. You will then want to work with an advisor to create a plan to replace the rest of your income stream using the assets from your balance sheet.

How to Save for Retirement

It is important to regularly set-aside money for retirement.

The most common way to do this is by contributing to a 401(k) plan or 403(b) plan. IRAs and Roth IRAs can also be used as well as contributing to brokerage accounts. HSA’s are becoming a more common form of retirement savings as well. A general rule of thumb is to contribute 10% of your personal income to retirement, but we like to customize savings plans for our clients based on their specific situation. Schedule a 15-minute call if you want to talk to an advisor about personalized retirement savings strategies. (+)

Top 5 Retirement Planning Tips to Maximize Your Employment Benefits

  1. Contribute enough to get the employer match on your retirement accounts.
  1. Consider contributing to a Roth 401(k)/403(b) if you expect to have your income increase in the future.
  1. Evaluate whether you should choose a health insurance plan that allows you to contribute to an HSA. If yes, maximize your HSA for retirement
  1. Review your benefits packet for any deferred compensation benefits and make sure you are utilizing them.
  1. Make sure that you are utilizing all tax benefits (health insurance is pre-tax, FSA and dependent FSA accounts, etc.)
retirement planning

How to Invest for Retirement

Equities (stocks) are an asset class that has historically beaten inflation for the long-term.

The longer someone’s time-frame for investing and the further that they are from retirement, the more they should allocate to stocks. As retirement approaches, it may make sense to add more bonds to your overall allocation. These are the general rules of thumb, but it would be best to discuss your specifics with an advisor. (+)

Why Diversification Is Important

Risk cannot be eliminated when investing.

However, investment risks can be reduced through diversification. By having exposure to multiple companies and asset classes, our clients are able to have more confidence that if any one company or sector of the economy performs poorly, other investments in the portfolio can help sustain the investments.

Why You Need to Know Your Risk Profile

Knowing your risk profile is critical.

One of the most disastrous scenarios possible would be for someone to make a poor investment choice and sell out of their investments during the first market downturn in retirement.

It is extremely important to understand the level of risk that you are comfortable with and then to create an investment policy statement that guides portfolio decisions.

Working with a Fiduciary Financial Advisor

Is your financial advisor held to a legal standard of acting in your best interest in managing your investments and providing financial planning advice?

A registered investment advisor must manage investments as a fiduciary, and a CERTIFIED FINANCIAL PLANNER™ professional must give advice while acting as a fiduciary. We recommend working with a fiduciary whenever possible.

Your retirement plan should reflect your goals and vision for your life.

Tax Planning and Retirement

One of the largest expenses in retirement is taxes.

Why not work with an advisor that can help you avoid tipping the IRS? Roth conversion strategies, RMD strategies, charitable giving strategies, gain/loss realization strategies – all these and more should be on the table for discussion every year in retirement.

Estate Planning and Retirement

Are you planning to leave an inheritance?

Or do you want to plan on spending as much as possible while you are living? Should you have trusts in place to help manage your assets in the event that you are incapacitated? As with all financial planning topics, everything is related and it is important to think about your estate plan while putting your retirement plan together.

estate planning

Common Questions about Financial Planning for Retirement:

How do I prepare my finances before retiring?

Create a budget based on your spending today.

Then imagine yourself as being retired. Based on what you are spending right now, how much do you want to be spending in retirement? Finding out the right number here is important. With it in mind, you can work with an advisor to see whether it is achievable.

 

What is the safest place to put my retirement money?

Asset allocation in retirement is extremely important.

You have to balance different risks. One of the risks is market risk. This is the risk of stocks decreasing in value due to market volatility. Inflation is another significant risk. If you are only considering market risk, it may seem “safer” to have all of your money in treasury bonds, but it is important to not forget the long-term risk of inflation, which stocks are well suited to overcome.

What are most retirement plans missing?

The one thing that I see as most impactful in a retirement plan is a sense of purpose.

It is important to go beyond the numbers and the money that makes retirement possible and ask: what is this money for? Retirement can be more than simply “not working.” I recommend sitting down with a blank page of paper and asking: “what is going to give me a sense of purpose in retirement.”

Work with a Financial Advisor Online or In Person

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

About the Author

Michael Urch

Michael Urch Senior Wealth Manager and CFP

Michael Urch is a Senior Wealth Manager at 360 Financial. Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning.

Prior to joining 360, he spent nine years honing his skills first at a Fortune 100 Financial Services Company and then at independent, planning-centric firms. He graduated magna cum laude from Bethel University with a BA in economics and finance, as well as a minor in mathematics.

Michael lives in Golden Valley, Minnesota with his wife, Bri and their three children. When he is not working, he enjoys exploring parks and reading books as a family, hiking, and playing guitar.

Schedule a Call with Michael Urch, Senior Wealth Manager

Other Articles and Guides 

Financial Planning vs. Financial Advisor – What’s the Difference?

Financial Planning in Minnesota

401k Retirement Planning Essentials

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

Schedule a 15-minute Call

 

Financial Planning in Minnesota

If you need financial planning assistance and a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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

Last Will and Testament Minnesota: A Simple Guide to the Basics

Posted on by Colette Nichol

Understanding Your Last Will and Testament in Minnesota: A Simple Guide

By Mike Rogers, AIF®, Founder and President of 360 Financial

Mike Rogers is a fiduciary financial advisor with over 30 years of experience in the financial services industry as an investment advisor and financial planner. He founded 360 Financial in 1995 and holds series 7 and 63 security registrations with LPL Financial.

 

Last Will and Testament Minnesota

This post will give you a brief overview of what you need to know about your last will and testament in Minnesota.

 

Table of Contents:

  1. Basics of Minnesota Wills
  2. The Role of Executors in Minnesota Wills
  3. Minnesota Inheritance Laws
  4. How to Include Minor Children in Your Will in Minnesota
  5. The Importance of Witnesses in Minnesota Will Creation
  6. Disputing a Will in Minnesota: Grounds and Processes
  7. Minnesota Estate Taxes and Wills
  8. Including Digital Assets in Wills
  9. Attorney’s Role in Drafting Wills
  10. Changing or Revoking Wills in Minnesota
  11. Checklist for Creating Your Last Will and Testament in Minnesota
  12. Financial Planning and Estate Planning in Minnesota

 

Basics of Minnesota Wills

A will is a legal document that outlines how you’d like your assets distributed after your death. In Minnesota, anyone who is at least 18 years old and of sound mind can make a will. To be valid, it must be in writing, signed by you or another person at your direction and in your presence, and witnessed by two people.

 

The Role of Executors in Minnesota Wills

The executor is the person you nominate in your will to carry out your wishes after your death. Their responsibilities include collecting your assets, paying off debts and taxes, and distributing the remainder of your estate as you specified in your will.

If you need help with estate planning in Minnesota, we recommend you speak with your financial advisor and estate planning attorney, particularly if you have a complex situation. 

 

Related Article: Intestate Succession Minnesota: A Simple Guide

 

Minnesota Inheritance Laws

If you die without a will in Minnesota, your assets will be distributed according to state intestacy laws. Generally, your spouse and children will inherit your estate. If you’re unmarried and childless, your parents or siblings may inherit. (+)

If you die without a will, MN courts will be tasked with determining who receives your assets upon your death.

 

How to Include Minor Children in Your Will in Minnesota

In Minnesota, you can’t directly leave assets to children under 18. You can, however, appoint a guardian and establish a trust in your will to hold and manage the assets until they reach adulthood. (+)

 

The Importance of Witnesses in Minnesota Will Creation

In Minnesota, your will must be witnessed by two people. They must see you sign your will or be told by you that it’s your signature. The witnesses must be “disinterested,” meaning they’re not beneficiaries in the will.

To ensure that your will is set up properly and legally, work with an Estate Attorney to complete it.

 

Disputing a Will in Minnesota: Grounds and Processes

Wills can be disputed on several grounds, such as the testator not being of sound mind or the presence of undue influence or fraud. Disputes must be filed in probate court after the will is admitted to probate. (+)

When you list a beneficiary on a retirement account, that asset will skip the probate process. This is also true of listing transfer on death instructions on a brokerage account and a payable on death instructions on a bank account. In addition to a will, consider listing these beneficiaries to have the advantage of skipping probate.

 

Minnesota Estate Taxes and Wills

Minnesota has an estate tax, and it applies to estates valued over a certain amount. It’s important to consider potential estate taxes when creating your will and planning your estate. The estate tax rate in Minnesota ranges from 13% to 16%, and as of 2022, it applies to estates worth more than $3 million.

If you have an estate that is currently (or is expected to be) worth more than $3,000,000, speak with a financial advisor and estate attorney about how to best structure the inheritance.

 

Including Digital Assets in Wills

Digital assets like social media accounts, emails, and digital currencies can be included in your will. You should provide detailed instructions about what should happen to these assets after your death.

It is a best practice to keep the information about how to access these accounts in a secure place, where trusted individuals can access them after your death.

 

Attorney’s Role in Drafting Wills

An attorney can provide valuable guidance when drafting your will. They can ensure your will complies with Minnesota laws, advise on complex situations, and help prevent disputes after your death.

A financial advisor can be helpful in guiding the conversation about your legacy and helping with your estate attorney. When you are creating the legal documents that are part of your estate plan (wills, trusts, power of attorneys and healthcare directives), you will want to consult with an attorney.

 

Changing or Revoking Wills in Minnesota

You can change or revoke your will at any time while you’re of sound mind. Changes can be made by creating a new will or making a codicil, which is an amendment to your will. To revoke a will, you can create a new will that states that it revokes the old one or physically destroy the old will.

While this article should give you a basic understanding of the will-making process in Minnesota, it’s always advisable to consult with an attorney when creating, amending, or revoking a will to ensure all legal requirements are met.

 

Checklist for Creating Your Last Will and Testament in Minnesota

1 Determine your assets:
List all your assets, including real estate, bank accounts, investments, retirement funds, insurance policies, and personal property like jewelry or vehicles.

2 Identify your digital assets:
Include digital assets like social media accounts, digital currencies, and digital copyrights.

3 Decide on beneficiaries:
Your beneficiaries can be individuals, charities, or organizations.

4 Select a personal representative:
Choose a trustworthy person to execute your will. You can also use a professional executor.

5 Appoint a guardian (if applicable):
If you have minor children, decide who will care for them if you die while they’re still minors. You can also choose contingent guardians if your primary choice is unable or unwilling to fulfill the role for some reason.

6 Set up a trust for minor children (if applicable):
If you have minor children or grandchildren, consider setting up a trust for their inheritance.

7 Understand Minnesota Inheritance Laws:
Ensure your will complies with Minnesota’s inheritance laws, especially if you’re disinheriting a spouse or child.

8 Consult an attorney:
It’s very important to consult with an attorney if you’re creating a will with any level of complexity. You want to ensure all legal requirements are met and your wishes will be accurately represented.

9 Sign your will:
Sign your will in front of two disinterested witnesses who must also sign the document.

10 Secure your will:
Keep your will in a safe place and let your executor know where it is.

11 Review and update regularly:
Life changes or significant changes to your assets may mean it’s time to update your will. Regularly review and update your will to ensure it accurately reflects your current wishes.

Remember, while you can create a will independently, working with an attorney can provide you with a more thorough and legally sound document.

 

Financial Planning and Estate Planning in Minnesota

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

About the Author

Mike Rogers

Mike Rogers is the founder and president of Minnesota-based financial advisory firm 360 Financial. As the founder, Mike’s priority is that 360 Financial always serves the clients with empathy, integrity, and honesty. This customized, client-centric approach allows the firm to help clients decipher between the things they can control and what truly matters.

In other words, Mike understands that money is not the end-all-be-all; instead, it’s the “how” that fuels the “why” to the question: “What’s important to you?”

 

Other Estate Planning Guides: 

Intestate Succession Minnesota: A Simple Guide

Estate Planning in Minnesota

 

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

Schedule a 15-minute Call

 

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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

Intestate Succession Minnesota: A Simple Guide

Posted on by Colette Nichol

Intestate Succession Minnesota: A Simple Guide

By Mike Rogers, AIF®, Founder and President of 360 Financial

Mike Rogers is a fiduciary financial advisor with over 30 years of experience in the financial services industry as an investment advisor and financial planner. He founded 360 Financial in 1995 and holds series 7 and 63 security registrations with LPL Financial.

 

Topics covered in this article

  1. An Overview of Intestate Succession Laws in Minnesota
  2. What Happens When There’s No Will?
  3. Understanding Your Inheritance Rights Under Minnesota Intestate Succession
  4. How Minnesota Probate Courts Handle Intestate Succession
  5. Impact of Marital Status
  6. The Role of Descendants
  7. Legal Rights of Half-Relatives and Adopted Children in Minnesota’s Intestate Succession
  8. The 120-Hour Rule
  9. Avoiding Intestate Succession: Importance of Estate Planning in Minnesota
  10. Financial Advisors in Minnesota

 

An Overview of Intestate Succession Laws in Minnesota

Intestate succession laws in Minnesota apply when a person dies without a will. These laws dictate how the deceased’s property gets divided among surviving relatives. The closer the relative, the higher the priority.

 

What Happens When There’s No Will?

When there’s no will, Minnesota intestate laws dictate property distribution. The estate goes to the closest relatives. These include the spouse, descendants, parents, siblings, or more distant relatives.

 

Understanding Your Inheritance Rights Under Minnesota Intestate Succession

Inheritance rights vary based on your relation to the deceased. Spouses usually receive the estate first. If there are descendants, they share the estate with the spouse. If there is no spouse or descendants, parents or siblings are next in line.

 

How Minnesota Probate Courts Handle Intestate Succession

Minnesota’s probate courts oversee the intestate succession process. They ensure the fair distribution of the deceased’s property according to the state’s laws. The court assigns an administrator to manage the estate.

 

Impact of Marital Status

Marital status greatly affects intestate succession in Minnesota. The spouse usually receives the entire estate if there are no descendants or parents alive. If there are descendants, the spouse receives the first $225,000 and half of the balance.

 

The Role of Descendants

Descendants play a significant role in intestate succession. Descendants include children, grandchildren, and great-grandchildren. If a spouse survives the deceased, the descendants share the estate with them.

 

Legal Rights of Half-Relatives and Adopted Children in Minnesota’s Intestate Succession

Half-relatives and adopted children have legal rights under Minnesota law. Half-relatives receive half of what full relatives would get. Adopted children receive the same share as biological children.

 

The 120-Hour Rule

Minnesota applies a 120-hour rule in cases of simultaneous death. If an heir doesn’t survive the deceased by 120 hours, they are deemed predeceased. The estate is then distributed as if the heir died first. 

 

Avoiding Intestate Succession: Importance of Estate Planning in Minnesota

To avoid intestate succession, it’s essential to create a will. A will allows you to dictate the distribution of your property. Estate planning ensures your wishes are followed, providing peace of mind for you and your loved ones. According to Gallup, only 44% of Americans indicate that they have a will. (+)

The need for estate planning cannot be overstated.

But estate planning is a lot more than just creating a will. Your financial advisor in Minnesota should be helping you with your retirement and estate planning. They can include reviewing your estate in their annual review meeting. 

 

Wealth Management and Estate Planning in Minnesota

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

About the Author

Mike Rogers

Mike Rogers is the founder and president of Minnesota-based financial advisory firm 360 Financial. As the founder, Mike’s priority is that 360 Financial always serves the clients with empathy, integrity, and honesty. This customized, client-centric approach allows the firm to help clients decipher between the things they can control and what truly matters.

In other words, Mike understands that money is not the end-all-be-all; instead, it’s the “how” that fuels the “why” to the question: “What’s important to you?”

 

Other Minnesota Estate Planning Articles and Guides

Estate Planning in Minnesota

How to Create Your Last Will and Testament in Minnesota

 

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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

How a Fiduciary Financial Advisor in Minnesota Can Help

Posted on by Colette Nichol

How a Fiduciary Financial Advisor in Minnesota Can Help

By Mike Rogers, AIF®, Founder and President of 360 Financial

Mike Rogers is a fiduciary financial advisor with over 30 years of experience in the financial services industry as an investment advisor and financial planner. He founded 360 Financial in 1995 and holds series 7 and 63 security registrations with LPL Financial.

 

Topics covered in this article

  1. What is a Fiduciary?
  2. What is a Fiduciary Financial Advisor?
  3. How to Find a Fiduciary Financial Advisory in Minnesota
  4. Is it Better to Have a Fiduciary Financial Advisor?
  5. Understanding the Fiduciary Standard in Financial Advising
  6. Ethical Responsibilities of a Fiduciary Financial Advisor
  7. Impact of Fiduciary Duties on Investment Strategies
  8. Regulatory Compliance for Financial Advisors
  9. Conflict of Interest Management for Financial Advisors with Fiduciary Duty
  10. Fiduciary Responsibility in Retirement Planning
  11. The Consequences of Breaching Fiduciary Duties
  12. Fiduciary Duties in Estate Planning and Wealth Transfer
  13. Evaluating the Performance of a Financial Advisor
  14. Work with a Fiduciary Financial Advisor in Minnesota

 

What is a Fiduciary?

A fiduciary is an individual or organization legally required to act in the best interest of another party. Fiduciaries must prioritize the interests of their clients above their own, which eliminates potential conflicts of interest and ensures you receive the highest standard of service and care.

 

What is a Fiduciary Financial Advisor?

A fiduciary financial advisor is a finance professional who is obligated to act in their client’s best interest. They provide financial advice and recommendations based on the client’s specific needs, goals, and circumstances rather than focusing on products or strategies that might benefit the advisor more than the client. 

For example, a fiduciary financial advisor can’t recommend a mutual fund that gives them a nice commission unless this mutual fund is the absolute best product for their client. When you work with a fiduciary, you don’t have to worry about being “sold” products you don’t need. Your advisor is legally required to act in your best interest at all times. 

 

How to Find a Fiduciary Financial Advisory in Minnesota

To find a fiduciary financial advisor in Minnesota, search for advisors with certified designations such as Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC). You can use online resources like the National Association of Personal Financial Advisors (NAPFA) or the Financial Planning Association’s (FPA) database. 

Always verify the fiduciary status by asking directly or checking the advisor’s Form ADV.

At 360 Financial, we are financial advisors, financial planners, wealth managers, and fiduciaries. 

 

Is it Better to Have a Fiduciary Financial Advisor?

Opting for a fiduciary financial advisor can be beneficial as they are required by law to act in your best interest. This obligation reduces the risk of conflicts of interest and ensures that your advisor’s recommendations align with your financial goals. However, it’s also important to consider an advisor’s qualifications, experience, and fees to ensure they are a good fit for your financial situation.

 

Understanding the Fiduciary Standard in Financial Advising

The fiduciary standard in financial advising refers to a strict code of conduct that advisors must adhere to. This standard requires advisors to act in a client’s best interest, avoid conflicts of interest, and disclose any potential conflicts. It’s a higher standard of care compared to the suitability standard, which only requires advisors to recommend suitable products.

 

Ethical Responsibilities of a Fiduciary Financial Advisor

Fiduciary financial advisors are bound by ethical responsibilities, including good faith and trustworthiness. They must provide accurate and complete information and diligently monitor and manage a client’s assets. They are also responsible for maintaining confidentiality and avoiding conflicts of interest.

 

Impact of Fiduciary Duties on Investment Strategies

Fiduciary duties significantly influence investment strategies. Advisors must consider the client’s financial goals, risk tolerance, and time horizon when making investment recommendations. They cannot recommend any investments that are not the absolute best fit for a client. This typically results in strategies tailored to each client’s unique situation rather than a one-size-fits-all approach. 

 

Regulatory Compliance for Financial Advisors

Like other U.S. states, financial advisors in Minnesota are subject to regulatory compliance. They must adhere to the rules set forth by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Compliance includes accurate record-keeping, transparent fee structures, and regular audits.

 

Conflict of Interest Management for Financial Advisors with Fiduciary Duty

Fiduciary financial advisors are required to manage conflicts of interest effectively. They must disclose any potential conflicts to their clients and take necessary steps to mitigate them. This ensures transparency and maintains the trust between the client and the advisor.

 

Fiduciary Responsibility in Retirement Planning

In retirement planning, a fiduciary’s responsibility is to provide advice that best suits the client’s retirement goals. This may involve suggesting suitable investment options, ensuring the client is maximizing their retirement benefits, and planning for a sustainable income during retirement.

 

Related Article: Is a Robo Advisor or Human Advisor Right for You?

 

The Consequences of Breaching Fiduciary Duties

Breaching fiduciary duties can have severe consequences. If a financial advisor does not act in the best interest of their client, they could face legal repercussions, potentially involving financial restitution and damage to their professional reputation. 

In some cases, advisors may lose their licenses or be banned from practicing. Clients who believe their advisor has violated their fiduciary duties can report their concerns to regulatory bodies such as the SEC or FINRA.

 

Fiduciary Duties in Estate Planning and Wealth Transfer

A fiduciary financial advisor’s role extends to estate planning and wealth transfer. They are expected to guide clients through the complex process of planning for the distribution of their assets upon their death. This includes understanding the client’s wishes, recommending appropriate estate planning tools (like wills or trusts), and potentially coordinating with attorneys or tax professionals. Moreover, they have to ensure a smooth, efficient transfer of wealth with minimal tax implications, always acting in the client’s best interest.

 

Evaluating the Performance of a Financial Advisor

Evaluating the performance of a financial advisor is not just about assessing the financial returns. It also includes reviewing how effectively they communicate, their responsiveness to your needs, and their ability to proactively address changes in your financial situation or the market. Advisors should provide clear, regular updates on your investments and be willing to discuss their decisions. Additionally, an advisor’s performance should align with your financial goals, risk tolerance, and investment timeline.

Remember, a fiduciary financial advisor’s primary obligation is to put your interests first.

 

Work with a Fiduciary Financial Advisor in Minnesota

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial. 

Founder and CEO of 360 Financial, Mike Rogers, has been a financial advisor for over 30 years. As a fiduciary, he always puts his clients’ best interests first and is dedicated to helping them achieve their big-picture financial and life goals. With his growing team, Mike is committed to providing outstanding financial services to successful professionals and business owners so they can live their lives on their own terms and leave a positive legacy. 

360 Financial is one of Minnesota’s best independent wealth management firms. 360 works with clients in Minnesota and across the US. If you’d like to work with a team that always puts you first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

 

Read More: 

Online Financial Advisors – Is a Robo-Advisor or Human Advisor Right for You?

 

 

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

Retirement Planning Minnesota: A Simple Guide

Posted on by Colette Nichol

A Simple Guide to Retirement Planning in Minnesota

By Mike Rogers, AIF®, Founder and President of 360 Financial

Mike Rogers is a fiduciary financial advisor with over 30 years of experience in the financial services industry as an investment advisor and financial planner. He founded 360 Financial in 1995 and holds series 7 and 63 security registrations with LPL Financial.

 

Whether you’re ten, twenty, or even thirty years from retirement, it’s important to start planning. Review the basics of retirement planning in Minnesota and get started. It’s never too early to start planning for retirement. Part of your planning will be considering expenses, taxes, and investments and how you want to live during retirement. 

 

Retirement Planning Topics in this Article

  1. Understanding Minnesota’s Tax Policies for Retirement Income
  2. Social Security Benefits: Maximizing Your Retirement Income
  3. The Role of a Minnesota Financial Advisor in Retirement Planning
  4. Employer Retirement Plans: 401(k)s, 403(b)s, and IRAs
  5. Minnesota’s Public Employee Retirement Association (PERA)
  6. How to Plan for Healthcare Costs in Retirement in Minnesota
  7. 10 Tips for Downsizing Your Home for Retirement
  8. The Impact of Minnesota’s Cost of Living on Retirement Budgets
  9. Utilizing Health Savings Accounts (HSAs) for Retirement in Minnesota
  10. Create a Retirement Budget
  11. Estate Planning in Minnesota
  12. Long-Term Care Planning for Retirees in Minnesota
  13. Inflation and Your Retirement Savings
  14. Financial Advisors in Minnesota

 

The top five things you should consider when planning your retirement in Minnesota are the state tax laws, cost of living, healthcare costs, how the climate may affect your expenditures during retirement, and estate planning. 

  1. Tax Implications: Minnesota taxes Social Security and most other retirement income.
  2. Cost of Living: Minnesota’s cost of living can impact your retirement budget, especially housing and healthcare costs.
  3. Healthcare Planning: Consider supplemental insurance and HSAs for healthcare costs.
  4. Climate: Minnesota’s cold winters may influence living and travel expenses.
  5. Estate Planning: Minnesota-specific estate planning can ensure a smooth transition of assets.

 

Related Post: A Guide to Financial Planning in Minnesota 

 

Understanding Minnesota’s Tax Policies for Retirement Income

Minnesota’s tax policies can significantly impact your retirement income. The state taxes Social Security benefits to the same extent as the federal government. It also taxes most other forms of retirement income, such as pensions and retirement account withdrawals.

As of 2023, the following is true of tax rates in Minnesota during retirement:

  • In Minnesota, your Social Security income is partially taxed.
  • All withdrawals from retirement accounts are fully taxed in Minnesota.
  • Public and private pension income is fully taxed.

 

Social Security Benefits: Maximizing Your Retirement Income

To maximize your Social Security benefits in Minnesota, you may want to consider delaying your benefits until you reach your full retirement age or older. The longer you wait, the higher your monthly benefit will be. Speak with your financial advisor about this to identify when is the right time for you to start taking Social Security.

 

retirement planning
A Minnesota financial advisor can provide expert advice tailored to your personal financial situation.

 

The Role of a Minnesota Financial Advisor in Retirement Planning

A Minnesota financial advisor can provide expert advice tailored to your personal financial situation. They can help you understand tax implications, investment strategies, and create a comprehensive retirement plan. 

If you don’t want to be worried about retirement for the next ten, twenty, or even thirty years, it would be wise to speak with a financial advisor and create a financial plan. Your financial advisor will be your guide, helping you towards your financial goals.  

 

Employer Retirement Plans: 401(k)s, 403(b)s, and IRAs

Employer-sponsored 401(k), 403(b) plans, and Individual Retirement Accounts (IRAs) are tools for saving for retirement. All of these offer tax advantages that can help your savings grow more rapidly. Minnesota employers may offer a match on 401(k) or 403(b) contributions, effectively giving you free money for your retirement savings.

There are also Roth 401(k)s, 403(b)s, and IRAs that have distinct tax advantages over the traditional plans. Talk with your financial advisor about what contribution is right for you.

 

Minnesota’s Public Employee Retirement Association (PERA)

PERA provides retirement benefits for public employees in Minnesota. If you’re a public employee, understanding the benefits and contribution requirements of PERA is crucial for your retirement planning.

In some cases, it may make sense to choose a lump-sum option rather than taking lifetime income. In addition, there are a number of income options available (joint life for the life of your spouse, individual life for you, individual life with period certain). Your advisor can help you decide what option is best for you.

 

How to Plan for Healthcare Costs in Retirement in Minnesota

Even with Medicare, healthcare can be a significant retirement expense. Consider options like Medigap or Medicare Advantage plans for additional coverage. Also, a Health Savings Account (HSA) can be used to save for healthcare costs tax-free.

If you are retiring prior to age 65, you will want to have good estimates for the costs of healthcare. You would likely be relying on COBRA insurance from your past employer or on health insurance that can be found through the MN health insurance exchange (MN Sure)

 

Estate Planning
Downsizing can reduce living expenses in retirement and free up capital that you can invest.

 

10 Tips for Downsizing Your Home for Retirement

Downsizing can reduce living expenses in retirement and free up capital that you can invest. When looking for a new home, consider location, accessibility, and proximity to healthcare services. Also, consider the emotional aspects of leaving home where you’ve lived for many years.

1 Evaluate your Needs: Assess your lifestyle and determine what you actually need in your new home. Think about the number of bedrooms, outdoor space, proximity to family and friends, and access to healthcare.

2 Sort your Stuff: Go through each room in your house and sort your belongings into keep, sell, donate, or discard piles. Be ruthless. Only keep what you absolutely need or love. Before you give things away, check with family members to see if they want any items. You might be surprised by what people want!

3 Plan your Space: Once you’ve chosen your new home, measure the space and plan where your furniture will go. This will help you decide what to take with you.

4 Sell Unwanted Items: Sell items you no longer need through a garage sale, online marketplaces, or consignment stores.

5 Digitize (Some Of) Your Memories: If you have many photos, documents, or memorabilia, consider digitizing them to save physical space.

6 Consider Storage: In your new home, consider investing in multi-purpose furniture with built-in storage or vertical storage solutions to maximize space.

7 Downsize Gradually: Don’t try to downsize all at once. Start months before your move, tackling one room at a time.

8 Get Help: Enlist the help of family members, friends, or professional organizers. They can provide emotional support and practical help.

9 Think about Accessibility: If you’re moving for retirement, look for a home that can accommodate your needs as you age, such as single-story living or wheelchair accessibility.

10 Embrace the Change: Downsizing can be emotional. Focus on the benefits, such as less maintenance, lower costs, and more freedom to enjoy your retirement.

 

The Impact of Minnesota’s Cost of Living on Retirement Budgets

Minnesota’s cost of living is slightly higher than the national average. Consider this when planning your retirement budget, especially when it comes to housing, healthcare, and taxes. When you work with a financial advisor, they’ll help you plan for retirement taking into account what you’ll be spending when you retire.

You might also consider the trade-offs of moving out of Minnesota when you retire. By moving to an area that has a lower cost of living or that has a lower state tax bracket, you might be able to afford to retire earlier or be able to spend more on travel and other goals in retirement.

If you’re creating your own financial plan, read more about the six steps in financial planning. Begin creating a financial plan that will help you achieve your financial goals and a relaxing and comfortable retirement. 

 

Utilizing Health Savings Accounts (HSAs) for Retirement in Minnesota

HSAs can be a great tool for saving for healthcare costs in retirement. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. After age 65, you can withdraw funds without penalty, but you will pay income tax on non-medical withdrawals.

If you do decide to utilize HSAs for retirement, you should invest them just like you are investing your other retirement accounts. Talk to your financial advisor about what would be appropriate investments for your HSA plan. 

 

Create a Retirement Budget

Start with your situation today. Review your total income, and subtract the amount you are saving and the amount you are paying for taxes. Now you’ve identified the amount of your current spending.

Will this change in retirement? Do you have a mortgage you will pay off? Will it remain the same in retirement? Are there any travel goals or other budget expenses you would like to add?

This will give you a good idea of how much income is needed in retirement, and you can work with a financial advisor to create a plan for getting that income.

 

Estate Planning in Minnesota

Estate planning involves more than just creating a will. It may also involve setting up trusts, naming beneficiaries for your retirement accounts, and creating a power of attorney and healthcare directive. 

A good financial advisor can help you with your estate planning and discuss the benefits of different legal documents. When it comes to actually drafting the legal documents you want in place, a Minnesota estate planning attorney can guide you through this process.

 

Long-Term Care Planning for Retirees in Minnesota

Long-term care can be a significant expense in retirement. Consider long-term care insurance, and look into Minnesota’s Medical Assistance program, which can help pay for long-term care if you qualify.

Minnesota has a tax deduction for long-term care premiums in qualified long-term care policies. To talk about long-term care insurance with an advisor, schedule a call with a financial advisor at 360 Financial.

 

Inflation and Your Retirement Savings

Inflation can erode your purchasing power in retirement. Consider investment strategies that can help your savings keep pace with or outpace inflation, such as investing in stocks or inflation-protected securities.

 

Financial Planning in Minnesota

SPEAK WITH AN ADVISOR

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor or financial planner at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch.  

Schedule a 15-minute Call

 

 

About the Author

Mike Rogers

Mike Rogers is the founder and president of Minnesota-based financial advisory firm 360 Financial. As the founder, Mike’s priority is that 360 Financial always serves the clients with empathy, integrity, and honesty. This customized, client-centric approach allows the firm to help clients decipher between the things they can control and what truly matters.

In other words, Mike understands that money is not the end-all-be-all; instead, it’s the “how” that fuels the “why” to the question: “What’s important to you?”

 

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At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

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This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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