- Preparing for an introduction meeting with our team
- Obtaining documents for the meeting (financial statements, retirement statements, etc.)
- What happens on our end before the second meeting
- Bucket sheet (cash, safety and growth)
At this point, a lot of work has been done on both sides of the table: you provide a wealth of information, and we give you a recommendation and insight into your retirement. Now, you have to decide whether or not you want to work with us as a client.
If you love everything and want to work with us to secure your retirement, we will move forward through a new process.
Meeting and Figuring Out Any Additional Information We Need
We’ve gathered a lot of information from you up until this point, but there are still some documents we’ll need to open up accounts. For example, we’ll need:
- Beneficiary information
- Dates of birth
- Phone numbers
- Contact information
We’ll spend time filling in documentation with all of your information to open up a Charles Schwab account in your name. Once all of this paperwork is signed, we’ll submit it to Schwab. In most cases, it will take 1 – 3 business days to open the account, depending on the type of account in question.
This is when:
- Transfers take place
- Nick reaches out to you about the account being opened
- Verify that everyone can access the new account (including you)
If you’re already a customer of Charles Schwab, we only need to provide a single form to access the account.
Understanding Our Relationship with Charles Schwab
It’s crucial for you to understand that we don’t work for Charles Schwab. In fact, we’re not connected with the company in any way other than using them as a custodian. Custodians can be:
- TD Ameritrade (not for much longer as Schwab acquired them)
- Charles Schwab
- Any place where you have your accounts
Charles Schwab doesn’t have a financial relationship with us.
When we transfer your accounts from your existing custodian to Schwab, something called an “in kind” occurs. This is a simple term, meaning that all of your assets are moved from one account to another and remain unchanged.
We don’t have to sell and repurchase anything when transferring your accounts to Schwab.
Until we come up with a strategy around the investments, nothing changes in your accounts during the transfer. The transfer doesn’t cause tax liability or anything like that.
What Happens If I Transfer My Monthly Distribution from One Custodian to Another?
If you have a custodian account with, say, Fidelity and you’re taking a $1,000 monthly distribution, what happens when you transfer to Schwab? We’ll need to fill out one additional form on your behalf and make sure the same exact thing happens at Schwab for you.
In essence, we’re just changing bank accounts when moving to Schwab, and we replicate everything for you effortlessly.
What Happens with a Company Plan, Such as a 401(k), 403(b), 457, etc.?
If you have what is called a “company plan,” the transfer happens a little differently. We require one less form to file and we’ll need to contact the company, such as the 401(k) company.
When we contact the company, we’ll request that the company send a check for the balance of your account. The check will be made out to Charles Schwab for the benefit of you. The check can be sent to you or to Charles Schwab directly.
The process varies and depends on how fast the company cuts the check.
Note: When we work together, we do a trustee-to-trustee turnover so that you don’t trigger a taxable event.
Tax Planning Over the Next Few Months
During the first few months of working with us, we’ll dive into tax planning. If you want to secure your retirement, you must not pay a dime more in taxes than is necessary. First, we’ll need your most recent tax return.
We’ll analyze these returns to learn where you can save money.
For example, perhaps you can benefit from a Roth conversion, so we’ll have a conversation around this to see if it’s something you’re interested in doing.
Of course, we may be able to leverage:
- Qualified charitable distributions
- Donor-advised funds
- Any opportunity to lower your taxable income
We want to lower your current taxable income and future taxes, too.
Clients Over the Age of 65
If you’re over the age of 65, you may be concerned about selling something with a gain or a Roth conversion. Clients who are paying Medicare premiums, or will be shortly, need to worry about something called IRMAA.
Don’t know what IRMAA is? Read our guide on it here.
Essentially, once your adjusted gross income reaches over a certain level, there’s a possibility that your Medicare premiums may start increasing. The goal is to keep your premiums at a level where whatever we do on our end, such as a Roth conversion, isn’t negated.
Our clients who work with us, we will:
- Introduce you to a CPA we work with
- Help you gather all of your tax forms
- Ensure that your return is filed on time
Taxes have a lot of moving parts, and we do our best to ensure that we take as much of the burden off of you as we can.
Communication With Clients
On our end, there’s so much going on quickly that it can feel overwhelming and confusing. We communicate as much as we can with our clients so that you’re never left wondering: what’s going on with my accounts?
We provide updates, often via email or a phone call, to tell you about accounts opening, ensure that you have access to each account, transfer estimates and then when the transfer is complete.
We also keep in close contact with you during this time to ensure that if you have any questions, they’re all answered in a timely manner.
If we’re transferring a 401(k), we often do not have an estimated date for this completion. However, we do see when the check is sent to Charles Schwab and when it is deposited into the account.
When the check goes to you, we’ll be in frequent contact with you to ensure everything goes smoothly.
At this point, we’ve done a lot of the process needed for our “45-day meeting.”
In most cases, the 45-day mark is when we have everything in-house, and all of your assets have been properly transferred. We’ll be getting together to:
- Ask you questions about logging into your account, statements and ensuring that you’re comfortable with the setup in place
- Finalize anything that is left to talk about for the investment strategy
- Deliver anything left in the investment strategy to you
We provide you with a one-page document on how everything is laid out for your multiple buckets. These buckets include your cash, safety, and growth accounts. During the visit, you’ll have time to ask us any questions about the way we devised these buckets.
Next, we’ll move on to the important part of estate planning, which will include a few things, such as:
We have a relationship with a partner firm, and we take care of this expense for our clients. The estate plan ensures that your retirement planning accounts for those times when you’re incapacitated or no longer living.
Since so much is going on during the first year of working with us, we will plan on meeting with you quite a bit so that we can get everything in place. You’ll also be able to see all of the work that we’ve done up until each meeting so that you can have peace of mind that your retirement is in good hands.
Do you want to learn more about our approach to retirement planning? Contact us today.