By Glenn J. Downing, MBA, CFP®

With this blog post I’m beginning a two-part series about retirement savings plans available to the small business owner. Earlier Jonathan wrote about the Traditional IRA and the Roth IRA. In this piece I’m going to explain the Simplified Employee Pension, or SEP IRA. It is best used in a small shop, with few (or no) employees. It can be established by an individual proprietor, filing a Schedule C, or by a corporation, LLC, or partnership.

The SEP – Simplified Employee Pension

The SEP is designed for the business owner with few employees. Money goes into the SEP from employer contributions only. All contributions are tax-deductible to the employer. There is no opportunity for employee deferrals. A SEP IRA account is opened for each participant, and all funds contributed are immediately vested. (There is an older version, called a SARSEP, or salary reduction SEP. Although many are still out there, they cannot be opened after...

By Glenn J. Downing, MBA, CFP®

Last year (2019) I watched the entire Upstairs Downstairs series on Britbox. Easily sixty episodes in all. My viewing interests are usually limited to either WWII or British crime stories, so this was a bit of a departure for me, and one I thoroughly enjoyed. As the name suggests, it is sort of a Downtown Abbey Lite. The time spanned goes from before WWI to the New York Stock exchange crash. It is the story of all the residents of 165 Eaton Place in London – the home of a member of Parliament who married a titled lady (the upstairs folks) and their household staff (the downstairs folks).

Richard Bellamy, MP, had two children – a married daughter in New York, and a son at home – James Bellamy. James was up at Cambridge, though no mention of a degree. He worked at a job he hated because it was, well, work, and then joined his regiment as an officer during the Great War. This is a fellow whose newspapers and shoelaces were ironed for...

by Jonathan G. Cameron, CFP®

When I originally wrote this, the Carolinas were experiencing the worst of Hurricane Florence.  As a native Floridian I've ridden out half a dozen hurricanes myself . The aftermath of a hurricane is not only about the damage to life and property, but for many it can take a serious personal financial toll. As you stock up on canned food, batteries, and bottled water, don’t neglect to address these top 6 financial priorities before a storm makes landfall.

1. Review Your Homeowners Insurance Policy for Windstorm Coverage

Odds are your home is your most valuable asset. Why roll the dice on this? Not having homeowners insurance coverage is a mistake. Having a homeowners policy with little hurricane windstorm coverage could become a catastrophe. Typically, your policy will have a windstorm deductible for hurricane damage claims in addition to your All Other Perils deductible for everything else. The deductible for hurricane damage can...

By Glenn J. Downing, MBA, CFP®

Usually when we think of estate planning we have in mind the orderly transition of assets at death. Death is something that you have a 100% chance of experiencing – we just don’t know when. Tomorrow isn’t promised to us – and neither is this afternoon, for that matter. Consequently it is prudent to plan for this eventuality.

What Documents Do You Need?

A valid will

A basic will is the foundational document of estate planning. You need that once you own real property or begin to accumulate assets. Typically, at the earlier stages of life, most of what you have is going to pass by operation of a beneficiary arrangement – by contract, in other words. Think life insurance or IRA and 401(K) beneficiaries. What won’t pass by operation of contract? everything else that you own. This would be real property, or your car, for example – assets that cannot have a beneficiary attached to them.

Guardianship for your...

 By Glenn J. Downing, MBA, CFP®

 529 College Savings accounts just got better! 

A 529 college savings account is one in which money is invested for a beneficiary’s future college expenses.  The account grows without taxation, and funds are eventually distributed with no federal taxation for the beneficiary’s qualified education expenses.  The growth never gets taxed!*  This is a huge benefit. 

 The states each sponsor a 529 plan.  Florida’s is the Florida Pre-Paid.  A parent goes online during open enrollment in the autumn and chooses an option:  tuition only, or tuition and housing.  Once enrolled, the parent pays a monthly fee.  The benefit is that the child goes off to college with all tuition paid for!  Fees and expenses are not covered, and those can be considerable.  The prepaid plan is best suited for a conservative investor.

 Most states 529 plans are of the mutual fund...

by Jonathan G. Cameron, CFP®

Here is something we hear on occasion at CameronDowning: “I’m not sure an IRA is for me. I hear it may be too risky.” The problem with this statement is that an IRA, or Individual Retirement Account, is not an investment. So what is an IRA?

An IRA is Technically an Account Registration

It holds investments, but is not an investment itself. You can put all kinds of investments within an IRA. Consequently, stocks, bonds, mutual funds, CDs, and even gold bullion are investment options within an IRA. You can be 100% in cash in an IRA, which by definition has no risk. We’ve also commonly seen annuities put in IRAs which is typically not a good idea, and I discuss why here.

So What Exactly is an IRA?

Getting the terminology right is important. Picture a candy wrapper holding chocolate inside. An IRA is like the candy wrapper. Likewise, there are different kinds of candy wrappers just like there are various kinds of IRA...

by Jonathan G. Cameron, CFP®

Your emergency fund is foundational to any financial planning. Here I discuss what it is (and what it is not), why you need to have one, and how much should be in it. 

At the Margin 

An economics professor once said that if you fall asleep in class and he calls on you to just reply, "at the margin," and you’ll likely have the right answer. The entire study of economics is about what happens at the margin: the next unit of production, the next unit of income, the next dollar of debt payment.  Think about it: bankruptcies happen when there’s just one dollar more due that you simply cannot pay. So in talking about an emergency fund, we’re talking about what happens at the margin of your financial life. You’re keeping cash set aside to make sure that you’ll never get to that point where you don’t have the next marginal dollar.

What’s an Emergency Fund For?

Emergencies happen in life:  this is...

Glenn J. Downing, MBA, CFP®

What kinds of insurance do you offer?

We broker life insurance, disability income insurance, and long-term care insurance. In obtaining Insurance coverage for our clients, We shop the market for the most suitable product at the best price.

Can I get auto or homeowners through you?

No – that requires another license which we do not hold. As part of a complete financial planning engagement, we will evaluate the client’s risk exposure in these areas, and recommend coverage changes as appropriate. We are glad to refer you to insurance agents who can assist you with these policies. BTW we neither pay nor accept referral fees from other professionals, nor do we accept any liability for their actions.

What role does life insurance play in a financial plan?

A crucial part. A life insurance death benefit can complete the overall plan in the event of an untimely death.

Tell me about life insurance for tax-free income.

The strategy is to purchase a...

by Glenn J. Downing, MBA, CFP®

From time to time I’m asked, Glenn: there are plenty of financial guys out there. They’ll do financial planning for free. So why should I pay you guys?

Good question, and not unexpected in these days of free resources online.  To answer it, let me give you a little background.

Back say, 50 years ago, if you needed professional financial advice, from whom could you get it?  

• banker
• stockbroker
• insurance agent
• accountant

What’s the issue about taking advice from these providers? It is the potential for conflict of interest. What do I mean by that? Well, the banker wants to open time deposit accounts and initiate loans. The stockbroker wants to trade stocks in your account. The insurance agent makes a living selling policies. The accountant, on the other hand, focuses on preparing financial statements and doing tax returns.  See my blog post about the advice industry here.  

Is There a Conflict of...

by Glenn J. Downing, MBA, CFP®

Why do financial planning?

Short answer: because no one can hit a moving target. The financial plan informs all financial decisions: how to invest, what to save and where, and what insurance should I purchase or drop.

What should I expect when I come in to see you?

At the time you made your appointment you would have discussed your concerns with one of our associates.  After determining if you would be a good fit to work with us, you have been given a list of documents to upload for the financial planners to view before your meeting.

When you come in we’ll meet in one of the conference rooms at our Miami office. We’ll give you a bit of personal introduction and will be interested to learn how you came to us.

From there, we listen and ask questions.  We want a general snapshot of your financial position, and we’ll really want to understand your specific concerns and goals for our engagement.

Toward the end of this initial...