Financial and Investment Expert Joseph M. Maas Publishes Second Book – 401(k) Insight: Getting to “Retired!”

Joseph M. Maas, CFA, CVA, ABAR, CM&AA, CFP®, ChFC, CLU®, MSFS, CCIM, a Principal and Investment Advisor with Seattle-based Synergy Financial Management, LLC, has published the second book in his Insight Series, 401(k) Insight: Getting to “Retired!” Active for over 23 years in the financial services and investment industries, Maas is an expert with helping business owners establish a 401(k) that benefits the company with reduced taxes, and increases retirement savings for both the owner and employees. John A. Flavin, a Certified Financial Planner, joins Mr. Maas as co-author. This 280-page, soft-cover book addresses two audiences. For the business owner, the book details the steps involved with creating a 401(k), guiding the owner with understanding the financial value of having a 401(k), the sponsor’s role and responsibilities, and familiarity with the RFP process when hiring the professionals who service the plan. For the employees, Maas and Flavin explain the value of this outstanding financial opportunity and describe how employees can use their 401(k) to build a retirement fund that creates a comfortable lifestyle for their elder years. Maas and Flavin use an in-depth case study of Linda Nelson, a fictional woman in her late 20s who is contemplating her financial future and retirement. The authors demonstrate how Linda can achieve her financial goals with careful planning, and model the decision-making process through Linda’s experience. Easy-to-follow charts and illustrations provide business owners with a step-by-step guide to starting a 401(k) plan, and employees with knowing how to take full advantage of this wonderful financial instrument for retirement saving and investing. 401(k) Insight: Getting to “Retired!” is the second book of...

Tax Exempt vs. Tax Deferred Income

It’s tax time and everyone wants to know how to reduce their income tax liability. While it may be too late to make changes that impact 2014, you’ve got plenty of time to make changes for 2015. As you do so, keep in mind the differences between tax exempt and tax deferred income. Tax exempt income: Many tax-exempt investments are available that provide interest without taxation. Most common are municipal bonds issued for various government operations like building roads, schools, libraries, etc. These are issued free of federal tax, and may also be free of city and state taxes if the purchaser resides in the locale. Your financial planner will guide you with selecting the best tax exempt investments for your portfolio by comparing the after-tax return rate with other investments of similar risk, so you receive the best return available. Your financial planner will also advise that though the interest is tax exempt, you may be liable for capital gains tax when these bonds are sold. Tax free growth is one of the most potent investment opportunities available, but there are many rules and tactics to contemplate when considering tax exempt income, and your advisor will help you select the best choice for you. Tax-deferred income: With tax deferred income, the return on these investments is not taxed until it is withdrawn. Therefore, earnings continue to grow without the restriction of taxation, making these investments another formidable opportunity for investment growth. As these investments have a time-value advantage, your estate may not need to withdraw any earnings for quite a while, at which time you may be retired...

Alternative Minimum Tax and Capital Gains Tax

While there are a seemingly endless variety of taxes that local, state and the federal government imposes on citizens, here are two taxes that are worth a quick description because these may impact you directly. The Alternative Minimum Tax (AMT): The AMT is mostly focused on individuals, C corporations, estates and trusts with high income to ensure that these entities don’t completely escape federal-level income tax through the adroit use of deductions, credits and exclusions they may employ. This way, these entities pay income tax through the AMT’s alternative tax system. Capital Gains Tax: A capital gain occurs when a capital asset such as stocks, land, buildings or equipment is sold at a higher price than the price of its original purchase. The capital gain is the difference between the two prices. If one of your assets has a capital gain when it’s sold, you have incurred a tax liability on the appreciated value. However, since the current highest tax rate for ordinary income is presently 39.6% and the current highest tax rate for capital gains is presently 20%, or almost half, it’s to your tax-savings advantage if you can precipitate more capital gains, either by selling capital assets or earning certain dividends that are taxed at capital gains’ tax rates. The preceding text is an excerpt from “Exit Insight: Getting to ‘Sold!’” by author Joseph M. Maas, available for purchase online at Merrell Publishing or Amazon....

FAQ: What are the different types of trusts?

In our most recent post, we gave a brief overview of trusts and why a business owner might need one as part of an estate planning package. In this post, we’ll explain a few other types of trusts, although our list is not all-inclusive. Synergetic Finance founder and author Joseph M. Maas explains trusts in his book, “Exit Insight: ‘Getting to ‘Sold!’” The following is an excerpt from pages 180-182. Other Types of Trusts The following is not a full listing of the many trusts available to you, but is intended instead to demonstrate there are myriad choices available to serve your estate according to the strategic plan you and your financial planner have created. The basic plan is to retain as much of your estate’s value as possible by limiting tax liability, and transferring your estate’s properties efficiently to your beneficiaries. Each person’s circumstances are unique, so the assortment of trusts from which you can choose provides opportunity to protect the wealth you’ve worked so hard to build. Critical to this endeavor is using the trained skills and talents of a professional and independent financial planner who understands your goals and can guide you toward achieving them. Irrevocable Life Insurance Trusts: By shifting your life insurance policies into a trust, these policies avoid probate, the proceeds are also kept out of your estate, and you ensure that your beneficiaries have liquidity to help them through the transitional period following your death. In addition, though you lose the capacity to exercise complete control, additional advantages are that the assets cannot be claimed by creditors, you can name your trustee...

FAQ: What is a trust and why do I need one?

Part of every business owner’s exit strategy should include estate planning. Estate planning often includes a trust, but what is a trust and why do I need one? Synergetic Finance founder and author Joseph M. Maas explains trusts in his book, “Exit Insight: ‘Getting to ‘Sold!’” The following is an excerpt from pages 179-180. Trusts A trust is an arrangement in which property is held by one party for the use of another, and it is formidable in establishing how the property within the trust will be used and maintained. There are a variety of trusts to choose from, each having a specific purpose. Your financial planner will discuss your options with you, and together you can select the trusts that best fit with your strategic plan to maximize your estate and minimize your taxes and costs. Here is an explanation of some of the trusts that are available. Revocable Living Trust A revocable trust, also called a revocable living trust, is a trust that can be altered or revoked by the trustor at any time. This allows the person who created the trust to keep complete control of the included property while also removing the property from the probate process. Should death occur, the trust becomes irrevocable and the trust controls the distribution of its included properties, not the decedent’s will. A revocable trust avoids probate, avoids public knowledge of its contents, avoids inclusion if the deceased’s will is contested in court, and provides a course of action in case of incompetence or incapacity. There are details to know, and your financial planner will safeguard your estate with...

FAQ: What is the standard of value? Part 2 of 2

In our last post, we started a discussion of standard of value, giving a brief overview and explaining Fair Market Value. In this post, we’ll cover book value, intrinsic value and investment value. The following is an excerpt from pages 90-93 of “Exit Insight: Getting to ‘Sold!’” Book value: The third type of valuation standard is Book Value, which is actually an accounting term. Book Value is not often used in a business valuation because the value as registered in the company’s financial books is not necessarily a true representation of the entity’s value. Book Value is derived from a business’s balance sheet of assets, liabilities, and the owner’s equity. Here is a formula that represents the relationship of these elements: Assets = Liabilities + Owners Equity Continuing this explanation, you’ll see in the formula below that Book Value equals the business’s net assets minus its liabilities as measured by historical costs. (Net assets are assets at historical costs minus accumulated depreciation, amortization and any depletion.) Book Value = Assets – Liabilities Yet another way of understanding Book Value is that it is the owner’s equity: Owner’s Equity = Assets – Liabilities Book Value = Owner’s Equity Intrinsic value: To determine the Intrinsic Value of a business, a valuator will compare the difference between the business’s value as calculated through a valuation with the value of the business being traded in the open market. Expressing this numerically, if Acme, Inc. is trading in the market at $50.00 per share, but the value of the company is $75.00 per share when analyzed by a valuation professional, then Acme, Inc. has...