Financial Planning
A dynamic approach to helping you and your family reach your financial goals
At GCG, we use financial planning tools and resources to help you and your family reach your financial goals.
We provide expertise in the six areas with the biggest impact on your personal financial situation, and develop plans
and strategies to help you succeed.
We help you identify where you want to go, and show you how to get there, turning financial planning into a powerful force for you.
- Current Financial
Position: The first step involves getting a snapshot of where things are today, including assets, liabilities, net worth and cash flow.
- Protection Planning:
Financially protecting yourself and your family from death, disability, accident and illness
- Investment Planning:
Strategies to help you retain assets and minimize payment of unnecessary taxes.
- Tax Planning:
Strategies to help you retain assets and minimize payment
of unnecessary taxes.
- Retirement Planning:
Creating accumulation and income strategies that help you achieve a financially secure retirement.
- Estate Planning:
Strategies for preserving and distributing assets to heirs in a way that fits your goals and desires, while minimizing estate taxes, probate expenses and estate administrative costs.
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Current Financial Position
Understanding your current financial situation is one of
the most important aspects of doing financial planning. Your
current assets, liabilities, liquidity and cash flow will
affect almost every other short or long-term goal that you
have.
Many people don’t realize the long-term impact of the financial
decisions they make on a day-to-day basis. Your financial
needs in the event of a death or disability will be closely
related to your current situation, and areas such as income
tax liability, asset allocation, estate tax liability, ownership
status of assets, and control of assets are all inter-related.
If you already have a good understanding of your current
financial situation, congratulations! If you could benefit
from a greater understanding of where you stand today, there
are numerous ways that you can begin.
Use worksheets to calculate your net worth and track your
cash flow. Personal finance programs such as Quicken™ or MS
Money™ are also helpful in gaining a better understanding
of where you stand today.
For help in identifying strengths and weaknesses in your
current financial picture, or for help in developing a comprehensive
financial plan, select the "Contact Us" option located in
the main site menu at the top of the page. Our Financial Advisors
are just a click away!
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Protection Planning
Protecting your family from major financial risks is one
of the cornerstones of any sound financial program. Life insurance,
disability insurance, health coverage and long-term care insurance
should all be evaluated to help minimize your exposure to
financial risk.
By working with a knowledgeable Financial Advisor, you can
develop a comprehensive approach to assessing your need for
additional coverage. To help you get started, click on the
Financial Calculators link located in the main site menu at
the top of the page.
While there are more complicated systems for calculating
your insurance needs, this provides you with an indicator
of whether you should consider increasing your life insurance
coverage.
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Investment Planning
Managing risk in your investments
Successful investing is based on managing risk — understanding
what risk means and using it to your advantage.
Risk refers to the chance that an investment's value or return
will be lower than expected. Investments with potential for
greater loss are viewed as riskier than those with a lesser
chance of loss.
However, the risks associated with investments differ in
the long-term compared to the short-term. In the long-term,
so-called "risky" investments may offer a greater chance of
reaching a financial objective.
Risk Levels
For example, a government bond that guarantees a return of
principal and $100 interest after 30 days is risk-free in
the short term, since the return will always be $100 regardless
of events in the financial markets, if held to maturity. In
contrast, common stock may have the potential of earning as
much as $200 and as little as $0 and offer no protection of
principal.
In the long-term, the picture changes. Based on historical
stock performance, risk faced by stocks declines over the
long-term. The risk faced by government bonds increases, however,
since their long-term returns they offer are frequently outperformed
by other types of investments and may not always keep up with
inflation and taxes.
The risk and return of any one investment should be viewed
in relation to your total investment portfolio — the combination
of investments you’re making. If you hold just one or two
accounts, you are more exposed to risk than if your money
is more widely diversified. Diversification means investing
in instruments which behave differently during a given economic
situation or time period.
A Financial Advisor can help you determine an appropriate
level of risk and diversification for your financial goals,
profile and time horizon. Talk to an advisor or representative
today about developing a customized investment strategy.
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Tax planning
As Ben Franklin aptly pointed out over two centuries ago,
taxes are one of the certainties of life. Our challenge is
to use the provisions of the tax code to our advantage wherever
possible.
For example, income can be from earned (employment) or unearned
(investment) sources, and can be taxed today, taxed later
(deferred) or not taxed at all (exempt). How we decide to
hold our assets and receive our income will have the greatest
impact on our income taxes.
Everyone knows that the U. S. tax code is extremely complex.
Many types of assets (tax-exempt bonds, IRAs, annuities, and
cash-value life insurance to name several) offer significant
tax advantages. Working with a financial advisor who understands
the tax implications of your financial decisions will help
assure that you are making those decisions with all the pertinent
information, often resulting in significant tax savings. For
help in identifying strategies to reduce your taxes, or for
help in developing a comprehensive financial plan, contact
one of our knowledgeable Financial Advisors today.
This information is a general discussion of the relevant federal tax laws. It is not
intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties.
This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer.
Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues
applicable to their specific circumstances.
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Retirement planning
Plans help address the changing concept of retirement
The concept of retirement is changing. And so are the ways
that people prepare for it. For some, retirement means lots
of leisure time to pursue hobbies and interests. For others
it means a change to part time work, and still others will
spend their new found free time with family members or as
a volunteer in the community.
Whatever your plans for retirement may be, you have a valuable
tool at your fingertips to help you prepare financially for
what could be the most rewarding part of your life. This tool
is your retirement plan. Many retirement programs offer investment
options to choose from, and contributions can come from your
employer, you or both to provide the accumulation you need
to save for the future.
Three retirement savers
Sid Saver, 25, has a long way to go before his golden years.
With an income of $25,000 in the early stages of his career,
Sid's working with an eye to the future. If Sid defers just
4.7 percent of his annual income to his 401(k), he could retire
with 80 percent of his annual salary*, adjusted for inflation.
And, Sid's tolerance for risk is high, given his long time
horizon. He'll allocate his money into an aggressive portfolio
made up of equity investments.
Debra Due Diligence, 35, hasn't started contributing to her
pension plan, opting instead to save $25,000 in an IRA plan,
and that may help offset possible foregone earnings. She'll
have to put more than 12.1 percent away in order to enjoy
80 percent* of her $35,000 income at retirement. Deb will
put her money into a moderately aggressive portfolio with
20 percent in fixed income and 80 percent in equity.
Pete Procrastinator has waited even longer. At age 48, he's
earning $50,000 per year as an editor for a small publishing
company. But he has only saved $5,000 in an IRA. Pete would
have to save more than 30 percent of his before-tax income
in order to retire with just 80 percent* of his current income.
That's more than the law allows, so Pete would have to use
another savings vehicle, as well. Pete's not too worried,
though. He plans to continue working part time after age 65,
and will invest 12 percent into a moderate portfolio, with
40 percent of funds going to a fixed income group and 60 percent
going to an equity group.
No matter where you are in your career, a retirement program
offers a wide range of investment options.
The most important thing you need to do is use it. Here's
a review of the three hypothetical retirement examples:
*Assumes a 3.5 percent inflation rate, investment
growth of eight percent before and six percent after retirement,
no employer-contribution pension plan and standard calculated
Social Security income. These are hypothetical examples for
illustrative purposes only and are not indicative of any particular
investment.
Developing a strategy for a financially secure retirement
is no simple task. That's why an experienced professional's
knowledge and objectivity can make this important challenge
more manageable.
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Estate planning
Helping you protect your legacy
No matter how large your estate is, a sound estate plan remains
the best assurance that your assets will be distributed to
the heirs you select in the way you choose. It can also help
protect your financial security if you become incapacitated.
While reducing taxes can be an important goal, it’s not the
only reason to develop an estate plan. Regardless of what
happens with tax legislation, an estate plan can be an essential
financial planning tool.
As you put together your own estate plan, consider these
elements:
- A will can specify who gets what and name guardians
for minor children.
- Durable powers of attorney allow whomever you choose
to make financial and medical decisions if you become unable
to do so yourself.
- Beneficiary designations on retirement accounts, life
insurance policies and the like must be coordinated with
the rest of your estate plan. Those assets will go to the
listed beneficiaries, regardless of your will.
- Titling of assets also should be coordinated with your
total estate plan. Property owned jointly with right of
survivorship, for instance, typically goes to the survivor,
superseding any instructions in a will.
- Trusts are flexible tools that can be used to manage
investments during your lifetime and beyond, distribute
assets to heirs under circumstances that you spell out,
minimize estate taxes, maintain the privacy of your financial
affairs and protect assets from lawsuits and seizures.
Estate planning can protect your family's interests and
ensure that your wishes are carried out.
What if I don't have a will?
If you die without a will or other testamentary document,
the probate court distributes your estate according to state
laws. About a third of the states have adopted all or part
of the Uniform Probate Code, which provides for the following
structure for distributing property if you die without developing
an estate plan (intestate):
- If there is a surviving spouse and no surviving children
or surviving parent of decedent, all property passes to
the spouse.
- If there is no surviving children but decedent is
survived by a parent or parents, the first $50,000, plus
one-half the balance of the estate passes to the surviving
spouse. The remainder passes to the decedent's parents.
- If there is a surviving spouse and surviving children
of both, the first $50,000 plus one-half the balance of
the estate passes to the surviving spouse. The remainder
passes to the surviving children equally.
- If there is no spouse and no children, the property
is divided evenly between your parents. If no parents
are living, it is evenly divided among the descendants
of your parents, namely your siblings.
- If there is no living relative, the property reverts
to the state.
In addition, the probate process is time consuming and
expensive. Consult one of our financial professionals
to learn how to protect your estate.
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Effective business continuation is both an "art"
and a science. First and foremost, it is an art.
Because the best business plan always considers
your unique financial goals and objectives, creativity
and customization is required to select and tailor
those strategies best suited to meet your specific
business continuation and benefit needs.
However, business continuation and benefit planning
is also a science. The best business plan should
take into account the tax and legal ramifications
of the various financial strategies adopted.
A Financial Advisor or Registered Representative
will incorporate both the art and science of business
planning in a program recommended to you.
The Art and Science of Business Planning can help
ensure the ongoing success of your business.
Key people are vital to the success of your business.
A Key Person Life Insurance Plan can provide the
funds you need to keep your business running smoothly
after you've lost a key employee through death or
employee turnover.
The employer can arrange an Exchange of Insurance
Agreement to reduce losses if a key employee leaves
prior to retirement. This allows the employer to
transfer coverage to a successor.
If a key employee dies, the employer receives the
policy's income tax-free death benefit* and can
apply it towards business expenses or losses caused
by the employee's death.
If you employ anyone whose sudden, unexpected absence
would significantly impact your business, consult
with your life insurance agent and financial professionals
about Key Person Life Insurance.
* Subject to the corporate alternative minimum
tax for C corporations.
The benefit program your company offers is critical
to attracting and retaining top employees. Qualified
benefit programs — pension and 401(k) plans — limit
participation by highly compensated executives.
A nonqualified plan is a unique benefit designed
to attract and reward top executives. Life Rewards,
a customized nonqualified benefit program, can strengthen
the tie between your company and its top executives.
Life Rewards offer valuable benefits to key executives:
Attracting, motivating and retaining key executives
takes a competitive compensation package that
includes more than a salary and a bonus. Until
recently, government regulations made it almost
impossible to single out and reward those employees
you value most.
The Golden Executive Bonus Arrangement (GEBA)
can be a solution for rewarding and retaining
your most valued executives. This tool gives
your company a current income tax deduction
through the purchase of cash value life insurance,
while maintaining control to encourage an executive
to stay with your company.
Other advantages of life insurance funded GEBA
include:
If you're looking for an executive compensation
tool that helps you retain one or more key
executives, consider using life insurance
in a GEBA.
