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Investment Advice You Shouldn’t Listen To

Investment Advice You Shouldn’t Listen To

If you’re hoping to build a strong investment portfolio or just hoping to save better, it may seem that everyone has an opinion about what you should do. Some will tell you the stock market is the only place to make money. Others say to invest in real estate. What do you believe? The biggest mistake you can make is not working with a financial advisor who can help you create a plan designed specifically for your individual needs. What advice is wrong, then?

Don’t Assume What Works for Them Will Work for You

The most common mistake individuals make is this one – they believe the investments another individual has made is what is right for their needs. The problem with this is a lack of planning for risk. In other words, it becomes critical for you to choose a plan designed for your needs.

Get Rich Quick Schemes

Another piece of advice commonly given that’s simply wrong has to do with a get rich quick scheme. These happen in investing as well. There’s a “hot” or a “can’t fail deal” out there that you need to be a part of. Generally, if it seems too good to be true, it is. You don’t want to bet your future and your current portfolio on investments that are not built on a sound foundation. That’s not to say there are no ways to build wealth quickly.

If It’s Illegal

Another common mistake many people make is this one – they believe that they can hide from the IRS. They believe they can make enough money in their investment strategies to overstep government regulations. Do not make this mistake. This type of advice – and any type of advice not specifically designed within the laws is advice that’s simply not going to be worthwhile.

What should you do instead? Hire a professional to help you with advice designed for your individual needs.

Contact Us to Learn More About Your Options

At Sterling Financial, you will always receive advice you can rely on. Our team customized retirement plans and other services to meet your needs. Contact us today to set up a consultation to discuss what those needs are.

5 Benefits of an Estate Advisor Investing Service

5 Benefits of an Estate Advisor Investing Service

If you have a big family, you’ve probably experienced the often uncomfortable task of talking about money. Even more so if you have had the honorable, yet terrifying task of serving as an executor of a will. The interweaving of family and money is not always easy.

As your family relationships may dodge some curveballs over the years, your relationship with money is also likely to fluctuate. Perhaps you’ve been through phases of save, save, save. Or maybe you have a collection of “As Seen on TV” pressure cookers that you’ve never used. It’s okay, you’re human— and those infomercials are really convincing.

If there’s one thing you’re never careless about, though, it’s doing the right thing—like deciding whether to sell your parents’ family home after they’ve passed or figuring out if you should set up a trust for your kids. These are not, by any means, easy decisions. Having a trusted advisor on your side can help.

It’s true that no one knows your finances like you do. In fact, you have an intuitive nature about managing your money that no one else can replicate, which is a major contributing factor when it comes to investment decisions. So, what does an estate advisor service add?

Here are some benefits of our estate advisor investing service:

  1. Proprietary Algorithms & Economic Overlays: We use a unique process that analyzes the numbers to provide better performance and lower risk.
  2. Registered Advisors: Sterling Wealth Strategies consists of a group of registered investment advisors that have consistently outperformed the market and continue to do so.
  3. Individualized Guidance: There’s no one-size-fits-all when it comes to estate planning. We design investment strategies based on your specific needs and lifestyle.
  4. Unmatched Expertise: Obstacles like poor performance, low fixed interest rates and turbulent market conditions can derail even the savviest investor. We’ve seen it all, and we leverage that experience to guide you to a more confident and secure financial future.
  5. Downside Protection: We firmly believe that investors simply cannot afford to lose their hard-earned money. That’s why we seek to preserve capital first. A big part of financial freedom is being free of worrying about a market crash.

If you need help establishing a trust, updating a will or designating beneficiaries on your retirement accounts, an estate advisor service will help you plan for the future. Sterling Advisor Group provides the ultimate investment experience with proven results. Get in touch with a financial partner or call us directly at 480.729.8000.

When Can You Take Money Out of An IRA Without Penalty?

When Can You Take Money Out of An IRA Without Penalty?

According to Gallup, most Americans retire at age 62, but it’s not uncommon to be forced into early retirement for health reasons or because of a layoff. If you’re looking to take money out of your traditional IRA before age 59 and a half, you will most likely have to pay a 10% penalty. In addition, the withdrawal will be considered income and taxed accordingly. There are some situations where you may be exempt from a penalty, but first, let’s review the differences between a Traditional and a Roth IRA.

Rules and Restrictions: Traditional vs. Roth IRA  

IRA stands for Individual Retirement Account. You put money into the account as an investment so you can use it when you retire. There are two types of accounts. Traditional IRA contributions offer a tax deduction during the contribution year, and distributions are taxed as income for the year the money is withdrawn. Roth IRA contributions do not provide a tax break, and distributions are generally tax-free, but there are income eligibility and other contribution restrictions.     

Can you take money out of an IRA without penalty?

If you’re younger than 59 and a half, you will likely have to pay a 10% early withdrawal penalty. For example, a 57-year-old retiree who withdraws $10,000 from their traditional IRA will owe the IRS $1,000. Furthermore, their taxable income will increase by $10,000, which may result in a higher tax bracket.

In terms of a Roth IRA, there’s no fee to withdraw original contributions, but there is a 10% penalty on the withdrawal of any profits. So, a Roth IRA that has grown to $12,000 from a $5,000 contribution would require a $700 early withdrawal penalty be paid by the account holder if he or she wanted to withdraw the entire balance before age 59 and a half. If only the $5,000 contribution were withdrawn, there would not be a penalty. Additionally, the Roth IRA distribution would not be taxed.

Are there any exceptions?

There are some ways to avoid the penalty before age 59 and a half. If you will be using the withdrawal for any of the following scenarios, you will probably be exempt from the 10% penalty. These are just some of the reasons why you might avoid the penalty.

  • Paying for qualifying college expenses  
  • Buying your first home (up to $10,000)
  • Unreimbursed medical expenses
  • Paying for health insurance while unemployed
  • Debilitating disability
  • Beneficiary inheritance
  • Some active duty military

Consult your financial planner if you’re nearing retirement and considering withdrawing from your IRA. Contact us today and we’ll help you come up with a smart withdrawal plan for your retirement years. 

In the Market for an Investment Advisor? Here’s What You Need to Know

In the Market for an Investment Advisor? Here’s What You Need to Know

Choosing the right investment advisor is a critical step toward achieving financial security. Yet the very gravity of the decision can make the process seem quite daunting — especially for those who lack expertise in the investment realm. That’s one reason why it’s imperative to weigh all your options carefully before making any commitments. Here at Sterling we make it our mission to use our experience, systems and expertise to make you feel confident in how you invest your money.

To help you accomplish this, let’s take a closer look at some of the key things to consider when choosing your next advisor.

Is your advisor fee-based?

Generally speaking, your advisor should be paid on a fee basis, rather than a commission model. Fee-based advisors typically are paid by the hour, instead of earning commissions on individual trades.

Why is a fee-based structure preferable? In a word, objectivity. Advisors who work on commission may have incentive to place you in and out of various investments — earning more money for them but working against your best financial interest. Fee-based advisors, on the other hand, have no incentive to offer anything but their best advice.

Does your advisor have the right qualifications?

The world of financial advising comes with a variety of titles and designations: certified financial planner, wealth manager, registered representative, just to name a few. The requirements for using such titles can vary dramatically; some require rigorous oversight and the passing of exams, while others require virtually nothing at all.

Smart investors look beyond a simple title to ensure their advisors possess the expertise that’s needed. When interviewing advisors, feel free to inquire about their background and which securities licenses they hold. You can also ask to see an example of a quarterly report, which should give you an idea of how the advisor operates. The Financial Industry Regulatory Authority also offers a useful online service that allows you to research the experience and background of advisors with a simple search.

Is the chemistry right?

Financial advisor, ideally, should be a long-term position — perhaps even a lifetime position. Because you’ll be working with this person closely for an extended period of time, it’s essential to make sure the chemistry is right.

The best financial advisors know that they are operating in a client-centered business. They understand that clear communication and a strong relationship are core ingredients in any successful long-term venture. Find an advisor who places emphasis on those values, and you’ll increase your odds of a long and profitable partnership.

Is your advisor well-rounded?

Today, the very best advisors are much more than a simple broker — they are comprehensive financial coaches who can offer detailed information and advice on most of life’s major financial decisions. A well-rounded advisor can help you pay for college, buy a home, save money on insurance, find tax advantages and build a nest egg.

In this sense, a great advisor can make life easier by helping you identify your objectives and realize your goals. By partnering with the right person, you can find the optimal strategy for most of the complex financial situations you’ll encounter.

The takeaway

Choosing the right financial advisor is an essential part of reaching financial independence. By considering the information outlined above, you can identify the advisor that best suits your needs — and lay the foundation for a happy, successful and secure future. Start by contacting a Sterling Group United advisor today.

Hidden Fees to Look Out for From a Financial Advisor

Hidden Fees to Look Out for From a Financial Advisor

You hire a financial advisor to help you make the best decisions regarding your money, but do you know how much you’re paying in hidden fees with your current financial advisor? The truth is, many people don’t. By understanding the common fees charged by financial advisors and how to find out exactly what you’re paying in fees and similar costs, you can make sure you’ve got the right advisor on your side.

Disclosed Fees

Keep in mind that by law, there are numerous fees that must be plainly disclosed to you as a client. These specific requirements, however, can vary depending on the type of investing you’re doing. For example, if you’re dealing with mutual funds, you may be required to be disclosed expense ratios up-front. Your expense ratio can vary greatly, but will include fees for administrative costs, fund management, and the like. If you’re dealing with an annuity, you can expect to face other fees specific to that investment as well—but the fact remains: expense ratios should always be disclosed up-front.

Potentially Hidden Fees

Aside from expense ratios, however, there are numerous other potential fees you could be paying for your financial advising. If you’re working with a financial advisor and aren’t sure whether you’re paying these fees (or if so, how much you’re paying), now would be a good time to find out.

Fund Fees

Fund fees are similar to expense ratios (and, in some cases, may be one in the same). However, while the cost of these fees may always be disclosed, it’s important to note that their specific reasoning may not be. Check your prospectus to see what kinds of fund fees you’re being charged, and if anything isn’t clear, don’t hesitate to ask for a detailed breakdown of exactly what these fees are going towards.

Sales Loads

A sales load generally refers to a commission that’s paid directly to the person who manages your fund; it is usually charged in percentage form and can range anywhere from 1% all the way up to 5%, so you definitely want to know about it. You can sometimes avoid these fees by using “no-loads” funds, which are not eligible for these commissions.

Trading Fees

These refer to transaction costs that are incurred when your financial advisor trades or passes a share. While these fees are usually quite small (around 1%), it’s still important to know about them, so check out your prospectus to learn more.

Nobody likes hidden fees, especially when working with someone who is supposed to help you manage your money. Get the financial guidance you need without compromise when you work with our team at Sterling Group United.

In the Market for an Investment Advisor? Here’s What You Need to Know

In the Market for an Investment Advisor? Here’s What You Need to Know

Choosing the right investment advisor is a critical step toward achieving financial security. Yet the very gravity of the decision can make the process seem quite daunting — especially for those who lack expertise in the investment realm. That’s one reason why it’s imperative to weigh all your options carefully before making any commitments. Here at Sterling we make it our mission to use our experience, systems and expertise to make you feel confident in how you invest your money.

To help you accomplish this, let’s take a closer look at some of the key things to consider when choosing your next advisor.

Is your advisor fee-based?

Generally speaking, your advisor should be paid on a fee basis, rather than a commission model. Fee-based advisors typically are paid by the hour, instead of earning commissions on individual trades.

Why is a fee-based structure preferable? In a word, objectivity. Advisors who work on commission may have incentive to place you in and out of various investments — earning more money for them but working against your best financial interest. Fee-based advisors, on the other hand, have no incentive to offer anything but their best advice.

Does your advisor have the right qualifications?

The world of financial advising comes with a variety of titles and designations: certified financial planner, wealth manager, registered representative, just to name a few. The requirements for using such titles can vary dramatically; some require rigorous oversight and the passing of exams, while others require virtually nothing at all.

Smart investors look beyond a simple title to ensure their advisors possess the expertise that’s needed. When interviewing advisors, feel free to inquire about their background and which securities licenses they hold. You can also ask to see an example of a quarterly report, which should give you an idea of how the advisor operates. The Financial Industry Regulatory Authority also offers a useful online service that allows you to research the experience and background of advisors with a simple search.

Is the chemistry right?

Financial advisor, ideally, should be a long-term position — perhaps even a lifetime position. Because you’ll be working with this person closely for an extended period of time, it’s essential to make sure the chemistry is right.

The best financial advisors know that they are operating in a client-centered business. They understand that clear communication and a strong relationship are core ingredients in any successful long-term venture. Find an advisor who places emphasis on those values, and you’ll increase your odds of a long and profitable partnership.

Is your advisor well-rounded?

Today, the very best advisors are much more than a simple broker — they are comprehensive financial coaches who can offer detailed information and advice on most of life’s major financial decisions. A well-rounded advisor can help you pay for college, buy a home, save money on insurance, find tax advantages and build a nest egg.

In this sense, a great advisor can make life easier by helping you identify your objectives and realize your goals. By partnering with the right person, you can find the optimal strategy for most of the complex financial situations you’ll encounter.

The takeaway

Choosing the right financial advisor is an essential part of reaching financial independence. By considering the information outlined above, you can identify the advisor that best suits your needs — and lay the foundation for a happy, successful and secure future. Start by contacting a Sterling Group United advisor today.