Search Results for: estate plan

Oct 15

Financial Planner or Estate Planner: Which Do You Need?

By Anna Byrne | Financial Planning , Retirement Planning , Tax Planning

Financial Planner or Estate Planner: Which Do You Need?

Financial Planners and Estate Planners are two different professions that are often confused. There is some overlap between professionals in these fields, but their roles are rather distinct. When you are striving to make a long-term plan for a strong financial future, both financial planners and estate planners play a crucial role.

In fact, when you consider some of the most recent personal finance statistics, it becomes very clear that many Americans could really benefit from retaining the services of both a financial planner AND an estate planner. For instance, 33% of Americans have no money saved for retirement, 60% lack any form of an estate plan, and only 46% have money saved for emergencies. Better planning starts with understanding what both types of planners do.

What is a Financial Planner?

A financial planner is a professional who offers a wide range of services that can assist both individuals and businesses to accomplish their long-term financial goals and accumulate wealth. They fall into two categories:

  • Registered Investment Advisor
  • Certified Financial Planner

Certified Financial Planners (CFP) are required to comply with the Certified Financial Planner Board of Standards, which means they have a basic level of expertise backed by a larger organization. Ethically they have to work in your best interest.

Services provided by both financial advisors and CFPs include:

What is an Estate Planner?

The goal of a financial planner is to assist with wealth accumulation. On the other hand, an estate planner can help you to make financial plans associated with your passing, which includes protecting the wealth that you have accumulated .

While you might believe only wealthy individuals need to work with an estate planner, you should consider the fact that everything you have accumulated in your life comprises your estate. Accumulated assets such as vehicles, furniture, bank accounts, life insurance, your home, and other personal possessions are all included in your estate.

Your assets become the property of the state if you die without a will or an estate plan in place , and your family members will not be able to claim them without paying legal fees and taxes. They will also have to face the stress of potential disagreements with other family members over how your property should be divided.

Besides planning for your passing, estate planning also involves creating a clear plan for your care if you become disabled , and it also covers naming guardians for underage children. Estate planning is a way to protect your family and your assets while reducing taxes and legal fees .

Which Do You Need?

The roles of financial planners and estate planners are unique, and for this reason, you will benefit from working with both . While your financial planner helps you accumulate wealth, he or she can also prepare you for a meeting with an estate planner as part of your long-term strategy. This includes providing the estate planner with lists of beneficiaries, tax return documentation, lists of investments and a breakdown of income and expenses.

When you work with both a financial planner and an estate planner, they will keep you accountable by periodically reviewing your documentation and beneficiaries and making sure everything is updated and reviewed as necessary. By taking the time to work with both these professionals, no important decisions will be overlooked, and you will take control of your financial future.


Note: This article was authored by Kristin Dzialo, a partner at Eckert Byrne LLC, a Cambridge, MA law firm that provides tailored estate planning. Eckert Byrne LLC and Insight Financial Strategists LLC are separate and unaffiliated companies. This article is provided for educational and informational purposes only. While Insight Financial Strategists LLC believes the sources to be reliable, it makes no representations or warranties as to this or other third party content it makes available on its website and/or newsletter,  nor does it explicitly or implicitly endorse or approve the information provided.  

Sep 16

“Tax Planning Strategies for the Four Major Stages of Retirement: Preretirement, Early, Middle & Later Years”

By Saki Kurose |

Chris Chen will be teaching a class on the four major stages of retirement, offered by Lexington Community Education via Zoom.  Topics covered will include: the critical tax questions you must answer before retirement; the surprises that often make retirement more expensive; what the Social Security “tax trap” is and how you can avoid it; why tapping assets in the wrong order can trigger higher Medicare premiums; the four stages of retirement and important tax actions in each stage; Traditional IRA and Roth IRA challenges and important considerations for rollovers; what you need to think about when it comes to estate planning and taxes; and mistakes to avoid when it comes to your investment portfolio, health care, and your estate.

Dec 09

Year End Tax Planning Opportunities

By Chris Chen CFP | Financial Planning , Retirement Planning , Tax Planning

Year End Tax Planning Opportunities

The Tax Cut and Jobs Act of 2017 (TCJA) was the most consequential tax reform package in this generation. It changed many of the ways that we think about reducing taxes.

According to the Tax Policy Center, we know that about 80% of taxpayers pay less income tax in 2018 than before the TCJA , about 5% pay more, and the balance of taxpayers pay about the same amount. On balance, the TCJA seems to have delivered on its promises.

A key item of the TCJA is that it increased the standard deduction, reducing the impact of the elimination of State and Local Taxes (SALT) under $10,000 and the elimination of personal deductions. As a result, about 84% of taxpayers claim the standard deduction and do not itemize. By comparison, about 56% of taxpayers itemized before the enactment of the TCJA. The vast majority of taxpayers are no longer subject to the Alternative Minimum Tax (AMT), since two of its key drivers, the deductibility of state and local taxes and personal deductions, are no longer a practical issue for most people. And in 2018, only 1,700 estates were subject to the federal estate and gift tax. So for most people, the TCJA has made taxes simpler to deal with. What’s there not to like about a simpler tax return ?

Federal deficit due to tax cuts

Source: Congressional Budget Office

Impact of the TCJA on the Federal Deficit

As predicted, the TCJA worsened the federal deficit bringing it to nearly a trillion dollars in fiscal year 2019. That was in spite of an increase in tax revenue due to the continuing improvement in the economic climate. Of course, the federal deficit continues to be driven by federal spending on the sacred cows of modern US politics: Defense, Social Security, and Medicare. Interest on the federal debt is also a major budget item that needs to be paid. While our continuing regime of low interest rates is helping control the interest on the debt, it is clear that the future may change that.

What will happen to tax rates?

Tax rates are lower now than they have been since the 1970s and 80s. Hence, industry insiders tend to think that tax rates have nowhere to go but up.  That is also what’s is predicted by the TCJA, which is largely designed to sunset in 2025. Should the American people turn on Republicans at the 2020 election, it’s possible that the TCJA will see a premature end. However, it seems that the possibility that the American people might elect a progressive in 2020 is largely discounted when it comes to tax rate forecasting: most people assume that tax rates will increase.

Year-End Planning

Political forecasting aside, there are still things that we can do to lower our taxes . It should be noted that many of the techniques in this article are not limited to the year-end. Furthermore, we all have different situations that may or may not be appropriate for these techniques. 

Tax Loss Harvesting

Even though we have had a pretty good year overall, many of us may still have positions in which we have paper losses. Tax-loss harvesting consists of selling these positions to realize the losses. This becomes valuable when you sell the equivalent amount of shares in which you have gains. So if you sell some shares with $10,000 in losses, and some with $10,000 in gains, you have effectively canceled out the taxes on the gains.

You then have to reinvest the shares sold into another investment. Be careful not to buy back the exact same shares that you sold. That would disallow the tax loss harvesting!

At the same time, it makes sense to review your portfolio and see if there are other changes that you would like to make. We are not fans of frequent changes for its own sake. However, periodically our needs change, the markets change, and we need to adapt.

Income Tax Planning

While tax loss harvesting is mostly about managing Capital Gains taxes, it is also important to keep an eye on income tax planning . This is a good time of year to estimate your income and your taxes for the year. When comparing your estimated Adjusted Gross Income with the tax tables, you will see if you might be creeping up into the next tax bracket. For instance, if you are single and your estimated AGI is $169,501 (and you have no other complexity), you are right at the 32% tax bracket (after you remove the $12,000 standard deduction).  In this example, that means that for every dollar above that amount you would owe 32 cents in federal income tax, and a little bit more for state income tax, if that applies to you.

If your income is from a business, you may possibly defer some of that income to next year. If your income comes from wages, another way to manage this is to plan an additional contribution to a retirement account. In the best of cases your $1,000 contribution would reduce your taxes by $320, and a little bit more for state taxes.

In some cases, you might have a significant dip in income. Perhaps if you have a business, you reported some large purchases, or you booked a loss or just had a bad year for income. It may make sense at this point to take advantage of your temporarily low tax rate to do a Roth conversion. Check with your wealth manager or tax preparer.

If your income does not straddle two tax brackets, the decision to invest in a Traditional IRA or a Roth IRA is still worth considering.

Charitable Contributions

By increasing standard deductions, the TCJA has made it more difficult for people to deduct charitable contributions . As a result, charitable contributions bring few if any tax benefits for most people.

One way around that situation is to bundle or lump charitable gifts. Instead of giving every year, you can give 2, 3 or more years worth of donations at one time. That would allow your charity to receive the contribution, and, potentially, for you to take a tax deduction. 

Pushing the bundling concept further, you could give even more to a Donor Advised Fund (DAF). With that option, you could take a tax deduction, and give every year from the DAF. That allows you to control your donations, reduce your income in the year that you donate, and potentially reduce income taxes and Medicare premiums. Consult your wealth strategist to ensure that taxes, income, and donations are optimized.

Retirement Accounts

First, it is important to review Required Minimum Distribution (RMDs). Anyone who is 70 ½ years of age or older is subject to RMDs. Please make sure to connect with your financial advisor to make sure that the RMD is properly withdrawn before the year-end.

The RMD is a perennial subject of irritation for people . Obviously, if your retirement income plan includes the use of RMDs, it’s not so much of an issue. However, if it is not required, it can be irritating. That is because RMD distributions are subject to income taxes that may even push you into the next tax bracket or increase your Medicare premium. There are, however, some ways that you can deal with that.  

For instance, if you take a Qualified Charitable Distribution (QCD) from your IRA and have the distribution given directly to a charity, the distribution will not be income to you. Hence you won’t pay income taxes on that distribution, and it will not be counted toward the income used to calculate your Medicare premium. However, it will fulfill your RMD, thus taking care of that pesky issue.

Generally, we advocate planning for lifetime taxes rather than for any one given year. Lifetime financial planning has the potential to result in even more benefits. It should be noted that many of the possibilities outlined in this article can be used throughout the year, not just at year-end. We encourage you to have that conversation with your wealth management team to plan for the long term!

Jun 25

What Is Your Legacy Plan?

By Chris Chen CFP | Financial Planning

What Is Your Legacy Plan?

While it may not be pleasant to think of one’s own passing, having your affairs in order can help ease the burden on friends and family, when the time comes, and can contribute to your own peace of mind knowing you have done all you can to prepare. There are many factors that should be considered when trying to create an effective and comprehensive legacy plan. Some considerations include:

  • Instructions on your own care in sickness
  • Guardians for your minor children should both parents pass
  • Protection from creditors
  • Charitable contributions
  • Continuation of a family business
  • Reducing or eliminating tax
  • Maintaining family harmony
  • Legacy creation and support of future generations

In addition, all these factors should integrate appropriately with your retirement income planning and your investment decisions.

Even if you already have a legacy plan in place, you may want to conduct a review. Decisions made years ago may not accurately reflect your current wishes. Legacy plans are not for the significantly wealthy alone. If you have children in your care or a business you wish to leave to future generations, it is important that protections and guidance are put in place now and are not put off until your retirement years. It is always a possibility that you may not have the luxury to last throughout the entire life expectancy table.

A poorly executed legacy plan, or the lack of one at all, could leave those you most care about to suffer needlessly in your absence. Be sure to work with a CFP™ professional or another experienced professional to gain control of your estate plan.


The preceding content was originally published on the Financial Planning Association © Web site,


Jan 23

How does the SECURE Act affect you?

By Chris Chen CFP | Financial Planning , Retirement Planning , Tax Planning

After several months of uncertainty, Congress finally passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act in December 2019, with President Trump signing the new Act into law on December 20, 2019. The SECURE Act introduces some of the most significant changes in retirement planning in more than a decade.

The SECURE Act makes several changes to the Internal Revenue Code (IRC) as well as the Employee Retirement Income Security Act (ERISA) that are intended to expand retirement plan coverage for workers and increase savings opportunities. The SECURE Act also radically changes several techniques used for retirement and tax planning. 

Some of the key provisions affecting employer retirement plans, individual retirement accounts (IRAs), and Section 529 Plans included in the SECURE Act are as follows.

IRA Contributions

Starting in 2020, eligible taxpayers can now make Traditional IRA contributions at any age. They are no longer bound by the previous limit of age 70 ½ for contributing to a Traditional IRA.  As a result, individuals 70 ½ and older are now eligible for the back-door Roth IRA .

As an aside, anyone who satisfies the income threshold and has compensation can fund a Roth IRA.

In addition, graduate students are now able to treat taxable stipends and non-tuition fellowship payments as earned income for IRA contribution purposes . I have a graduate student, so I understand that their stipend income may not allow them to contribute to retirement. However, that is something that forward-thinking parents and grandparents can consider as part of their own estate planning.

Required Minimum Distributions

As our retirement age seems to push into the future steadily, so are Required Minimum Distributions under the SECURE Act. This provision, which applies to IRAs and other qualified retirement plans (401(k), 403(b), and 457(b)) allows retirees turning 70 ½ in 2020 or later to delay RMDs from 70 ½ years of age to April 1 of the year after a retiree reaches age 72 . In addition, the law allows people who own certain plans to delay it even further in the case that they are still working after 72. Unfortunately, the provision does not apply to those who have turned 70 ½ in 2019. Natalie Choate, an estate planning lawyer in Boston, says in Morningstar, “no IRA owner will have a beginning RMD date in 2021”.

This RMD provision is part of the good news in the SECURE Act. It will allow retirees more time to reach their retirement income goals. For many, it will enable better lifetime tax planning as well.

End of the “Stretch” IRA

Prior to the SECURE Act, the distributions on an inherited IRA could be “stretched” over the expected lifetime of the inheritor. That was a staple tool of estate and tax planning. 

No more. With a few exceptions, such as for the spouse, the “stretch” is now effectively crunched into ten years. Accounts inherited as of 12/31/2019 are now expected to be distributed over ten years, without a specific annual requirement.

The consequence of this provision of the Act is likely to result in larger tax bills for people inheriting . This makes planning for people who expect to leave IRAs, as well for inheriting them, more important than ever. 

Qualified Birth or Adoption Distribution

The new law allows a penalty-free distribution of up to $5,000 from an IRA or employer plan for a  “Qualified Birth or Adoption Distribution.” For a qualified distribution, the owner of the account must take the distribution for a one-year period starting on (1) the date of birth of the child or (2) the date when the adoption becomes final (individual must be under age 18). The law permits the IRA owner who took the distribution to pay it back to the plan or IRA at a later date. However, these distributions remain subject to income taxes.

Generally speaking, we at Insight Financial Strategists think that people in this situation should avoid availing themselves of this new wrinkle in the law. In our experience, a distribution from retirement accounts before retirement can have profound impacts on retirement income security. 

529 Plans

It may sound off-topic, but it is not. The SECURE Act also addresses 529 plans. For students and their parents, the SECURE ACT allows tax-free 529 plans to pay for apprenticeship programs if they are registered and certified by the Department of Labor.

This provision will be helpful for those people who have children headed to vocational track programs.

In a very partial solution to the student loan crisis, savings in 529 plans can now be used to pay down a qualified education loan, up to $10,000 for a lifetime . Technically, the law makes this provision effective as of the beginning of 2019. 

Given how students and parents scramble to meet the challenge of the cost of higher education, I do not forecast that most 529 plans have much left over to pay off loans!

Business Retirement Plans

(Part-Time) Employee Eligibility for 401(k) Plans – In most 401(k) plans, participation by part-time employees is limited. The SECURE Act enables long-time part-time workers to participate in 401(k) plans if they have worked for at least 500 hours in each of three consecutive 12-month periods. Long-term part-time employees who become eligible under this provision may still be excluded from eligibility for contributions by employers.

Delayed Adoption of Employer Funded Qualified Retirement Plan Beginning in 2020, a new plan would be treated as effective for the prior tax year if it is established later than the due date of the previous year’s tax return. Notably, this provision would only apply to plans that are entirely employer-funded (i.e., profit-sharing, pension, and stock bonus plans).

403(b) Custodial Accounts under Terminated Plans are allowed to be Distributed in Kind – Subject to US Treasury Department guidance, the SECURE Act allows an individual 403(b) custodial account in a terminating plan to be distributed “in-kind” to the participant. The account distributed in this way would retain its tax-deferred status as a 403(b). 

Establish Open Multiple Employer Plans (MEPs) – Employers may now join together to create an “open” MEPs, referred to in the legislation as “Pooled Plans.” This will allow small employers to join together and share the costs of retirement planning for their employees, such as through a local Chamber of Commerce or other organization, to start a retirement plan for their employees. 

Increased Tax Credits – The tax credit for small employers who start a new retirement plan will increase from $500 to $5,000. In addition, small employers that add automatic enrollment to their plans also may qualify for an additional $500 annual tax credit for up to three years.

There are many more provisions in the SECURE Act. While some of them are useful for taxpayers, it is worth noting the observation by Ed Slott, a tax expert and sometimes wag: “whatever Congress names a tax law, it does the opposite .”  This is worth keeping in mind as you mull the implications of this law. With the SECURE Act now the law, it may be time to check in with your fiduciary financial planner and revise your retirement income and estate plans.

Aug 06

What to Expect Financially When Expecting

By Jason Berube | Financial Planning

What to Expect Financially When Expecting

Recently two of my closest friends and their wives became expecting parents. Of the two couples, one is expecting for the very first time. This very happy news inspired me to write this post to share my experiences as both a parent and a financial planner.  I would like to share my insights with becoming a parent for the very first time and getting a chance to understand and become competent at the financial aspects of parenting. 

Going down the path to parenthood, a thrilling moment in a relationship is quickly followed by the sobering realization of the costs involved in raising a child.

Many people receive help from family, friends and baby showers in accumulating the initial items needed such as furniture, baby equipment, and newborn clothes. This assistance may ease some of the immediate financial burdens but the ongoing cost of diapers, food, toys, and childcare can be a staggering expense.

What is less apparent at first is that non-child related expenses may be reduced. Many parents stay home more to take care of the baby, which means they have less time to go out and spend money on restaurants, bars, entertainment, and travel!

I am often asked what is the biggest financial expense that new parents should anticipate. I have found from my own experience is that most parents’ budgets will adapt to accommodate the new needs and replace old ways of spending. 

If you are a new or expecting parent, here are some suggestions on how you can take action now to prepare your financial life for your new way of life.

Set Up An Online Automatic Savings Account

The best way to prepare for increased expenses is to start making monthly contributions, before the baby arrives, to a savings account dedicated to baby-related costs. When goal-setting, it is often a good idea to establish different savings accounts for each goal like a vacation, buying a new house or, in this instance, saving for the ongoing cost of providing for a child. Having separate accounts can be a great way to keep track of how you organize your money. For example, if you have two different checking accounts, they can each have a different name, such as “Baby’s Expenses” and “Mom’s Mad Money” – or whatever you want! Putting aside money each month will benefit you in two ways. It gives you a chance to get use to the bigger cash outflows from your checking account and it also provides you with a nice cash cushion for baby-related expenses that you may have overlooked.

Create A Budget

Once you have children, finances have a way of becoming more complex.  That can be compounded by the fact that there is less time to keep track of everything.

New parents should consider creating a budget to keep their finances on track. One way is to create a “reverse budget”. It simply helps you to figure out how much you need to save, makes those savings automatic and then allows you to spend the remaining amount of money as you please. This process emphasizes using a regular and ongoing savings method instead of manual expense tracking, (a big plus when unexpected baby expenses arise). Once a reverse budget is set up, the entire thing is automated. 

From a financial planning perspective, a reverse budget forces you to write out your short- and long-term goals, which may be different now that a little one is on the way. And, you can use the same tool for other goals such as vacation or retirement.

Get Basic Estate Documents

Estate planning is a frequently overlooked task. Nonetheless, it remains very important for new parents to complete. There are five estate planning documents you should consider regardless of your age, health and wealth:

    1. Will
    2. Durable power of attorney
    3. Advanced medical directives
    4. Letter of instruction (LOI)
    5. Living trust (or revocable trust)

Creating a will is the most important step in an estate plan because it distributes your property and assets as you wish after death. Even more importantly, a will names legal guardians for your children in case both parents pass away while the children are still minors. 

Without a will that names a guardian for your children, the state you reside in will determine it for you.  That may not align with your wishes and creates needless anxiety.

Although, the other items in the list above are beyond the scope of this post, expecting parents should pay attention and review them, with a professional if you need to.

Figure Out Childcare Now

Whether you want to send your kids to daycare, hire a nanny, get help from grandparents or stay at home yourself, you need to get a plan in place soon.

The average cost of center-based daycare in the United States is $11,666 per year ($972 a month), but prices range from $3,582 to $18,773 a year ($300 to $1,564 monthly), according to the National Association of Child Care Resource & Referral Agencies (NACCRRA).

Most daycare centers require a non-refundable deposit. If you’re planning on using daycare, you should make a deposit at your daycare of choice as soon as possible!!!

Daycare slots will fill up quickly, so even registering for daycare just a few months before your due date can still leave you on a waiting list.

Hiring a nanny is not easy either. Finding someone you can trust, afford and fit in your schedule can be tricky. It is a little more difficult to secure a nanny as far in advance as a daycare center, but it is never too soon to begin looking so you can familiarize yourself with the important qualities and nuances of these relationships.

Long Term

It’s easy to remain focused on the joy (and anxieties) of the present. However, don’t forget the long term: although you may be overwhelmed by the excitement of a new addition to the family, you still have to steer your growing family into financial security for the long term.  

A new baby on the way is a great opportunity to check your long term financial plan. A bit like checking the air in your tires before a long trip. What to do for college savings.  How to prioritize retirement savings and investment. Dealing with the mortgage and other debt. And many other questions.

Consider Hiring A Financial Planner

If you’re feeling concerned about all the financial details involved in raising a child, just know that you’re going to do great! You’re planning ahead and getting prepared now, which will go a long way once your baby arrives.

But if you’re still worried, now may be the time to hire a financial planner, preferably a fee-only fiduciary. Hiring a professional frees up your time to do the other things you love most in life – including focusing on your growing family.

It can also help alleviate any stress your finances may cause because a really good financial planner will work with you to get your entire financial house in order and help you keep it that way forever.

Apr 15

McKenzie Bezos: 4 Wealth Strategy Concerns

By Chris Chen CFP | Divorce Planning , Financial Planning , Tax Planning

McKenzie Bezos: 4 Wealth Strategy Concerns

source: pexels

On April 4th, it was announced that McKenzie Bezos would be receiving 36 billion dollars worth of assets from her divorce from Jeff.  

First of all, congratulations to Jeff and McKenzie for keeping this divorce process short, out of the media as much as possible, and out of the courts. We are not going to know the details of the Bezos’ agreement. However, some information has been disclosed in the press.

As reported by CNN, McKenzie is keeping 4% of their Amazon stock, worth approximately 36 billion dollars. Jeff retains voting power for her shares as well as ownership of the Washington Post and Blue Origin, their space exploration venture. According to The Economist, this makes the Bezos divorce the most expensive in history by a long shot.

As a post-divorce financial planner, I feel a little silly thinking of what I would tell McKenzie to do with her money now. The magnitude of her portfolio is well beyond run of the mill high net worth divorces with assets only in the millions or tens of millions of dollars. McKenzie can buy $100M or $200M houses and condos wherever she wants. She can have her own jets and her own yachts. She could buy an island or two.

Unsurprisingly, McKenzie’s wealth is concentrated in AMZN stock. That has worked out well for the Bezos’ for the past several years. It is likely to continue to be a great source of wealth for both of them in the future. As it stands, McKenzie is now the third richest woman in the world. Who knows, if she holds onto AMZN stock, she could become the richest woman in the world one day! McKenzie’s concerns with budgeting, taxes, and wealth strategy will soon be in a class of their own.

There are, however, some lingering considerations for McKenzie, particularly when it comes to capital gains taxes, portfolio management, philanthropy and wealth transfer.

Capital Gains Taxes

McKenzie probably has an enormous tax liability built into her AMZN holdings. While I am not privy to her cost basis, it is not unreasonable to assume that it is close to zero since the Bezos’ have owned Amazon stock since the company’s inception. Should McKenzie sell her AMZN stock, the entire amount would likely be subject to capital gains taxes. As such McKenzie may not be worth quite $36 Billion after taxes are accounted for .

A benefit of keeping the stock until her death is that her estate will benefit from a step up in cost basis. This would mean that the IRS would consider the cost of the stock to be equal to the value at her death. This favorable tax treatment would wipe out her capital gains tax liability.

Portfolio Management

Nevertheless, the standard advice that wealth strategists give clients with ordinary wealth applies to Ms. Bezos as well: it would be in McKenzie’s best financial interest to diversify her holdings. Diversifying would help her reduce the risk of having her wealth concentrated into a single stock. It is a problem that McKenzie (and Jeff) share with many employees of technology and biotech startups.

McKenzie might not want to sell all of her AMZN stock or even most of it. Although we have not read their separation agreement, she has probably agreed with Jeff that she would retain the bulk of her holding. She may also believe enough in AMZN and Jeff’s leadership to sincerely want to keep it. Regardless, McKenzie should still diversify her portfolio to protect herself against AMZN specific risks.


An advantage of having more money than you need is that you have the option to use the excess to have a measurable impact on the world through philanthropy. In 2018, Jeff and McKenzie created a $2B fund, the Bezos Day One Fund, to help fight homelessness. Given that the home page of the fund now only features Jeff’s signature, this may mean that Jeff is keeping this also. McKenzie will likely organize her own charity. What will her cause be?

Philanthropy can be an effective tax and estate management tool , primarily because, within limits, the IRS allows you to deduct your donations against your income thus helping you manage current and future taxes. For McKenzie, it is about deciding what to do with the money, instead of letting Congress decide.

Wealth Transfer

McKenzie’s net worth is far in excess of the current limits of federal and state estate taxes. Unless she previously planned for it during her marriage, she will have to revise her estate plan.  Even though she would benefit from a step up in basis on her AMZN stock if she chooses not to diversify, she would still be subject to estate taxes, potentially in the billions of dollars.

Of course, no matter how much estate tax McKenzie ends up paying, it is likely that she will have plenty to leave to her heirs.

Financially, McKenzie Bezos has what wealth strategists would consider as ‘good financial problems’ . She has the financial freedom to focus on the important aspects of life: family, relationships and making a difference.


A version of this post appeared in Kiplinger on April 12, 2019

Nov 18

Wealth Strategy

By Chris Chen CFP |

Wealth Strategy

Many people think of wealth management as a synonym for investment management. If that's all it is, why not just call it investment management? The truth is that Wealth Management is a bit like beauty, it's in the eye of the beholder.

That's because families' wealth prospects are not just limited to investments. Of course, investments are important, but so are insurance, legacy planning, retirement, education planning, taxes and dealing with the transition aspects of divorce and retirement. Any financial factor that affects a family's wealth is part of wealth management.

Wealth management starts with you to assemble your life and financial concerns into an integrated wealth strategy that includes the various aspects of your finances. We work with your tax, legal, insurance and other professionals to ensure that all aspects of your financial life are addressed as comprehensively as possible.

Many of our clients live in Lexington MA, Arlington MA, Bedford MA, Concord MA, Newton MA, Boston, Brookline, Weston MA, Waltham, Cambridge MA, Belmont MA, Lincoln MA, Watertown, Wellesley, Winchester MA.

Mar 27


By wpadmin |


please schedule time here

to discuss views on the economy, financial planning, or sustainable investments.

In this episode of the Wicked Pissah podcast, Chris Chen, CFP® CDFA joins an esteemed panel including Gina Arons, Psy.D., and Atty. David Kellem to discuss  the challenges and benefits of working with clients going through divorce.

Chris Chen, CFP® CDFA joins "Money Talk Tuesday", hosted by the Financial Planning Association of Massachusetts, which covers the financial, legal, and emotional ramifications of divorce. 

Do you have an option to take a lump sum or lifetime payments of your pension? The amount offered for a lump sum may be lower than steady payments, but steady payments may be fixed for life and you may loser purchasing power over time.  Click here to read Sarah O'Brien's article about what else you might want to consider in making the decision.

Divorce can bring on many challenges like navigating personal finance matters relating to co-parenting.  Andrea Browne Taylor writes about 10 things you should be aware of after a divorce, including tax rules, college financial aid, and estate planning.   

In this article, Brett Arends examines a do-it-yourself investor's unusual asset allocation which goes against the conventional wisdom on Wall Street to go heavy on U.S. funds. 

As the pandemic causes continuing uncertainty for many companies, Sarah O'Brien for CNBC writes about the decision many retiring workers must make: to take a lump sum or lifetime payments from their pension plans and how it depends on the employer's long-term viability. Read the article here.

Ali Malito discusses a personal finance celebrity's opinion on which individual retirement accounts we should be putting our investments into.  The right thing to do often depends on the individual and should be based on a strategy to minimize taxes over a lifetime.  Check out Ali's article.

In this article, Stephen Andrew shares experts' opinions about a number of ways to use the coronavirus relief stimulus checks to your benefit, including buying stocks, building an emergency fund, and paying debts. 

Bob Powell now writing for USA Today addresses the temptation to raid retirement accounts if the crisis has depleted your cash. The bottom line is that you should avoid it if you can. 

Writing for Marketwatch, Ali Malito observes that the coronavirus crisis has depleted retirees and pre-retirees assets, putting into question how to manage retirement. We like to think that it starts with a good plan! Check out Ali's article.

Bob Powell from The Street Retirement Daily addresses a widespread tendency for employers to reduce matching contributions to their employees' retirement plans. With Covid-19 ravaging the country, many employers feel that it's the prudent thing to do. Check out this story in The Street.

The return on annuities is often based on actual rates of interest. With rates at record lows, returns on annuities may be at risk. If you are counting on annuities as part of your plan you may want to consider an alternative strategy according to this article by Brett Arends from MarketWatch

In divorce, you have to make sure to address life insurance. Ashley Chorpenning covers the in and out for Forbes in this article.

If you are one of the many Americans that will be receiving a stimulus payment, you might be wondering what is the best way to use the money? Andrew Keshner from MarketWatch has some ideas.

Wondering how you should manage your personal finances in uncertain times? Lucy Lazarony suggest some steps.

If you have Roth retirement accounts you should consider Ginger Szala's suggestions in Think Advisor.

Five Star Wealth Manager Newton
Chris Chen Named a 2020 Five Star Wealth Manager.

Each year, the annual peer-nominated Five Star award program honors wealth management professionals who show a commitment to clients, demonstrate strong industry credentials and are evaluated on the quality of their current practice.

We are very proud to be part of this program!

Fractional shares offer new possibilities for investing.  Consider the example Chris provides for how it could work in real time.

People can be either very for or very against annuities. The reality is that they are complex, and if you are considering annuities, you should understand those complexities, because you will be stuck with them for a long time. Check out Bernice Napach's article on this delicate subject.

Have your ever wondered what makes a retirement plan a Pension versus a 401(k) or 403(b)? Investopedia provides specific detail about each type of plan along with Chris's guidance

Annuities can be a complex and often misunderstood retirement savings tool.  Chris discusses the pros and cons of annuities here

Personal longevity is an important factor to consider in retirement planning.  Greg Iacurci from Investment News explores the issue here.

When young adults get into debt, they may choose to use the funds in their 401k plan to repay it.  Sarah Min here.


McKenzie Bezos: 4 Wealth Strategy Concerns

Just recently McKenzie and Jeff Bezos settled the terms of their divorce.  McKenzie now has some wealth protection issues to consider.  Chris discusses what financial planning strategies might apply to McKenzie as she moves foward with her life:

Avoiding common mistakes before or during your retirement is important. Chris and other financial advisors discuss what to be mindful of for retirement planning here


Financial Advisers Take Issue with Democratic Plans to Tax the Rich

In "Financial Advisers Take Issue with Democratic Plans to Tax the Rich", Jeff Benjamin gets the perspective of financial planners about the latest income tax proposals from the Democratic candidates. Financial Planners tend to be more anti-tax than average. I take the opposite side. It's not that I like taxes any more than anyone else. However, I believe in a democracy, we need to each pay our share. Maybe it starts with cutting loopholes for the well off as well as for corporations. Read more here


Rolling Out Robo-Advisors Has Been Challenging For Early Adopters

Are you considering using a Robo-Advisor for your investment recommendations? Ryan Neal talks to Financial Planners about their experiences and concerns with the technology. The reality is that robo implementation has been difficult. See what Chris has to say here

Have you evaluated your financial health lately? Chris has some ideas about what to consider as you get back on track for success

Are you concerned about the market's wild ride? If you are like most people you will be.  Check this article by Ali Malito for MarketWatch for advice on how to cope with market volatility. Chris suggests differentiating funds that are needed for the short term from the funds that are needed for the long term.

Emily Blandon


In "10 Ways to Improve Your Retirement Finances in 2019" Emily Blandon at US News compiles strategy recommendations to boost returns in 2019. Have you thought of a Goldilocks approach to diversification? Check that and the other strategies here.


For many retirees, even those who have meticulously planned their retirement income, the amount of taxes they are expected to pay may come as an unwelcome surprise. How can you best plan for a tax efficient retirement? Chris Chen and other financial planners offer common sense suggestions in this CNN Money article.


Most people would be better off not having mortgages in retirement. Relatively few will get any tax benefit from this debt, and the payments can get more difficult to manage on fixed incomes. But retiring a mortgage before you retire isn’t always possible. Financial planners recommend creating a Plan B to ensure you don’t wind up house rich and cash poor – see what Chris Chen has to say.

The change in tax laws affects how alimony and child support are treated, going into effect for agreements signed after the end of the year. So, if divorce is in your near future, it might pay to try to beat the clock, says Chris Chen in this Kiplinger article.

Yes, you can. However your specific needs should drive the number and type of policies you purchase. Read Chris’ input to this story for more information on properly planning for insurance needs.

The latest data from a poll of 1,000 Americans age 22 to 37, finds that nearly half of millennials are spending more money on restaurants and dining out than they are putting into retirement accounts. Thirty-two percent spend more on clothes than they save, and more than a quarter reported spending more on coffee, alcohol and online streaming services. See what Chris Chen has to say from a financial planning perspective.

Seventy percent of U.S. households headed by people ages 65 to 74 had at least some debt in 2016, according to the Federal Reserve’s latest Survey of Consumer Finances. Because paying debt usually gets more difficult on a fixed income, people have the most options to deal with debt if they create a plan before they retire, financial planners say. Refinancing a mortgage, for example, is usually less of a hassle while people are still employed. It’s also typically easier to generate the extra income that may be needed to pay off debt. Read Chris Chen’s thoughts on generating cash flow is retirement.



Insight Financial Strategists’ own Chris Chen has been named to Investopedia’s Most Influential Advisors list for 2018!
The list celebrates financial advisors who have contributed significantly to conversations about financial literacy, investing strategies, life-stage planning and wealth management.


U.S. News and World Report

With a bond tent, an investor gradually allocates a larger portion of his or her portfolio to bonds as he or she nears retirement in order to protect against market downturns. A bond tent can be an appropriate tool for investors who will not have large Social Security payments or pensions, and who will need to rely primarily on income from their portfolio to fund retirement. “The reality is that we cannot predict when a downturn will actually happen and what its magnitude will be. Hence strategies like bond tents are critical to the financial well-being of retirees and near retirees.” says Chris Chen, a financial planner for Insight Financial Strategists in Waltham, Massachusetts.

ESG is a relatively new term in investing. It stands for Environmental, Social and Governance, referring to the three components of what is more widely known as socially responsible investing. In this USA Today article, Bob Powell, with the help of Eric Weigel, Chief Investment Officer at Insight Financial Strategists, explores the intricacies of this style of investment.

Advisors focused on capturing next-generation assets should realize there’s a surviving spouse between them and their millennial pot of gold — and, statistically speaking, it’s a woman. Chris Chen of Insight Financial Strategists in Waltham, Mass., agrees recent divorce and widowhood are “emotionally overwhelming” experiences — but he thinks the hands-off element is sometimes temporary. “What they want is to avoid anything that reminds them of the trauma that they just experienced,” says the CDFA. “They want to avoid also what they perceive as the real hard work of getting on top of the financial issues.”

Under President Trump’s new tax plan, starting in 2019, payers will be no longer be able to deduct their alimony payments. For divorcees in the top tax bracket, the change could mean they effectively pay double in post-tax costs compared to what they had previously agreed to in their prenups.  If agreements aren’t amended to factor in the tax changes, it will be up to divorce attorneys to settle — or judges to decide — whether the amounts or formulas still stand for couples who divorce starting next year. “Folks already don’t like paying alimony, so doubling the effective cost would be painful,” said Chris Chen, a financial planner who specializes in divorce-related matters at Insight Financial Strategists.


Medical Economics

Physicians are riding the digital health wave, investing in startup companies long before they reach the public stock markets as technology and regulation disrupt the healthcare industry. Some physicians see the deals as financial investments, others see them as potential future careers, but all of them should keep the significant risks of early-stage companies in mind before jumping in, experts say. Consider the personal credibility of anyone involved in the deal, says Chris Chen, CFP, chief executive of Insight Financial Strategists in Waltham, Mass. “Financials always look good because they are contrived to look good,” he says. In other words, treat any future projections with skepticism. “Beyond that, look at whether the principals are properly motivated and have credibility from doing this work before.”

If your retirement investments are spread out over multiple individual retirement accounts (IRAs), it may make sense to treat these various accounts as one, a process known as “aggregating.” Aggregation means treating several accounts as one, not actually combining them, and can allow for more efficient planning for distributions and more efficient investment strategy management.

Day trading is treacherous, especially in a volatile market. “If you want to compete on that level, you need the weapons,” Chen said. “It’s like going to a gunfight with a knife.” Day trading in a consistent bull market, like the past year and a half has been, can be easier, since you buy, see the prices go up and sell to make a profit. But during volatility, it’s almost impossible to tell what will happen and how long the ups and downs will sustain, he said.

Just two weeks ago the consensus was that we were going to experience a continuation of the bull market at least into the early part of this year. This is still our view. Read Chris’ thoughts on the recent market turmoil, as well as the views of other financial advisors.

Buying life insurance on someone else and naming yourself as beneficiary might sound like a plot point in a film noir mystery. But taking out a policy on another person makes good sense in some situations. Whether you can do it, though, depends on your relationship and having the other person’s consent.

Credit cards can be a useful convenience when used for day-to-day expenses and paid off at the end of the month, says Chris Chen, a certified financial planner and wealth strategist at Insight Financial Strategists in Boston. “In some cases, it’s very difficult to function without a credit card — for hotels and rentals cars, for instance,” he says. He adds that they are also useful for online shopping, since credit cards offer far more protections than debit cards.

Many non-native workers in the U.S. are young professionals hired by firms seeking workers with highly valued skills. In 2016, more than 870,000 foreign nationals were granted the most common temporary work visas. Should these workers consider contributing to company sponsored plans? This article provides important considerations in answering that question.

Acrimonious couples who were racing to get divorced by Dec. 31 or face dire tax consequences can breathe a sigh of relief. The final tax overhaul bill gives them until the end of 2018 before completely upending the divorce process.

If you’ve decided that a store card isn’t right for you, stay strong and don’t let the sales associate persuade you. “Their job is to get you to sign up,” says Chris Chen, a Massachusetts-based CFP.

Written into the fabric of the new GOP tax proposal is a change in how alimony is taxed. People paying alimony could lose “the greatest tax deduction ever.” And that could ultimately affect those receiving alimony, too.

While many couples dissolve their marriages without significant legal involvement, divvying up retirement accounts, particularly pensions, is thorny. Doing it without a proper legal agreement could stick you with a hefty tax bill and penalties. In some cases, one party may end up with nothing.

For women, divorcing an income-providing, money-managing spouse is bound to do damage to the bottom line – and force some changes. However, with proper planning and education, uncoupling can offer independence and financial power as well.

In this article, Chris Chen and Eric Weigel explain the new trend toward socially responsible investing (SRI) and the accompanying environmental, social and governance (ESG) metrics used by investment managers, as well as the evolution of these strategies over time, and important considerations for interested investors.

Getting the flu shot should be a no-brainer,” says certified financial planner Chris Chen, wealth strategist with Insight Financial Strategists in Waltham, Massachusetts. “The low or free cost of the shot is one of the great deals of everyday living, given what it can cost if you get the flu.”


Wicked Local Lexington

Economic and Finance Lecture Series — Money Management & Investment: Retirement: 2 p.m. Nov. 1. Wealth strategist Jim Wood from Insight Financial Strategists LLC will present money management considerations for one’s pre-retirement “accumulation period” and their post retirement “distribution period” at the Lexington Community Center. Call 781-698-4870 to sign up.



Investment News

Nearly thirty years ago, on Oct. 19, 1987, investors and advisers learned a lesson about stock market volatility that has stayed with them to this day. “I had recently graduated from graduate school with an MBA,” said Chris Chen, a financial planner with Insight Financial Strategists. “Everyone I knew who went to Wall Street that year got laid off.”

Going from a dual-income household in marriage to a single-income household is a big change.  “Alimony and child support are not forever,” Chen says. “You have to plan for when it ends: Continue advancing your career to progress from a lower-paying job, and make sure your expenses are lined up at the right level.”

Read Chris Chen’s take on a new Harvard Business School study that found that employees tend to contribute the same amount to either a Roth or traditional 401(k), indicating some employee confusion around the tax advantages and impacts.


The DO: Money Matters

“New doctors have a lot of pent-up consumption, so it’s natural that they would want to splurge a little,” says Chris Chen, a certified financial planner with Insight Financial Strategists in Waltham, Massachusetts. But giving into temptation and plunking down a wad of cash on a BMW or a Lexus can be a terrible financial mistake, Chen says. Find out why.

Don’t neglect to review your insurance coverage amid the grief and complicated logistics of breaking up. The right insurance creates a financial safety net for the fresh start ahead, and this article outlines the checklist you should be using.

In this article, we’ll go over eight major reasons why you should focus on keeping your 401(k) plan until retirement, rather than using it as a piggy bank.


Financial Advisor Magazine

A rising number of financial advisors nationwide believe that virtual reality (VR) technology geared to financial planning will help clients overcome their limited ability to envision their golden years. Learn more about these tools under development.

As the Department of Labor’s rules that govern the practice of advising clients on investments take effect,  advisors provide insight into their individual philosophy and personal ethical considerations that will guide their roles as fiduciaries.

If you’re planning to remain in a relationship without getting married, consider these guidelines before putting down cash on an investment like a home or car. You owe it to yourself and your partner to be prepared — just in case.

Check out these tips on how to pre-load your spending, a classic method to ensure that you don’t overspend. Advance planning and a thoughtful approach to spending can help you meet your financial goals.


Insurance News Net

Many baby boomers are still wounded financially by the the Great Recession of 2008. Advisors can help them recover, although many are hesitant to seek advice.

Advisors are fielding questions and concerns from clients worried about the current bull market’s advanced age, and reminding them to take a long term view with respect to their savings and investments.


The DOL fiduciary rule was passed last year to mandate that advisors’ advice should only be in the client’s best interest. Dodd-Frank was passed and implemented in the wake of the Great Recession to help prevent another crash. The Trump administration has suggested that they wanted to get rid of the DOL rule and Dodd Frank.

It is accepted wisdom that portfolios need to be re-balanced. Yet this is task that is more complicated than at first blush.


Investor’s Business Daily

Long Term Care is a critical and complex aspect of a retirement plan. Yet it is often not addressed very well. For most people it is well worth the effort. Check also this blog post by Jim Wood.

Giving money to kids can be more complicated than giving a toy. Jean Chatzky goes over some of the key considerations

Student loans are a major investment these days, leading to a substantial average default rate ranging from 18.9% in New Mexico to 6.1% in Massachusetts, according to Nerdwallet.


Magnify Money

The Federal Reserve came through with its long awaited interest rate increase this December 2016. A quarter point increase is small, but it still has impact on people’s finances.


Investment News

Obviously, men also make mistakes when they divorce. Did we mention the obvious path to try to avoid these mistakes?

There appears to be a gender divide about divorce attitudes that leads to mistakes that women tend to make more than men. In my opinion, the divide is not so much about gender as it is about the relative power of the parties.

For many, the last few years before retirement is a planning scramble. Despair not! There are still things you can do if you are late starting.

It is critically important not to overreact to the new administration. In the end, the US economy will outlast Trump .

A lot of things will change with the new Trump administration. However, if you have a strong long term plan, things will probably work out. If not, get a long term plan! For the short run, you may want to mitigate risks.

Notwithstanding the post election market rally we are likely to face a few bumpy roads ahead. It is important not to panic and not to lose sight of long term goals.

In this Investopedia piece, I review some of the issues with divorce and retirement accounts.


CNS News

How to Ditch Your Bank

Who has never been annoyed at their bank? In the wake of the Wells Fargo scandal, this article by Jeanne Lee of Nerdwallet explores the steps to take when you want to ditch your bank!


PR Buzz

A plug for a new book on negotiating from Janet Miller Wiseman. This new book outlines a practical way to negotiate disagreements. Janet Miller Wiseman is a Certified Family and Divorce Mediator and a co-founder of the Massachusetts Council on Family Mediation. She is also the author of Mediation Therapy: Short-Term Decision Making for Couples and Families in Crisis.

Mark Schoeff at Investment News asked if Trump’s tax avoidance is legal and/or moral, and if it is evidence of the famous Trump business acumen.

Suzanne Wooley at Bloomberg wonders if spouses hide retirement savings from one another . She cites a Fidelity study that states that 43% of people do not know how much their partner makes, much less how much is in their partner’s retirement account. Most people also have no idea what they would need to keep up their lifestyle in retirement.

Why might that be? According to Suzanne’s article, they are a range of factors ranging from people hiding their finances to people not having a culture of talking about money (this is my contribution to Suzanne’s article).

Regardless it seems that most of us could use a course in financial communications .

Suzanne Wooley writes in this Bloomberg article that the Betterment robo advisor can now optimize for taxes as well as asset allocation. It sounds like a compelling solution.

After testing the Betterment, it occurred to me that a client had better understand asset allocation, and now taxes as well, if they want to make good decisions. Sure a robot can implement anything you tell them, but you still need to give them the right input!

A robo cannot integrate tax loss harvesting in one account in your wider financial strategy, including your overall tax planning, legacy planning, risk management and coordinate various accounts.

With the current state of development, robo advisors are best used as a tool for Certified Financial Planner professionals, maybe not so much for end users directly.

In the wake of the Brangelina divorce, Dan Goldstein of MarketWatch delves into the issues of disposing of your home when you are divorcing.

There is nothing easy about divorce or widowhood. Ilana Polyak’s article in CNBC summarizes the issues

There are still too many people who feel compelled to raid their 401(k) in times of stress. This article by Debbie Nason for CNBC captures the issues.

Kate Ashford at Forbes reviews some of the critical decisions about college financing.

It is unfortunate that so many people feel that college was not worth it. Kate Ashford at Forbes explores the issues

Diversification is an oft misunderstood concept. This article by Chris Chen reviews some of the issues.

People often want to know how fast they should pay off their mortgage. It sounds obvious (as soon as possible), but it may not be.

What should Prince have done about his estate planning. Unfortunately, Prince left quite a challenge behind.


Investment News

Chris Chen is happy to figure prominently on this list!


Wealth Management


Boston Globe


Health Insurance Taxation Issues Post-Divorce
by Chris Chen, CFP®, CDFATM and Justin L. Kelsey, Esq.

Unintended Consequences of “An Act to Reform and Improve Alimony,” in Massachusetts: Avoiding the Pitfalls on the Road to Reform
by Janet Miller Wiseman, Certified Divorce Mediator, Jeanne Kangas, Esquire, and Howard Goldstein, Esquire, Chris Chen, Certified Divorce Financial Analyst.
Originally published by the Boston Bar Association.


1 2 3