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Your Advisor Can Help with Your Long-term Strategy

Between layoffs, falling stock prices and a possible recession brewing, media headlines are scary right now. It may seem tempting to cash out or make quick decisions to protect your financial assets, but remembering your long term strategy is even more critical during a down market. There is a right way and a wrong way to adjust funds in your savings and investment accounts. Successfully navigating tax laws and market trends requires a system of checks and balances best executed by a seasoned tax professional who should also hold themselves to a fiduciary standard. (Click here to learn why working with a fiduciary is important.)

Investing without Tax Knowledge: A Dangerous Game

No one knows your financial situation better than the licensed tax professional who prepares your return every year. You may have a brilliant outside investment manager, but if this individual does not consult with your CPA or tax accountant, you run the risk of incurring thousands of dollars in taxes. Investment managers who are not tax accountants are prohibited from giving tax advice, so they are not under any obligation to communicate about a taxable event.

We see this predicament all the time. It is not uncommon for new clients to come to us for help after an investment manager suggests an investment move that resulted in unintended tax consequences. For example, if a client moves $100K out of their pension to invest in a new stock while shares are cheap, the investment might pay dividends, but this individual needs to be prepared to pay tax on the additional $100K in income tax. In short, investing without tax knowledge can create collateral damage.

The Storen Financial Advantage

At Storen Financial, we eliminate avoidable tax consequences since your tax accountant and your investment manager are one and the same. This is a distinct benefit in working with us for both your investment and tax needs, since we marry the investment strategy to your current tax situation. When Storen Financial prepares a tax return, we are able to recommend investment options while keeping a pulse on your individualized tax consequences for both the short and long term.

With this knowledge, we can structure retirement planning to your advantage. There are many investment strategies for retirement including pensions and social security, as well as traditional and Roth IRAs. Each strategy comes with a different set of tax rules. Some are taxable upfront while others are tax-deferred. People get into trouble when they withdraw, move, or, adjust dollars from these accounts before the maximum retirement age, whether it’s losing out on opportunities for compound interest, claiming social security before age 66, or even moving funds temporarily for a down payment on their forever home.

The Storen Financial team can help you fully understand the direct tax impact for this year, next year, and 10 years down the road. We can also help you determine when you should retire and when to claim social security benefits. We are here for the long haul—not just for a one-time investment opportunity.

Click here to learn more about our financial planning and investment services.


Blog by Greg Storen, MBA – President, Advisory Services Director

Learn more about Greg and the rest of the Storen Financial team here.