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Five Crucial Financial Planning Tips for Late Starters
Posted on December 9, 2013 by admin

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Just like going to the doctors for regular check-ups, paying close attention to one’s personal financial planning is an important task that should be a part of normal routine. Unfortunately however, many Americans tend to ignore monetary matters until it grows into far too enormous of a task for one person to handle.

The wealth management advisors at the XML Financial Group would argue that it is time to put fears aside and make financial planning a top priority, even if one thinks it is too late to start. Chances are that one will live longer into retirement than expected and it is never too late to begin preparing for one’s future. Here are some crucial t financial planning tips for late starters:

1.    Start saving more immediately.

Although it may seem like years 50 to 65 fly by in the blink of an eye, it is still a great period of time during which one’s retirement savings should ideally double. To work towards this financial goal, start adding funds to it by deferring income into an IRA, 401(k), or both immediately.

2.    Play Catch-Up

The IRS may allow one to defer additional income, especially if one is over 50. Referred to as “catch-ups” because the government estimates how long a person will live into retirement, this method will help compound a couple thousand dollars over the decades spent not working; one just has to save the money.

Invest in Profitable New Skills

If one has neglected retirement planning, it is likely they will be forced to continue working well into their 60s. It is not a good idea to count on a company retaining employment throughout one’s retirement age. Instead, invest time in learning new skills to enhance your professional value. Should downsizing happen anyway, it will make one’s resume much more attractive for the next job.

Consider Relocating

All too often, people consider moving to lower-cost states long after these changes would have made a significantly positive difference in one’s financial standing. Should there be a chance of relocation during retirement, it is a good idea to start exploring options immediately. It may even be a better idea to move sooner rather than later, should the real estate markets change for the worse.

Create a Portfolio That is Realistic

In addition to saving more; late starters should devise a means of building retirement while minimizing the risks involved. One means of creating a solid portfolio is by passive investing. This option is important at any age, even at minimal cost.

Financial Tips to Keep in Mind When Getting Divorced
Posted on November 25, 2013 by admin

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Take it from the wealth management consultants at XML Financial Group, major life events generally carry significant financial repercussions. Especially with particularly emotional events, such as marriage or divorce, poor financial decisions can easily be made resulting in negative monetary consequences. Before undergoing such a life-changing occurrence (particularly divorce), it is important to compile a team of professionals to help both you and your bank account handle the difficult transition.

For those about to go through the divorce process, here are a few financial tips to keep in mind:

  • In addition to a divorce lawyer, one should consider adding a Certified Divorce Financial Analyst to their team to help keep concentration on big topics such as: asset division, child custody, and possible spousal support.
  • While preparing for the divorce process to begin, one should always make copies of all financial records as it is much easier and less expensive to be fully organized in advance. When going through records, be sure to make copies of: the last three years personal and business tax returns; investment account statements; employee benefit booklets; pay stubs; insurance and annuity information; credit card statements and receipts for larger items. Also consider providing credit applications as it provides a wealth of information regarding assets, liabilities, and income. (An experienced CPA could be able to find assets that a spouse may be hiding.)
  • Taking an inventory of all debts categorized by whether they are individual or joint is an excellent way to stay financially organized during a divorce. Smaller debts, such as credit cards, can be moved into one spouse’s name. Larger joined debts like mortgages require much more consideration, and it is important to pay close attention to how it is handled in the property settlement and divorce decree. If one spouse is going to receive the marital home, the mortgage will need to refinanced in their name. After all, creditors don’t look at who gets a property in a divorce, only the names listed on the mortgage.
  • The party receiving spousal and/or child support can potentially lose their payments because of a disability or death of the paying former spouse. One should consider helping to protect themselves against this by obtaining both disability and life insurance policies on the ex-spouse before the divorce is finalized. Although the premium expense should be negotiated during the divorce, the receiving spouse should own the life insurance.
  • Have a skilled CDFA run an inflation-adjusted cash flow projection to help identify all financial issues in a divorce, namely who should keep the home or whether or not it should be sold. Doing so will help determine the ability of one or both parties to afford basic living expenses, as well as achieve retirement and educational goals. It is also a good idea to evaluate pension and 401(k) accounts as unless they are divided immediately, one could be subjected to unnecessary penalties. Those looking to transfer funds from a 401(k) to the other spouse’s IRA can use a Qualified Domestic Relations Order (QDRO).

Note: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Important Mistakes to Avoid in Estate Planning
Posted on November 19, 2013 by XML Financial Group

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While it may seem obvious, let the wealth management consultants at XML Financial Group assure you: money matters aren’t any easier for families with a high net-worth. It is common for estate and tax legislation to change as the years pass and relationships are often complicated in wealthy families, making involved estate planning a must.

Even the most foolproof plans can be subject to inconsistencies over time, however. Here are some prime examples that could cause serious problems when it comes to estate planning:

  • Power of Attorney

    Naming a legal agent to handle financial, fax, and other matters should serious illness or death occur is vital in planning an estate. Still, it is common that clients neglect to utilize an attorney to act on their behalf all the time. For those who are apprehensive, create a system of protective checks and balances to ensure all agents are doing their job.
  • Financial Projections

    Entrusting estate planning to an attorney alone can often prove inadequate as they tend to create plans based upon a current balance sheet, rather than originating from a financial projection. Advisors create these projections to justify the middle of the road when it comes to estate planning. Although some tax-minimization actions may be taken, the outlook won’t be nearly as complicated or costly as a balance sheet alone may project.

  • Gift Provisions

    Several of the power of attorney documents allow a legal agent to make gifts that reduce estate taxes or accomplish another financial goal. As the older population increases, it is likely that revocable living trusts will be more frequently utilized, whether it to facilitate the management of assets as health problems mount or to avoid probate.

    While living trusts can also include provisions for gifts, such as continuing financial help to adult children, planners should always coordinate it with power of attorney documents.

  • Tax Allocation

    Despite being ignored in many estate plans, tax allocation should be a primary focus for high net-worth families. Those strapped with a 40% federal estate tax will be faced with some difficult decisions when choosing who inherits what, for example. Families who pay a state estate tax instead of a federal one should be especially concerned with this provision.

    It is essential to understand a client’s objectives. If the goal is to bequest a trust because of financial challenges the inheritor faces, it may be a good idea for the residuary to bear additional costs or tax burdens.

  • Multiple Trusts

    Generally, a high net-worth client will have a will that allocates their assets to trusts to heirs and likely as life insurance policy that provides trusts for heirs as well. The two documents appear to be similar, but are often created at different times with varying goals ultimately causing the terms to differ a bit.

    If wealth management advisors are simply dividing a family’s wealth into various trusts for several children, the task at hand could be relatively painless to manage. Should each child have several different trusts that require a fractionalized portion of the family’s wealth however, the administrative burned becomes increasingly complicated. It is important for consultants to research all potential inconsistencies amongst the trusts and address them promptly.


Characteristics of a Financially Smart Single: Managing Money Solo
Posted on October 29, 2013 by admin

With divorce rates in the United States growing to increasingly high levels, many Americans are choosing not to get married. While this choice provides a great sense of flexibility, only having to worry about oneself can create a little too much freedom—especially when it comes to one’s finances. Also, as a single person doesn’t have access to financial support that would otherwise be provided by a spouse’s income, money could be a real issue in the event of an emergency.

Because of the extreme amount of self-sufficiency required for a single person to be financially successful, it is even more important that these individuals are wise about their spending, expenses, and assets.

To help get you on the right track, the Maryland financial planning consultants at the XML Financial Group have comprised some important advice to keep in mind:

  • Be aware of your expenses. – Even though one may not have to financially support anyone else, that certainly doesn’t mean it is a good idea to frantically spend, amount credit card debt, or any other behaviors that may negatively impact your credit score. Analyze spending every month and how it compares to your income and assets—setting a budget is a good way to help eliminate both unnecessary purchases and dangerous spending habits.
  • Handle debt with intelligence. – As a rule of thumb, credit card purchases should equal no more than 30 percent of the card balance. No matter what, always pay at least the monthly minimum payment on time to keep one’s credit score from being hit. Checking one’s credit score at least once a year isn’t a bad idea, either.
  • Be prepared for the worst. – Especially in today’s roller-coaster economy, it isn’t uncommon to find oneself unexpectedly unemployed. Regardless of whether one was laid off or unable to work because of a health issue, it is vital to have an emergency fund for support until employment is resumed. At the very least, try to save six to nine months of living expenses.
  • Think ahead to the future. – Taking advantage of employment benefits, such as retirement plans or 401(k) programs is always a smart idea. Often times, employers will match some or all of what an employee contributes. If these benefits are unavailable, one should consider enrolling in an individual retirement account or IRA. American singles in their 20s and 30s should attempt to save at least ten percent of their income, increasing their contribution with every pay raise.While many may be tempted to draw from a retirement account for any number of reasons, it can be a costly endeavor to do so. Not only will one lose interest earned on the withdrawn money, but the person will also be subjected to penalties and taxes.
  • Expect the unexpected. – Even if one isn’t married and/or doesn’t have children, it is still important to be ready should any incident occur. For example, it is important to childless singles to have a life insurance policy to prevent their parents or siblings from becoming liable for their debts, including funeral expenses. Being ready for the unexpected can help one ensure that their family is taken care of, long after they’re gone.

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Preparing Your Financial Planning To-Do List
Posted on October 28, 2013 by admin

All too often, working professionals in the United States tend to avoid personal financial planning. Many figure that earning a reoccurring paycheck is satisfactory wealth management and neglect to worry about saving and smart spending choices.

However, this is a crucial mistake that the Maryland financial planning advisors at XMLFG see all too often and can have serious monetary consequences in the future if left unattended. It is essential to put away money earned on every paycheck to be used for a laundry list of necessities—the amount saved is insignificant compared to the sheer fact that the something is being set aside.

To prepare a personal financial plan, here are some helpful tips on how to get started:

  1. Determine how much to save.Although it may appear simple, most American workers only contribute to their savings when a financial emergency arises. Generally, a sound savings plan includes a targeted monthly and annual goal regardless of what actual number is set.
  2. Account for unexpected expenses.Whether it be a broken washing machine or child with a broken arm, unexpected expenses happen on a regular basis and are a simple fact of life. Because of that, it is important to have a few months’ salary saved as a cushion. Should one need to take cash from that account to resolve a short-term financial problem, they’ll have the funds to do so. (Just make sure to refill it as soon as possible!)
  3. Decrease the potential for any and all risks.Typically, one will hold several different insurance policies. Between auto insurance, homeowners insurance, and everything in between, it is a good idea to analyze what would happen in the family breadwinner were unexpectedly unable to work. If a family would be unable to survive this case, contact an insurance agent to find a reasonable premium that will better protect the unit’s finances in the event of an emergency.
  4. Financially reward yourself before all others.When it comes to saving, it is vital to pay oneself before anyone else. If one has access to a 401(k) program at work, take advantage of it by talking with the human resources department about incorporating automatic deductions into that account. If such a program is not available, many employers will send a second check that can be deposited directly into one’s savings account.
  5. Incentivize monetary success.Keep in mind, saving for one’s retirement isn’t about prohibiting oneself from making financial decisions that fall into the “wants” category. Should one reach their targeted annual savings goal, they can reward themselves with a small spending splurge. Because one will have money accumulating in a savings or retirement account, an occasional “treat” won’t be unmanageable.
Financial Planning Tips to Keep In Mind as 2013 Nears an End
Posted on October 25, 2013 by admin

Although it may seem like the autumn leaves just started falling, the Maryland wealth management consultants at XML Financial Group knows that preparing for the end of the year is just around the corner—a time when making smart monetary decisions can become more difficult than ever.

Despite what many may think however, one can still make some beneficial money moves before the end-of-the-year. To finish out 2013 on a financially successful note, here are some helpful tips to take to the bank.

  • Donating to charities or your appreciated securities is a way to save with Uncle Sam. Those who do so get an immediate tax break and can avoid capital gain taxes.
  • Strive to make extra contributions to 401(k) accounts. Not only will one decrease their taxable income, but they’ll be increasing their retirement savings at the same time.
  • Invest in an IRA and make it a point to open either a Roth or traditional IRA before the 2013 tax year comes to a close. In addition to receiving valuable tax benefits, a person can contribute to it for the 2013 tax year until April 15th, 2014.
  • If one has itemized deductions, it may be a good idea to make the payments in December, so it will be possible to deduct them when filing 2013 taxes.
  • Make all purchases that are tax-deductible before the end of the year.
  • Look to harvest unrealized losses to offset any realized gains.
  • Attempt to harvest unrealized losses to take the $3,000 income deduction.
Preparing for Retirement: 5 Things Every 50-Something Should Do
Posted on October 2, 2013 by XML Financial Group

Preparing for Retirement: 5 Things Every 50-Something Should Do

While most things tend to get better (and easier) with age, take it from the wealth management advisors at XML Financial Group: managing finances certainly one of them. As American workers are either at or near their peak earnings once entering their 50s, having enough money to retire becomes increasingly important. If earning ends meet is difficult now, it isn’t likely to get any easier as one gets older.

In fact, controlling costs and reducing debt is more important for 50-somethings than their younger counterparts. Because right now is the last opportunity aging Americans will have to structure their finances in a way that allows them to comfortably retire, the last thing those in their 50s want to do is spend more than they make.

Allow these tips from the XML Financial Group help you prepare for retirement, helping to minimize any financial mistake that could negatively impact the rest of your life.

  1. Work on lowering your interest rates.

    Everything in life is negotiable—even interest rates on things from car loans to credit card debt. After all, if one is paying less in interest, more money will be available to be put towards the overall balance. Especially if you have a long-standing history of paying your debts on time, most creditors will be willing to negotiate. Just pick up the phone and call.

  2. Organize your debt payments, then attack.

    Take all debt payments and organize them by interest rate, from highest to lowest. For the debts with lesser interest rates, pay just the minimum. For the debt with the highest interest rate, one should always try to pay as much above the minimum as possible until the balance has been paid in full. (And then move down the list, until completely gone.) This can help one prioritize their debts, helping to eventually eliminate them.

  3. Monitor spending and cut some corners.

    Whether one uses a spreadsheet, pencil and paper, or personal finance software, it is especially important to track where every dime spent is going. This is one of the best ways to get a completely clear idea of what one’s spending is actually like. That information will help determine what expenses are “wants” versus “needs,” highlighting those that should be cut.

    For “must have” expenses, like medical costs, negotiation is still possible. Most medicines come in a generic version that is significantly cheaper than the name brand, and could save lots of money over time.

  4. Keep your dependents in check.

    Unfortunately, 50-somethings often find themselves walking a financial tightrope—the ultimate balancing act between taking care of both not-quite-independent children and aging parents. While one should continue to love their family and provide for them, it should be done in a way that doesn’t negatively impact finances.

  5. Experience is your biggest financial advantage.

    The reason that most 50-somethings are at or near their peak earnings is because they’ve become an established professional in their chosen industry. A fantastic way to make extra cash in your 50s is try a hand at consulting. Even if attempting it alone sounds too overwhelming, there are several online networks available to help professionals find additional careers and can be helpful.

Appreciate the advice but unsure of where to start? Contact the LPL financial planning consultants at the XML Financial Group for a free, no-obligation review of your portfolio!

The XMLFG Guide to Making Financial Resolutions and Keeping Them
Posted on October 1, 2013 by XML Financial Group

As the seasons change from summer to fall, 2013 New Year’s resolutions seem like a very distant memory. Personal resolutions are easy to name but hard to keep, regardless of the time of year—this is especially true for financial resolutions.

The Maryland wealth management consultants at the XML Financial Group see it all the time. While many Americans resolve to control their spending and reduce debts, it doesn’t always happen. Unexpected expenses or poor financial decisions have a sneaky way of interrupting well-intentioned plans.

What can investors to do keep their financial resolutions? Here are some suggestions:

  • Clarify financial goals by setting ones that are realistic and measurable, and put them in writing. By defining a set amount to save each month with a written plan, one can have a visual picture of their financial goals—making it much easier to stick to.
  • Call for reinforcements and share financial goals with others. By being open about money matters, investors can get the support they need to follow through with a financial resolution.
  • Take advantage of online tools and software that can help with efficiency. By having a paycheck automatically deposited (as opposed to receiving a physical check), one could be less tempted to spend it unwisely.
  • Even though investors can establish a good credit score by paying their balances in full every month, credit cards usually work against financial goals. It is always a good idea to only use credit cards when necessary and limiting the amount of open accounts.
  • Define incentives that are rewarding, as they can reinforce positive habits. Financially, that could mean setting aside a small amount of money to spend on a “want” expense when certain objectives are achieved. This little bit of not-so-guilty pleasure can incentivize one to work harder and stick to financial goals.
The Conversation Families Can’t Delay – Elder and Long-Term Care Issues and Challenges
Posted on September 27, 2013 by XML Financial Group

Essentially a comprehensive tactic that helps define a senior’s wishes, elder care planning assists assigned caregivers and/or advocates in the difficult and complex process involved in the physical, personal, and financial affairs of seniors in the last stages of their lives.


In the best scenarios, either family or designated friends should be fully involved in the long-term care planning stages, especially if they will act as the primary caregiver for the senior. Despite the importance of discussing elder care, the conversation tends to be avoided or delayed by most families—when in fact, it is amongst the most essential conversations a family could possibly have.


Start Planning Today


Whenever one procrastinates on any type of planning, the likelihood of mistakes and lost opportunities are much greater than if great time and care is put into the process. Under the assumption that these discussions are being held while elderly parents are still able to make their own choices, the adult children need to understand that these conversations are for the benefit of their parent(s), to help them make the best choices possible as they age. Should adult children be forced to make high-priority decisions due to the senior’s loss of mental capacity, elderly parents should be cared for with the utmost compassion and dignity. Also to be discussed: who will be responsible for dealing with the senior’s needs, especially as their ability to be in control of their own lives gradually diminishes.  In some families the responsibilities are spread out while others designate one or two family members to care for the parent. Regardless of who is doing what, it is vital that all are clear on what each person is responsible for—that way, fatal mistakes are avoided.


Organize Tasks into a List


Not only should a plan be implemented as parents age, but some type of safeguard needs to be placed barring the senior from making serious mistakes of judgment that could have devastating financial and emotional consequences. Keep a firm and updated record on all legal documents, medical bills, and financial statements, with an extra copy on file at all times. Although some seniors find this topic uncomfortable, parents should at the very least disclose to their adult children who their financial planning consultants are as well as information and location of financial accounts.


Long-Term Care is Only One Step in the Process


As we age, the risk of requiring long-term care gradually increases. Yet, many families neglect to develop and implement a plan. Despite sometimes being difficult due to varying family dynamics, these conversations are especially important to have as a parent’s health declines and premium rates increase. The significant impact that delaying the implementation of an elder care plan can have on the entire family makes this conversation one that families can’t afford to postpone, literally.



Questions for Consideration


While most would ideally like to stay in their personal homes as opposed to a senior community or nursing home (especially when trying to save money), many families seriously misjudge their ability to handle elder care alone. It may sound like a piece of cake in writing, but there are a laundry list of questions a family could consider before volunteering for such a significant undertaking.


  • Are you physically able and trained to provide quality care to aging parents or your spouse?
  • Have you ever considered how elder care would be financed, should it ever be needed?
  • Do you know what long-term care services cost in your area?
  • Would engaging in long-term care services affect the financial stability of your spouse?
  • If saddled with long-term care expenses, how long would your assets last?
  • Are you okay with the fact that health insurance doesn’t cover long-term care?


As many oppose traditional long-term care policies for a variety of reasons, there are a variety of other solutions offered that can provide a payout regardless of what twists and turns life takes. For example, the purchase of a rider on a life insurance policy ensures that the death benefit is used to pay for qualifying long-term care expenses. The advantage of this route is that any of the unused life insurance death benefits will be paid to the beneficiary, avoiding the problematic situation of leaving money unattended to.


Those adult children with concerns regarding financing their parent’s long term care expenses may want to discuss buying and being a beneficiary of a life insurance policy that doubles as a long-term care policy. This will help minimize the potential financial risks to the adult children’s savings and assets. (Regarding the exemption to gift tax rules for the direct payment of healthcare costs this solution may offer, clients should consult with their tax professional.)


Talking with your clients about elder care issues, such as long-term care, is not only important but it will provide you with great credibility as a comprehensive financial planning consultant. And as not all clients have legal counsel or other professionals to help accomplish tasks listed on their elder care checklists, financial advisors have the opportunity to refer clients to centers of influence that you utilize. (Attorneys and CPAs, for example.) When having this conversation with younger clients, ask if they’ve addressed elder and long-term care concerns with their parents. Who knows, you may just be able to snag a new client in the process.


Guarantees are based on the claims paying ability of the issuing insurance company.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing

Top 10 Reasons Every American Needs a Financial Plan
Posted on September 10, 2013 by XML Financial Group

Despite the common belief that financial plans are for the extremely wealthy, the retirement planning consultants at the XML Financial Group know the importance of being prepared for the future—regardless of what one’s income level is.

While having a comprehensive financial plan can benefit anyone, most Americans aren’t aware of its value. According to the 2012 Household Financial Planning Survey, only 31% of financial decision makers say they’ve created a financial plan for their families, either on their own or with professional help. The survey, conducted by the Certified Financial Planner Board of Standards, defines a comprehensive financial plan as one that accounts for: savings and investments, retirement, education, emergencies, major purchases, insurance, and other financial goals.

Unfortunately, only a small number of Americans have set plans to cover even a portion of their finances. Results from the same survey showed that only 35% have a financial plan for emergencies while two-thirds have an idea of how they will meet any of the other five savings goals, such as retirement or a down payment on a house. It takes smart financial decision making to climb into a higher income bracket—a task that becomes increasingly difficult without a comprehensive financial plan.

For those still not convinced, here are ten other reasons why getting a financial plan should be at the top of any to-do list:

  1. Families can define their financial goals, often helping couples to get on the same page regarding spending and saving.
  2. Financial plans will help one see whether their goals are realistic and under what timeline.
  3. Comprehensive financial plans will help one see how to control their spending to eventually obtain goals.
  4. Creating a financial plan will make past or current money mistakes blatantly clear.
  5. Those who have a financial plan can easily measure their current progress towards future goals.
  6. Developing a plan surrounding personal finances will help to maximize money.
  7. Those with a financial plan are far more confident about managing money—the above survey found that 52% of respondents with a plan feel very comfortable with their savings and investments, while only 30% without share the same outlook.
  8. Financial plans can help identify potential future risks not previously thought of or discussed.
  9. Preparing for the future with a financial plan will help build personal wealth.
  10. Those with a comprehensive financial plan have the potential to live more comfortably than those without, regardless of what income bracket one falls into.

Don’t miss out on your chance to be prepared. Discuss your financial goals and options with the wealth management consultants at the XML Financial Groups. With unbiased advice completely tailored to the specific portfolio, our advisors assist every client in reaching their total financial potential.

For a free, no-obligation review, click here to contact the professionals at the XML Financial Group today!




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