The A, R, and T of an Investment Portfolio SMART Goal

A successful investment portfolio begins with SMART goals – objectives that are Specific, Measurable, Attainable, Realistic, and Time-Bound.

Our last blog noted that the more specific the goal, the easier it is to measure whether it has been achieved.

Specificity is a highly important factor in sound portfolio goals, but those goals would have little chance of being accomplished if they were not also attainable and realistic.   These latter two attributes go hand-in-hand and must be acknowledged at the outset of the goal-setting process. 

A Sound Investment Portfolio Starts with S.M.A.R.T Goals

Virtually all clients who work with us at Thorley Wealth Management to develop investment portfolios have three common objectives.  In simple terms, they want to make money, not lose their principal, and not pay an undue amount of taxes. 

Record Retention: What Records Do You Need to Keep?

We all have various documents and records that are too important to keep in an ordinary file drawer.   These might be for tax, insurance or investment purposes, and we understand the need to retain them in a safe and secure place. The question arises, however, as to just how long we need to hold on to these records.  We recommend designating the documents in one of three categories:  short term (1-3 years), medium term (6-7 years) and long term (indefinitely). 

You Should Have a Password Manager

A 2015 Dashland blog post noted that the average American has 130 online accounts, and prudent security would suggest that each of these have a unique, strong password.

The Benefits of a Digital Estate Planning Organizer

Most of our clients have made estate plans to dispose of their tangible property after they are gone. Today, however, most people also have a good deal of intangible property to deal with -- things like online accounts for banking, payment, retail, social media, email, and even for our websites and blogs.

Organize Your Documents

We all have dozens of important personal documents.   We may access some routinely, others once in a while, and others perhaps not for years.  Yet it’s important for us – and for others we designate – to know where these documents reside.  Are they in a safe deposit box?  A file drawer?  The household safe?

Review Your Retirement Plan

Asset allocation in retirement plans:  Year-end is a good time to review your investment asset allocation in your reitrement plan vis-a-vis your risk tolerance.  Are you being too conservative or too aggressive?  Be sure you are comfortable with your current exposure level.

Consider IRA Conversion

Before the  end of the calendar year, you may want to consider converting an IRA, especially if there has been a change in your household income.  For example, if your income is lower in the current tax year, you may want to consider a full or partial conversion of your traditional IRA into a Roth IRA to allow those funds to grow tax-free.  The calculations to make such a decision can be complicated.  You have to consider all of your retirement accounts, conversion tax, and "run the the numbers" to make an informed decision as to whether a conversion makes sense for

Some Final Thoughts on Year-End Strategies

Beware of tax-bracket creep:  If your income last year was close to moving to a higher bracket and it hasn't changed significantly, you may find yourself in a higher bracket this year because of indexing.  This could make the various tax-reduction strategies even more important to you.

Medical Insurance Plans and Medical Expenses

If you are participating in a high-deductible medical insurance plan, consider making the maximum contribution into your Health Savings Account.  HSAs can help pay for out-of-pocket medical expenses and, if not used, HSAs contributions and interest can grow and accumulate tax deferred. Any contributions and earnings you withdraw will be tax free if used to pay qualified medical expenses in your retirement, but keep in mind you'll pay a 20% penalty and income taxes if the money is withdrawn and used for nonqualified expenses.