Search Results

As someone who is nearing retirement or currently retired, your comfort often comes with knowing that your financial security is in order. But, when stock markets crash 20, 30 or even 40%, you will likely ask yourself the question: Do I have enough time to recover what I’ve lost within my investment portfolio? Hi, I’m Mark Fonville, Financial Advisor and certified financial planner at Covenant Wealth Advisors, and I’m going to walk you through some important considerations when thinking about the answer to this question. (insert branding and music) Clearly, we all hope that our investment portfolios will continue on an upward trend indefinitely into the future. But, the truth is that stock markets always pull back and the timing of when stock markets will fall is always unpredictable. Sure, there are always a handful of people who “predict” a stock market crash. But the law of large numbers suggests that with enough forecasts, there will inevitably be someone who accurately predicted a stock market crash or correction in the first place. This doesn’t mean that they had a crystal ball or were smart. It simply means that raw chance alone should always deliver a handful of people who accurately predict the stock market’s direction. That’s why traditional wisdom of staying invested for the long-term is so important. For investors who are wise enough to focus on the long-term and remain invested through these difficult times, how long does it take for markets to recover after they fall 20, 30, or even 40% or more? After all, do you really have enough time for your portfolio to recover? Diversified stock markets have always recovered for as long as we have data. That isn’t to say that Armageddon won’t happen in the future and past returns are certainly no guarantee of the future, but research suggests that the odds of markets eventually recovering is very strong. Take a look at the chart in front of you as an example. You can see three important insights here: First, stock market pull backs since 1956 lasted on average just under 1 year. Some stock market crashes were worse than others. For example, the crash of 1987 only lasted three months whereas the tech crash from 2000 to 2002 lasted two years and six months. Secondly, stock market recoveries, also known as bull markets, lasted much longer than stock market declines or bear markets. While this isn’t always the case, it’s an important fact. Thirdly, recessions often occurred during stock market declines. But there are periods where a recession occurred, but stock markets still went up. So, how long does it take for stock markets to recover? The data shows that since 1950, stock market pullbacks typically recover their losses within 19 months of markets bottoming out on average. When stock markets decline less than 22%, the average recovery was only seven months. However, when stock markets decline more than 22% as they have this year, the recovery took an average of 27 months to recover. While looking at the average recovery time for stock market crashes can be helpful, nobody knows how long it will take future stock market declines to recover. At Covenant Wealth Advisors, we believe that you should have a time horizon for investing of ten years or more if you want to invest in stocks. This is based on over a hundred years of data. If you don’t know what your time horizon is in the first place, or if you need personalized advice on your portfolio, call us at 888-320-7400 . We’re happy to help create and implement an investment plan that’s tied to your life plan. Thanks so much. Disclosures Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated.

Are you thinking about getting professional financial advice? How do you know if you need a financial advisor in the first place? The answer isn't always black and white. After all, it takes time to find a financial advisor who has the competence, integrity, and communication skills you need. Good financial advisors also cost money. Some are compensated directly by their clients in the form of hourly fees, fixed fees or even flat fees based on a retainer model. Others are compensated via commissions or simply charge on a percentage of the investments they manage on your behalf. For example, at Covenant Wealth Advisors we charge a fixed fee of $2,500 to $3,500 for a comprehensive financial plan for retirement. We charge between 0.40% to 1.25% per year on the investments we manage. This is called an AUM fee. But, investment management fees can differ across advisors as we see in the chart below from Kitces.com: But every advisor is different. To make matters more complicated, financial professionals can provide a lot of different financial services including: Developing a personalized plan to help you toward your financial goals. Provide investment portfolio advice that includes mutual funds, stocks, or bonds. Estate planning and life insurance strategies to help ensure your assets transition to your heirs the way you intend. Budgeting to help you gain control of your cashflows. Tax planning to help reduce taxes now and in the future. Investment management to help grow, preserve, and utilize your investments. Create a retirement income plan that takes into account social security decisions, pensions, and other sources of income. Then, you have to make sense of industry jargon. You'll see words like Certified Financial Planner (CFP), fiduciary standard, and fee-only posted to advisor websites. We even use the same terms on our website: Now, you might be thinking, "wow, that's a little to consider! Maybe it's not even worth it." The good news is that financial advisors have the potential to add a lot of value. Vanguard, one of the world's largest investment firms, has been studying the value provided by advisors for years. Based on their study , advisors may add 3% or more of return to your investment portfolio. A 2020 study by Russell Investments concludes that advisor's may add 2.88% in return per year. Better returns can be an enticing reason to work with a financial advisor, but there are many more reasons to consider including peace of mind, financial security, and clarity going forward. The first step in your journey is to determine if you need to hire a financial advisor in the first place. Here's four signs to help you determine if you need a financial advisor. 1. You only focus on the small pieces, not the big picture. It’s not uncommon to find individual aspects of financial planning to be straightforward. Saving money in a 401k, buying insurance, and creating a budget on their own aren’t complicated. However, by themselves, they don’t constitute a financial plan. A financial plan is an amalgamation of your financial needs and unique lifestyle considerations. Someone with a goal to retire early will require a different savings strategy than someone who wants to work in their golden years, for example. Financial planning isn’t just about mastering the individual pieces, it’s about harnessing your resources to enhance and enrich your life. While you know you need to save money and contribute to your 401(k), you might not be able to create a lucrative strategy to withdraw those funds in retirement, understand how those withdrawals affect your tax liabilities and know the way your 401(k) interacts with your other savings vehicles—all of which impact your daily life. Each of these pieces fit together to bring about your ideal retirement lifestyle. In financial planning, everything is connected. Each decision you make has an impact on another area, making it crucial to evaluate how each piece influences the others. Let’s say your dream retirement location requires an out-of-state move. That move ripples into your daily life, your new state’s tax requirements, proximity to your children and loved ones, estate and inheritance laws, and so much more. If you aren’t familiar with these nuances, it’s easy to miss something. The adage “You don’t know what you don’t know” certainly applies here. Blind spots can pop up at any time and without an objective perspective, can easily snowball into costly mistakes. A properly trained and experienced financial advisor can help you see these blind spots, create a coordinated plan, and help you monitor it to make adjustments as needed. If you keep questioning yourself or losing sleep over whether you are doing the right thing, it may be time to hire an expert. 2. You don't have a clear retirement plan. There’s a lot more to having a successful retirement than deciding to not go back to work. Though you likely know that much, have you taken the time to think through and plan for all the necessary components of a well-crafted retirement plan? Retirement planning is a complex process . From cash flow to lifestyle to healthcare to taxes and more, a robust retirement plan can help you feel confident and secure as you prepare for and move through your golden years. In the chart below, you can see different expenses and goals to consider when developing financial cash flows for retirement. An advisor can help you structure a plan that supports your lifestyle needs and can give you the tools to prepare for them. One of the most important decisions you’ll have to make concerning retirement is choosing how to withdraw from your savings to cover your spending needs. Which accounts should you tap first for income in retirement? Conventional wisdom says to tap your taxable brokerage accounts first, but we've found that this rarely makes sense. A thoughtful approach to retirement withdrawals can allow you to spend more, pay less in taxes, and even add years to the length of time your savings will last. Considering how drastic it would be to run out of money in retirement, that one benefit alone would make it worth having an effective withdrawal strategy. If you are retiring before 65, how will you pay for healthcare until you qualify for Medicare? There are strategies available that can nearly eliminate your healthcare premiums but, you must plan to make sure it's done right. 3. You're paying too much on your tax bill. The catch here, of course, is knowing if you are paying too much in the first place. We are passionate about being tax-savvy at Covenant Wealth Advisors, and there are potentially numerous recommendations we can make to help you save money on your tax bill. Proactive tax planning touches nearly every aspect of your financial life from saving to investing to withdrawals and more. High-earners can particularly benefit from a strong tax strategy. If you are in your 50s, it's important to start building a game plan to have control over your taxes when you retire. This goes beyond simply maximizing deductions on your annual return and more to thinking about the multi-year tax consequences of how you position your retirement savings. How you spread your savings across 401(k), Traditional IRA, Roth IRA, Trust, or brokerage accounts matters from a tax standpoint. Getting advice on the best location for your investments can potentially save tens of thousands of dollars in taxes long-term. For example, it sometimes makes sense to intentionally increase your tax bill in one year so that you can lower it even more in future years. Roth conversion s can be a powerful strategy to help reduce taxes in the future. Partial Roth conversions can also be used to give you the lowest average tax rate possible. 4. You're navigating life transitions. Life is full of changes. We are continually growing and evolving, and changes in your personal life often affect those in your financial life and vise versa. What makes these transitions complicated from a financial planning perspective is that you often only experience them once, so you don’t have any prior experience to draw from. Financial planners are especially helpful in times of change, such as moving into retirement, receiving an inheritance, building an estate plan, marriage, or divorce. This is particularly true if you work with one that focuses on your specific matter since not all financial planners are the same. There are unique financial considerations in all of these moments, and the right planner can help walk you through your options to help you make the best financial and personal choices. These changes are sometimes unexpected and can be overwhelming, such as losing a spouse . Without your spouse, you’ll have to take the lead on your finances, a task that can be even more overwhelming when compounded by grief. A financial planner could be a comforting and stable resource to help you take control because while it might be your first time undergoing this challenge, your advisor has likely had years of experience serving people just like you. Conclusion Understanding whether or not you need a financial advisor isn't always easy. But, working with a financial advisor is a great way to bring structure, balance, purpose, and intention to your financial life. The best financial advisors should be able to help you craft a plan that makes the most of your resources to live a meaningful and fulfilling life. Our team at Covenant Wealth Advisors specializes in helping individuals age 50 plus who have over $1 million in investments and retirement savings. As a registered investment advisor, we are gladly serve as a fiduciary. This means that we are required by law to put your interests ahead of our own, all the time. As a fee-only advisor, we never receive commissions which can reduce conflicts of interest. If you are anxious about retirement, have questions about how to make your money last, or simply want financial peace of mind, give us a call. We help clients all over the United States using Zoom video conferencing. If you’d like to learn more about how we can help you with your finances, set up a call today. About Mark Fonville, CFP® He is the President of Covenant Wealth Advisors and a Certified Financial Planner professional specializing in retirement income planning, tax planning, and investment management. Mark has been featured in the New York Times, Kiplinger Magazine, and the Chicago Tribune. Mark's company is the #1 fastest growing company in Richmond, VA and maintains a 50:1 client to advisor ratio. Learn more Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

Michael and Lisa haven’t set their retirement date. It’s not because they aren’t on track to retire. Rather, they just haven’t decided if or when they want to leave their careers. Michael is a busy executive and Lisa is a respected physician. Luckily for both of them, they both still get satisfaction from their jobs. Even better, their work continues to provide purpose and meaning to their lives. They’ve worked hard over the past twenty years in their respective roles and they aren’t quite ready to abandon their passions just because they are nearing their 60s. For them, their problem isn’t addressing past mistakes with their money, as they’ve accomplished a lot and made many smart decisions: Producing high six-figure salaries and compensation Fully contributing to retirement accounts and other investments Building a nice cash reserve for emergencies Paying down debt on a small mortgage Protecting their income and wealth with the right types of insurance So what’s the challenge? Michael and Lisa have this nagging feeling that they may be missing some key details. Do they have the right plan for them? The recurring theme is that they don’t know what they don’t know. Michael and Lisa have always depended on their staff at work. Yet, they’ve never hired anyone to help guide their personal money decisions. As they near the next chapter of life…they realize they need a specialist to help them build out the best strategy for their money. That includes finding someone who can help them reduce taxes leading up to and through retirement. Michael and Lisa are certainly in no hurry to retire, but they want to know what the future holds. THE APPROACH Michael and Lisa understood that retirement would be one of the most expensive decisions they would make, which is why they wanted advice from a Certified Financial Planner who specialized in retirement planning. They are also busy. There simply doesn’t seem to be enough time and they don’t want to get tied up trying to figure everything out on their own. THE RESULTS When Michael and Lisa found the right Certified Financial Planner, they were concerned about their investments. But, they also wanted help with their total financial life, including taxes. A comprehensive road map was put together that met all their needs: A tax-efficient investment strategy to reduce risk and improve expected returns. Lower investment costs. Improved mix of investments to better align with their goals. A smart, sustainable rebalancing strategy. Reduction of income taxes through charitable giving, Roth IRA conversions, social security timing, and more. A tax-efficient IRA funding strategy. They also adopted an easy-to-use personal money website, helping them organize their financial life and gain clarity. Michael and Lisa now enjoy the clarity and peace of mind that comes from having a personalized financial plan for their future. They now have more confidence and mental freedom to dedicate toward the lifestyle they want. It also helps knowing they have options when it comes to retirement. Find out if we're a fit for you today Disclosure: Case studies presented are purely hypothetical examples only and do not represent actual clients or results. These studies are provided for educational purposes only. Similar, or even positive results, cannot be guaranteed. Each client has their own unique set of circumstances so products and strategies may not by suitable for all people. Please consult with a qualified professional before implementing any strategy discussed herein. No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms' investment advisory services. Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

Married couple David and Mary recently retired from their fulfilling careers and are now embracing the next chapter of their lives. They are seeking a plan that will help them continue their current lifestyle well into retirement, yet also have the security in knowing they will not experience tough financial times in the future. They want to meet their tax burden easily, optimize their investment portfolio by making their money work for them, and create a reliable stream of income. These are their top financial priorities going forward. THE CHALLENGE David has given over 30 years of demanding work to his own company prior to this decision to retire and move into the next phase of life. With his children out of home and financially independent themselves, he and Mary are looking forward to dream vacations they have always wanted, golfing more with other retired friends, and giving back to their community with some volunteer work. David’s retirement package included a 401(k), stock options, and a pension. He would like to make these assets work more by generating more returns so he and Mary can enjoy a relaxed future focused on the things they want to do, rather than need to do. David was not initially informed as to how he could access these funds and needed professional financial advice as to what investment options he could enter into. David’s primary goal is to ensure that he and his wife’s financial situation remains stable while facilitating the lifestyle they envisioned for retirement. THE APPROACH David and Mary’s retirement planning process needed to be pleasant and hassle-free. Avoiding a stressful planning period was a priority for them. To avoid any headaches and complications, the first step they took was to identify any potential future tax burdens. Working together with David and Mary’s CPA, the retirement planning steps they took involved: Compiling all the information David needed from his company’s benefits administrator, Summarizing all the options available to David and Mary, along with being made aware of any tax burden, Opening new investment/retirement accounts, Devising a schedule of withdrawals to create a reliable income stream. By taking these measures, David and Mary were able to understand all their retirement finance options. This removed much of the stress many other new retirees experience. They were able to move forward with their plans, confident in knowing that they would be well looked after. THE RESULTS The financial planning that David and Mary conducted proved helpful in many ways, but particularly in: Being able to reduce the impact of taxes on their finances, now and in the future, David’s retirement savings reorganized to help reduce risk, and The couple could enjoy a predictable stream of income, without adjusting their lifestyle. Today, David and Mary are enjoying retired life! They travel back and forth between their home in Long Island, NY, and their beachfront property in the Caribbean. They are also constantly visiting new golf courses and resorts when they can in between time spent with their young grandchildren. The knowledge that their financial situation is secure for the rest of their lives is incredibly reassuring. David and Mary love life, as they feel it is on their terms. David and Mary regularly review their retirement situation. New federal and state tax laws may come into effect, so it is important that they are being monitored each year to ensure they are taking advantage of any opportunities available to them and ensure they do not receive any nasty tax surprises from the IRS. Disclosure: Case studies presented are purely hypothetical examples only and do not represent actual clients or results. These studies are provided for educational purposes only. Similar, or even positive results, cannot be guaranteed. Each client has their own unique set of circumstances so products and strategies may not by suitable for all people. Please consult with a qualified professional before implementing any strategy discussed herein. No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms' investment advisory services. Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

A married physician is planning to retire and prepare for the future of his three children and spouse. INTRODUCTION Jim is happily married to his high school sweetheart Margie, and they have three children, Joe, 20, John, 17 and Bernadette, 12. Jim is currently a shareholder in a successful neurosurgical medical practice group. He has found his career in practicing medicine to be incredibly rewarding, but recent changes to state healthcare practice standards and an increase in insurance liability has led to a substantial decline in the practice group’s revenue and an increased workload that is hard to cope with. This is especially the case amongst the elder members, like Jim. Jim’s first son Joe is currently enrolled at Vanderbilt University as a Junior and his other son John is quickly approaching college age, as a junior at the local high school. Jim’s daughter Bernadette is a beautiful 12-year-old but has some challenges. She has special needs related to autism spectrum disorder (ASD). Despite performing well in elementary school, Jim and Margie are unsure if college will be the right atmosphere for her socially, nor will it have the learning assistance programs and guidance she needs for academic success. Jim and Margie are also concerned that Bernadette may not be able to live independently as an adult and they may have to provide a level of financial and living assistance throughout her lifetime. THE CHALLENGE Jim has accumulated over $1.5 million in assets. His accounts are mostly small and distributed amongst a few different brokerages and mutual funds. He knows he is not making his finances work more to provide for his family’s future but does not have time to meet with a financial advisor and devise a more effective investment strategy. He would like to retire at 65 but is unsure what he needs to do to be financially safe in retirement. Jim would also like to purchase a small, but well-located golf condo in Fort Lauderdale, Florida sometime in the next 5 years. He also would like a boat for weekend trips to enjoy with the family. Margie’s primary concern stems from being able to protect the family’s financial future should anything unforeseen happen to Jim. Having recently experience the loss of her beloved father, this concern has become increasingly pertinent for Margie. She has also started to assume more of the responsibility for her aging, widowed mother’s finances and well-being. Margie wants to future-proof the family’s financial situation by having several safety nets in place. These include taking out life insurance and disability insurance policies, as well as having long-term care insurance in place. Margie also wants to ensure her and Jim’s wills are up-to-date and remain so. HOW DID COVENANT WEALTH ADVISORS HELP? THE APPROACH Joe and Margie decided that Covenant Wealth Advisor's services were perfect in answering all their financial questions, creating the necessary safety nets and arrange their investments to help them achieve their goals. One of our financial planners collaborated with them to create a complete and tailored financial plan. Jim and Margie also began working with one of our experienced investment portfolio managers to both merge and manage their investments and accounts in way to achieve their goals. We did the following financial plan for Jim and Margie: Create a net worth analysis to examine the family’s assets and liabilities. We recommended they refinance their existing home mortgage and paired them with a trusted lender who specializes in the financial situations of physicians. Devised a cash flow plan to restructure their fixed expenses to afford them more flexibility should Jim’s income become unstable. We even showed them how to fund Jim’s dream boat for the next year and purchase the golf condo in Fort Lauderdale within 5 years. We also created a college fund for their children, Joe and John. We examined the cash flow they had and borrowing strategies they could undertake to ensure funds were available immediately for Joe and John’s college expenses. For Bernadette, we developed an education funding plan that is highly flexible, given that she would likely not attend college like her brothers. Our financial planners then developed a retirement projection that demonstrated to Jim and Margie what they needed to save each year to retire happily. Part of this projection involved devising a comprehensive plan for how Jim could begin identifying value from his shares in his practice group, plus examining the buy-sell agreements between the partners. Furthermore, we assisted them in seeing how their insurance needs impacted their financial situation and helped them find the most comprehensive coverage to meet their needs. Jim required about $3 million more in life insurance to adequately protect his family than initially thought. Most of this could come from term insurance, but a significant section needed to come from permanent insurance in the event Bernadette needed more substantial financial support. We then paired them with an independent life insurance agent we know well to get the new insurance policies set up. Jim and Margie also needed a small amount of long-term care insurance, to meet one of Margie’s requests. So, we referred them to another trusted agent who specializes in long-term care insurance to get the coverage in place. We then went on to review their estate planning and analyze their current wills. One glaring issue emerged that their choices of guardians for Bernadette, in the event of their passing, would not be sufficient for her. They also did not have a power of attorney clause in either will should either Jim or Margie pass to manage the other’s finances. We then connected them with an experienced attorney who helped ensure their assets were properly titled and the designation of beneficiaries on the life insurance policies and retirement plans were consistent with their estate plan. THE RESULT Together with one of our portfolio managers, an investment policy statement was crafted that will guide the family in their future investment strategy successfully. We helped them consolidate their assets into a single custodian that allowed them to actively manage their assets. Jim and Margie meet with their portfolio manager every 6 months (or whenever they feel like it) to discuss any changes in their financial plan. Every quarter, the family receives a thorough report of their investments so they can measure their financial progress. Through the help a personalized financial plan and continuous advice to keep them on track, Jim and Margie now have the peace of mind they need to enjoy life without the stress of money. Disclosure: Case studies presented are purely hypothetical examples only and do not represent actual clients or results. These studies are provided for educational purposes only. Similar, or even positive results, cannot be guaranteed. Each client has their own unique set of circumstances so products and strategies may not by suitable for all people. Please consult with a qualified professional before implementing any strategy discussed herein. No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms' investment advisory services. Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

Do you know how much money it would take for you to retire comfortably right now? Once you can confidently answer this question, you’ll be able to understand your retirement timeline better. Even if you aren’t quite ready yet, working through this poignant question can help you see if you are on the right track. So how do you find the answer? Here’s a process we recommend working through to find your ideal retirement savings “number.” Before you get started, download our master list of retirement goals . You may find it helpful as you think through the steps. Make An Honest Calculation of Your Current Expenses When was the last time you consulted your cash flow plan? Do you have a solid grasp of all your expenses? Have you taken the time to organize and tally them? Do you know your annual income? If not, this is an excellent place to start. You may be surprised by what you find as it’s easy to underestimate what you’re honestly spending each month/year/etc. Yes, the extra evenings out and longer vacations add up, potentially more than you realize in the moment. Check each account you spend from, like checking accounts, credit card statements, or cash, and see what you’re truly spending each year. A solid rule of thumb is aiming to replace about 80-90% of your pre-retirement income for your golden years. Why so much? Your retirement expenses likely won’t dip as significantly as you think. Add it up and get a number! This exercise lets you see your current level of annual spending and shows you how much income you’ll need just to maintain your current lifestyle. For example, if you spend $5,000 per month, that's $60,000 per year. Multiply that by the number of years you think you’ll spend in retirement, 30, for example, and it really highlights how much you’ll need. Keep in mind you’ll also have to factor the current and future inflation rate into those projections. $5,000 in today’s dollars likely won’t be worth the same 5 years from now. Put Real Numbers To Your Big-Ticket Retirement Lifestyle Goals Next, think about significant retirement spending goals that aren’t reflected in your current budget. If you are already spending on a particular category, think carefully about how that spending might change as you move into your new retirement lifestyle. For example: How much is your present travel budget? Will it increase in retirement? For example, if you live farther away from children and grandchildren, you might spend more on flights or gas to see them. Or you have a long vacation travel bucket list of adventures to book. Are you planning on making a move? Out of state? Downsizing? Snowbirding? Purchasing a vacation property? What is your projected retirement age? Knowing when you retire will give clues into how much money you’ll need to do so comfortably. Retiring at 55 (early retirement) may look different than retiring at 62, or 67 (full retirement age for those born in 1960). A little tip: Don’t fool yourself into underestimating the cost of your goals. If you do, you run the risk of undershooting your savings target. Say you plan on moving out of state. Have you considered the cost of property in your new area? What about practical things like property taxes, homeowners insurance, state taxes, healthcare, etc.? Is the cost of living comparable, or will you spend far more on a night out, golf club membership, or a weekly trip to the grocery store? By not being honest about how much your big-ticket retirement goals will cost, you may have to scale back your retirement vision, work a few years longer, or find additional stress regarding your money—that’s not the retirement you want or deserve. Add it up and get a number! Look Closely At Your Health People are living longer than before. While you may think it makes sense to project your retirement plan to your 80th birthday, that notion might be outdated. At age 65, the average life expectancy is still 18 years for men and a little over 20 for women. In addition to longer life expectancies, many retirees have a goal of living longer lives. A new Edward Jones Age Wave report found that although retirees are stressed about outliving their savings, nearly 70% of Americans want to live to 100 . The people in the study cite 100 as the “ideal length” of time for retirement. So whether you want to live longer, you’re more likely to live longer, or a combination, it’s critical that your finances can keep pace. Consider how your present health and family history might affect your longevity, and come up with a reasonable estimate of your personal life expectancy. But use a healthy dose of caution. You don’t want to run out of money because you underestimated your longevity. Living longer is a good thing, but you need to account for additional medical expenses that come with a longer life. An average 65-year-old couple can expect to spend $315,000 (after-tax) on health care in retirement, according to a Fidelity study. And that estimate doesn’t account for additional expenses that Medicare doesn’t cover, like long-term care costs, which may be more prevalent the older you get. Think through some core health-related questions: How “healthy” are you? What do you do to take care of your health as you age? What’s your family health history? Do you have any underlying conditions to monitor? What medications are you taking? Do you require any specialist doctors? Do you anticipate significant changes to your health in the next few years, like surgeries, hearing aids, etc.? If you think you’ll live longer than average, how will that increase your healthcare expenses? Add it up and get a number! Weigh Your Debts and Assets When you’re deciding whether or not you can sustain your retirement plans based on your current nest egg and spending habits, don’t forget about your personal balance sheet. Keeping this updated enables you to assess where you are regarding your outstanding assets or liabilities. Do you have outstanding debts, like a mortage, personal loan, business loan, credit card debt, etc.? Will those be gone by the time you retire or are you on course to pay them off? What about assets you plan to sell before retiring? These could be things like a business, real estate, or other big-ticket items. Larger assets could be a source of money to pay down debts or pad your nest egg. Take some time to look at other retirement accounts, like a traditional IRA, Roth IRA, 401k, brokerage account, and more. You’ll also want to evaluate other sources of income, like savings accounts, real estate, annuities, pension, Social Security income, and more. Knowing the actual and projected value of these accounts helps give you a more accurate picture of your net worth heading into retirement. Add it up and get a number! Add Everything Up Once you have a good overview of your cash flow plan and have made the necessary estimated adjustments discussed above, add them together to get a grand total. Take your total annual expense estimate and multiply it by the amount of time you plan to be in retirement. You’ll get the generalized sum of money you need to pay for your planned retirement lifestyle. Now you have a rough number! Is Your Portfolio Up To Snuff, And How Can You Make It Last? Now that you have a target retirement number, you can think through how to hit it. Will you have enough to retire? You need to map a plan for getting from where you are now to where you want to be. For example, maybe you think you’ll need to have $2 million saved by the time you are 60. But depending on your living expenses, retirement funds, and larger savings goals, that money might not last you as long as you thought. Consider how your investments might grow over time. What is your expected rate of return, given how conservatively or aggressively you invest based on your risk tolerance, capacity, and other factors? Don’t forget to include all of your other income sources as well, such as: Social Security benefits Pensions Rental Income Part-time work Are you on track, given your portfolio assumptions and other income sources? If not, what can you do differently? Will you need to make any adjustments to your investment strategy? If this seems like a lot to try and make sense of, we can help you make a realistic retirement plan that optimizes your portfolio and accounts for a wide range of unexpected turns. We use Monte Carlo simulations to help us chart the best path and track progress as we go. If you’re ready to get started, contact us today , and we will guide you through the process of finding your retirement number and giving you the peace of mind to retire comfortably when the time comes. Mark Fonville, CFP® Mark is a fiduciary, fee-only financial advisor at Covenant Wealth Advisors serving clients across the United States. He specializes in helping individuals aged 50 plus create, implement, and protect a personalized financial plan for retirement. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule a Free Consultation Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

Roth conversions are a prevalent retirement planning strategy, and for a good reason. In the right situations, they can significantly reduce taxes throughout your retirement and boost the value of your retirement accounts. When is the right time to do a Roth conversion ? Does this strategy still work when you’re retired? Are there situations where you might want to think twice before doing one? Let’s review the benefits and discuss some potential downsides. You may want to download our Roth conversion checklist to work through as you read. Roth Conversion Refresh A Roth IRA conversion is when you rollover your money from a traditional tax-deferred account into a Roth IRA. When you do a conversion, you pay income tax on the amount you convert. This strategy enables people in a higher tax-bracket to take advantage of these valuable Roth accounts. Let’s look at a simple example. If you convert $50,000, you’d include $50,000 in your income that calendar year. However, the exact calculation can be tricky if you have multiple existing IRAs; here, the pro-rata rule applies! If your IRA balances consist entirely of traditional contributions and earnings (pre-tax), then there’s no concern. However, suppose any amount of any of your IRA balances comes from after-tax contributions (typically because you’ve made a nondeductible contribution to a traditional IRA). In that case, your conversion will be treated as though it came proportionately from your tax-deferred contributions and after-tax contributions. The takeaway is that you can’t just convert your after-tax contributions if you also have a tax-deferred balance. A big reason you might have after-tax contributions in a traditional IRA is that your income exceeds the limit to directly contribute to a Roth. For 2022, that income limit is $144,000 if you’re single and $214,000 for a couple, although those start to phase out at $129,000 and $204,000, respectively. Roth IRAs have the same contribution limits as traditional IRAs in the 2022 tax year; $6,000 plus another $1,000 if you’re 50 or older, but they have some unique features: Qualified distributions are tax-free in retirement. Don’t have required minimum distributions RMDs (giving you more options and flexibility). Are great vehicles to pass down wealth to heirs because they can also withdraw funds tax-free. Roth IRAs can be important accounts for your retirement income and savings strategy. Roth Conversions And Retirement Now that you’re all caught up on Roth conversions, what makes them so popular for retirees? Roth conversions can be beneficial throughout retirement as it helps you build up your tax-free income bucket for retirement savings, leverage lower tax brackets, and help with estate planning and legacy planning (i.e., passing wealth to beneficiaries tax-efficiently). But Roth conversions aren’t always the best choice. Retirees need to watch out for increasing their tax bracket too much. While that may sound obvious, the nuance is more powerful than you may realize. A Roth conversion would likely be inefficient if your anticipated future tax rate is lower than your present tax rate. Worse, it could create a domino effect because other retirement expenses are based on your taxable income. If your income goes up because of a Roth conversion, you could end up: Paying more for Medicare premiums via IRMAA. With a larger portion of Social Security benefits subject to taxation. Net investment income tax on gains from taxable investments. Typically, a Roth conversion makes more sense for early retirees who aren’t claiming Social Security and haven’t started RMDs. They tend to have more flexibility and options to strategically implement Roth conversions because of that income flexibility. In addition to the retirement stage, you can also consider Roth conversions in a down market. Since the IRS determines your tax bill by the amount you convert, a down market allows you to convert a more significant portion of your tax-deferred savings with a lower tax bill. What’s The 5-Year Rule (And Why It’s So Misunderstood) You might be hesitant to do a Roth conversion in retirement because of the five-year rule. However, that may be due to confusion about how the 5-year rule works. In fact, there are actually several different pieces to understand! Let’s break it down to help clear up the 5-year confusion. The 5-year rule concerning conversions says that with every conversion, the 5-year clock starts on those specific converted dollars. If you withdraw the converted dollars before 5 years pass: You are subject to the 10% early withdrawal rules on the conversion plus You are subject to ordinary income tax and a 10% early withdrawal rule on earnings. However, if you are 59 ½ or older you can access the conversion amount at any time without the 10% penalty. Also, remember that you can always withdraw the contribution amounts tax-free at any age and any time. The 5-year rule determines whether you need to consider the 10% early withdrawal penalty on the conversion and whether taxes and early withdrawal penalties apply to the earnings. Think back to that $50,000 example we mentioned earlier. If you withdraw before 5 years pass, you will incur a 10% early withdrawal penalty if you are under 59 ½. If the account grows to $55,000 after converting, you would have to wait 5 years and until age 59 ½ before withdrawing the extra $5,000. Otherwise, you’ll have an income tax liability and a 10% penalty on that $5,000 of earnings. So, yes, the 5-year rule means we’d have to be more cognizant and strategic with the withdrawals, but this doesn’t have to be why Roth conversions won’t work for you. Roth’s in Real Life: A Case Study For a more detailed example, consider that you are currently in the 22% Federal Income Tax bracket. Based on Social Security benefits, a pension, and the amount saved in your 401k and IRA, you anticipate being in the 28% bracket once RMDs start (assuming the TCJA of 2017 sunsets). In this case, it might make sense for you to convert now and pay taxes while you are in a lower bracket. It could save you thousands of dollars per year throughout your retirement. If you decide to convert, how likely will you run into a roadblock with the 5-year rule? After all, you don’t want to run into a situation where you must withdraw too soon. It depends on how much you convert and need to withdraw from savings. It’s best to consider this risk and plan accordingly. However, the IRS treats your withdrawals in the most favorable way, assuming that any money withdrawn comes first from contributions, then conversions, then earnings. As you can see, proactive tax planning is critical for the health of your retirement strategy. Sounds like a lot to keep track of? In addition with talking to your CPA, don’t forget to use our Roth conversion checklist and give us a call if you need help seeing where a Roth conversion strategy could fit into your larger financial planning efforts. Scott Hurt, CFP®, CPA Scott is a fiduciary, fee-only financial advisor at Covenant Wealth Advisors serving clients across the United States. He specializes in helping individuals aged 50 plus create, implement, and protect a personalized financial plan for retirement. Schedule a Free Consultation Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

To feel confident in retirement, you know you need a plan. You may even have something in place with a specific retirement income number in mind. But are you on track to reach it? Having a clear idea of what you’re working towards is excellent, but it’s equally critical to know if that plan will stand the test of (retirement) time. Wouldn’t it be nice to know if you’re on the right pace to reach your retirement “number”? How do you know if you’re spending too much (or too little) in your golden years? Did the r ecent market volatility knock you off course ? Is there a way to track everything to see if you are still on the path to a successful retirement? There sure is! And it’s called Monte Carlo Analysis. A Monte Carlo Analysis is an excellent tool to gauge how likely you are to reach your retirement spending goals . Today we’ll dive into what a Monte Carlo analysis is, how it works, and how it can inform your plan's efficacy. Breaking Down A Monte Carlo Analysis By now, you’re probably picturing a high-class casino nestled in the French Riviera. But we’re not referencing this famous Monaco gambling landmark. Monte Carlo Analysis is a mathematical method for forecasting and evaluating risk more comprehensively—not as much fun as trying your hand at Roulette, but far more practical. To get started, you load all appropriate data into the software, like your retirement age, nest egg, spending goals, asset allocation, etc. After you input all the required data, the system uses the repetition of random variable assumptions based on your inputs to produce projected outcomes. Most models will usually run over 1,000 times! You’ll see the results populate on a bell curve. By evaluating the raw data, you’ll have access to a broad spectrum of outcomes from unrealistically good to unrealistically poor, with many reasonable ones in between. You’ll find the average of the entire range of projected outcomes in the middle, which is usually the most accurate. Projections via a Monte Carlo analysis are more valuable than a simple straight-line projection in an excel spreadsheet because it helps you estimate the likelihood of different outcomes. For example, are you wondering if $2 million is enough to retire at 60? Or is $1.5 million enough money to retire at 65? A Monte Carlo analysis can help bring color and context to the answer and give you the tools to make informed investing and spending decisions in retirement. Monte Carlo Simulation And Finance There are several ways a Monte Carlo Analysis can help you create and track a better financial plan because it specializes in randomness and uncertainty. Sound familiar? Much of your financial plan focuses on the future, and future results are far from certain. So you can model any aspect of your plan that fits the bill with Monte Carlo: Portfolio valuation, spending projections, long-term financial planning items like planned withdrawals, investment rate of return, and more. But why is it helpful? By taking the time to create an accurate model, the results you receive will be heads and shoulders above an “educated guess,” which, unfortunately, is often what people rely on. Instead, you’ll have an outcome that is produced with real data. You’ve worked too hard and saved too much to base your retirement savings plan on a guess. Monte Carlo helps you make informed, data-driven decisions, which can inspire confidence in your overall plan. Perhaps you’ll need to adjust your investment strategy to reach your financial goals. As you know, understanding risk is a core element of your financial plan. Monte Carlo Analysis is a much more technical way to quantify risk and understand your probability of success because you can view the end result as a probability figure. That figure details whether or not your plan is projected to succeed exactly as you have it. Rather than a single straight-line estimate that you might see on an excel spreadsheet, Monte Carlo Analysis helps you model a range of possible outcomes. It’s also a great visual aid! Here’s an example of what Monte Carlo results might look like. Although the process of running a Monte Carlo simulation is technical, you can present and understand the outcome with a simple chart. That’s more than just a nice-to-have feature; it actually makes the tool more effective. If you can understand a core concept, there’s a better chance you’ll implement and stick with it. How A Simulation Can Impact Your Real Retirement Experience It’s important to synthesize a simulation into your real life. How can you do that with Monte Carlo? This type of analysis brings content to your retirement plan —you’re not planning in a vacuum. It’s useful for helping you understand how well your portfolio may do decades from now if you’re planning on spending too much throughout retirement and even if you could spend more than you are planning to. Even though the inner workings of the simulation are technical, we can easily customize it for your unique situation. For example, we can input variables and assumptions we do know, such as when you plan to retire, how you plan to invest, and your life expectancy, then let the algorithm work its magic. The result of the Monte Carlo Analysis can even help inform us of how to adjust your plan when needed . Say your Monte Carlo score is far too high (yes, there is such a thing). That result might indicate you’ll have too much money leftover once you pass. Perhaps you consider adding an extra vacation each year or buying a new vehicle into your cash flow plan without risking your retirement. You can also see which variable (spending, investment returns, or taxes) impacts the outcomes the most. This knowledge can help you think about the areas of your plan to focus on or which element carries the most risk. You may find that an item you thought was important doesn’t have a notable impact on your plan. Or that something you didn’t think mattered is responsible for a larger portion of your success. We use Monte Carlo Analysis as part of our larger planning software with all of our clients who want a better sense of their financial security in retirement because we think it is a great tool to understand risk and obtain a more nuanced picture of your retirement plan. Covenant Wealth Advisors is a trusted group of financial advisors that can help you visualize your retirement and make necessary changes to get you where you want to be. Call us today to talk about how a Monte Carlo Analysis can help you identify key risks in your retirement plan or how you can get set up to easily track your plan going forward. Mark Fonville, CFP® Mark is a fiduciary, fee-only financial advisor at Covenant Wealth Advisors serving clients across the United States. He specializes in helping individuals aged 50 plus plan and invest for retirement. Forbes nominated Mark as a Best-In-State Wealth Advisor*, and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule a Free Consultation Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

When it comes to finding the right team to manage your finances, trust is everything. But trust is more than just a gut feeling. There are certain traits and characteristics you may want to look for to help you decide whether you should trust an advisor to help with your specific needs. But, like many things in life, trust is subjective and sometimes you just have to go with your gut instinct. Aside from instinct, we believe your journey should begin with asking smart questions. But, how do you know what questions to ask? Most people don't have experience constantly interviewing financial advisors. That's why a checklist of questions can be helpful from the start. Download our comprehensive list of questions to ask a financial advisor for more helpful tips. But there are additional keys to consider to find a financial advisor who is required by law to always put your interest first and one who has the competence to give you great advice in the first place. While trust is subjective, here's how to potentially improve the chances of finding a financial advisor you can trust. Ensure Your Financial Advisor Practices Under the Fiduciary Standard When screening potential registered investment advisors or financial planners, the first thing you may want to determine is if they are a fiduciary. The test should be an easy one—an advisor who is truly bound by a fiduciary standard will be willing to sign a fiduciary oath. Signing a fiduciary statement is critical because embodying its tenets supersedes a simple statement or promise. An advisor who follows a fiduciary standard is bound by law to act in your best interest. There are other standards of practice that don’t require strict adherence to the fiduciary standard, such as the new “Regulation Best Interest”, or Reg BI, that brokers are held to. The name can be confusing because there are four key components that brokers must adhere to including 1) Disclosure obligation; 2) Care obligation; 3) Conflict of Interest Obligation; and 4) Compliance Obligation. You can learn more here. It may be difficult for investors to understand the difference between a financial advisor serving as a fiduciary and a broker serving under the "Regulation Best Interest" standard. Check Out Their Specializations and Credentials Financial planners are not one-size-fits-all. Personal finance is a big topic and you want your advisor to be well-versed to support your specific set of needs. Are you in your 50s or 60s looking for an advisor who specializes in retirement income planning? Are you airline pilot? Perhaps you're a business owner in need of an exit strategy. Maybe you're a doctor who wants to start saving but also chip away at your massive student debt. Guess what? There’s an advisor out there for you. At Covenant Wealth Advisors, we specialize in in retirement income planning and investing. Credentials can also be an indication of the advisor’s expertise and practice focus. The CFP® is a well known designation within the industry. A Certified Financial Planner™ will have a broad knowledge of all areas of financial planning and have demonstrated that competence through education, experience, and testing. A Certified Public Accountant or CPA will bring additional tax knowledge which is paramount to sound financial advice. There are specific credentials for almost any financial planning specialization out there including divorce, college planning, and estate planning. An advisor may also be a member of professional associations that speak to their focus. For example, I'm a member of the National Association of Personal Financial Advisors (NAPFA) because we believe that clients are best served by fee-only Certified Financial Planners. We also believe that our advisors and our clients benefit from an association with other like-minded planners. Peruse their Online Materials A great way to get a feel for your potential advisors before speaking with them in person or over the phone is to take a look at their digital presence. Do they have a website? Take a look at their blog. What topics do they cover? Do any apply to you? As you read through their communication materials, does it feel like they are speaking to you about your needs or to someone else? Remember, this is how an advisor is choosing to communicate to the public and potential clients. If it doesn’t seem like they are communicating with you, it’s probably better to check out another advisor whose vision may be more closely aligned with yours. Many advisors will offer free resources in the form of checklists or questionnaires. For example, we post financial videos to help individuals better digest information. You'll also want to review the advisor's form ADV Part 2A and 2B. This document will reveal the advisor's business practices and any potential conflicts of interest. If you think you may be interested in working with a particular advisor, try one out to see how they approach certain topics. If the topic is what you need and their approach resonates with you, then it’s an indication that you may work well together. Set Up an Interview Beyond the more technical elements of the advisor/client relationship like competence and practice focus, there still has to be a certain amount of chemistry to make it work. Most advisors offer a free phone call or Zoom session for prospective clients. Once you've done your research and feel that it's worth pursuing, talk to them to get a feel for them, their process, and to see if you would be a good fit. This also gives you a good opportunity to ask them questions about their fiduciary responsibility and expertise. During this interview, there are some key indicators to watch for. Does the advisor appear genuinely interested in you? If so, this is a sign that they think you may be a good fit for them. You want an advisor to feel that way because if they don’t see you as a good fit, they will likely not give you the attention you deserve. Does it feel like the advisor is trying to sell you from the very first conversation? The initial meeting should be about establishing a mutual relationship. That’s difficult if the advisor seems intent on selling you something at the onset. Are they asking inquiring questions to better understand your situation and financial goals? A good advisor will use this first meeting to better understand you, so they can know if they are best suited to help you. Does the advisor speak in your terms or use industry jargon you can’t understand? A well-meaning, smart, and competent advisor that doesn’t effectively communicate with you can’t provide the same value as one that does. You may not understand the intricate details of what they do, but they should be able to explain it to you in simple enough terms that you don’t feel lost. Get a Financial Plan Before You Commit to Investing A lot of financial advisors say they provide comprehensive financial advice, but end up only wanting to sell you mutual funds or insurance products. While investment advice and insurance is one piece of the pie, the right financial advisor should provide advice on your total situation. Moreover, you may be nervous handing over your million dollar plus portfolio to an advisor you don't know very well. That's why we advise individuals to purchase a comprehensive financial plan from the advisor they choose first. A plan can help you answer a lot of questions such as: When and how can I retire? How can I reduce taxes? When should I take social security? Which accounts should I withdraw from first in retirement? The financial planning process can also give you the chance to get to know your financial advisor before you actually commit to having them manage all of your money. This face-to-face time may be instrumental in helping you find a financial advisor you can trust. For example, at Covenant Wealth Advisors we often design a customized financial plan before we ever invest a dollar. The financial planning experience may last three to four meetings over the course of four to eight weeks or more. We even provide a guarantee which means that we will refund the fee you paid if you are unhappy with our advice or services within the first six months of signing the planning agreement. Aside from the personalized advice clients receive, we've also found that financial planning gives clients a chance see how we work and communicate prior to making a long-term commitment. Starting with a shorter term commitment through the development of a financial plan may give you time to determine if you trust the advisor or not. Trust Yourself If you follow the suggestions mentioned above the last step is to make your decision. This requires that you rely on your own judgment. Finding an advisor is a lot like finding the love of your life. It's very subjective and if it doesn’t feel right, it probably isn’t. The advisor needs to show a genuine interest in helping you and leave you with a good feeling about working with them. But, that only scratches the surface and doesn't guarantee results. Even if they hit all the right buttons outlined above, if you don’t feel comfortable with them, it’s ok to keep looking. After all, it's your financial life. Give Us a Call If you are looking for an advisor you can trust to help you with your retirement income plan, we would love to hear from you. Give us a call and we will be glad to answer any questions you have. About Mark Fonville, CFP® He is the President of Covenant Wealth Advisors and a Certified Financial Planner™ professional specializing in retirement income planning, tax planning, and investment management. Mark has been featured in the New York Times, Barron's, Kiplinger Magazine, and the Chicago Tribune. Learn more Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

In 1776, the Committee of Five, as they were called, edited Thomas Jefferson's draft of the United States Declaration of Independence and included these words.. We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness . The words our founders put on paper set the foundation for the freedom we all enjoy today. While most of us do indeed pursue happiness, there is no guarantee that we will achieve it. After all, life is hard. Recently, my wife and I attended a wedding in Maryland. We had a wonderful time dancing and conversing with old friends. One of the happiest people I spoke to was a young man in his 40s who had been recently diagnosed with late stage cancer. I learned that he had made the decision not to get treatment because, in his eyes, he wants to enjoy life to the fullest while he still can. That must be one of the hardest decisions a person can make. After all, he has a beautiful wife and children who love him. I'm also in my early 40s and this news really hit me. We all deserve to be happy but sometimes we delay the truly important things in life that actually create happiness in the first place because we think there will always be a tomorrow. I pray there will be a tomorrow for the young gentleman I met at the wedding. But, sometimes it takes a glimpse of another's suffering to remind us about what‘s important and what makes us happy in the first place. What does it take to be happy in retirement? Here are four ways to potentially increase your level of happiness. 1. Embrace relationships In 2017, the longest running study on Happiness ever designed was published by Harvard University. The revelation was that close relationships, more than money or fame, are what keep people happy throughout their lives. 2. Exercise (even a little bit) Experience tells me that exercise improves my mood. But, as it turns out, academic research also tells us that even people who work out even once a week or for as little as 10 minutes a day tend to be more cheerful than those who never exercise. 3. Give to others People who give money or time to others are happier. Harvard Business School Professor Michael Norton conducted a number of studies that showed people are happier when they spend money on others vs. buying "things" for themselves. You may think that buying bigger and better material things for yourself will provide happiness, but research suggests otherwise. Even more surprising is that giving has also been shown to be good for your health and increase longevity as outlined in a 1999 study by Doug Oman of the University of California, Berkeley . 4. Establish a relationship with a financial advisor They say that money can't buy happiness. But new research from Herbers & Company published in 2022 tells us that people who maintain a relationship with a financial advisor tend to be happier than those who do not. In a survey of 1,000 random consumers across the US, Herbers & Company found that those with a financial advisor are statistically happier than those who haven't hired an advisor. Conclusion What's the bottom line? You can influence your own happiness. Think about the relationships you have in your life and reach out to someone you care about. Having money up to a certain point can make you happy. But, studies show that happiness starts to level out at a certain amount of income and spending more on tangible things doesn't increase your feeling of happiness. Instead, consider giving your time or money to people or organizations in need to help boost your level of happiness. If you don't exercise now, start a new routine of simply taking a one mile walk in the morning. It doesn't have to be hard and the science of habits tells us that creating new habits in small bites is much more likely to create a permanent habit than trying to go "all in" at once. And finally, if you don't have a financial advisor you can trust to help guide your decisions, contact us . Money stress is real and having a plan may help create peace of mind, help you focus on the things that matter, and bring a bit more happiness to your life. So, what do you think? What makes you happy? Let me know! About Mark Fonville, CFP® Mark is a personal financial advisor and the President of Covenant Wealth Advisors. He manages investment portfolio and provides retirement income planning for individuals age 50 plus who have over $1 million in investments. He has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule a call. Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. We provide investment advisory, financial planning, and tax planning services to individuals. Investments involve risk and does not guarantee that investments will appreciate. Past performance is not indicative of future results. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place.

There are 300,000+ financial advisors in the United States. That makes it hard to find a financial advisor whom you can trust. To help solve that problem, Forbes has announced it's annual list of Best-In-State Wealth Advisors for 2022 and Mark Fonville of Covenant Wealth Advisors was awarded a spot on the list . Mark Fonville, CFP ® was identified as a top wealth advisor based upon a robust selection process. Forbes collaborated with SHOOK Research to choose each advisor based on a selection process which included an "algorithm of qualitative and quantitative criteria, including: in-person interviews; industry experience; compliance records; revenue produced; and assets under management." Each year, Forbes creates a list of top financial advisors that strives to identify advisors on characteristics that go beyond simply "robo-ranking". According to Forbes, they seek "advisors that are leading the way in offering best practices and providing high-quality experience for clients." Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. SHOOK does not receive compensation in exchange for its Top Advisor placements or rankings, which are determined independently ( see methodology ). Participation in this directory is limited to ranked advisors; once placed on a ranking, advisors may choose to pay fees to Forbes and Shook for premium listing features as indicated by highlighted names. Investors must carefully choose the right advisor for their own situation and perform their own due diligence. SHOOK’s research and rankings provide opinions intended to help investors choose the right financial advisor and are not indicative of future performance or representative of any one client’s experience. Past performance is not an indication of future results

Can you hear that? Yes, it’s the chatter of real estate markets. Over the last couple of years, the housing market has been as hot as ever. In 2021, housing prices ballooned by 18.8% , and housing demand has continued upward since 2008. According to the Wall Street Journal , middle-class Americans are being priced out of the new housing boom, making affordability a massive issue: “At the end of 2019, there was one available listing that was affordable for every 24 households in this income bracket. By December 2021, the figure was one listing for every 65 households.” With inventory at an all-time low as recently as the end of 2021 and demand nearing an all-time high, the housing market looks like it's set to burst. But what’s driving this flurry of activity? Today, we wanted to take a closer look at the state of the U.S housing market in charts , including how we got here and what that data might mean for all buyers, whether you’re a first-time homebuyer or someone who has moved quite a bit. Here are five powerful U.S. housing market charts that help illustrate these mind-blowing real estate trends. The Markets Say “Jump,” and Houses Ask, “How High?” First, let’s look at a chart that will provide some perspective on just how much home prices have climbed. The S&P/Case-Shiller home price index is a popular measure of national housing prices. To construct the index, they take samples from 20 cities across the U.S. In December of 2021, the index rose to 287. By comparison, the index was 207 at the height of the 2008 housing bubble. That’s a 39% increase from the peak! What’s fueling this massive increase? It’s likely a combination of broad demand for new homes and record low interest rates that make borrowing large sums of money more affordable. Though interest rates are on the move, so there’s potential for a respite from the storm. As of February 28th, 2022, housing prices are at an all-time high as illustrated by the S&P/Case-Shiller U.S. Real Estate Market chart below. The S&P/Case-Shiller index is an important measure of national housing prices. This chart uses the 20-city index. As you can see, home prices continue to rise to record levels as many seek new homes. New Construction Is Going Up In addition to rising home values, people are building more homes, making homebuilders in high demand. With record shortages, pre-built houses can be hard to come by, so some homeownership hopefuls decide to build. Housing starts as of March of 2022, which indicate new residential construction projects, were 35.7% higher than the average over the past several decades. Historical data from the U.S Department of Commerce measures this factor during the month construction begins. We see the same trend with building permits, too. The chart below indicates that even more new construction is on the horizon since a building permit means someone has taken steps to get approval for their construction. Building permits are 39.7% higher than historical average. But building your own home won’t come cheap. Construction costs hit record highs in 2021. Data from the U.S Census Bureau found that prices for construction rose by 17.5% from 2020 to 2021—the most significant jump since 1970. Material and labor costs are also making homes that much more expensive. Overall, material costs increased by over 23%, with lumber skyrocketing by 85%. So, if you’re looking to build, be sure to account for these additional expenses. Existing-Home Sales Home sales are going steady as demand continues to rise alongside the growing economy. Unlike the previous data, this U.S. housing market chart examines the sale of homes already built. In March of 2022, 5.77 million existing homes were sold. While existing home sales have seen a slight decline since the start of the year, what’s even more interesting is the price these homes are selling for. At the end of 2019—pre-pandemic—the median sales price for a house was $327,100. At the end of 2021, the median price bounces to $408,100. That’s a 124.8% increase over two years! How Quickly Are Homes Selling? Our next real estate market graph indicates the relative supply of available homes or the monthly inventory. The months’ supply of inventory is a technical measure that estimates how long it would take to sell every home that is currently available to buy based on recent market activity. This is notably different from new construction or existing home sales in that this measure compares the supply of homes with the level of demand in one number. When this number is lower, it means houses are selling quickly. While the average metric is 5.7 months, we’re currently sitting at 6.4 months as of March of 2022. This increase is likely due to higher home price tags, which we explored above. Keep in mind that supply plummeted at the onset of the pandemic when the initial home-buying spree began. Experts found that inventory plummeted 53% when compared to pre-pandemic levels. Even though the supply of homes has increased since then, it is still limited. We expect to see limited supply continue to drive housing construction. Mortgage Refinancing Although not a measure of new construction or sales, mortgage refinancing is another relevant item in the real estate market. People have many reasons to refinance. Cash-out the equity in their home Adjust their loan term (going from a 30-year to a 15-year mortgage, for example). Lower their monthly payment. Regardless of the borrower's reason, refinance activity is highly correlated with interest rates. The lower the interest rate, the more likely borrowers will be to refinance because the new mortgage will have a lower rate. Rates have been at historic lows, making refinancing an appealing option. In this graph, you can clearly see that refinancing spiked at the beginning of 2020. Again, this is directly tied to the fact that the Federal Reserve cut rates in response to the Covid pandemic. To avoid confusion, notice that the 30-year treasury rate, displayed on the right side of the chart, is inverted. This activity will slow down as mortgage rates start to go back up. Considering that inflation fears are at the forefront of the national economic stage, this is likely to happen soon. In fact, the average interest rate for a 30-year fixed mortgage is already 4.91%. Plus, the Fed announced plans to continue hiking interest rates over the course of the year to help counteract high inflation levels . Understanding The Housing Market The housing market has been a marvel to watch and study over the past couple of years. Understanding where these numbers come from can help bring comfort and knowledge to the situation. There’s no better antidote to fear and confusion than education and knowledge. We hope you found these real estate market graphs and charts and our explanations to be helpful. If you have any questions or need help seeing how the real estate market may affect your ability to retire comfortably, give us a call . We would be happy to help! And remember, if you’re saving for a home, check out our free guide about the best accounts to save more money . Happy reading! About Mark Fonville, CFP® Mark is a personal financial advisor and the President of Covenant Wealth Advisors. He manages investment portfolios and provides retirement income planning and retirement tax planning for individuals age 50 plus who have over $1 million in investments. He has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine. Schedule a call. Disclosures : Covenant Wealth Advisors is a registered investment advisor with offices in Richmond and Williamsburg, VA. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated.