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Picking Investments Should be Like Picking Shoes. What Do I Mean by that Statement?

sara@stilettofinancial.com (Sara Faitelson) — Wed, 04 Jun 2025 16:06:56 GMT

Picking investments should be like picking shoes. What do I mean by that statement?

Hello fellow blog readers. As we begin the summer season, it’s time to put the boots away and reach for your sandals in the closet. Why do we change which footwear we choose? It’s because the seasons are changing. What about the financial season? Does it change? All the time. What does this mean for investors?

You must know which “shoes” are in season. Are we in the season of Bonds, Large Cap Growth, Value, International, SMID cap growth, Energy, Health Care, Technology, Mid-Cap growth or value? Well, it depends on the many economic factors. Why is this important? If you are heavily invested in a specific sector of the market when it is volatile, you are going to see a lot of peaks and valleys on your statements. This makes investors nervous and afraid to stay in the market. They are wearing the wrong pair of shoes during a specific economic season. How do you know if you are in the wrong sector of the market at this particular time?

It's really important to discuss what you are invested in with a financial professional. They can guide you in your decision making, which can help you see more consistency in your accounts. They can do a deep dive into your accounts and see if your current portfolio is beating indexes such as the S&P 500, Dow, Nasdaq. A financial professional’s goal should be to try to beat the index as much as and as often possible. That is what they are paid to do.

Remember: it’s not about how much you make. Rather it’s about how much you keep. Consistency is the key. Make sure you are wearing the right pair of shoes during this economic season.

Please feel free to reach out with additional questions and enjoy sandal season.

Registered representative of, and securities and investment advisory services offered through Hornor, Townsend & Kent, LLC (HTK), Registered Investment Advisor, Member FINRA/SIPC, 800-873-7637, www.htk.com . Stiletto Financial is unaffiliated with HTK. HTK does not offer tax or legal advice. Always consult a qualified advisor regarding your individual circumstances.

All investing involves risk including the possible loss of principal. No strategy assures success or prevents loss.

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Can I Use Life Insurance for Only Death Benefit Purposes? Are there Any Other Benefits?

sara@stilettofinancial.com (Sara Faitelson) — Thu, 01 Aug 2024 19:51:11 GMT

Can I Use Life Insurance for Only Death Benefit Purposes? Are there Any Other Benefits?

Life insurance is often viewed as a safety net—a means of providing financial protection for loved ones in the event of the policyholder's death. While this is indeed one of its primary functions, life insurance can offer a multitude of benefits beyond simple death benefits. By understanding how to leverage life insurance effectively, individuals can optimize its potential to meet various financial goals, secure their family's future, and even enhance their own financial well-being during their lifetime. In this blog, we'll explore the different ways to leverage life insurance to its fullest extent.

1. Protecting Your Loved Ones: At its core, life insurance provides a crucial safety net for your loved ones by replacing lost income and covering expenses in the event of your death. This protection ensures that your family can maintain their standard of living, pay off debts, cover funeral expenses, and pursue their long-term financial goals even in your absence. Term life insurance is often the most cost-effective option for providing this essential protection.

2. Building Cash Value with Permanent Life Insurance: Unlike term life insurance, permanent life insurance policies such as whole life or universal life offer not only death benefits but also a cash value component that accumulates over time. Policyholders can leverage this cash value in various ways, including borrowing against it, withdrawing funds, or using it to supplement retirement income. While these policies typically have higher premiums than term life insurance, they provide a valuable avenue for building tax-deferred savings and creating a financial legacy for future generations.

3. Estate Planning and Wealth Transfer: Life insurance can play a vital role in estate planning by providing liquidity to cover estate taxes, debts, and other expenses without requiring the liquidation of assets. High-net-worth individuals can use life insurance to equalize inheritances among heirs, protect business interests, and facilitate a smooth transfer of wealth.

4. Supplementing Retirement Income: For individuals approaching retirement or those seeking additional sources of retirement income, life insurance can serve as a valuable supplement to traditional retirement savings vehicles. Permanent life insurance policies with cash value accumulation can be accessed tax-free through policy loans or withdrawals during retirement, providing a source of tax-efficient income that complements other retirement assets such as 401(k)s, IRAs, and pensions. By strategically timing withdrawals and managing policy loans, retirees can enhance their financial flexibility and sustain their desired lifestyle throughout retirement.

5. Funding Long-Term Care Needs: As the cost of long-term care continues to rise, planning for future healthcare expenses is becoming increasingly important. Certain types of life insurance policies offer optional riders or features that allow policyholders to accelerate a portion of their death benefit to cover long-term care expenses in the event of qualifying medical conditions or chronic illness. These long-term care riders provide a valuable layer of protection against the potentially devastating financial impact of extended healthcare needs, offering peace of mind and preserving assets for beneficiaries.

Life insurance is a versatile financial tool that can be leveraged in various ways to protect your loved ones, build wealth, and achieve your long-term financial goals. Whether you're seeking basic financial protection, exploring wealth transfer strategies, or planning for retirement and long-term care needs, life insurance offers customizable solutions to suit your unique circumstances. By working with a knowledgeable insurance advisor or financial planner, you can develop a comprehensive life insurance strategy that aligns with your objectives and helps secure a financial future for yourself and your loved ones.

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The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure you are insurable. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges; if a policy is surrendered prematurely, there may be surrender charges and income tax implications. You should consult a qualified tax professional for tax advice on your own personal situation. All guarantees are based upon the claims-paying ability of the issuer.

Optional riders and benefits may be subject to eligibility requirements, additional premium requirements and/or minimum or maximum coverage amounts. Availability and rider provisions vary by each state.

Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the death benefit and policy values. Loans are income tax free as long as policy is not a “modified endowment contract” (MEC) and policy must not be surrendered, lapsed, or otherwise terminated during the lifetime of the insured, and withdrawals must not exceed cost basis. Partial withdrawals during the first 15 policy years are subject to additional rules and may be taxable. Excess policy loans can result in termination of a policy. A policy that lapses or is surrendered can potentially result in tax consequences. You should consult a qualified tax professional for tax advice on your own personal situation. All guarantees are based upon the claims-paying ability of the issuer.

What Kind of Relationship do you have with Money? Can it be Improved?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 20 May 2024 14:34:37 GMT

What Kind of Relationship Do you Have with Money? Can it be Improved?

Managing personal finances is an essential skill for achieving financial stability and long-term security. Whether you're aiming to build wealth, save for retirement, or simply avoid debt, having a solid grasp of financial management is crucial. Fortunately, there are practical steps you can take to take control of your money and pave the way for a more secure financial future. Here are five key strategies to help you manage your personal finances effectively.

1. Create a Budget: One of the foundational pillars of effective financial management is creating and sticking to a budget. A budget provides a roadmap for your spending by outlining your income and expenses. Start by listing all sources of income, including salaries, bonuses, and any other earnings. Next, track your expenses, categorizing them into essential (such as housing, utilities, groceries) and non-essential (like dining out, entertainment). With a clear understanding of your cash flow, you can allocate funds appropriately, ensuring that your essential needs are met while also setting aside money for savings and discretionary spending. Several budgeting tools and apps are available to help streamline this process and provide insights into your spending habits.

2. Build an Emergency Fund: Life is full of unexpected twists and turns, from medical emergencies to car repairs to sudden job loss. Building an emergency fund is like creating a financial safety net to cushion you during challenging times. Aim to set aside at least four to six months' worth of living expenses in a separate savings account. This fund should be easily accessible but separate from your regular checking account to avoid temptation. Start small if necessary, but make regular contributions a priority until you reach your target. Having an emergency fund not only provides peace of mind but also prevents you from having to rely on high-interest loans or credit cards in times of need.

3. Eliminate High-Interest Debt: Debt, particularly high-interest debt like credit card balances or payday loans, can derail your financial progress and keep you trapped in a cycle of payments. Take proactive steps to eliminate or reduce high-interest debt as quickly as possible. Start by prioritizing debts with the highest interest rates while making minimum payments on all other accounts. Consider debt consolidation or balance transfer options to streamline your payments and potentially lower your interest rates. Additionally, focus on living within your means to avoid accumulating new debt. With dedication and a strategic repayment plan, you can regain control of your finances and free up more money for savings and investments.

4. Invest in Your Future: Building wealth and securing your financial future requires more than just saving money; it also involves investing wisely. Take advantage of retirement accounts such as 401(k)s or IRAs to save for the long term. These accounts offer tax advantages and compound interest, allowing your savings to grow significantly over time. If your employer offers a matching contribution to your retirement plan, be sure to contribute enough to maximize this benefit. Beyond retirement accounts, explore other investment opportunities such as stocks, bonds, mutual funds, or real estate, depending on your risk tolerance and financial goals. Consider consulting with a financial advisor to develop a personalized investment strategy tailored to your circumstances.

5. Educate Yourself and Seek Professional Guidance: Financial literacy is a powerful tool that empowers you to make informed decisions about your money. Take the time to educate yourself about personal finance topics such as budgeting, investing, taxes, and insurance. Additionally, don't hesitate to seek guidance from a qualified advisor. They can provide valuable insights, personalized advice, and strategies to optimize your financial situation.

Effective personal finance management is not just about making ends meet—it's about taking proactive steps to achieve financial stability, security, and freedom. By creating a budget, building an emergency fund, eliminating debt, investing wisely, and continually educating yourself, you can navigate your financial journey with confidence and clarity. Remember, the key to financial success lies in disciplined planning, prudent decision-making, and a long-term perspective. Start implementing these strategies today to lay the groundwork for a brighter financial future tomorrow.

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Why Am I Always in the Red Zone at the End of Every Month?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 30 May 2023 19:38:58 GMT

Why am I Always in the Red Zone at the End of Every Month?

Hello blog readers. I hope everyone is enjoying this weather. I just cannot get enough sun and BBQ. This topic of this blog has to do with having a monthly deficit at the end of the month on a regular basis This topic comes up a lot when I talk to people. We always end up talking about “the B word” everyone hates: budget. A budget sounds so confining like jumping on a 5pm NYC subway pre-covid. That is never a fun ride. So, how can we get out of the red without having so many restrictions?

Let’s discuss a case I was brought into a few years ago. A couple said they make a decent living but cannot figure out why they were unable to save money for the future. We sat down and looked at their monthly expenses for the past three months. Guess what we found?

There were subscriptions and expenses for items they do not even use monthly. Once we cut those expenses out, we looked at how often they ate out as opposed to bringing lunch. They never brought lunch from home. We came up with an agreement of bringing lunch from home three days a week and only eating out twice a week. What happened to that couple?

Not only did they have money to save at the end of every month for their future, but the husband also lost 40lbs from making these minor financial adjustments.

What is the lesson? You do not need to be counting every nickel and dime you spend per month, but can you make smarter decisions when it comes to how you use your money? If you are unsure, I have a few tools I can share with you. Please feel free to reach out via LinkedIn.

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Are You Bad at Saving Money?

sara@stilettofinancial.com (Sara Faitelson) — Wed, 04 Jan 2023 21:50:45 GMT

Are You Bad at Saving Money?

I was on the phone during quarterly reviews with clients this year and a lot of them said the same thing to me. “Sara… I am terrible at saving money.” We laughed together and then I would ask why they are so bad at saving money. The reason has to do with the effects of this pandemic.

Many people are working from home which means during their breaks they are shopping online. This has created some issues financially. It is completely understandable since we cannot do activities we would normally do. We have more free time and have to stay at home, which is a perfect cocktail for online shopping. What can someone do who is in this predicament?

There are investment companies that have applications you can download. You can set automatic deductions from your bank account into your investment account. The account is liquid meaning you have one hundred percent access to the money. If you need the money all you have to do is transfer it back into your bank account. The funny thing with people is if the money is sitting in an investment account as opposed to a checking or savings account, they are not so quick to spend it. This is a great mind trick for people who have a hard time saving money.

There are many companies that can accommodate you. However, not all companies are the same. Before you make your first deposit, make sure to do a comparison on each company. This will help you match yourself with the company that fits your needs. You can save money. It just takes a little ingenuity on your part.

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Should I Worry About Probate?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 19 Dec 2022 16:19:47 GMT

Should I Worry About Probate?

Hello blog readers. I hope everyone is safe and healthy. I was thinking about a client and thought it was important to share her story. I really admired this woman. She was a 911 survivor and unfortunately, she was diagnosed with cancer and passed away before ever reaching age 55. She was a widow and had only one child.

There were a few problems with case. One, she never completed a trust and never transferred her new house in a trust. She passed away seven days after having a house built and never had the chance to live in it. Second, her trust was being created while she was very ill and was never completed. Third, her child was not financially ready to inherit as much was left to him all at once. Fourth, her son must wait for this new house to go through probate and pay for the housing expenses, even though he no intention of keeping the house. He wants to sell it but cannot. While he is waiting, he must use the money he inherited to pay for the housing expenses.

You are probably thinking what I am thinking: what a mess! These things happen in the real world and the only money that has been released to the beneficiaries are accounts where they have been named such as life insurance policies and investment accounts. If you have not spoken to an estate attorney about creating a trust, your family could end up in the same situation as my client’s family.

Should you worry about probate? Yes, if you love your family.

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I am not Married/ We Do Not Have Any Children: Who Should We Leave Our Estate to?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 22 Nov 2022 19:05:18 GMT

I am not Married / We Do Not Have Any Children: Who Should We Leave Our Estate to?

Hello Blog Readers,

I have some clients who are not married, and I have some that do not have any children. When we discuss who the beneficiaries should be on their financial accounts, it becomes a big deal. Why? Well sometimes they have a good relationship with just one of their siblings and the others they do not. Or they may have a good relationship with just one niece or nephew and not the rest. Who should they choose without hurting any family member’s feelings?

Another option I put on the table is their favorite charity. There are so many charities that could use the money to help others. Why else is choosing a charity a viable option? The answer in one word is: taxes. If you leave money to your favorite charity, then the charity will receive the money tax-free. Also, during your lifetime, you can start making contributions to your favorite charity and receive a tax write off. Before making a contribution, or leaving a charity funds as a beneficiary, it is important to talk to a tax specialist. This way you will not have to have that awkward conversation at the dinner table during family get togethers.

Your family may not love your idea to leave money to your favorite charity, but at the end of the day it is your money, and it is your decision. There are so many people right now without a job and they do not have enough money to buy food, wouldn’t it not be nice to give back to the community. If you would like to make a charity your beneficiary, please reach out to them for further assistance. There really is more happiness in giving than there is in receiving.

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Do you Look at Only One Piece of the Pie?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 12 Oct 2021 22:05:30 GMT

Do You Look at Only One Piece of the Pie?

Hello blog readers. I hope everyone is safe and healthy. It has been quite a year. Who would have thought we would still be in a pandemic a year and a half later, but here we are. Lately, we have been laughing about what people are calling Covid 15 – gaining 15lbs during this pandemic. I do not know about you, but I am a big fan of pizza, which is why it is easy to become a victim of Covid 15. Most of us cut the pizza pie into 8 -10 slices. Would you ever buy a whole pizza, cut off one slice, and then throw away the rest of the pizza? I doubt it, but that is what many people do when assessing their financial goals.

Last week, my business partner and I were sitting with a couple who is in this situation. They have one piece of their financial business with one person and then other pieces with other people. When I asked how their pension works with their retirement plan, they looked at me like I was speaking a different language. No one has ever looked at this piece of the pie and tried to fit it in the rest of the retirement plan.

I asked about reviewing the pension booklet and creating a game plan where they can start planning for their retirement date. They said “oh, that’s how you figure out when to retire.” This is a situation that happens more than I can count. Clients have different people doing different things for them, but no one has an end game. Retirement because reactionary rather than proactively assessed.

What is the point of this story? The lesson is: “don’t eat one piece of the pizza and throw the rest of the pie in the trash.” If you want to have success, all pieces of the pie must be analyzed, and they must work together to compliment each other.

Registered Representative of, and Securities and Investment Advisory services are offered through Hornor, Townsend & Kent, LLC, (HTK), Registered Investment Advisor, Member FINRA/SIPC. (215) 957-7300. Stiletto Financial and other listed entities are unaffiliated with HTK does not provide legal and tax advice.

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I Look at my Account Every Day vs. I Never Open the Statement… Which Type of Investor should I be?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 02 Mar 2021 17:37:59 GMT

I Look at my Account Every Day vs. I Never Open the Statement… Which Type of Investor should I be?

Hello blog readers. I know it has been a few weeks since I have been able to post. It is tax season and it gets crazy here. This time of the year I am usually on the phone or clients reach out every day non-stop. One week we had a waiting list because we received so many calls in a week. Things are finally calming down and I wanted to write about two types of clients I have.

Let me start by saying it is not great to go extremes. I want clients to open their statements and ask questions when we do our quarterly reviews. However, I do not want to receive a call if a client looses 17 cents. Having balance will help you be realistic, and you will not make knee jerk reactions. Balance is the key.

It is good for people to want to know how their account is doing, what kind of trends advisors, and the tax consequences associated with their decisions. However, a financial advisor is not focused on day trading. We look at money from a long-term perspective and take the emotion out of investing. What do I mean by that?

Have you ever gone food shopping on an empty stomach? It is the biggest mistake I have ever made in my life. I ended up buying way too much food that I could never eat by myself. I was hungry and everything looked appetizing and I started to fill up that shopping cart. We can make the same mistake when it comes to investing in the market: buying investments because everyone tells you to and you are always looking for a good tip.

What is the moral of the story? Keep track of your accounts, maintain a balanced view, and don’t go food shopping on an empty stomach when it comes to investing.

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We Have Decided to Get a Divorce…Who Should I Call First?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 01 Feb 2021 18:40:16 GMT

We Have Decided to Get a Divorce....Who Should I Call First?

Hello blog readers. I hope everyone has been as busy as me. I thought it was time to write about a call I received a few weeks. A couple I have been working with has decided they want to get a divorce. The wife calls me and tells me what is going on and her husband knows we are speaking because they both want to speak to me. The wife handles the finances mainly for the family and they each had some questions.

We first went over the children. They have a blended family, and I needed to know if any of the children are legally adopted by the other party. They had one child together and the other children were not legally adopted by either of them. That helped me explain if any child support could come into play during negotiations.

Next, we went over the house: how much they owe, who wants to stay in house, or will they sell it. We also went over how much it is worth and if they were both contributing toward paying the mortgage and taxes. Third, we went over the investment accounts and pension plans. I specialize in separating assets and in particular pensions. Some people make the mistake of giving up their assets in exchange for keeping all of their pension. I explained what would happen in that situation, particularly if the other party passed away.

In the end the client was happy to get a financial picture before calling her attorney. She was able to pinpoint topics that need to be discussed and negotiated.

What is the lesson? Before calling your attorney, it is imperative to reach out to a certified divorce financial analyst to give you a fuller picture. It will save you time, energy, and aggravation when starting the divorce process.

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How Many Buckets of Money Should I Have?

sara@stilettofinancial.com (Sara Faitelson) — Fri, 18 Dec 2020 19:49:43 GMT

How Many Buckets of Money Should I Have?

Hello blog readers. I hope everyone is safe and sound. We are living in some unprecedented times that is for sure. I thought I would touch on topic that comes up a lot in meetings with newly acquired clients. I will start with a case study a remember very well.

This gentlemen had $1 Million sitting in his 401k. He was telling me about when he retires all the things he going to do like travel and play more golf. We discussed how much income he would need in retirement after doing a cash flow analysis of their expenses. Then I realized something he needed to take into consideration. The word we all hate: taxes. He never took taxes into consideration. Is it a good idea to put all of your money in one basket?

As many of you know. I am a shoe enthusiast. Imagine if I owned 100 pairs of brown shoes. My life would be very boring. If I like to have different shoe colors and styles, would you not agree that my financial future is more important than shoes? Why do people buy 100 pairs of brown shoes financially? Most likely it is because they think they are doing the right thing. Are they? Would you like to own 100 pairs of the same colored shoe? Of course not! And that is why it is important to have a few buckets working for you. How many buckets should you have?

Well it depends on your financial circumstances and goals. If anyone has ever read “The Power of Zero” by David McKnight, they know that it is a good idea to have at least three buckets of money. I agree with his ideology because it makes sense from a tactical and tax perspective. He speaks about tax-deferred, tax-free, and taxable buckets. In my next blog, I will explain the difference between each bucket of money.

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The Market is Going Crazy.. Should I Move to Cash?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 24 Nov 2020 17:49:14 GMT

The Market is Going Crazy.. Should I Move to Cash?

I thought I would write about something that happened last week. A client calls a few weeks ago frantic to move everything to cash. We of course did what the client asked us to do. Then the next day he tells me how happy he is in cash. A week later he calls me frantic telling me to move a portion back into the market today. He asked what I thought. I said “you should do whatever makes you happy.” At the end of the day I know my client and all he wants to do is whatever he wants to do. There is no way of moving that mountain.

Why is he doing this? Of course, he is trying to time the market. Does he usually get it right? No, but it makes him feel better, so I do what he asks me to do. Should you run to cash? The answer is as always: it depends.

This client will not retire for at least another 10 years so timing the market makes no sense. He can get in and out of the dance all he wants, but it will not matter until he is ready to retire. If he retires in a downward market then not only will he be losing money, but he will be taking money out to live on. He will bleed his accounts if he retires in multiple two back to back downward market years. For example, 1973 and 1974’s rates of return for large cap growth funds were negative back to back years. If want to find out how downward the market was in those years, can look up historical rates of return on yahoo’s website.

So that is why it is good to have a sound defensive and offensive retirement strategy. Many people know how to get up the mountain, but crash and burn when trying to get down the mountain I like to call “retirement.”

If he called me and was on the cusp on retiring this year or next year, then I would likely tell him that preservation of capital is imperative because he cannot afford to take a lot risk so close to retirement. However, he has a long way to go and all he is doing is driving himself crazy.

The moral of the story is: do not make knee jerk decisions until you talk to your financial advisor and try to keep an open mind. All investing involves risk, including loss of value, and past performance is not a reliable indicator of future results.

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Did you Just Get your First Job? Should you Start Planning for your Future Now?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 17 Nov 2020 19:11:58 GMT

Did you Just Get your First Job?... Should you Start Planning for your Future Now?

Hello blog readers. I hope everyone enjoyed the wonderful weather we had. I know I have been enjoying my weekly runs through my neighborhood.

I was on the phone with a client that told me one of her children got a great job and she said I think he should start planning now. I asked her why she felt that way. She said my husband and I made a lot of financial mistakes and I do not want my children to fall into the same pitfalls. I understood her point of view and we set up a meeting for the three of us.

My client’s child did have a great job and had no idea how to plan for the future. It took a lot of reasoning to explain the basics, but with time he finally got it. He knew he had to find a way to plan for retirement and have a general investing bucket, he just did not know how to do it. Many people think their kids may not be interested in planning for the future. If do not ask them, you will never know. Maybe it is on their mind and they are too afraid to ask for help.

My father works in finance so finance was always a big topic in my household. However, not every kid’s parent works in finance. Why not sit down with your children who are just entering the work force and help them plan?

What is the moral of the story?... It may be uncomfortable to talk about finance, but it is necessary for all to have a financial education. If you are not sure how to help your children, reach out to your financial advisor and they can guide you.

Hopefully one day your children will thank you.

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Chronic Illness Accelerated Benefit Rider: the good, the bad, and the ugly

sara@stilettofinancial.com (Sara Faitelson) — Mon, 02 Nov 2020 19:49:43 GMT

Chronic Illness Accelerated Benefit Rider: the good, the bad, and the ugly

Now that we have discussed the benefits and disadvantages of the LTC policy, how about we discuss the benefits and disadvantages of the CIAB rider on a life insurance policy. I want to discuss the disadvantages of this rider first.

Since this rider is an option on a life insurance policy, it comes with restrictions. What are those restrictions? First, you cannot write off this policy like would do with a long-term care policy. If you deduct the premiums on a life insurance policy on your taxes, the benefit will be taxable. It would not be a good idea to deduct the premiums on your taxes unless you want a bigger tax bill for yourself or your beneficiaries. It is important to talk to tax advisor before deducting life insurance premiums.

Second, there is a limit on how much benefit you can receive. On a LTC policy you can buy an unlimited daily benefit. That is not the case using a CIAB rider. The IRS has annual guidelines as to how much daily benefit a person can receive. This number increases yearly based on cost of living. Using the CIAB rider, there is only so much one can receive.

What are the advantages? I cannot tell how many times I have had this discussion with couples, and this first question they ask me is: “what if I pass away before using this LTC policy?” The answer is if you do not use it, you loose it. That makes people not too happy. If you never use the CIAB rider then death benefit will be paid out to your beneficiaries. No use it or loose it issue here. The policy is a pool of money that can be used during your lifetime or as a death benefit to your loved ones.

Second, if you have been in the LTC world for as long as I have you know something important about premiums on these policies: the premiums are not locked in for life. What does that mean? That means you can get a rate increase every contract anniversary if the insurance company makes that decision. One insurance company raised their premiums by 40% in one year. That was a shock and many policyholders had to decrease their benefit to keep the policy or cancel the policy all together. With life insurance with the CIAB rider the policy can be a guaranteed policy, which means no crazy premium increases.

Which one is better? The answer is: it depends on your situation. Weigh the pros and cons and then you can decide which option works best for you and your family.

Should I Buy? Should I Sell?

sara@stilettofinancial.com (Sara Faitelson) — Wed, 28 Oct 2020 18:06:07 GMT

Should I Buy? Should I Sell?

Hello blog readers. As many of you know I love to run on Sunday Afternoons. As I run through my neighborhood, I will see a few for sale signs posted. Then a few weeks later the house is sold, and it sold higher than the asking price. Why are many people buying and selling homes in this market?

How about we look at the elephant in the room: the pandemic. Since many people are working from home and their children are learning online, they see no need to live in an apartment in the city. The children need space to run and be outside. The parents need a home office. The amount of money people pay to live in the city can be much more than a mortgage payment in the suburbs. People are overcrowding the suburbs because it is hard to work and do homework in a small apartment. All the glitz and glam of city life has been taken away and many people are making the move.

Why are they overpaying? Interest rates on mortgages are at an all time low. Many people figure I will overpay for the house by $25-$50k and pay around a 3% interest rate. They see it as a good compromise. Is it really a good compromise? Well if you speak to a tax consultant, you will find out that only interest on a house is tax deductible and not principal. It is important to talk to a tax consultant and do the math before making a twenty or thirty-year mistake.

Why are people selling? They are retiring or have lost their jobs. Many people make their house their number one asset and if they are no longer working, they can sell the house for a more than it is worth. They may move out of state and take a job online or in the state they decide to move to. Who really is making this situation beneficial for them economically? The retirees.

What it is the answer to this post?.....

It depends on what phase of life you are in. The best advice I can give is speak with a tax consultant before buying or selling. It is important not to make a fast decision.

Long-Term Care Insurance vs Life Insurance with the Chronic Illness Accelerated Benefit Rider… How do you choose?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 19 Oct 2020 16:46:10 GMT

Long-term Care Insurance vs Life Insurance with the Chronic Illness Accelerated Benefit Rider… How do you choose?

This is a big question if you are a baby boomer. I just met with a couple that had this specific question and there really is not a one size fits all answer. Why do I say that? Let’s look a little deeper at both options. It really is comparing apples to oranges. I will give it my best shot.

With the long-term care insurance policy, you pay a premium for a daily amount of long-term care coverage. This may start at $300/day daily benefit. You can add certain riders, or options, such as 3% or 5% compounding interest on the daily benefit. You can choose your elimination period, which means you can decide how long you would have to wait before the benefits would kick in. The shorter the elimination period and the more riders you add, the more the premium costs.

What are some of benefits of choosing a long-term care policy? Couples receive a discount if they purchase a long-term care policy together. Also, depending on what state you live in, you can receive a tax deduction for the premiums paid. Please check with your tax advisor and he/she will be able to tell you what your state laws are. If the policy is not part of the state partnership plan, then you can live anywhere around the world and receive your benefits as long as you qualify. *

What are some disadvantages of choosing a long-term policy? The premiums are not locked in. What does that mean? That means the insurance company can increase your premiums every contract year if they decide to. Some insurance companies have increased their premiums by 15% or up to 40%. So be prepared to get rate increases just like you do for car or homeowner’s insurance. In the next blog I will discuss the benefits and disadvantages of choosing a life insurance policy with the chronic illness rider.

*If you are not sure how to qualify for a chronic illness, please check out my previous blog that discusses this topic.

Is Long-Term Care Insurance Really that Important?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 13 Oct 2020 15:49:21 GMT

Is Long-Term Care Insurance Really that Important?

Many people have a parent or grandparent they are taking care of. Some of us are in what I like to call “the sandwich generation:” they are taking care of their parents and children. Talk about a lot on your plate. I feel for my sandwich generation clients because they are incredibly stressed out. I do not have to help my mom full time, but she has had over 18 surgeries and there are times where she needs my help. This why this topic is personal to me.

My mom is young and has had a lot of health problems. A garbage truck ran a red light and hit my dad’s car. The three of us were in the car. My mother sustained over 22 injuries and had to learn to walk again. She has also had cancer twice. It has not been an easy road. That is why I wish she had a long-term care policy before she had 18 surgeries.

How does one qualify for long term care? You qualify if you cannot do two of six activities of daily living. What are those ADLs?

• Eating

• Bathing

• Dressing

• Mobility

• Maintaining Continence

• Toileting

You also qualify if you have a severe cognitive impairment such as Alzheimer’s.

As we can see long-term care is important. The next set of questions many people have is: Can I afford long-term care insurance? What happens if I do not use the benefits? What happens if I move out the country?

In the next blog I will discuss the difference between long term care and life insurance with the chronic illness rider.

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The Biggest Mistakes Clients Make in the Divorce Process

sara@stilettofinancial.com (Sara Faitelson) — Tue, 06 Oct 2020 18:11:50 GMT

The Biggest Mistakes Clients Make in the Divorce Process

Sara Faitelson, Certified Divorce Financial Analyst, has seen many mistakes that people make over the course of their financial planning. If you are going through a divorce, here are just a few for you to consider:

1. Don’t Let Your Emotions Control Your Decisions: People go through many emotions and phases from the time they start thinking about divorce to the time the divorce is actually done. For many, it is such an excruciating process that people just want it over, no matter the cost. As such, they are sometimes willing to give away everything just to end it. Sadly, many people regret these decisions later on when they are less emotional, when things are done, and more importantly, when they realize that they simply don’t have enough money because they compromised too much in the divorce. We know it’s a difficult process, but always remember that the decisions you make now will really affect you for the rest of your life. Make sure you’re not compromising solely to “get it done” and that any compromises you make have been well thought out and discussed with your legal and financial advisors.

2. Make Sure You Get Your Share of the Pension. If you are going through a divorce, it is likely you are evaluating all of the assets, including pensions and other retirement plans. However, pensions have very specific requirements in order for you to get your share if it’s not in your name. Your divorce lawyer will need to obtain what is called a QDRO (Qualified Domestic Relations Order). This is a specific kind of Order that allows your spouse to assign your interest in the pension to you if the pension is not in your name. The work doesn’t stop there though, and this is where Sara sees crucial errors. You must stay informed as to when your spouse retires and contact the Plan Administrator yourself to ensure that you start receiving your distribution of the pension. Don’t assume that someone else is taking care of it. Sara has seen couples engage in post-judgment litigation over this when the Plan Administrator didn’t properly distribute the Pension.

3. Make Sure Life Insurance Provisions Are Active, In Force and Maintained. Sara has seen devastating consequences when a party does not maintain life insurance as required by the settlement agreement. It is your responsibility to make sure that life insurance is procured, in force and maintained. Don’t assume that just because it’s an obligation by your spouse in your settlement agreement that they are actually doing it. You should be entitled to contact the insurance carrier yourself at any time and confirm that life insurance is in place, that the premiums are current, the death benefit amount and who the named beneficiaries are. However, this must be explicitly provided in your settlement agreement.

4. Evaluate Your Parent’s Estate Plan for a Dynasty Trust. This is important so that your spouse (current or future) will not be entitled to share in any inherited property you may receive, even if it might otherwise become marital property according to the divorce laws. In New Jersey, inherited property is generally considered exempt from marital property. However, there are exceptions to that rule, one of them being when you use it as marital property. (For instance, using inherited money to pay off a mortgage). There are creative ways to prevent this, which requires a conversation about your parents’ estate planning.

5. Be Careful About Offsetting Retirement Accounts. It is not uncommon to see a couple who has to split all of their retirement assets simply agree that one party keeps their own and then one pays a smaller lump sum to equalize the difference. This sounds like a good idea because it means less money actually exchanges hands (and less paperwork). However, if you are keeping your pension and giving your spouse liquid money (e.g. a 403b or 401k funds) instead, you could be giving away money that would otherwise have been yours to keep if that spouse predeceases you. Sometimes when an ex-spouse who would have had a share of your pension dies before you, that spouse’s share reverts back to you. Therefore, if your ex-spouse dies and you already gave him his/her share of the pension with extra 403b funds, you won’t get those back. However, if you had just given him/her a share of the pension, you would have gotten to keep it all. This does depend on the specific terms of the Pension Plan at issue. It’s important to know those details before you agree upon how the retirement plans will be distributed.

These are just a few of the most glaring complications Sara Faitelson has seen in her practice as a financial advisor that are particularly important for divorcing couples.

If you need the advice of a financial advisor like Sara, you can reach her at:

Sara Faitelson

2 Park Avenue, Suite 300

New York, NY 10016

Phone: (646) 432-7804

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The Big Cs....Credit Cards

sara@stilettofinancial.com (Sara Faitelson) — Mon, 14 Sep 2020 14:48:05 GMT

The Big Cs.....Credit Cards

Hello blog readers. I decided to write this time about a topic that I am getting multiple calls about just in this past week: credit card debt. A lot of referrals have been stating they have a ton of debt because a: they lost their job, b: they were out of the job for a few months and returned back to work, or c: they are helping their children who have lost their job. We are living in some unprecedented times. How do you stop yourself from drowning in credit card debt?

One way is the power of negotiation. I cannot tell you how many people do not realize they can negotiate with the credit card company on how much interest they should pay per month. It is a game changer. It is really important to let the credit company know that you are going through a hard time financially and they will try to accommodate as much as they can. You may wonder: why would they do that?

Companies want to get paid for their goods and services and if you never pay them back, that does not help their bottom line. They are willing to negotiate because they have no other choice right now. What other steps can you take?

Another thing to look at is look at how much do you owe on each credit card. You want to go after the smaller balances first. This makes someone feel in financial control. Once they see they can knock out one credit card at a time, they are more willing to stay on track with their game plan. It is important to see progress.

Interest rates are so low that some clients are refinancing their homes at a much lower interest rate. Then they are using the additional money they are saving on their mortgage and allocating that amount to pay off their credit cards faster.

You can take control of your credit card debt with a little will power and a good game plan.

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Are Zoom Meetings Effective?

sara@stilettofinancial.com (Sara Faitelson) — Tue, 01 Sep 2020 15:00:06 GMT

Are Zoom Meetings Effective?

Hello blog readers. I hope everyone is safe and has electricity. Many people I know had no power for over a week. It was crazy. Nobody could get any work done and now finally everyone is back to business. A client of mine reached out to me two weeks ago and said her cousin is looking for financial guidance. My client also said she had additional questions and asked if I would be willing to give my financial literacy class through zoom. I said absolutely.

It was so nice having both ladies ask so many questions. Even though it was just the three of us, they were able to share personal concerns since the group was so small. They felt comfortable expressing their feelings and asking a lot of questions. We have a lot of planning to do together and now my client’s cousin has a friend that would like me to give another financial literacy class. It made me realize that the size of the group is not what is most important, what is important is how interested others are in sharing their concerns.

Many business owners are using zoom and are looking to speak with large groups. Have you ever thought about doing a small zoom meeting with a client and their friends or family? You might be surprised as I was on how effective small zoom meetings work. I look forward to conducting more zoom meetings in the near future.

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Do you have an Ultimate Goal?

sara@stilettofinancial.com (Sara Faitelson) — Wed, 26 Aug 2020 17:01:38 GMT

Do you have an Ultimate Goal?

We have limited time, energy and resources. That means nobody can buy time. We can delegate and leverage our time, but we still have to know what’s our ultimate goal. In today’s world it is always about the next new thing. Everybody loves a new and shiny thing and they love to get rid of something that is old. That is why people would wait overnight to get the latest phone Apple would launch. It is not like these people do not have phones that work. They want the best and the newest phone on the market. How about your business or practice? Do you have an ultimate goal? Or are you just looking for something shiny and new every quarter?

Almost 10 years ago I fell into the divorce market. I started noticing a pattern. Many divorced women were looking for another woman to be on their side. Someone to help them get through their financial and emotional messes. I am not saying men do not want the same thing. I am saying that over eighty percent were divorced women versus men. I found someone who was looking for someone like me and I wanted to be a resource to them. I learned as much as I could about divorce proceedings and where I would fit into the team. It made me realize what my ultimate goal was: help women make savvy decisions. Women tend to make decisions based on feelings rather than facts. My goal was to help them find a balance between feelings and logic. Let me tell you it is not an easy task, but I love it. I love receiving their calls of appreciation because someone took the time just to listen to them. We do not always talk about their finances. I became their friend too. It is nice to know we can make a contribution to enrich people’s lives.

Sometimes we are so busy living in the day to day activities that we miss the mark. We forget about the ultimate goal and go after the flavor of the week. I will never regret my decision on my ultimate goal. I hope everyone who is reading this blog has a similar passion.

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It Can Wait

sara@stilettofinancial.com (Sara Faitelson) — Mon, 17 Aug 2020 18:14:55 GMT

It Can Wait

Have you ever heard anyone say that before? Or let me think about it. Why do people use those expressions? They use them for different reasons. One reason is because they do not know what they want to do. Second, it is their nice way of saying no. Third, they are afraid of making a commitment. Does it really make a difference if you wait a day, two days, a month, or even a year?

Yes it does and it can have lasting consequences. Lately I have been thinking about one of my clients who passed away during the pandemic. Four years ago, we sat down and discussed her wishes and implemented them. She was specific as to how she wanted her financial plan done and who would get what. At that time, she was only 48 years old. A few months ago, I got the call from her husband that she passed away from complications from a surgery. She was only 52 years old. I offered my condolences and then he proceeded to ask me questions about some decisions she made. She made those decisions without him and I needed to help him fill in the blanks. I still cannot believe that she passed away to be completely honest and it taught me a good lesson.

Nothing can wait because we just do not know what will happen tomorrow. No one is invincible and you can be fine one day and not the next. Having someone to work with you can help ease the family’s pain and brings less stress on all parties. Like I said some things just can’t wait.

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It's Not About How Much You Make, It Is About How Much You Keep

sara@stilettofinancial.com (Sara Faitelson) — Mon, 27 Jul 2020 15:55:11 GMT

It’s not about how much you make, it’s about how much you keep

Last week I had a client call me about his accounts he has for his daughter with me. It was a nice conversation and in the end he always tries to give me stock tips. He tells me about much he is making with certain stocks he is hedging and when he is taking a bath in other stocks he wishes he did not choose. I always tell him the same things: it’s not about how much you make, it’s about how much you keep. What do I mean by that?

If you are trading your investment account and you make a gain, you get a 1099. If you have a loss you can use that loss to offset gains too. Accountants go back and forth with clients about gains and losses on their brokerage accounts during tax season. The client ends up doing so much work and I ask them is it worth it? Can you delegate? The answer is yes, and it can be done with tax harvesting.

There are companies out there that will tax harvest for you. That means at the end of each month they look at the gains and use months that have losses to offset the gains in the account. The 1099 looks very different than what you would be used to, and it presents less headaches for you and your accountant. You can still purchase stocks, bonds, ETFS and you have control of the account. Some companies even have investment freedom in their portfolios. The control is given based on if the account reaches a certain investment amount.

What is the point of this discussion? It might be time to look at your investment accounts vs. using a company that will tax harvest. Your everyday investor has access to the same stocks, bonds and ETFS. Nobody is holding onto the so called “secret sauce” since we live in a global market.

Doesn’t everyone want to keep more? Well the key is: tax harvesting.

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Are you too young to buy life insurance?

sara@stilettofinancial.com (Sara Faitelson) — Wed, 08 Jul 2020 18:04:16 GMT

Are you too young to buy life insurance?

I get asked that question a lot. I am also asked: at what age should I look into purchasing life insurance? There really is no right answer. A lot of people I know would say the sooner the better. It really depends on what your circumstances are if it is the right fit. I will use myself as an example. I am unmarried, without children and a lot of people in my situation would say they do not need life insurance. So, then why do I have a policy?

I have one for multiple reasons. One is because I have a brother with special needs. I am his only other sibling and he cannot work, which means I want to make sure I take care of him. I made his supplemental needs trust the beneficiary of the account so that he will not have control over the money. I cannot tell you how many parents have children with special needs and make their child a beneficiary. That is a topic for another day.

Another reason is because I wanted to capitalize on the chronic illness rider. My mom is disabled and has had over 18 surgeries. It can be hard to juggle running a business and helping my family. I do not want to be a financial burden to my family if a chronic illness were to happen to me.

Third, I like that I can accumulate money tax-deferred into an account that is nor correlated to the market. Like I said people purchase life insurance for many reasons. Maybe you have more reasons than me. Being in the middle of a pandemic really helped me put my priorities in perspective. Hopefully, you have too.

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What happens when you do not update your beneficiaries after a divorce has been settled?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 22 Jun 2020 20:26:53 GMT

What happens when you do not update your beneficiaries after a divorce has been settled?

Well blog readers, it is that time of year again. Since couples are cohabitating and I am getting phone calls about separation. It is sad but true. I figured it would be a good idea to discuss a few housekeeping ideas when it comes to after a divorce has been settled. Today I wanted to beneficiary designations.

Let’s say a couple has finalized their divorce. The divorce decree states that they must keep their beneficiaries the same until the youngest child reaches eighteen years of age. After that, they are welcomed to change their beneficiaries. Let’s say both ex-spouses remarry and their children become adults. At that point, they can change the beneficiary to their new spouse. What if they did not and they unexpectedly pass away? Talk about another fun time I do not want to be at their dinner table.

The ex-spouse will receive the money because they were the named beneficiary. Sometimes the second spouse sues the ex-spouse for the money and it goes nowhere. This is not up for discussion in court because the named beneficiary is entitled to receive the money. They cannot ask a dead person to change their wishes. That is the power of a named beneficiary on an account.

This is not the same like we discussed where you accidentally disinherit one of your children.

What is the lesson? If you are in a second marriage and your children over 18 years old, it might be a good idea to double check who your beneficiaries are. Remember: happy life, happy wife.

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Could you Accidentally Disinherit One of your Children?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 15 Jun 2020 15:35:35 GMT

Could you Accidentally Disinherit One of your Children?

You might think that is impossible. Unfortunately, it is. How? Well, do you have more than one child? When is the last time you looked at your beneficiaries on your life insurance policies, employer sponsored plans (401k, 403b, 457, TDA), or investment accounts? With the current situation we are all going through, now might be the time to do a review. Why is it so important?

Let’s say I have a client that has three children and the last time they updated their beneficiaries was when child number two was born. I do not know about you, but I would feel sorry for the youngest because he is a beneficiary on nothing. Let’s say mom and dad both pass away and not only did they not update their beneficiaries, but they did not update their legal documents. Talk about a family dinner I do not want to be a part of after mom and dad die.

Now child number three has to get an attorney to try to fix this oversight. Not only will it bring stress on the them it will also cost money to get this issue solved. A judge may have to get involved. The older children might object. It opens up a can of worms because of this small oversight.

The lesson is: many of us are working from home and now is the time to update beneficiaries.

In my next blog I will discuss how this can happen after a divorce is finalized.

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Inherited 401k.. Blessing or Curse?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 08 Jun 2020 17:04:33 GMT

Inherited 401k... Blessing or Curse?

Everyone says they would love to inherit money. Have you ever thought about the consequences of inheriting a 401k? Let me tell you about a childhood friend of mine. His parents divorced when he was young and per the divorce decree, when the children turned 18 years old the mother would make the children the beneficiaries on her 401k. So many mistakes were made in that divorce agreement but there is more.

Unfortunately, she suffered from cancer and died in her early fifties. The children were already in their twenties and were the beneficiaries of the 401k that was never moved into an IRA while she was on disability. Four and half years later my friend receives a bill from the IRA for the taxes due on the 401k account that were required to be paid within six months. He calls me up and I had to explain to him the implications of inheriting a 401k when you are not the spouse. It was a very distressing time.

Many people during this pandemic have lost their jobs which means their 401k is still sitting with their previous employer. If you would like more information about inherited 401ks, please feel free to reach out. Knowledge is empowering.

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What is Under the Hood?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 01 Jun 2020 15:55:30 GMT

Have you ever asked yourself: what is under the hood?

Hello blog readers. I hope everyone had a great weekend. I do not know about you, but I love my car mechanic. He has the same name as my brother which is easy to remember, and he is always honest. As a woman I really appreciate a mechanic that says “you do not need that,” “it’s a waste of money,” or “come back in 1000 miles and then you will need to get to get that done.” It is hard to find good, honest people nowadays. At least I have an honest mechanic.

What does this have to do with finance? Well, I love to tell people let’s talk about the “f” word. After I say that people always have this very confused look on their faces. What do I mean by the “f” word? I mean fees. I met with a gentleman last year that sent me his over 200-page investment quarterly report. Talk about a nightmare! It took me days to figure out how much he was paying in fees. Not everyone has the patience to take apart an over 200-page report. It still made me wonder: how many people out there actually know how much they are paying for their investment accounts?

I love when people say they pay nothing. Let me tell you something: there is no Mother Theresa fund. We all pay. The question is: how much? In this particular market, how even more important it is to look under the hood. Some analysis I have done has helped people save 1% per year in internal costs. It does not sound like a lot, but if your account is over a certain threshold, it may be time to do a financial check-up.

What do you have to loose?

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Stop Being Beige

sara@stilettofinancial.com (Sara Faitelson) — Tue, 26 May 2020 16:22:06 GMT

Are We Beige?

During the coronavirus outbreak I have been as you know keeping up with clients and doing some more reading. I went to conference last year in Chicago and a few books were given to the attendees. I am on the last book that was given to me. If anyone has any good suggestions for books I should read, please put them in the comments section.

This statement “stop being beige” is one of the chapters of the book I am currently reading. It made me think a lot about my practice. Anyone who knows me knows as a person knows I am not very beige. I am an independent thinker who likes to travel around the world and experience new cultures. The question now was: was my business beige?

I am not sure I have a complete answer yet. This is what I know so far. In my office there are less than 10% who are women who do what I do. That is different from the normal. I needed to more different than that, so I focused on helping divorcees through the process. There are less than 5,000 CDFAs in the United States and I am the only one in my office. Great, another difference. That just was not enough. How else could I make myself different?

I see people I work with as part of my family. I like to think of myself as mother hen protecting her little chicks. How do I protect others from making serious financial mistakes? The key of course is education. I asked clients if they have friends that are worried about the financial situation we are living in. Many of them said yes, so I offered a zoom class to help their friends. I could answer their burning questions and maybe stop them from making knee jerk reactions. At this time educating others is imperative. I just wanted to be a resource to others in any way possible. Give back to the community and show them it is about being reliable. How are you differentiating yourself from others? Please let know in the comments section.

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From Negative to Positive

sara@stilettofinancial.com (Sara Faitelson) — Mon, 18 May 2020 17:16:22 GMT

Feeling Uninspired? How I Went from a Negative to Positive Outlook

Have you ever had a week where everything went wrong? That was my week last week. I had a fight with my boyfriend about our future and him getting his act together. A client whose boyfriend is a doctor was giving her terrible financial advice and there was nothing I could do. That would be like me being asked to listen to heartbeat and being asked if that person has a heart defect. I digress… It was just one of those weeks where I just prayed it would be over. I decided to make the next Monday a better work week. I promised myself something has to change. Then, Monday came along…

I was making my normal Monday calls and was on the phone with a client who is the middle of her divorce. They could not sell the house before this pandemic and were basically forced to cohabitate. I call her every two weeks just to check up on her. We were going to work on digging deeper into her retirement plan with her job.

After doing extensive research I was able to give her a few options where she could decrease the internal costs of her plan. I kept the conversation simple, sweet, and effective. After we went through the results and spoke more about her mental health, she thanked me. She was grateful that I went the extra mile to get her answers that no one has ever done for her.

That made my day and my whole week. So, what is the point of this story?

If you own a business, no matter what kind it is, be in constant contact with your clients. Show them you care about them as people and not just as a way to make a living. They will sense your honestly and maybe like me: it will make your week.

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Are You Someone Who is Pushing the Margin?

Wed, 08 Apr 2020 17:43:32 GMT

Why Should I Push the Margin?

I thought this blog series would focus on two things I love: people who think outside the box and reading. I just finished reading a wonderful book by Melinda Gates and it really spoke about people living on the margins. She said people living on the margins are: “the people who push us to the outer limits and trigger in us the feeling we are afraid of.” I stopped and thought about that quote a lot. Who are these people?

I took a look at my clients and more than half are those kind of people. They are go-getters who crave education. They inspired others and me to be become better at helping others achieve their goal. They made me who I am today. I just want to thank all my clients that are living on the margins in life. They are breaking stereotypes and really making a difference. Your work does not go on deaf ears. I hope to be inspired by more of the people living on the margins. They make what I do for a living a blessing.

Who in your life pushes you to your limits? I would love to hear what my blog readers have to say: your opinion counts.

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What is it Like to Have a Sibling with Special Needs?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 30 Mar 2020 17:53:28 GMT

I have read many articles about how parents can help children with special needs...

Have you ever thought about a fellow sibling’s point of view? Let me tell you a little about my brother. My brother has Asperger’s and was misdiagnosed most of his life. I am his only other sibling and hold a weight of responsibility if my parents were to predecease me. What steps did I take to protect my brother’s financial future?

First and foremost, I had a supplemental needs trust created. With this legal vehicle, I could name the trust as the beneficiary of many assets. This was important because my father, mother and myself had him named as beneficiary of our life insurance. We all want to take care of him, then he will not be a financial burden for others. He cannot be responsible for such a large sum of money, so we named the trust as the beneficiary. There are investment accounts, housing, and other valuables that the family would like to pass down to him. Knowing the laws of in state when it comes to how to transfer assets to child with special needs is imperative. Make sure you keep up to date on any changes and take action.

We all love our children and siblings, but we can hinder them financially or from benefits if we do not know the laws that governs the state we live in. What is the moral of the story?

Check all investment accounts, life insurance, wills and family trusts to make sure the supplemental needs trust is the beneficiary for your child. One mistake could make all that you have worked for go to someone you did not intend. Take pride in being financially literate.

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Do I Need a Financial Check Up?

sara@stilettofinancial.com (Sara Faitelson) — Thu, 06 Feb 2020 21:51:42 GMT

What I learned from going to the dentist...

Hello blog readers. Thanks again for all the love and support. I love hearing all the feedback from the blog posts. Keep them coming. I received a call from my dentist and was told it was my 6 month cleaning. I totally forgot about it as usual and I made sure I did not miss my appointment. Who wants cavities? Obviously no one and that is one of the reasons why I get my 6 month cleaning.

Like me, many of us care about our teeth not eroding. What about our finances? Could our financial plan erode us of the life-style we dreamed of? Am I on the right track? I hear that question from clients all the time and then I tell them it is time to go to the drawing board. Some things to look at is what we have accomplished and what can we do better to achieve your goal. My goal is to live in Tuscany and never come back. For others, their goal may be the complete opposite of mine.

It leads me to the most important thing I need to be made aware of: tell me who you are and I will tell you how I can help. Goals change because life happens. Helping people achieve realistic goals and get to the lowest tax bracket is my objective. If you are not having financial check-ups I leave you with the question: why not?

Moral of the story: financial education is powerful and could save you a lot of heartache. Talk to a financial professional and get that check-up.

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Why Did October Mean So Much To Me?

Tue, 10 Dec 2019 21:50:21 GMT

Why the month of October meant so much to me...

As many of you are aware, my mother is a two-time breast cancer survivor. It meant a lot to think about the good times and difficult obstacles she had to overcome. The one issue that never came up was financial issues. How come? Well before this life altering event happened, my family made sure to take a deep dive into finances. I remember as a kid seeing my dad’s friend that sold him his life insurance and disability policies come to the house to do reviews. He always made sure if one parent could not work or passed away, my brother would be taken care of. In my next blog I will talk a little more about having a sibling with special needs and the issues that must be addressed.

My father made sure to never go over the budget. He sat down and showed my mother what the expenses were and how much income came in. I remember at four years old being asked what a check book was for and I said proudly “so daddy could pay the bills.” Everyone laughed but financial literacy was as the forefront of what was taught. I thank my family for those great lessons. In another blog post, I will explain one big mistake he made and how it can change your life. Our life was not perfect, but they helped me see the importance of helping others.

What is the morale of the story?

Do not wait until tragedy strikes before making financial decisions. The earlier the better. Encourage your children who are entering the work force. You cannot take back time.

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Does it Really Matter if I Choose a Roth IRA or Traditional IRA?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 11 Nov 2019 21:50:40 GMT

Recently I was sitting down with a contact who invited her sister to join us...

Recently I was sitting down with a contact who invited her sister to join us. This question was brought up during the conversation early and both wanted to know the answer. Both have different circumstances and both never understood the difference between these two retirement vehicles. First, let’s discuss the tax implications. Second, does the decision one chooses affect social security.

With a traditional IRA, the contributions are tax deductible for income purposes. Let’s say I make $100k/year and I contribute $5,500/year into my Traditional IRA, what will my tax returns say? It will say that I made $94,500 and I will pay taxes on the $5,500 plus growth during retirement. What about Roth IRAs?

With my $5,500 Roth IRA contribution, I will pay the taxes on my contributions based on my current tax bracket and the growth on the account will be tax free. It will be tax free as long as the account has been opened for 5 years and the individual is 59 ½ years of age. How does the choice I make affect my social security?

Most people are not aware that up 85% of one’s social security payments could become taxable. What is it based on? It is based on how much distributions an individual takes out of their accounts in retirement. However, this does not apply to a Roth IRA since the distribution is tax-free. What is the lesson?

It makes a difference if you choose a Roth or Traditional IRA. Before making that decision, it is important to understand the rules associated with both retirement vehicles and talk to a financial professional.

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Can You End Up in the Same Tax Bracket in Retirement?

sara@stilettofinancial.com (Sara Faitelson) — Mon, 11 Nov 2019 21:26:22 GMT

How many times have you heard people say in retirement “I will be in a lower tax bracket?”

How many times have you heard people say in retirement “I will be in a lower tax bracket?” I hear that on a regular basis. The question I ask them is how can you be sure that is true. Well, the key is cash flow analysis. Take a look at your paycheck and tax returns. How many tax deductions do you currently have and how many will you have in retirement? Let’s discuss a case as this can help clarify the issue at hand.

Let’s say I have a couple who will have social security and pensions in retirement. This is a pretty common situation that I see only a daily basis. They have been told their whole life they will have to pay less taxes in retirement because they will be in a lower tax bracket. What is the truth? After reviewing their pay stubs, tax returns, pension and social security projections: the results shock the couple. They will end up in the same tax bracket now as they will be in retirement.

In retirement they will no longer have a mortgage, children as dependents, and will no longer be contributing to their retirement plans. Once they looked at what their net income was, they realized it is the same value, or more, than their combined social security and pensions.

What is the moral of the story?

Cash flow analysis is imperative while doing retirement planning. Taxes can make or break your retirement plan.

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Why Working with a CDFA from the Beginning is Imperative?

Mon, 30 Sep 2019 20:26:10 GMT

How to get a good financial outcome in divorce.

Many people going through the mentally taxing issue of divorce tell me: “I will worry about division of assets and the tax consequences once the divorce is finalized.” Why is this such an issue? I was reading about matrimonial cases and one really peaked my interest. A couple was getting divorced and the wife handled all the financial matter for the household. There was over $1 million in liquid assets that was acquired during this marriage. The wife proposed splitting the assets 50/50 with the husband acquiring all the 401ks and IRA money. She, in turn, would acquire the money market account and brokerage account they had been contributing to. Unbeknown to the judge about the tax implications of each bucket of money, he signed judgment and the money was divided. Many wonder why this is a problem?

Well, the 401ks and IRAs were never taxed before and the money market and brokerage accounts were after tax accounts. That means the husband would have to pay taxes on both buckets of money he acquired and the division of assets was not equitable. With the help of a CDFA this would not have happened. Taxes are very often not taken into consideration and then an equitable settlement was not actually reached.

If one wants a good financial outcome, a strong strategy must be put into place. Hiring the right players are key to success. So the next time you hear a friend, colleague, or family member going through a divorce tell you about their case, ask them what did your CDFA say? It could change their life!

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stiletto_test

Picking Investments Should be Like Picking Shoes. What Do I Mean by that Statement?

Can I Use Life Insurance for Only Death Benefit Purposes? Are there Any Other Benefits?

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We Have Decided to Get a Divorce....Who Should I Call First?

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How Many Buckets of Money Should I Have?

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The Market is Going Crazy.. Should I Move to Cash?

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Did you Just Get your First Job?... Should you Start Planning for your Future Now?

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Long-Term Care Insurance vs Life Insurance with the Chronic Illness Accelerated Benefit Rider… How do you choose?

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Is Long-Term Care Insurance Really that Important?

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The Biggest Mistakes Clients Make in the Divorce Process

The Biggest Mistakes Clients Make in the Divorce Process

The Big Cs....Credit Cards

The Big Cs.....Credit Cards

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Are Zoom Meetings Effective?

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It Can Wait

It's Not About How Much You Make, It Is About How Much You Keep

It’s not about how much you make, it’s about how much you keep

Are you too young to buy life insurance?

Are you too young to buy life insurance?

What happens when you do not update your beneficiaries after a divorce has been settled?

What happens when you do not update your beneficiaries after a divorce has been settled?

Could you Accidentally Disinherit One of your Children?

Could you Accidentally Disinherit One of your Children?

Inherited 401k.. Blessing or Curse?

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Have you ever asked yourself: what is under the hood?

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Are We Beige?

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Why Should I Push the Margin?

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I have read many articles about how parents can help children with special needs...

Do I Need a Financial Check Up?

What I learned from going to the dentist...

Why Did October Mean So Much To Me?

Why the month of October meant so much to me...

Does it Really Matter if I Choose a Roth IRA or Traditional IRA?

Recently I was sitting down with a contact who invited her sister to join us...

Can You End Up in the Same Tax Bracket in Retirement?

How many times have you heard people say in retirement “I will be in a lower tax bracket?”

Why Working with a CDFA from the Beginning is Imperative?

How to get a good financial outcome in divorce.