IDT, headed by financial advisor David Calderon, oversees about $186 million in client assets, providing financial planning and investment guidance to individuals and families across Long Island and the greater New York region. IDT was formerly affiliated with LPL Financial.
Calderon says he spent more than a year evaluating platform partners before choosing to go with NYFP, citing the firm’s advisor-first culture, transparent support model and the opportunity to operate under his own brand, according to a company statement.
Ken Femiano, founder and managing director at NYFP, provided guidance to Calderon through the evaluation and transition process.
“As I evaluated potential partners, the level of follow-through and real support Ken and his team consistently delivered stood out immediately,” Calderon said in the statement. “At NYFP, you’re never on an island. You have access to guidance, resources, and flexibility without sacrificing independence. That culture allows me to run my business my way, with full support behind me.”
New York Financial Partners has about 50 advisors nationwide and manages about $4 billion in client assets. Its securities and investment advisory services are offered through Osaic Wealth.
“My co-founder, Howard Asch, and I built NYFP with a strong focus on supporting advisors at every stage of their business,” Femiano said in the statement. “From infrastructure and operational resources to hands-on guidance during transitions, our team delivers on what it promises: consistency, flexibility and an advisor-first mindset.”
His career began in 1995 spending two years as a life insurance agent and two years at a bank before forming Atlantis Financial Inc. Over those years he has developed his three-step interactive approach to financial planning: life planning, financial planning, followed by financial advice around tax, investments, and insurance.
In his experience an interactive collaborative approach is much more effective than collecting your information, going away and preparing your plan, and then presenting you with the plan. Chances are it is not your plan because you weren’t there when it was created, and you won’t absorb much.
When Norman is not working, he plays ping pong, sails, skis, zips off to Miami or travels with his kids. A mild brain injury prevents his wife from travel.
If you want to experience financial planning, feel free to reach out to schedule a complimentary zoom meeting where Norman will find out more about you and what you want to achieve. After about an hour you will both know if Norman’s approach is right for you.
• Fees paid by clients based on assets managed by advisor • Fees paid by clients for advice (not based on assets) • Commissions
Languages written and spoken
• English
Why did you become a planner?
Financial planning is about helping people get what they want, and I get a lot of satisfaction from assisting people when I can.
I didn’t come into financial planning right away. My first career was land-use planning. Back in the late ’80s, real estate wasn’t booming, so I made the shift to financial planning. A book I read on penny stock investing back in high school got me started.
What is your approach to financial planning?
Behind the scenes, I am data driven and I want to see the evidence supporting my advice.
My approach to planning is based on the simple truth no one can deny: You only have so long to enjoy your money. So how can you make the best use of it?
Artificial intelligence is expected to transform the way companies do business, including those in financial planning and investment management. That means financial advisors need to get onboard or risk being left behind. “They have to realize an AI apocalypse is coming,” said Craig Iskowitz, CEO and founder of Ezra Group, a strategy consulting firm to asset managers and broker-dealers. Of course, financial advisors have been using some technology, like financial planning software, for years. Others are now embracing AI to help with operational workflows, such as meeting summaries and emails. Yet experts expect a dramatic shift as AI eventually becomes more entrenched in the day-to-day investment process. “Large language models, such as OpenAI’s GPT and Anthropic’s Claude, can deliver significant productivity gains because they can process vast amounts of text data, such as annual reports, debt documentation, news articles, or broker research, much faster than humans,” Vincent Gudsdorf, head of AI analytics and digital finance research at Moody’s Ratings, wrote in a report earlier this month. “These models can automate the creation of documents like earnings reports or market commentaries and generate investment ideas,” he added. Right now, AI is still in its infancy as infrastructure is built out, said Leo Kelly, founder and CEO of private wealth advisory firm Verdence. His firm has just under $4 billion in assets under management. “There are applications but they are very rudimentary and people don’t know how to use them yet,” he said. Those he calls “deniers,” who don’t want to embrace AI, will be fine in the early stage, Kelly said. But “the light at the end of the tunnel is a freight train [aiming] for them.” There are also early adopters, who may be rushing into the technology and could see challenges down the road, and those who are thinking strategically and building out their technology, he said. The latter will be the most successful, said Kelly, whose firm is currently rebuilding its technology stack. “We are basically getting our arms around our data and organizing and structuring our data in a way that it is clean and precise,” he said. “Then you can take AI and start applying applications and those applications will be highly effective if you have taken your time.” It is a massive commitment, he noted. “The payoff will be huge if you do it right,” he added. AI ‘wealth whisperers’ Eventually, regulators will get their arms around AI and understand that the data is protected, predicted certified financial planner Timothy Welsh, president of wealth management consultancy Nexus Strategy. Then, the conversation among investors will go from “who is your money manager” to “which AI are you using?” he said. “If you think about creating asset allocation and picking stocks, bonds [and] mutual funds … [financial advisors] are relying on intelligence from the asset managers of the world,” he said. “But that research is the core stuff that AI can do more than humans.” Still, AI will help financial advisors do their jobs better — not necessarily put them out of work. Welsh envisions advisors having more time to talk with their clients. “Therapist kind of stuff,” he said. “Those skills are way more in demand.” AI tools can also dramatically enhance background searches, data analysis, portfolio analysis and risk analysis for financial professionals, Kelly said. “All of this work they can do radically faster than they used to,” he said. “They can take in more data and make better decisions.” Iskowitz at Ezra Group sees AI leveling the playing field in what he calls the “democratization of EQ,” or emotional intelligence. All the data now available on the internet, like social media posts, will help advisors learn more about their clients and therefore help them relate better, he predicts. “The real golden ticket is going to be in gathering terabytes of data and sifting through it intelligently and coming up with pattern matching,” he said. “That’s called machine learning, but doing it much quicker and over much more unstructured data … emails, notes, social media, posts, videos that AI can quickly review and then drill down and distill the exact insights for each prospective client.” AI can also help managers analyze which clients to pursue and how to speak with them based on their backgrounds, he said. In about two years, Iskowitz predicts a chatbot will be able to provide full financial plans directly to clients, interact with them and give them the option to open accounts with the click of the mouse. “[It] will do all the work for you, put you in the right models, adjust it all and go,” he said. “These AIs are going to be like wealth whisperers.” What to do Nexus Strategy’s Welsh believes financial advisors should begin getting comfortable with current AI capabilities. “Get started today. This is something you can get ahead of,” he said. “Just keep it in the box right now — operational efficiencies. There is no issue with that.” For Verdence’s Kelly, the first thing advisors should do is ask themselves who they are — an early adopter, a denier or a strategic thinker. “Don’t try to fool yourself into that answer,” he said. “If you want to change things, you have to change.” They should then evaluate where they are in the marketplace — what are their competitive advantages and disadvantages. After that, decide if you need to invest in the people and technology, partner with a larger firm or, if you work at a big bank, decide if you want to leave since the big banks have to also manage risk and the capability of these AI tools, he said. Those who run small mom and pop firms managing their own portfolios should start thinking about partnering with a larger financial advisor firm or technology company, Kelly said. Otherwise, “AI is going to monetize you out of business,” he said. Iskowitz suggests advisors branch out and also go into areas like alternative investments, tax and estate planning, more advanced retirement planning, insurance and annuities. They can also use more visual tools, like an asset map that does a visualization of a client’s financial life, he said. Advisors should have regular conversations with their technology vendors, who are already hard at work deploying AI features, he advises. “Don’t go and buy anything new. It’s already coming to you. Just wait,” he said. “Your financial planning software is launching AI functionality. Your meeting organization tools are launching a functionality.” Also, make sure you train your internal staff and let them know no one is getting fired, he advised. Anyone whose work is being replaced can be moved elsewhere in the company, he said. “It’s a learning curve. Like any software, you need to spend time to train your staff and train them in the ways that they feel comfortable,” he said. “AI can help you.”
Fee-based advisors, who charge based on asset size, typically work better for people with more assets and dollars to invest.
Tam said fee-based financial planning aligns the motivation of an advisor with the client.
“They’re not going to be motivated to do what we call churning your accounts, or selling and buying similar mutual funds, so they can make a commission,” he explained.
On average, fee-based planners charge a flat rate of 1% and provide holistic advice such as tax planning, estate planning or even everyday financial planning during uncertain economic times.
While uncommon, fee-only, advice-only financial planners are another way to seek help with your money. This type of planner reviews the client’s finances and makes recommendations. It’s then left up to the client to implement those recommendations.
These advisors simply provide guidance and do not sell investment products, Tam said.
“It truly is a decoupling of advice versus sales, which we think is a very positive thing,” he said.
The fee is typically charged at a flat rate, Tam added.
Miller’s goal is to safeguard the financial dreams of his clients. He strives to protect the assets they have worked hard to accumulate throughout their lifetime. Miller provides objective advice based on his deep and thorough understanding of each client’s personal situation. He delivers comprehensive cross-border financial planning advice while making it easy to understand. He is bound by a fiduciary standard. He places his clients’ interests first, above all else.
Who does he work with? For the last 20 years Miller has been committed to assisting families, business owners, and retirees on both sides of the border. He works alongside a highly experienced, independent, wealth management team at Cardinal Point Wealth Management.
I try to picture 84-year-old me being told by my kids that it is time to hire a financial planner. I may not be so keen myself when the time comes. Maybe I should bookmark this column.
I took over the management of my mother’s finances toward the end of her life. She seemed reluctant, but she knew it was time. I think she still saw me as her little boy even though thousands of clients and readers looked to me for advice that she was hesitant to take.
Managing your own investments to save on fees
If you expect to pay $35,000 a year on fees to invest in mutual funds, Laasya, I am speculating here, but you probably have somewhere between $1.5 million and $2 million of investments. Mutual fund management expense ratios (MERs) are embedded fees that are paid from the fund’s returns each year. They are about 2% on average but can range from under 0.5% for low-cost, passive index funds to 3% or more for segregated funds from insurance companies.
If you have $1 million or more to invest, there are discretionary portfolio managers who use stocks and bonds or proprietary pooled funds who may charge 1% or less of your portfolio value. (Discretionary means the portfolio manager makes buy and sell decisions on your behalf.)
You could certainly invest in exchange-traded funds (ETFs), and now there are plenty of simple asset-allocation ETFs (also known as all-in-one ETFs) that can be a one-stop shop for investors. Fees are in the 0.25% range.
Why self-directed investing may not be the answer
The problem with buying an ETF, Laasya, is that your kids are concerned about you investing on your own. And if they wanted to be self-directed investors, they probably would have offered to help you manage your investments. They did not. So, if you pull your investments to manage them yourself again, you may be putting your kids in an uncomfortable position, as they may potentially have to become DIY investors at some point if you’re unable to manage your own investments.
Self-directed investing may seem easy to people who are comfortable doing it. But I remain convinced that some people will never be able to manage their own investments, no matter how simple it becomes.
Have you considered a robo-advisor?
I often joke with my wife that I am very good at a short list of things in the financial planning realm, but not much else. There are plenty of things that I could probably learn to do around my house or in other aspects of life that I have no interest in learning. I would rather pay an expert.
Canada Pension Plan (CPP) deferral:CPP deferral is worth considering for any healthy senior in their 60s. If you live well into your 80s, you may collect more pension income than if you start CPP early, even after accounting for the time value of money and the ability to invest the earlier payments or draw down less of your investments. CPP deferral can protect against the risk of living too long, especially for a single retiree, and particularly for women, who tend to live longer than men. CPP can be deferred as late as age 70. The benefit increases by 8.4% per year after age 65, plus an annual inflation adjustment.
Old Age Security (OAS) deferral: Like CPP, deferring OAS can be beneficial for seniors who live well into their 80s. One exception is low-income seniors who might qualify for the Guaranteed Income Supplement (GIS) between 65 and 70. Single seniors aged 65 and older, whose income is less than about $22,000, may qualify. OAS can be deferred as late as age 70. The benefit increases by 7.2% per year after age 65, plus an annual inflation adjustment.
Annuities: Almost everyone wants a pension, yet almost no one is willing to buy one. You can buy an annuity from a life insurance company using non-registered or registered (ie. RRSP) savings. (What is a non-registered account? How does it work?) Based primarily on your age and resulting life expectancy, an insurer will pay you an immediate or deferred monthly amount for life—even if you live until 110. If interest rates are higher when you buy an annuity, the monthly payment amount may be slightly higher as well. If you don’t have a pension and you want the security of a monthly payment, an annuity can be worth considering. Especially if you’re in good health and are a conservative investor.
Survivor benefits in Canada
Most DB pension benefits are payable only to surviving spouses. Some pensions have survivor benefits for children or a guaranteed number of months of payments to an estate.
A CPP survivor pension can be paid to the spouse or common-law partner of a deceased contributor. Single retirees are somewhat disadvantaged since their children will usually not qualify for a benefit if they die.
Children’s benefits are only payable if a surviving child is under 18, or if they are attending full-time post-secondary education and are between 18 and 25.
Advice, accountability and cognitive decline
One of the challenges everyone faces as they age is making sound financial decisions. Our experience and knowledge may increase as we age but our ability to process complex decisions tends to begin declining before we retire.
Single seniors don’t have a partner to bounce ideas off, so many may find themselves stressed about retirement and financial planning. And not everyone feels comfortable talking about money with their children and friends, and not everyone has a financial advisor, either. (Use the MoneySense Find a Qualified Advisor Tool to find an advisor near you.)
Partners, adult children and friends can provide accountability, as well with spending and other financial decisions and keep each other in check.
A single retiree can certainly be successful, but the challenges they face are different from that of couples.
For these reasons, being conservative, deferring pensions, considering annuities, seeking financial advice, and proactively planning are all strategies to consider when planning for retirement as a one-person household—especially if you have no pension plan.
In my opinion, the best thing about the evolution of the investment industry is a (slight) increase in transparency. There is a long way to go, and consumers are still disadvantaged in a lot of ways, but we are making progress.
I am also of the opinion that not everyone should be a self-directed investor. Sure, it can be relatively easy, but having worked directly with thousands of clients during my career, I can also say that does not matter to some people who would never think of pressing the buy and sell button themselves.
Investment professionals are better off working with clients who do not want to micromanage them. Conversely, investors who want to take control of their own portfolios have lots of tools at their disposal. I like to see everyone investing in the way most suited to their situation. Below, I explore two important innovations that have appeared over the past decade that can lower the cost of managing an investment portfolio for retail investors.
How ETFs changed the game
The first Canadian mutual fund was introduced in 1932, but it was not until the past 40 years that they became mainstream. The past 10 years have started to show a shift in demand from investors to exchange-traded funds (ETFs), but mutual fund assets still dwarf that of ETFs. In fact, though the ETF market is growing faster, the mutual fund market in Canada is still about five times bigger (about $2 trillion compared to about $400 billion).
An investor can build an ETF portfolio using individual components like a Canadian stock ETF, a U.S. stock ETF, a global stock ETF, and a bond ETF. They can buy ETFs that track stock market sectors and complement these ETFs with individual stocks.
There are over 1,100 ETFs in Canada with 40 fund sponsors and easy access to thousands of U.S.-listed ETFs as well.
The selection is enough to make your head spin and almost necessitates the use of an advisor to wade through the options. More and more advisors are using ETFs throughout their client portfolios, but a new class of ETFs may be better suited to self-directed investors.
How to invest using all-in-one ETFs
Enter stage left the all-in-one exchange-traded fund, also known as asset-allocation or one-click ETF. The idea is simple: choose a single ETF that gives you access to all the asset classes an investor might need in a single product.
Every client can expect one-on-one service that includes transparent fees, a fully customized tax-efficient portfolio and financial planning services tailored to their specific needs. Gunn takes the time to learn about what’s important to his clients. “No two clients are alike, but they all have goals and dreams, and sometimes those are overshadowed by fears,” he says. Regardless of the situation, Gunn listens and helps develop a plan to deal with the issues and set his clients up for success on their terms.
With a focus on long-term solutions, Gunn says he builds relationships with his clients to ensure they consistently succeed in their financial pursuits; because his success is tied directly to theirs. He says he is motivated to help his clients achieve their financial goals and grow their wealth.
In recent years, Gunn has specialized in an area that seems under-serviced. It is one thing to help clients gather assets and watch them grow over time, but it is a completely different skill that allows his clients to live off the fruits of their labour throughout retirement. “Time is no longer your friend, and the strategies required to make this happen are very different,” he says. Many cannot afford to make mistakes during this phase of life, he adds, and this is when a financial expert is required. Becoming a retirement income specialist was the best decision Gunn says he ever made. Knowing his clients sleep at night without worrying about their money running out and the stress that causes provides him with incredible satisfaction.
Over the years, Gunn continued his education and added certifications to serve his clients better and provide a wide range of expertise. Gunn is a Certified Financial Planner, Registered Retirement Consultant, Certified Executor Advisor, Certified Professional Consultant on Aging, Real Wealth Manager and Licensed Insurance Broker.
Continuous education is essential, according to Gunn, and he does not believe you can ever “know too much.”
• Fees paid by clients based on assets managed by advisor
Languages written and spoken
• English
Why did you become a planner?
The financial industry always interested me, and I started helping people to understand how this industry works and how to address certain financial situations. I started investing in my teens and learned early to never lose sight of the taxes paid and reduce them whenever possible. As a result, wanting to become a Certified Financial Planner came very naturally to me. I realized I could utilize my financial acumen to help other people. The bottom line is, I really enjoy helping people succeed.
What is your approach to financial planning?
Use of common sense and time-trusted methods. Financial planning does not need to be complicated. The more clients know the more comfortable and motivated they become. I focus on educating my clients, so they have a solid understanding of the elements of financial planning before the plan is put to work.
What is your proudest achievement as a financial planner?
Servicing multi-generational clients and seeing the younger generation embracing financial advice. Building a solid foundation for their futures is very rewarding. I work with a family of three generations, and working with them together provides them with real comfort not just for their individual needs but for intergenerational wealth transfer later, too.
First, what questions you should ask a financial advisor
When you meet with a prospective financial advisor for the first time, your gut instinct might be to tell the advisor what you’re seeking and ask if they can assist. However, if you’re looking for a truly objective financial advisor, you’ll have to approach the meeting differently, says Chapman.
Before sharing a lot of details about yourself, he recommends asking the advisor these questions, in this order:
“Who is your ideal client?”
“How do you help your ideal clients?”
“What common problems do you help your ideal clients solve?”
“Who do you not work with?”
“How do you get paid?”
If the advisor can clearly answer these questions, the answers don’t raise any red flags, and the advisor takes the time to explain things, then you’re probably a good fit. It also helps if you like the person.
The fifth question is important when working with any financial professional, says Chapman. Whether it’s an accountant, a mortgage broker or a financial advisor, ask them, “Who pays for your services?” Ideally, you want the answer to be “You.” This provides the highest likelihood that there won’t be any outside influence on, or any conflicts of interest in, their advice. For example, if an advisor gets a commission from selling you certain investments or insurance packages, or for recommending a specific mortgage, that could be a conflict of interest.
How to do an advisor background check
Before you hire a financial advisor, you’ll want to do your homework. This involves doing a background check and confirming credentials.
Financial advisors should have at least one professional designation, such as Certified Financial Planner (CFP), Chartered Life Underwriter (CLU) or Registered Financial Planner (RFP), among others. You’ll want to verify with the appropriate issuing body or bodies that the advisor is in good standing. “It means they have paid their membership dues and attested they completed all continuing education requirements,” says Chapman.
Your advisor might also be willing to provide references from existing clients—just keep in mind that these are the ones who are happy with their work.
Most Americans have less in their retirement accounts than they’d like, and much less than the rules say they should have. So, obviously, if that describes you then you’re not alone. Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.
What Your Retirement Savings Should Look Like by Age 50
Financial experts sometimes suggest planning for your retirement income to be about 80% of your pre-retirement income. So, for example, someone who earned $100,000 per year going into retirement would plan on having about $80,000 per year while retired. The reason for this discrepancy is that most households tend to have fewer needs and responsibilities while in retirement, and therefore fewer expenses. The only major exception to this rule is when it comes to healthcare. You should expect those costs to rise in your later years.
To make your savings last, financial experts recommend that you plan on withdrawing about 4% per year from your retirement fund. This will depend on three main factors:
How much money you have in your retirement fund
The average rate of return that your retirement fund generates
So, for example, say you plan on needing $80,000 per year in retirement.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
First, you should look up how much money you can expect each month from Social Security. This income will depend on how much you made during your working life, as well as when you choose to retire. If you are an average Social Security recipient it will come to approximately $1,650 a month, or $19,800 a year. So you should plan on withdrawing an additional $60,200 per year to make up the difference.
Applying the 4% rule of thumb, $60,200/0.04, suggests that this household will want about $1.5 million in their retirement fund. Other, more conservative, recommendations suggest making these plans without accounting for Social Security. In that case, you would want about $2 million in your retirement fund.
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The 4% rule may entail withdrawing too much. It comes from, in part, conservative estimates of your retirement fund’s returns. By the time you retire you should have shifted your portfolio to safe assets. Many retirement funds, with comparatively safe assets, will have a return rate of around 3% to 5% by this point, allowing you to hover right around the replacement rate for your withdrawals.
So someone who earns $100,000 per year will want to have around $1.5 million in their retirement fund by age 65. At age 50, then, many experts suggest that this retiree would need to have – at a bare minimum – around $600,000 up in a 401(k), or other tax-advantaged account. That would give the retiree 15 years to boost their retirement nest egg by an additional $900,000, or grow by an average of $60,000 annually for each of the next 15 years. That is unlikely to happen without significant capital appreciation in the retiree’s tax-advantaged account. Many advisors recommend seeking a rate of return around 7% to 8% to reach the needed $1.5 million.
Reaching the Retirement Finish Line
How Much Should I Have in My 401(k) at 50?
Besides making sure that the asset allocation of your retirement fund is sufficiently aggressive, there are at least four other steps you can take to get from $600,000 at 50 to $1.5 million at 65.
Max Out Your Catch-Up Contributions
This is the most important thing you can do. The IRS limits how much you can contribute to 401(k), individual retirement account (IRA) and Roth IRA in a single year. After you turn 50 it raises the cap, allowing you to make what are called “catch up contributions.” In 2022, for example, most workers can only contribute up to $20,500 to their 401(k) account. However, anyone age 50 or older can contribute up to $27,000. That extra $6,500 is significant, and between age 50 and age 65 it has time to add up to something very real. Take advantage of it.
Open Simultaneous Retirement Funds
The IRS allows you to contribute to a 401(k), an IRA and a Roth IRA in the same year. However, there is overlap between the contribution limits for an IRA and a Roth IRA.
If you are already maximizing your contribution limits to your 401(k) but are still concerned that it isn’t enough, consider opening an IRA or a Roth IRA to supplement your savings. Doing so will allow you to put money into multiple retirement accounts at the same time, helping you to boost your savings considerably.
If you already have simultaneous retirement accounts, consider simply opening an earmarked account. Even though it won’t see the same tax advantages, there’s no reason that you can’t save for retirement with an ordinary investment portfolio. You can put as much money into it as you like then just plan on leaving it there for retirement.
Manage Debt, Manage Spending
An excellent way to free up some cash is to stop making interest payments on debt. If you have existing debt, paying it off more quickly will reduce the amount that you spend on interest and fees. This will, in turn, give you more cash to dedicate toward your retirement account.
When it comes to long-term debt, like a mortgage, paying it off more aggressively can also reduce your potential expenses in retirement. You won’t have to make those payments, which can reduce the amount of money you’ll need each month once you’ve stopped working.
At the same time, consider your overall lifestyle. If you think you may not have enough for your retirement, are there ways that you can shift your lifestyle over the long run that will reduce expenses? Is there someplace less expensive you could live, for example? This isn’t as simple as skipping your morning latte. Instead, consider whether you can shift your monthly needs in a way that might significantly change your budget both today and in retirement.
Consider Working More and Retiring Later
If you don’t have enough money to fund additional retirement accounts, consider taking on additional work to earn that money. This can range from freelance or gig work to a formal part-time job.
This is not a recommendation we make lightly. By the time you’re in your 50s, the last thing most people will want to do is “hustle.” However, secondary work is a good way to boost your finances, and if you need the money for retirement then it has to come from somewhere. More importantly, while it would be unpleasant to need a second job at 55, it would be far worse to need a job at 75. Working today might help ensure that you don’t have to do so tomorrow.
The jump in Social Security payments from normal retirement age to 70 is significant. If you were born between 1943 and 1954, If you start receiving benefits at age 66 you get 100% of your monthly benefit. Should you start receiving retirement benefits at age 67, you’ll get 108% of the monthly benefit because you delayed getting benefits for 12 months. If you start receiving retirement benefits at age 70, you’ll get 132% of the monthly benefit because you delayed getting benefits for 48 months.
Bottom Line
How Much Should I Have in My 401(k) at 50?
Most financial experts suggest that retirees should have around five to six times their annual income saved up in their retirement account by age 50. If you haven’t hit that mark, it’s probably a good time to maximize catchup contributions and consider opening one or more additional retirement accounts. In addition, make sure your investments are poised for capital appreciation, which of course entails more risk, and cut your discretionary spending.
Tips on Retirement Planning
We can all use help with our finances, and never more so than when it’s time to save for retirement. That’s where a financial advisor can offer valuable guidance and insight.
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s 401(k) calculator to get a quick estimate of how much you’ll have in your 401(k) by the time you retire.
What’s the difference between the types of advisors listed in the tool?
The Find a Qualified Advisor tool allows you to search for advisors by Qualifications, Location, Services, Specializations and Payment Model.
A note about location: Maybe you’ve already tried searching for “financial advisor near me” or something similar. Many advisors now provide services virtually, so you don’t necessarily need to find an advisor in your own town or city.
The advisors listed in our tool provide different services and have different specializations, and they have a variety of financial planning designations. In addition, they charge for or get paid for their services in several ways. Here’s how to understand these criteria:
Services
The advisors in our directory may provide some or all of the following services:
Financial planning: These advisors can evaluate your current and future financial states and provide a comprehensive financial plan with recommendations to optimize your situation while taking into account your goals and values. A financial plan can also focus on a specific goal or circumstance, such as planning for post-secondary education funding, debt repayment, financial planning as part of a separation or divorce, risk management or retirement, to name only a few examples. See below for a list of different financial planning designations.
Investment planning and implementation: These advisors can provide specific investment recommendations and implement them by investing your money for you. To provide investment planning and implementation services, an advisor must be licensed by the investment regulatory body in every province and territory where they provide services, and they must manage money through an investment dealership.
Insurance planning and implementation: These advisors can provide specific insurance recommendations and implement them by selling you insurance products. To provide insurance implementation services, an advisor must be licensed by the insurance regulatory body in every province and territory where they provide services.
Mortgage/lending implementation: These advisors can provide specific mortgage and lending recommendations and implement them for you by arranging mortgages, term loans, consolidation loans and other forms of credit. To provide mortgages, these advisors must be licensed as mortgage brokers or mortgage agents in every province and territory where they provide services.
Specializations
The advisors in our directory may specialize in specific types of advice or services—such as cross-border or international financial planning, socially responsible investing, business succession planning or retirement income planning.
Qualifications
The advisors in our directory are all members of the Financial Planning Association of Canada. In accordance with FPAC membership requirements, they all have at least one of the following financial planning designations:
You may have to book more sessions after your initial visit, or one might suffice to help you get organized. Heath says, it’s ultimately up to you to determine if you need an ongoing relationship that’s valuable to you and justifies the ongoing fee. “Some clients like the peace of mind and discipline,” he says. “Many couples appreciate having an impartial third party to mediate their financial decisions. Plenty of singles benefit from having someone to talk to candidly about finances in lieu of a partner.”
The best way to prep for a financial planning session is to ask the planner what they require from you, and then have your documents ready to meet with them, Heath says. That way you can get the most out of your time together, and come out with a solid plan.
7. Invest in GICs or other investments
Arguably, the best financial gift you can give your future self is investments. Depending on where you put your money, you could grow it with compounded interest.
GICs, for example, are low-risk investments that are great for saving towards life goals like tuition or a wedding. Putting your money in a GIC is like making a loan to a financial institution. You deposit your money for a set amount of time like 30 days up to 10 years, depending on the term, and the institution gives you back your money plus the interest earned on your deposit at the end of the period. If you think there’s a chance you’ll need the money sooner, consider a cashable or redeemable GIC. The interest rate will be lower than with non-redeemable GICs, but you can cash out anytime.
One thing to note is the risk/return tradeoff with investments. Riskier investments like stocks can come with higher potential returns. Many young investors start out with exchange-traded funds (ETFs), which are a basket of assets like stocks. ETFs have built-in diversification, which helps reduce your portfolio risk. If you’ve never invested before and you’re not sure how to begin, consider speaking with a financial advisor and signing up for the MoneySense Invest newsletter. And keep reading. Find out if investing is right for you and how to get started:
8. Make a will and powers of attorney
An Angus Reid survey found that 80% of Canadians under 35 don’t have a will. If you’re just starting out in your career and haven’t accumulated many assets, you might wonder why you’d need a will.
If you were to pass away without a legal will, the government would divide up your estate—your bank accounts, possessions, investments and other assets—between your parents or next of kin. It might not be split up in the way you wish it to be, and if you have a common-law spouse, they would likely be left out. This could cause a lot of worry and distress for your loved ones in an already difficult time.
If you want to write a will and you don’t have a complicated tax situation, an online will platform like Willful or Canadian Legal Wills could work. However, if your situation is a bit more complicated, you may wish to speak with a financial advisor or lawyer who works with estate plans.
Like it or not, generative artificial intelligence has arrived on Wall Street — and experts expect it to transform the way firms do business.
To be clear, artificial intelligence, like natural language processing and machine learning, has been used by wealth management and asset management firms for years. Yet with generative AI now on the scene, it can have a powerful impact when combined with other AI technologies, said Roland Kastoun, U.S. asset and wealth management consulting leader for PwC.
“We see this as a massive accelerator of productivity and revenue growth for the industry,” he said.
In fact, the banking sector is expected to have one of the largest opportunities in generative AI, according to McKinsey & Company. Gen AI could add the equivalent of $2.6 trillion to $4.4 trillion annually in value across the 63 use cases the McKinsey Global Institute analyzed. While not the largest beneficiaries within banking, asset management could see $59 billion in value and wealth management could see $45 billion.
Some of the biggest names in the business are already on board.
Earlier this month, BlackRock sent a memo to employees that in January it will roll out to its clients generative AI tools for Aladdin and eFront to help users “solve simple how-to questions,” the memo said.
“GenAI will change how people interact with technology. It will improve our productivity and enhance the great work we are already doing. GenAI will also likely change our clients’ expectations around the frequency, timeliness, and simplicity of our interactions,” the memo said.
Meanwhile, Morgan Stanley unveiled its generative AI assistant for financial advisors, called AI @ Morgan Stanley Assistant, in September. The firm’s co-President Andy Saperstein said in a memo to staffers that generative AI will “revolutionize client interactions, bring new efficiencies to advisor practices, and ultimately help free up time to do what you do best: serve your clients.”
Earlier this year, both JPMorgan and Goldman Sachs said they were developing ChatGPT-style AI in house. JPMorgan’s IndexGPT will tap “cloud computing software using artificial intelligence” for “analyzing and selecting securities tailored to customer needs,” according to a filing in May. Goldman said its technology will help generate and test code.
Those who don’t embrace AI will be left behind, said Wells Fargo bank analyst Mike Mayo.
“If the bank across the street has financial advisors that are using AI, how can you not be using it too?” he said. “It certainly increases the stakes for competition, and you can keep up or fall behind.”
In fact, as the younger generation ages, those digitally native investors will seek greater digitization, more personalized solutions and lower fees, William Blair analyst Jeff Schmitt said in an Oct. 20 note.
“Given that these investors will control an increasing share of invested assets over time, wealth management firms and advisors are leveraging AI to enhance offerings and adjust service delivery models to win them over,” he wrote.
Cerulli Associates estimated some $72.6 trillion in wealth will be transferred to heirs through 2045.
The big appeal of generative AI — and a differentiator from other AI tech — is its ability to generate content, said PwC’s Kastoun.
It’s one thing for technology to analyze a large set of content, he pointed out. “It’s another thing for it to be able to generate new content based on the data that it has, and that’s what’s creating a lot of hype.”
Yet what he’s seeing in both the wealth management and asset management business is the use of multiple elements of AI, not just generative AI, he said.
“It’s the power of combining these different technologies and methodologies that is really creating an impact across the industry,” Kastoun said.
Firms are now figuring out how to incorporate generative AI into their businesses and existing AI technologies. At T. Rowe Price, its New York City Technology Development Center has been building AI capabilities for several years.
“We ultimately are looking to help our decision makers get the benefit of data and insights to do their job better,” said Jordan Vinarub, head of the center.
His team made a big pivot with the arrival of generative AI.
“We kind of saw this as an existential moment for the firm to say, we need to understand this and figure out how we can use it to support the business,” Vinarub said. “Over the past, I guess, six months … we’ve gone from just pure research and proofs of concept to then building our own internal application on top of the large language model to help assist our investors and research process.”
It’s not only the big firms adapting to generative AI; smaller upstarts are looking for ways to disrupt the industry.
Wealth-tech firm Farther is one of those. Its co-founder, Brad Genser, said the company is a “new type of financial institution” that was built to combine expert advisors and AI.
“If you don’t build the technology, along with the human processes, and you don’t control both, you end up with something that’s incomplete,” he said. “If you do it together, you’re building people processes and technology together, then you get something that’s greater than the sum of its parts.”
Then there is Magnifi, an investing platform that uses ChatGPT and computer programs to give personal investing advice. Investors link the technology to their various accounts, and Magnifi can monitor their portfolios. About 45,000 subscribers have connected over $500 million in aggregate assets to the platform, Magnifi said in November.
“It’s a copilot alongside individual consumers that they’re interacting with over time,” said Tom Van Horn, Magnifi’s chief operating and product officer. “It’s not taking over control, it’s empowering those individuals to get to better wealth outcomes.”
The technology is so fast moving, it’s difficult to know what use cases could exist in the future. Yet certainly as productivity continues to increase, advisors can increase their time and level of engagement with their clients.
“It could change the way we think about a lot of the way we set up our business models,” PwC’s Kastoun said.
It’s also about people working with the technology and not the technology necessarily replacing humans, experts said.
“The dream state is that every employee will have an AI copilot or AI coworker and that each customer will have the equivalent of an AI agent,” Wells Fargo’s Mayo said. “I’m not talking about computers alone. I’m not talking about humans alone, but humans plus AI can compete better than either computers or humans alone.”
— CNBC’s Michael Bloom contributed reporting.
Correction: This article has been updated to reflect that Magnifi said in November that about 45,000 subscribers have connected over $500 million in aggregate assets to the platform. A previous version misstated the amount of assets.
A growing number of mutual funds are converting to exchange-traded funds, which is a positive trend for investors, experts say.
Since early 2021, there have been more than 70 mutual fund to ETF conversions, including nearly three dozen in 2023, according to Morningstar Direct, and experts say more conversions are coming.
“It’s steadily increasing year-over-year,” said Daniel Sotiroff, senior manager research analyst for Morningstar Research Services.
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A 2019 change from the Securities and Exchange Commission provided fund managers with more flexibility, which has helped pave the way for mutual fund to ETF conversions, according to Sotiroff.
The conversion itself is tax-free to the investor and switches from actively managed mutual funds, which aim to outperform the market. The primary benefit of the new ETF is more tax efficiency.
“That’s a big selling point,” Sotiroff said.
Year-end mutual fund capital gains distributions can be a pain point for investors with actively managed mutual funds in brokerage accounts. Those payouts can trigger a sizable tax bill, even when the investor hasn’t sold shares.
In 2023, many fund managers realized gains to meet investor redemptions, resulting in double-digit projected payouts for some funds.
The most attractive feature of an ETF is that most don’t distribute capital gains at the end of the year.
Despite the uptick in mutual fund to ETF conversions over the past couple of years, it’s still “kind of rare to see,” according to CFP Matt Knoll, senior financial planner at The Planning Center in Moline, Illinois.
Sotiroff said conversions have been “relatively smaller” actively managed mutual funds worth around $100 million or less that are more likely to be converted to ETFs.
“You’re not seeing a lot of big-name mutual funds turning into ETFs,” he said. The exceptions, of course, were Dimensional Funds and JPMorgan conversions.
Future conversions are likely to be smaller, actively managed mutual funds outside of 401(k) accounts, Sotiroff said.
I don’t expect real estate prices to rise at the same 6.75% rate we have seen over the past 10 years, so instead, let’s say prices rise at 4% per year. Some people may think that number is high, while others may think it is low. But if you look back at U.S. residential real estate appreciation since 1890, which looks to be similar here in Canada, prices have only risen by a bit more than the rate of inflation, so even 4% may be generous. Nevertheless, assuming 4% growth is correct, the condo would be worth $740,122 after 10 years. Home equity, representing the condo’s value minus the mortgage balance, would be $471,613.
What if someone could rent the same $500,000 condo for $2,000 per month (a number that might seem high or low depending on where you live)? Compared to making monthly mortgage payments on that same property, the renter would be saving $559 per month. Their rent would rise over time, say, at 2% per year, so the $599 per month of savings would decrease over time.
Now, let’s say they invested their initial $100,000 (the amount that would have been used on a down payment) and $559 a month (a number that would decrease as rent increased) into a tax-free savings account (TFSA). If they earned 4% per year on their investment, they would have $204,396 after 10 years. The buyer, with $471,613 of home equity, is clearly better off than the renter, right?
The problem here is you cannot just compare the mortgage payment to the monthly rent. Owning has other incremental costs that might include:
Property tax: $200 monthly (not ap Condo insurance: $10 or more per month, compared to tenant insurance Condo fees or repairs: $500 more per month, compared to renting
Property tax rates can vary significantly depending on where you live. And condo fees and repairs can vary, depending on the age and amenities in the building. But if we added another $710 per month from the categories above to the renter’s monthly investment deposits, the renter would have $319,117 accumulated after 10 years. The same tax-free TFSA return of 4% is assumed, perhaps in their spouse’s TFSA.
The owner would still have 471,613 in home equity. So, owning is still better than renting, right?
Let’s not forget there are costs to buy and sell real estate. It could cost $10,000 in land transfer tax, legal fees and other costs to buy, and another $40,000 to sell after 10 years. If the renter added these amounts to their investments, they would be at $373,919. The buyer is still ahead of the renter with $471,613, but as you can see, the gap is closer.
PHOENIX — Retirement security is a concern for many older Americans and outliving savings is often their biggest fear.
To that point, some 58% of savers and retirees worry about running out of money, according to recent research from Cerulli Associates.
But “retirement spending is not pass-fail,” said certified financial planner Justin Fitzpatrick, co-founder of Income Lab, a retirement planning software company.
Your retirement spending isn’t static, meaning there’s room for adjustments over time, depending on your needs and goals, he said, speaking at the Financial Planning Association’s annual conference on Wednesday.
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It’s “really disquieting” to go from working with a steady paycheck to retirement with income uncertainty, which can lead to paralysis, Fitzpatrick said. Here’s what retirees need to consider.
Financial advisors often rely on “probability of success” scores as clients approach retirement — based on a so-called Monte Carlo simulation which shows a range of possible outcomes.
However, Fitzpatrick sees retirement expenses as “a series of small liabilities,” and many of these costs can be flexible. For example, you may opt for the brewpub over a steakhouse or skip a vacation, he said.
“These are not necessarily the things you would prefer ahead of time, but they’re different from financial ruin,” Fitzpatrick said.
Total financial ruin is “almost impossible” because individual liabilities can be small and spending generally happens slowly enough to make “minor and temporary adjustments” over time, he said.
Fitzpatrick suggests using “risk-based guardrails,” or predefined guidelines, to increase or decrease retirement spending. The strategy uses planning software and considers longevity, future cash flows and income changes, along with other factors.
“You find a spending level that is reasonable,” and when the risk of doing nothing gets too high, you need to start spending less, he said. However, this requires monitoring and updating the plan regularly.
“An advisor can be that spending GPS along the way and let you know when an adjustment makes sense,” Fitzpatrick added.
Their shared hippie spirit brought them together over a vegan potluck dinner, but the prospect of years in federal prison for allegedly stealing millions from a mentally-ill Malibu doctor, has driven a wedge between them.
A federal fraud prosecution against a pair of yoga gurus accused of siphoning cash from Dr. Mark Sawusch’s $60 million fortune took a significant turn at the end of August when one pleaded guilty and agreed to testify against the other, her ex-boyfriend, according to court documents and people familiar with the matter.
Anna Moore’s guilty plea before a federal judge in Los Angeles on Aug. 28 represents a serious legal challenge to her longtime partner, Anthony Flores, who faces decades behind bars if convicted in the case. Flores pleaded not guilty after his arrest in January.
Details of Moore’s agreement with federal prosecutors remain under seal, but people familiar with the matter say her ultimate sentence in the case will largely be determined after her level of cooperation is evaluated. A sentencing hearing for Moore was set for Nov. 6.
“We are aware of Ms. Moore’s decision to plead guilty. Obviously this changes Mr. Flores’ legal situation in the case, and we are currently reviewing our options,” Flores’ attorney Ambrosio Rodriguez said.
Messages left with Moore’s attorney weren’t immediately returned. A spokesman for the U.S attorney’s office for the central district of California declined to comment.
The tragic end to Sawusch’s life began on June 23, 2017, when the brilliant, but troubled, ophthalmologist met Flores and Moore in a chance encounter at a vegan ice cream parlor in Venice Beach, Calif.
Flores, who went by Anton David, was a guru-esque figure with long, flowing hair and a beard. He worked as a hair stylist on film shoots. Moore, a pixie-like blond, was an actress and singer. The couple had met years earlier at a vegan potluck dinner and had fallen in love over what they described as a shared hippie spirit. Together, they ran a yoga center in Fresno, Calif., while going back-and-forth to L.A.
Their spiritual vibe cast a spell on Sawusch, who had just days earlier been released from a mental health facility, where he had been committed after suffering a breakdown, court filings said. Within a week, Flores and Moore had moved into Sawusch’s multi-million dollar beachfront home in Malibu, Calif., federal prosecutors said.
Over the next year, the pair gained increasingly firm control over the doctor’s life and finances, with Flores establishing power of attorney over Sawusch’s vast fortune while plying him with a steady diet of marijuana and LSD as he also underwent experimental ketamine treatments for his bipolar disorder that left him addled, investigators said.
Sawusch later died in May 2018 of a lethal mixture of ketamine and alcohol, according to a coroner’s report. The Los Angeles County medical examiner’s office ruled the death an accident.
In her guilty plea, Moore said she was not immediately aware of the scope of Flores’ alleged efforts to steal the doctor’s money, but admitted that following Sawusch’s death she participated in a later effort in probate court to keep the stolen money. Prosecutors have alleged that this was a separate fraud.
When Sawusch’s family sought to take control of his estate, they discovered that almost $3 million had been transferred from his accounts to ones controlled by Flores in the days before and after the doctor’s death, federal prosecutors said.
Sawusch’s family launched a civil lawsuit against the yogi couple and convinced a California state judge to issue a restraining order freezing Flores’ and Moores’ accounts, and order they return the money. Instead, federal prosecutors say, the two engaged in a second fraud by making false claims in probate court that Sawusch had verbally told them he would give them a third of his fortune plus his Malibu beach house.
The couple claimed that the doctor had given them the money in return for them taking care of him and as part of an effort to protect his fortune from his family, from whom he was estranged. The family said those claims were untrue and that the pair had kept Sawusch isolated from his friends and family.
Eventually, the couple returned around $2 million of the doctor’s money, but around $1 million remained unaccounted for, according to federal prosecutors.
Flores and Moore broke up during the pandemic after nearly a decade together. Moore moved to Mexico while Flores remained in Fresno, where he was arrested in late January. Moore was arrested at George Bush Intercontinental Airport in Houston upon her return to the U.S. around the same time. Both have been held without bail since.
Indeed, everyday home expenses, including utility bills, property taxes, insurance and home maintenance, cost the average homeowner $14,155 a year, not countingthe typical mortgage payment, according to a June report from Zillow and Thumbtack.
Many homebuyers just focus on the principal and interest of their mortgage payment, said certified financial planner Vince Darling at the Stonebridge Group in Forest Lake, Minnesota. “This can lead people to penny-pinch once they move into a new home.”
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Here are three of the most common surprise homeownership expenses and how to prepare for each one, according to experts.
As a first-time homebuyer, it’s easy to overlook property taxes since you’ve never paid those levies directly. Rates often vary widely by city or county, making it harder to plan for the bill.
Based on your home’s assessed value, it’s important to know which jurisdictions levy the taxes and how often reassessments happen, said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center. “A good person to call up would be the local representative,” he suggested.
Another major expense can be homeowners insurance, with an average yearly premium of $1,428 for $250,000 in dwelling coverage, according to Bankrate.
However, it can be significantly higher in disaster-prone areas, said CFP Kevin Brady, vice president at Wealthspire Advisors in New York. These policies may not cover key weather events, so check your coverage carefully, he said.
Typically, you’ll need separate policies for floods and earthquakes. You may face a separate deductible and provisions for hurricanes and other windstorms.
With premiums on the rise, you may start shopping for a policy and gathering quotes before putting in a home purchase offer.
The cost of home repairs and maintenance can also be a hidden expense for first-time homebuyers.
Annual maintenance costs soared to an all-time high during the second quarter of 2023, reaching $6,493, compared with —$5,984 one year prior, according to Thumbtack.
While a good home inspector can prepare prospective buyers by sharing the condition of a roof or major systems that typically need replacing at set intervals, many experts recommend extra savings for inevitable expenses.
As a first-time homebuyer, you need to make sure you have a sufficient cushion for surprises — I’d argue 5% of the home’s purchase price at least.
Nicole Sullivan
Co-founder of Prism Planning Partners
“As a first-time homebuyer, you need to make sure you have a sufficient cushion for surprises — I’d argue 5% of the home’s purchase price at least,” said Nicole Sullivan, a Libertyville, Illinois-based CFP and co-founder of Prism Planning Partners.
“Be aware that anything that comes up on the home inspection will need to be addressed and could happen sooner rather than later,” she added.
