The Importance of Diversification, Tax Planning, and Having a Retirement Plan

Tax Advisory

Watch Erin Kennedy and Jordan Flowers from Wealth Financial Services and Tax Advisory talk about his unique approach to diversification and retirement planning. Jordan explains that while many people think of diversification in terms of stocks, bonds, and mutual funds, he looks at it from a tax perspective. He helps clients move their money from tax-deferred accounts into tax-free accounts, allowing them to pay less to the IRS and keep more of their money.

Jordan also discusses his framework for helping clients stay on track with their financial plans regardless of market fluctuations. He breaks down their money into three categories: safe money, income-focused money, and growth-focused money. By ensuring clients have enough income to cover their expenses, they are not forced to sell investments when the market is down. Flowers also emphasizes the importance of personalized service and offers a roadmap for clients to achieve a safe and secure retirement. This roadmap includes an income plan, tax plan, healthcare plan, estate plan, and investment plan.

Jordan Flowers and team craft custom, objective investment strategies to help build and preserve your wealth. Minimize your stress and maximize your life by contacting Wealth Financial Services and Tax Advisory for a complimentary meeting today!

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Transcript:

Erin Kennedy (00:16):

Hello and welcome to Retirement Wealth Academy. I’m your host, Erin Kennedy. Thanks for being with us. This show is dedicated to helping retirees and pre-retirees sort through some of the most complicated topics about retirement. And for that, we turn to local experts. Today we have Jordan Flowers with us. Jordan, it’s good to see you.

Jordan Flowers (00:32):

Great to be here, Erin.

Erin Kennedy (00:34):

I’m excited to talk to you because I know that you have a very different approach to diversification. I feel like a lot of us hear diversification, but you think about it a little bit differently. Explain that please.

Jordan Flowers (00:44):

Yeah. A lot of people, when they hear diversification, they think of stocks, bonds, mutual funds. When I think about diversification, I look at it from a tax point of view. How much money is in non-qualified accounts, tax deferred accounts, or tax-free accounts? And the majority of Americans have deferred, deferred deferred for decades, and the majority of their money is in tax deferred IRAs, 401Ks, and I show my clients how you can move from tax deferred and from taxable assets more and more into tax-free assets and make sure you pay less to the IRS, and you keep more of your hard-earned money in your pocket.

Erin Kennedy (01:17):

I like the sound of free too. That sounds good.

Jordan Flowers (01:20):

Well, we got to pay our fair share, but not a dollar more.

Erin Kennedy (01:22):

Yeah, no more than that. So walk through then the framework that you have in place that allows clients to just stay to their financial plan no matter what the markets are doing, because as human beings, it’s so very difficult not to react emotionally.

Jordan Flowers (01:39):

So we have a framework to make sure that our clients don’t sell when the markets are down, to make sure they have peace of mind and they can keep up with their lifestyle in retirement. We kind of break down their money into three categories. Safe money, money designed for income, and then growth money designed for long-term. So just an example of some safe money. It could be money in banks, short-term instruments, it’s safe, it’s secure, it’s not going to go. It’s very high, but it’s also going to be there if you need it. And some people equate that if you take low risk, you get low returns, you need to take high risk to get high returns. We can show people how you can look at that a little bit differently. You can get much better returns and still take no risk.

(02:17):

The second category is kind of money designed for income. That could be dividend stocks, that could be bonds, that could be structured notes, annuities, real estate, kind of those asset classes that are really designed to kick out a monthly income to keep up with people’s lifestyle. And once you make sure the income keeps up with their expenses, that allows the other funds that maybe go into the growth bucket. Money for growth over time. So when the market takes a dip, we’re never forced to sell because their income is always taken care of.

Erin Kennedy (02:48):

And that income is so important in retirement, right?

Jordan Flowers (02:50):

It provides peace of mind for a lot of our clients.

Erin Kennedy (02:53):

Let’s talk through too, I know that you always offer very personalized service to your clients and you help them design kind of their own personal roadmap to make sure that they have the retirement that they envisioned.

Jordan Flowers (03:06):

So we believe our clients deserve a life beyond what they even imagined. They deserve that to maximize their life and minimize stress, and we have a roadmap to help them accomplish those goals. That roadmap, we actually call our safe and secure retirement roadmap, and it takes our clients through five phases of their retirement. Many times when you work with an advisor, they give you a portfolio and they just handle the investments.

(03:27):

But we don’t believe a portfolio is a plan. So our plan kind of starts with an income plan to make sure you have enough income to keep up with your lifestyle, maximizing an income, and also minimizing taxes. The second part of our roadmap is a tax plan. We want to make sure that we pay the least amount of taxes over your lifetime, not just for this tax year. The third phase of that is actually healthcare planning. So we in our office have a Medicare representative that helps our clients get on the best Medicare plans and reviews that on an annual basis as well as we look at long-term care strategies and how you can leverage your funds to pay for long-term care.

(04:02):

The fourth phase is estate planning. We make sure that we have an estate plan that all your documents and your accounts are in good order, so they go to who you want them to go to. It isn’t just left up the chance. You control where the assets go and avoid probate. So taking an income plan, an estate plan, a tax plan, an investment plan, and a healthcare plan, we really provide that full roadmap to make sure that our clients achieve peace of mind.

Erin Kennedy (04:26):

I would like to ask though, you’ve been doing this for a long time. What separates you from everybody else?

Jordan Flowers (04:32):

Yeah, so I think first and foremost, we’re fiduciaries. We’re legally bound to put our client’s interests ahead of anything else, but we take that one step further because if you work for a big box firm, that big box firm, they might be fiduciaries, but they’re really recommending their products or investments because that’s where they get some more extra incentive. We are also not only fiduciaries, but we’re independent. We work directly for the client, not for a big box firm. So we can virtually recommend any investments in products if it helps accomplish our client’s goals.

(05:03):

And then we overlay that with taxes because we’re super tax focused. What good is all the money you make if you got to give it right back to the IRS? So we have a tax plan to assure our clients that they pay the least amount of taxes over their lifetime so we can really kind of focus on that tax component. 30 minutes with our firm could hopefully benefit our clients for the next 30 years and pay the least amount of taxes over their lifetime.

Erin Kennedy (05:25):

Such an important proactive conversation to have then.

Jordan Flowers (05:27):

Very much so.

Erin Kennedy (05:28):

Jordan, thank you so much for your time today. We appreciate it.