High income earners often find themselves in a bit of a quandary when it comes to retirement planning. Individuals making over $132,000 and married couples making over $194,000 are not eligible to contribute to a Roth IRA.1 For 401(k)s, the annual contribution limit of $18,000 ($24,000 for those over 50)2 is simply not enough for someone who made, say, $250,000 per year during their working years. Saving $18,000 a year is probably not sufficient for someone at that income level to maintain the same standard of living in retirement. Of course, this does not mean that high income earners should shy away from contributing to 401(k)s or other employer-sponsored retirement plans. The more a person can contribute to a tax-deferred plan, the better. But for high income earners, saving enough so that you can replace your income in retirement means turning to other methods and savings vehicles to reach your goals. Here are three potential options. [+] Read More

Retirement and financial planning can essentially be broken down into three phases: Saving Investment Distribution (Retirement Income) For many people, that means spending our working years making an income to provide for our families and to save for retirement. We then invest our savings in hopes of achieving a rate of return over time, to grow the assets and provide for our retirement. And finally, we devise strategies to generate retirement income from our savings. [+] Read More

If it feels like the United States has been delivering good (but not gangbusters) economic growth and solid stock market returns since 2009, it’s because it has been – at least relative to some other parts of the world. Europe has continued to struggle with GDP growth and cannot seem to fully shake its sovereign debt issues; Japan has experienced weak growth and lackluster inflation for years; Britain is taking the significant and potentially risky step of leaving the European Union; and Emerging Markets growth has slowed. In a world of political and economic uncertainty, the United States often feels like the best house on the investing block. For those reasons – and because the US is arguably the largest and most diverse economy in the world – many investors prefer to keep their money close to home. In many ways it makes sense, and for the last few years it has likely been a beneficial strategy. But as Russ Koesterich of Blackrock (the largest money manager in the world1) smartly points out, “the tendency to invest close to home is understandable, [but] it may not be optimal,” adding that “US outperformance isn’t pre-ordained.” [+] Read More

There’s been a growing debate surrounding the rise in popularity of “passive investing” as an alternative to active management. Passive investing often refers to the use of ETFs or indexing strategies to mimic a certain benchmark – in short, it essentially allows the investor to simply ‘set and forget’ their investment strategy. Here, we’ll take a look at potential flaws with the passive approach – flaws that many investors may not be considering. But first, it is worthwhile to examine why some investors are reconsidering the value of active management. [+] Read More

Editor’s Note: This post was originally published in December 2015 and updated January 2017. While financial advisors and money managers have many commonalities, and are complementary to one another, the two jobs are very different and are rarely held by one individual. Financial advisors – also referred to as wealth managers, financial planners and investment advisors – understand the specifics of their client’s financial lives and create a detailed, comprehensive investment plan that is best positioned to help you reach your financial goals. Money managers on the other hand spend their time focusing on successfully managing the strategies that your portfolio is invested in. WrapManager's eBook, Guide to Researching Money Managers, discusses this topic in more detail, but we believe your financial advisor and your money managers should be different people. This allows for additional checks and balances that wouldn’t exist if one person performed both jobs. After all, no self-respecting chef would disparage their own food! [+] Read More

Over the past few years, there’s been a technology-related buzz in the financial industry, but it’s not about the latest ‘app’ from Silicon Valley or about Snapchat’s IPO. It’s about a fairly new approach to managing money through “robo-advisors.” These “advisors” are essentially online programs that use computer algorithms – instead of real investment managers and human advice – to make portfolio allocations over time. It sounds futuristic and perhaps promising, but there’s a problem. Robo-advisors generally only perform one function: allocating a portfolio. That may be fine for a new or novice investor that does not have complex financial needs – someone who may only be looking for a diversified portfolio in a cookie cutter format (conservative, aggressive, or somewhere in between). [+] Read More

When you encounter articles focused on retirement planning, the subject matter is generally about how to invest—what strategies are good for growth vs. income, what products are useful for different investment and tax objectives, and so on. Often left out are insights about how to spend, which is an equally—if not more—important aspect of planning. An investment plan that does not adequately account for how cash flow needs and expenses change over time could put an investor at risk of running out of money too early. [+] Read More

For many investors and retirees, the task of navigating Social Security is often a tricky (and sometimes confusing) undertaking. In fact, it is complex to the point that Fidelity Investments recently brought to light several “myths” about Social Security, which are really misunderstandings more than anything else. In several surveys, Fidelity found that investors had misconceptions about some of the key features and rules surrounding Social Security Retirement Benefits. These misconceptions can cost retirees money over time, so it’s important to work with a financial advisor when making the important decisions about when and how to take your benefit. [+] Read More

At WrapManager, our focus is on helping you build an investment plan that can provide for you and your family—hopefully for generations to come. That means part of our work focuses on estate planning, and making sure our clients are thinking about what strategies are needed to plan for the distant future. For 2016, if your value of your estate is less than $5,545,000, then your estate tax planning process may consist of mostly fundamental estate planning—having a will, making sure your beneficiaries are in order, and maybe setting up trusts so you can control how your assets are distributed after death. WrapManager has put together this estate planning guide to help you get started.1 [+] Read More