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Roth IRA's

Is a Roth IRA Conversion Right for You?

Written by Spiral Design on . Posted in Investor Education, Resources, Retirement Resource.

IS A ROTH IRA CONVERSION
RIGHT FOR YOU?

Concerned about future tax rates? You may want to consider converting your Traditional IRA to a Roth IRA. A Roth conversion is a permissible transaction that allows you to pay income taxes on some or all your retirement assets when you convert and benefit from taxfree withdrawals in the future.

Some benefits:

  • A Roth IRA allows for an after-tax contribution, tax-deferred growth, and taxfree distributions at retirement age.
  • You may pay lower taxes if your current tax rate is lower than your expected tax rate in retirement.
  • Inheritance or long-term wealth accumulation goals — Roth IRAs do not require investors to take required minimum distributions at age 72. Also, inherited Roth accounts offer taxfree distributions to any beneficiaries.
  • Tax diversification — What are your other sources of retirement income? Having both tax-free and taxable distributions gives you greater control. When is a conversion appropriate?
  • If your income is too high to contribute directly to a Roth IRA or if you have existing funds invested in a Traditional IRA, you may want to consider a Roth conversion.
  • If you feel your tax bracket is lower now than it will be in the future when you take a Roth IRA distribution, this could be an appropriate strategy. There are other considerations, so we encourage you to speak with us to learn more. We always recommend including your accountant or tax preparer in the final decision.
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DID YOU KNOW?

YOU CAN CONVERT A TRADITIONAL IRA FROM ANOTHER COMPANY INTO A FAM FUNDS ROTH IRA

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Common Cents Planning

Written by Spiral Design on . Posted in Investor Education, Planning Tips, Resources.

COMMON CENTS
PLANNING

  • SAFETY NET

    In an ideal world, investors should have at least six months, and as much as two years, of living expenses set aside before they invest in stocks. Although you may not be there yet, it is a worthwhile goal. Having a sufficient cash reserve – in good times and bad – should provide flexibility and allow you to make rational, unforced financial decisions. The first step is to create a budget so that you can make saving a habit. The amount of this emergency fund should be based on your circumstances.

    YEAR-END GIFTING

    For 2023, you can make a tax-free gift of up to $17,000 ($34,000 if you and your spouse elect to split gifts on your federal tax return) to an unlimited number of individuals. A gift of an appreciated security is also a great way to transfer wealth while possibly reducing your future tax liability.

  • Senior man with grandaughter gardening in the backyard garden.


HSA: A TRIPLE-TAX ADVANTAGE

A Health Savings Account (HSA) is only offered in conjunction with a High-Deductible Health Plan (HDHP) – the plan type, if available, you elect during your employer’s health insurance open enrollment period. An HSA can offer much more than just an interest-bearing account to help cover out-of-pocket medical costs. It should be considered as a potential long-term vehicle to cover future medical expenses. Automatic payroll deductions present an excellent way of forced savings into an HSA and the HSA offers a triple-tax advantage: 1. Tax deduction 2. Tax-deferred growth 3. Tax-free withdrawal if used for medical expenses There are more advantages to consider. Additionally, it is good to check with the HSA’s trustee to review your investment options.

ESTATE PLANNING REVIEW

It is a sound practice to review your estate planning documents and account beneficiaries regularly to ensure that they reflect the desired distribution of your affairs. These documents include health care proxies, powers of attorney, last will and testament, and trusts. If you have not had these documents prepared or reviewed by an estate planning attorney, we encourage you to do so to ensure that your objectives will be fulfilled.

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Account Options

Written by Spiral Design on . Posted in Investing Basics, Investor Education, Resources.

Account Options

Retirement Accounts

Whether you are just getting started, changing jobs, doing a 401(k) rollover, or in retirement, our team can guide you. Accounts include:

  • Traditional IRA
  • Roth IRA
  • SEP Account
  • SIMPLE IRA
  • 403(b)(7)


Education Savings Accounts

Are you ready to pay for your child’s college education? If not, we can help.

  • Coverdell Education Savings Account (ESA)

Other Types of Accounts

  • Separately Managed Accounts
  • Uniform Transfers to Minors Act Account (UTMA)
  • Trust Accounts
  • Business Accounts
  • Taxable Accounts
  • Small Business Retirement Accounts

Open an Account

FIXED INCOME & BALANCED PORTFOLIOS

Are you aware that Fenimore provides fixed income offerings?

  • Our fixed income strategy’s primary objective is capital preservation with income generation. We construct bond portfolios to provide stability with current income.
  • We design balanced portfolios for those who seek both long-term capital appreciation and current income by investing in stocks, bonds, and cash.
  • The minimum Fenimore Asset Management relationship for a fixed income account is $500,000.

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Remove the Emotion from Investing

Written by Spiral Design on . Posted in Investing Basics, Investor Education, Resources.

REMOVE THE EMOTION
FROM INVESTING

The numerous news headlines processed every day can cause an investor to be fearful and make misguided decisions with their assets. The good news is that there is a calm and sensible investment approach called dollar-cost averaging (DCA) that can help mitigate the angst.

  • DCA is a long-term strategy that involves investing a fixed-dollar amount into a mutual fund account (for example) at regular intervals. It takes advantage of the cyclical nature of the stock market and allows you to focus on long-term growth and ignore short-term market conditions.

  • Since you always invest the same amount, you purchase more shares when the price is low and fewer shares when the price is high. DCA’s premise is that your average cost per share may be less than your average price per share, thus reducing your investment risk over time.

  • DCA also allows for small investments that, when done consistently over time, can grow into big savings.

Automatic investing from your bank account is an easy way to make saving a habit while bringing some peace to your life.

Dollar-cost averaging is a plan of continuous investment in securities regardless of their inconsistent prices. Of course, you must consider your financial ability to continually purchase shares. As with all investment methods, there is no performance guarantee.

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TAKE ADVANTAGE OF
FAM FUNDS’ LOW
MONTHLY MINIMUM — $50
Call 800-932-3271 to Learn More

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