Tax Planning

Four Things You Must Do at Age 50
Lucia Capital Group Weekly

Four Things You Must Do at Age 50

April 9, 2020

A person in their 20s seems to have just about all the time in the world – or so it may seem to them. And that may be a somewhat correct assumption when it comes to their long-term finances, like saving for retirement. But ask just about anyone who’s at least age 50, and they’ll tell you that the time went by quickly, and now that their retirement date is much closer, they realize they have far less margin for error. If you’ve reached the age of 50 and your retirement date is approaching, but still a decade or more away, you may have a unique opportunity to take care of a few very important things. In fact, making a few small changes or updates right now could potentially save you time, money and aggravation when you finally make it to retirement.

The College Saving Dilemma
Lucia Capital Group Weekly

The College Saving Dilemma

April 2, 2020

Every parent wants what’s best for their kids, so it’s natural for them to feel the need to help them wherever they can. As a result, many new parents begin to save for their child’s college education immediately, guessing (perhaps correctly) that tuition costs 18 years from now will have risen almost unimaginably high. And that may be a very good idea. What’s not a good idea, though, is to take the money you were saving for your own retirement and redirect it to a college savings account for your children. Shortchanging your retirement savings, especially in the earlier stages of your working life, can ultimately cause much bigger problems for you down the line.
This Is Why We Strategize!
Lucia Capital Group Weekly

This Is Why We Strategize!

March 13, 2020

When markets are good, when equity values are rising, it can be difficult to be the lone voice that sets out to remind people that the good times don’t last forever. It’s a tough sell. But as we’ve seen over just the past several days, things can turn around, and turn around quickly. We can’t predict when, why or how – we only know they will. Absent a fully-functioning crystal ball, the only thing we really can do is to be ready when it hits. This is why we say that having a strategy is absolutely crucial. Buildings have fire exits, homes have storm cellars, and prudent investors have a plan. And while no plan or strategy is completely infallible, it’s a good bet that those who strategize for the bad times may be better prepared when they occur. True, the up-markets don’t last forever, but then again, neither do the down-markets. Lucia Capital Group Chairman and CEO Ray Lucia Jr. offers some words of encouragement in this Bonus Edition of Lucia Capital Group Weekly.

Is It Time to Restructure Your 401(k)?
Lucia Capital Group Weekly

Is It Time to Restructure Your 401(k)?

March 5, 2020

One of the nice things about a 401(k) plan is that it’s automatic. You set it up, create your allocation, decide what percentage of your income will go in each pay period, and just let it happen from there. Many people don’t give it much thought after that. And that may be fine, if you’ve still got 10 years or more until retirement. But as the date gets closer to when you’ll actually need to access that 401(k) money, the set-it-and-forget-it approach often becomes less beneficial. You begin to subject yourself to market risks if you don’t change your allocation to include some less-volatile assets. Many people recognize this, and actually do make changes to their 401(k) allocation. But there’s another step that you may be missing — a crucial step that you need to consider, well before you retire.

The 4 Steps of Retirement Income
Lucia Capital Group Weekly

The 4 Steps of Retirement Income

February 27, 2020

Financial planning is our business; it’s what we do every single day. And since no two people have the exact same goals, risk tolerances, investments, and income needs, every single plan we put together is different. Much of the planning process boils down to this: How do we create enough retirement income for you to live the way you want to live, without having to worry about how long your money will last? Some people have all the income they’ll ever need, and more. Others require some extra careful planning to meet their goals. But while the details of each plan may be vastly different, there are some common basic steps that we use to formulate each one.

3 Questions Every Confident Investor Should Ask
Lucia Capital Group Weekly

3 Questions Every Confident Investor Should Ask

February 21, 2020

The current bull market for stocks began on March 9, 2009. But the belief among some investors at that time was that stocks still had farther to fall, and the worst was still to come. They were wrong. Now, nearly 11 years later, we still have not seen another bear market in the S&P 500. This situation has created in the minds of some investors that stocks will continue to climb forever – a mistaken idea that could have dangerous consequences. When markets are flying high (or, conversely, when they’re sinking into oblivion), it can create a recency-bias mentality that may cause you to stray from your stated investing objectives. You may be tempted to make a risky move in response that you’ll later wish you hadn’t: a move that may be irreversible. Before you make a move like that, either out of fear or elation, you should ask yourself three important questions.

Can You Control the Uncontrollable and Forget the Rest?
Lucia Capital Group Weekly

Can You Control the Uncontrollable and Forget the Rest?

February 13, 2020

In last week’s video, we explained why it’s often better to manage the amount of risk you take in your portfolio, rather than trying to achieve a high rate of return.  We showed how two sets of hypothetical portfolios, both with the exact same investments over a 10-year period of time, could have entirely different outcomes — simply by changing the date that a retiree began taking withdrawals. In this week’s edition of Lucia Capital Group Weekly, our “Professor” Rick Plum takes that same hypothetical scenario and expands the time horizon by another ten years.  How did these two (imaginary) identical portfolios fare after a 20-year time horizon? You may be surprised.  
Manage Risk, Not Return
Lucia Capital Group Weekly

Manage Risk, Not Return

February 6, 2020

When it comes to investing, people often make the mistake of focusing on the wrong goal. Certainly, most everyone would like to see a good rate of return on their investments, and it’s nice when that happens, but trying to manage your way into achieving a high rate of return is almost always a fool’s game. Day trading, chasing yield, acting on short-term market predictions, and other gambits are not only time-consuming, but also time wasting. There is simply too much that is out of your control. A better way to go may be to focus instead on what is actually manageable: the amount of risk you take. While lower risk usually offers lower rewards, it may also potentially protect your portfolio from loss. This may be especially true over longer periods of time — and when it comes to stock (equity) investments, a long time horizon is essential.

A Strategy That May Save You Thousands in Taxes This Year
Lucia Capital Group Weekly

A Strategy That May Save You Thousands in Taxes This Year

January 23, 2020

Of all of the bills you pay in your life, your tax bill has to be one of the hardest. Unlike with your credit card bill, or your electric or water bill, you get virtually nothing in exchange for shelling out your tax money. So it stands to reason that you’d like to pay only the absolute minimum amount in taxes over the course of your lifetime, if at all possible. At Lucia Capital Group, we love a good strategy – especially a tax strategy. If you’re in a somewhat high tax bracket, and you want to make a gift to someone in a lower bracket – like maybe your kids – you may be able to do it in a way that benefits both the recipient and yourself.