Financial Planning

At its most basic level, Financial Planning is a 6-step process we as CFP® professionals use to create a comprehensive financial plan for our clients. As a result of this process, we create what we believe to be the best foundation from which to provide advice. The areas discussed below are all components of a well-rounded financial plan. 

Investment Management


How does Nikulski Financial approach managing client portfolios?

It all starts with identifying a client’s risk tolerance. We use a software tool called Riskalyze that helps a client identify a level of risk that is appropriate for them and their specific situation. The output from Riskalyze is then used to create a portfolio that aligns with a client’s risk tolerance. 

Is there an overall investment philosophy at Nikulski Financial?

Yes. We believe the best approach for our client’s portfolios is within a core-satellite investment structure. This means that the majority of a client’s assets are within one of three “core” risk-based model portfolios that we manage: Moderately Conservative, Moderate, and Moderately Aggressive.

The remainder of a client’s portfolio is then invested among “satellite” holdings, where we look to assume a tactical strategy to take advantage of opportunities within the market.

Other questions that we will address: 

  • Does it make sense to time markets? 
  • What type of investments should my portfolio include? 
  • Should I use mutual funds, exchange-traded funds, or individual stocks & bonds? 
  • Does Nikulski Financial have any online tools for me to use? 

 

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Risk Management


Does Nikulski Financial sell insurance?

We do not sell insurance, although we help clients navigate this often-confusing topic. There are good reasons to own insurance, it’s just figuring out what those are and how much insurance should someone buy. This is where we help.

Other questions that we will address:

  • When should I look at getting long-term healthcare insurance? 
  • Is there a point when I should cancel my life insurance policy? 
  • How do I update my beneficiaries on my life insurance policies? 
  • When should I apply for Medicare and how do I navigate this area? 
     

 

 

Taxation


How will retirement distributions affect my taxes?

Ultimately the taxation of retirement account distributions depends on the type of account you are distributing from.  Qualified distributions from Roth IRA’s for example are 100% income tax-free (because the account was funded with after-tax money). Distributions from Traditional IRA’s on the other hand are taxable as ordinary income.

Are certain investments more tax-efficient than others?

Yes, many different types of securities have different tax implications.  One example in particular is Exchange Traded Funds (ETF’s) which are generally very tax-efficient and transparent in cost. By comparison, many mutual funds are inherently tax-inefficient and can create a tax burden even if you did not sell any shares.

Other questions that we will address:

  • What is a Roth Conversion and is it right for me? 
  • Should I take a qualified distribution out of my IRA, even if I don’t need the income? 
  • How are my social security benefits taxed?

 

 

Retirement Planning


Should I contribute to a Roth or Traditional IRA?

The answer to this question may require asking yourself several other questions such as – do I believe I will earn more or less income in future working years?  What are current, past, and proposed future income tax rates? How well is my portfolio diversified from an income tax standpoint?

Lump-Sum or take a pension as an annuity?

How should my money be invested once I retire? How your money is invested prior and during retirement has little to do with the simple fact that you are “retired.” Instead, focusing on your ability to assume risk (from a psychological standpoint how much volatility in your account balance can you endure in the short run) and your capacity to take on risk (how much can you afford to take, meaning what goals are your retirement accounts funding and the time horizon of those goals) determines your portfolio allocation through retirement. 

Other questions that we will address:

  • Will I have enough to retire?
  • When should I collect Social Security?
     

 

Estate Planning


Who will manage my affairs if I am unable to do so?

If you are mentally or physically impaired and cannot carry out your activities of daily living, an attorney in fact or Durable Power of Attorney would take over managing your personal affairs.  If no such document is in place at the time of need, the person providing for your care and managing your affairs may not be who you would have originally intended.

What is probate court? Can it be avoided?

Probate is a public forum in which assets of the decedent are distributed in accordance to their Living Will and from which assets final debts are paid. In certain instances, estates can take years to settle in probate court.  Probate can be avoided if all assets in the decedent’s estate have named beneficiaries or is in a form of ownership that does not cease at death (such as revocable trusts).

Other questions that we will address:

  • How is my property transferred at death?
  • Who will care for my children and how do I ensure my resources will be best used for their benefit?
  • What would happen to my business if I was unable to return to work tomorrow?