By Thomas Britt

Many people dream of one day receiving an inheritance, planning what they’d do with the money and how it could impact their future. But when it comes down to it, the news that an inheritance is coming your way is usually accompanied by conflicting emotions. Losing a loved one is hard, but inheriting money can be a blessing. An inheritance can improve your financial situation and offer peace of mind, and it can also remind you of your loved one’s legacy and how much they cared for you.

The unfortunate reality is that sometimes people who receive an inheritance don’t know how to properly manage it. In worst-case scenarios, inheritors blow their inheritance in a matter of years or even months, sometimes falling into more debt as a result of overspending.

You want to use these new funds wisely and avoid risking the legacy your loved one left for you, so it’s critical to approach your inheritance thoughtfully and strategically. Allow yourself time to work through this transition and explore the options available to you. As you navigate this process, keep the following in mind.

Work Through the Grief

Before making any decisions about the money, you need to process the loss of your loved one. Failing to deal with your grief can result in emotional spending that compromises the money you’ve just received. If you give yourself some time, you may become more sensitive to your loved one’s wishes or have the chance to clear your head of complex emotions.

If your loved one spent their life building and protecting their wealth, they probably hoped you’d do the same. Letting your inheritance sit for a minute can help you overcome the initial temptation to splurge on something like a fancy vacation or expensive new home. If it’s important to you to honor their legacy, don’t forget to take care of your own emotions to protect the wealth they’ve gifted to you.

Understand the Type of Inheritance You’ve Received

It’s probably a good idea to consult with a tax planning or financial planning professional so you understand what type of inheritance you’ve received. Common types of inheritances include:

• A trust account or cash
• A retirement account such as an IRA or 401(k)
• A house or other property

Knowing the type of inheritance you’ve received impacts how you access the funds, any taxes that may be associated with it, and what your options are to move forward.

For example, if you inherit a home but don’t want to live in it, you may need to learn more about potential capital gains taxes before deciding to sell the property. If you find that a capital gains tax would be too costly, you might explore another option, such as renting out the house or living in it temporarily as you assess your situation.

Likewise, inheriting a retirement account comes with its own set of considerations, particularly if you inherit the retirement account from a non-spouse. Regardless of the inheritance you receive, it’s best to contact a tax planning or financial professional who understands the intricacies of inheritance situations.

Take Stock of Your Financial Situation

Once you understand the type of inheritance you’ve received, you’re better equipped to align your plans for the inheritance with your other financial goals.

For example, if you have high-interest debt to pay off, you could improve your financial situation by paying down that debt with money from the inheritance. If your emergency fund could use a boost, you might want to set aside a portion of the money to better protect yourself from unexpected life events.

If you’re debt-free and already have a comfortable emergency fund, there are other areas in your life you may need to catch up on, such as:

• Contributing to your retirement account
• Paying down your mortgage
• Saving for your children’s college education
• Giving to a charity or foundation you care about

Consult With a Professional

As with any major financial decision, consulting a professional is the most important step. Experienced and objective advice can help curb temptation and ensure you’re not misusing the inherited money, and a trusted financial professional can also help you optimize the inheritance to build a better financial future for the long run.

We at Benchmark Wealth Management want our clients to live confidently with their future in mind. We take a holistic view of their situation to help incorporate the inheritance into their overall financial plan, boosting their financial security and reaching other financial goals. If you want to partner with a financial planner who has your best interest as their number-one priority, ​call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional and holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

By Richard W. Stout III

We all have to be young before we can be wise. For many, this mantra mirrors their relationship with money. To become financially wise, we need to learn key principles, many of which we wish someone would have shared with us earlier in life.

Whether you’re a parent, grandparent, or young adult, I want to share a few principles I wish I had grasped at a younger age. Whatever stage you’re in, I hope they either help you directly or you take the time to share them with someone who looks to you for guidance in life.

This isn’t just a blanket “start saving and avoid debt” message—it’s deeper than that. What I wish I had known about money when I was younger:

• The power of compound interest and returns
• How money can be a tool for both good and bad
• How our emotions affect our money habits

The Power of Compound Interest and Returns

Gains on gain, interest on top of interest—that’s the power of compound interest or returns in a nutshell. Compound interest is most often received from a savings account that earns interest through a bank. It’s a concept most easily understood through examples.

Each month, the bank pays you interest. The payment is a percentage of your account balance. If your interest rate is 0.5% and your account balance is $10,000, you’ll see a deposit of $50. If you leave the account untouched, next month your interest rate will still be 0.5% but your balance is now $10,050, and the interest payment increases to $50.25.

While at 0.5%, compound interest doesn’t give you much to talk about, putting this same money into the stock market and seeing compound returns may have you running to the rooftop. When your money is in the stock market, the balance will fluctuate. Using our $10,000 example, let’s say you saw a 10% return last year. That means your new balance is $11,000. Likely the easiest $1,000 you ever made.

While downturns in the stock market are inevitable, if you play the long game, history shows that the stock market has seen a nominal rate of return of 10.9% over the last 50 years. (1) Generally speaking, this means an average return of 10.9% before considering taxes, fees, and inflation. (2)

So what happens if you leave that $10,000 in the stock market for 30 years and receive an average rate of return of 10.9%? You’ll be sitting on $222,816.01. Many new to these concepts have a more conservative take; after all, most of us have lived through recessions. Even at a rate of 5%, your $10,000 will grow to $43,219.42 after 40 years.

In both cases, the growth potential is too great to ignore. The problem comes when people learn this lesson when they’re 55 instead of 25. While these examples speak for themselves, the key takeaway is that putting away money today is how you work smarter, not harder. Time is precious when it comes to compound interest and compound returns.

How Money Can Be a Tool for Both Good and Bad

In the last example, you saw how a relatively small amount of money can be used as a tool to accumulate wealth. You don’t have to be rich to invest $10,000. But coming up with $222,816.01 later in life, if you missed the boat early on, is impossible for many. (3)

Concepts like paying yourself first—where you put away a small amount of your money from each paycheck or every month—are solid principles for leveraging time and accumulating wealth without leaning on luck or hoping for an inheritance.

Apply this idea to maxing out an IRA. Those under 50 can contribute $6,000 per year. Divide that out over 24 paychecks in a year, and you’re looking at $250 in contributions. While it may take a bit of budget finagling to come up with that every paycheck, many will spend that money either way. Using money as a tool, for good, is a choice. Foregoing an auto loan is a perfect way to come up with that money without cutting back on your regular spending.

Speaking of auto loans, debt is an easy way to use money as a tool for the bad. A seemingly little bit of money can get you an awful lot in today’s world. New cars and homes outside our budget are two ways many leverage debt to get things they want instead of prioritizing retirement saving and living within their means.

Remember the compound interest example where you were effortlessly making tens of thousands of dollars over time? The same principle applies here, except this time it’s turned around, and you’re lining someone else’s pocket with money by paying interest instead of receiving it.

How Our Emotions Affect Our Money Habits

Are you a spender or a saver? Many of us naturally lean toward one over the other. But think about these other factors: safety net, social status, helping others, supporting your family, name brand, budget. Each of these will spark emotion and play into how we handle money.

Understanding your emotional ties to money will help you pivot in some areas and learn where you need to make improvements. In the same frame of thought, it can point out strengths and areas where you’re using money as a tool for the good.

Generally speaking, if we are greedy or self-centered by nature, our spending habits often reflect these characteristics. Remaining grounded, thinking about those around us, and prioritizing the future we truly want are great ways to overcome negative emotional ties to money.

Getting it Right With a Financial Planner

With these principles in mind, you’re in the right frame of mind to make sound financial decisions. After all, success with money is often more about discipline and consistency when you’re young rather than mastering complex financial concepts.

When you’re ready to make good decisions, but need a hand in assuring you’re maximizing the dollars you’ve saved, a financial planner can guide you through the planning, savings, and investing strategies required to meet your personalized goals.

This is best done in person so we can get to know you and share our approach firsthand. For a consultation to see if our services can help improve your financial situation, please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon only when coordinated with individual professional advice. Past performance is no guarantee of future results. Diversification does not ensure against loss

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results.

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

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(1) https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/

(2) https://www.investopedia.com/terms/n/nominal-rate-of-return.asp

(3) https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

By Thomas Britt

Parents of children with special needs typically face unique challenges at various points along their journey: increased medical expenses, highly specialized care, and the need for extra support (just to name a few). On top of this stress is the added burden of worry about what will become of your child when you pass away. One way to lighten the load is to ensure the financial aspects of these needs are covered. So, how do you plan for these challenges and secure a sound financial future for your child?

Consider the practical steps below that you can take now to not only give yourself peace of mind that your child will be secure if something should happen to you, but also help to provide your child with safeguards while you’re still here.

Look into Government Assistance

Do you qualify for government assistance? While some qualifications vary by state, here are two programs we suggest you investigate.

Supplemental Security Income

Supplemental Security Income (SSI) is a federal income supplement program that provides cash to meet basic needs for food, clothing, and shelter. (1) If your child meets the Social Security Administration’s definition of a disability, then they may qualify for assistance. While your child is under age 18, Social Security considers all household income when determining eligibility. Once your child turns 18, benefits are calculated on his or her income alone. (2)

Medicaid

Medicaid is federally funded, but it’s administered and operated by the State (which means eligibility may vary from state to state). In most cases, if your child qualifies for SSI, they’ll qualify for Medicaid too. Medicaid funds can be used for healthcare expenses, home health services, medical equipment, and more.

Save for the Future

529 ABLE

Even with government assistance, you may still have ever-growing out-of-pocket costs as you care for your child. A 529 ABLE account helps fill in this gap.

529 ABLE plans, which are similar to 529 college savings plans, can be used for qualified disability-related expenses in addition to education-related expenses. These expenses may include housing, transportation, employment training, healthcare, and anything else needed to maintain your child’s quality of life.

As of 2021, you can make an after-tax contribution of up to $15,000 per year into an ABLE account. (3) The money is withdrawn tax-free for qualifying expenses. As long as the account balance is below $100,000, it doesn’t count toward calculating SSI eligibility.

Special-Needs Trust

For most high-net-worth families, opening an ABLE account is the first step in securing their child’s future. The second step is establishing a special-needs trust. Assets placed in this type of trust don’t interfere with your child’s ability to receive government assistance (as long as all assets list the trust as the beneficiary, not the child).

If your child is named the beneficiary of assets totaling more than $2,000, they’ll no longer qualify for government assistance. Keep this in mind to share with well-intentioned family members or friends who would like to leave assets to your child. They’ll need to list the trust as the beneficiary in order for your child to remain eligible for benefits.

Hope for the Best (But Prepare for the Worst)

Letter of Intent

You know your child better than anyone. If anything were to happen to you, you’d want your friends and family to be aware of all those personal details. A Letter of Intent does just that. While this document isn’t legally binding, it can include incredibly helpful information, such as:

• Your child’s daily, weekly, and monthly routine
• Your child’s personal likes and dislikes
• Your hopes and dreams for your child
• Your child’s medical history
• Contact information for doctors
• Any other pertinent information

Adult Guardianship

Once your child is 18, they’re legally an adult in the eyes of the law. If you foresee your child needing guardianship beyond the age of 18 (because they’re unable to make their own medical and financial decisions), speak with a professional about how you can become their legal guardian. This process may include creating a power of attorney or healthcare proxy in the event of an emergency.

Your First Step

As the parent of a special-needs child, you’re no stranger to both profound challenges and extraordinary joys as you experience the ups and downs together. This unique role deserves support in every possible area, but especially in the area of finances. As the father of a child with Asperger’s, my personal knowledge and experience inform the work that I do. I am honored to support you on this journey. The Benchmark team and I can help you navigate these complex financial issues by providing resources tailored to your specific situation. Please call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation. Together we can assess if we’re the right fit for your family as you move closer to financial security in this unique area of need.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

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(1) https://www.ssa.gov/ssi/

(2) https://www.ssa.gov/ssi/text-eligibility-ussi.htm

(3) https://www.finra.org/investors/learn-to-invest/types-investments/saving-for-education/able-accounts-529-savings-plans

By Richard W. Stout III

On both a local and global scale, the unprecedented uncertainty of the past year and a half has been the cause of increased stress for many people. Corporations and individuals alike are having to constantly adjust to an ever-changing world.

In times such as these, many people respond by putting their financial planning on hold in an effort to avoid adding to their stress. Rather than putting off taking action, let our team at Benchmark Wealth Management act as your support system, helping you to manage the financial stress that you have in your life, and working with you to create a comprehensive financial plan that will meet your needs in this rapidly changing world.

Guiding You Through Challenging Times

We understand that the financial decisions you make can have a lasting impact on those around you. When planning for the future, you may not only need to consider your own needs but also those of the people you love and who may depend on you. Creating a financial plan that takes into consideration where you are financially, where you want to be, and how you are going to get there can be a tall order in this challenging environment.

Planning for retirement, buying a home, and saving for a child’s college education are some of the financial challenges many individuals face today. A dedicated financial planner in your corner can ease the burden of making some of these stressful decisions. Our background and education have informed our ability to analyze our clients’ lifestyles and create a personalized financial plan for them. We want our clients to have confidence in their finances regardless of market conditions or the state of the world around them.

Providing Exceptional Service to You & The People You Care About

Benchmark Wealth Management offers a personalized, white-glove experience. We listen to your needs and provide advice that aligns with your values and expectations. We know the importance of creating a financial plan that helps you take control of your life no matter what challenges you face.

For us, providing trusted fiduciary care is just the beginning of our process. The care and attention we give our clients is what truly sets us apart from other firms. We treat each and every client as if they are our only client. Not many execute a service model to the level we deem necessary. It’s how we do business. No exceptions.

Friends & Family Are Welcome

If you know someone you believe would benefit from our insight and guidance, we welcome the opportunity to meet them. In addition to arranging to meet in person, we can also have impactful conversations by video chat or phone. We know time is valuable – when and how we meet can be personalized to accommodate the busiest of schedules. Please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results.

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

By Richard W. Stout III

Social Security is an important piece of your retirement puzzle, even if you won’t be relying on it to pay the bills. However, just because you may already have a nest egg to provide for your later years, don’t overlook Social Security. After all, those benefits are rightfully yours and you should take the time to optimize them for your unique situation.

For the Single Women

Many women make the mistake of claiming Social Security as soon as they’re eligible. Few wait until full retirement age, and even fewer wait until age 70. But your benefit amount increases by 8% each year from 66 to 70, plus cost of living increases for inflation, so it pays to wait. (1)

For example, let’s say your full retirement age is 66 and your monthly payment is estimated to be $2,000. The chart below shows how much you’d get every month if you started collecting at age 62 (reduced benefits), 66 (full benefits), and 70 (increased benefits).

If you start collecting benefits at this age…	your monthly payout will be this much…
62	$1,500
66	$2,000
70	$2,640

 

Just by waiting until age 70, your monthly payout increases by 32% each month, which could lead to thousands of more dollars throughout your retirement. (2)

But when you should claim benefits isn’t as simple as waiting until age 70. Your health, home, and personal circumstances could indicate otherwise. Maybe you find out you have advanced-stage breast cancer, so you start taking benefits at age 62. Or maybe you are in good health and have plenty of other resources, so you use other accounts to fund retirement while you wait until age 70. Tailoring your claiming strategy to your unique life circumstances is key, and a professional can help you take all factors into account.

For Those Who Are Divorced

This may come as a surprise, but divorcées can claim their ex-spouse’s benefits as long as they were married for at least 10 years. The amount you receive is equal to 50% of your ex’s benefits. If you qualify for your own benefits, you either receive 100% of your benefit amount or 50% of your ex’s, whichever is higher. (3)

If your ex passes away, you receive benefits as a widow, which means you get 100% of your ex’s payout. The best part? Your ex never has to know you’re collecting spousal benefits. Social Security doesn’t notify them and you’re not required to reach out. There is one caveat to this rule, however. You won’t qualify for spousal benefits if you remarry. Your ex can, but you can’t. Although, if you happen to remarry and your second marriage ends in divorce or your spouse dies, you’d once again be eligible for your first spouse’s benefits.

For the Widows

Widows and divorcées who were married for at least a decade are eligible for survivor benefits when a spouse dies. Just keep in mind that you won’t qualify for survivor benefits if you remarry before age 60.

As with regular Social Security payouts, you receive reduced benefits if you claim them before you reach full retirement age. But unlike regular payouts, you don’t have to wait until you’re 70 to get the highest amount.

The chart below shows what percentage of survivor benefits you’d get based on your situation: (4)

Widow Type	Benefit Amount Before Retirement Age	Benefit Amount At Full Retirement Age
Widow	71.5% to 99% (starting at age 60)	100%
Disabled Widow	71.5% (starting at age 50)	100%
Widow With Child Under Age 16	75% (at any age)	100%

Meet With a Financial Professional

Social Security is an intricate puzzle with many pieces, so attempting to go at it alone may not be the best course of action. To gain clarity and help maximize your benefits, it’s best to work with a financial professional.

Our team at Benchmark Wealth Management can help you evaluate your options and choose a claiming strategy based on your unique situation. We are here to walk with you as you navigate Social Security, and the rest of your financial journey as well. If you have questions about Social Security or you need help developing a big-picture financial plan, please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

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(1) https://www.ssa.gov/benefits/retirement/planner/delayret.html

(2) https://www.ssa.gov/oact/quickcalc/early_late.html

(3) https://www.investopedia.com/articles/financial-advisor/112216/divorce-and-new-social-security-rules-what-know.asp#:~:text=The%20basic%20rules%20for%20divorced,age%2062%20and%20currently%20single

(4) https://www.ssa.gov/planners/survivors/ifyou.html

By Thomas Britt

For over 20 years, I have had the pleasure of executing financial plans for a number of Pfizer employees when their incentive stock options (ISOs) or nonqualified stock options (QOs) became vested. It can be an exciting season, and if done correctly, can yield incredible financial opportunities.

However, in order for these options to be a blessing and not a curse, they need to be treated carefully and deliberately. There are 3 paths to choose from when it comes to exercising stock options:

1. You can hold on to the options.
2. You can exercise your options and hold the stock.
3. You can exercise the options and then immediately sell the stock.

None of the choices listed here are inherently better than the others. It’s important to take into consideration your current financial standing and your long-term strategy when deciding which path is best for you.Let’s unpack the different options and why each one might make sense for you.

Path 1: Hang Tight and Plan

The first option has a singular but powerful purpose, and that is to allow you time to plan. Jumping into exercising your ISOs/QOs can put a lot of strain on your liquid cash assets. On the other hand, cashing them out immediately can expose you to tremendous tax liabilities.

Because you have about 10 years to exercise your ISOs/QOs, you don’t have to make a move right away. If you don’t have a solid plan, appropriate resources to exercise, or if you are in a disadvantageous tax situation to cash out, then waiting may be the right move.

But waiting doesn’t mean that you aren’t taking action! Now is the time to put a plan in place, setting time frames for when and how much you will exercise. Further, you need to consider your larger financial goals and plans and optimize your ISO/QO strategy in such a way that it enhances the big picture. For example, you may have 10 years to use your options, but if you are scheduled to retire in 5 years, then it’s important that your plan takes this into consideration.

Path 2: Exercise and Hold

Because of the way selling stock is taxed, ideally you always want to hold it long enough for it to become qualified. Basically, the rule is that if you sell your stock within one year of exercising your option, or within 2 years of it being granted, then your gains will be considered unqualified and subject to standard income tax. This is not a favorable tax situation.

Comparably, if you are 2 years past the grant date and 1 year past your exercise date, then your gains are now considered qualified and are subject to long-term capital gains taxes. This is a very favorable tax situation.

The difficulty lies in fronting the cash to purchase your options. If you are buying 5,000 shares at $20/share, that’s $100,000 (which is the legal annual limit). If you have $100k of liquid assets that you can tie up for a year, then this may not be a problem. However many people have their money working for them in other long-term investments, making this difficult.

One way to handle this is to utilize what is called a cashless hold, where you cash out just enough of the stock to pay for the whole option. You will be subject to standard income on whatever you cash out, but the rest of the stock you can hold on to until it is qualified, or even longer if it makes sense for your plan.

Path 3: Make the Cash Grab

Finally, as long as your options cost less than the stock is worth, this might be an opportune time to make the most of these additional funds. Maybe you have been thinking about buying a boat or upgrading to a bigger house and cashing in may seem like a good way to fund these dreams. It’s possible; however, easy isn’t always best, and fast isn’t always wise.

There are certainly times when this is the best path to take. Perhaps you find yourself in a crisis at the same time the options are vested, or maybe you find yourself preparing to leave the company unexpectedly and needing to exercise your options before they expire. Regardless of your particular circumstances, to ensure that exercising options makes the most sense at any given time it’s important that all aspects of your financial landscape be considered to avoid unnecessary tax implications.

Getting Expert Help

This article touches on only a small part of what really should be a much larger discussion with a financial planner. As you can see, there are many considerations when handling your Pfizer stock options. If you need help navigating through this phase of your wealth management, I have the experience and expertise you need on your side.

Together we can walk through your options and custom tailor a strategy to work for your specific situation. To arrange a consultation, call 860.434.6890 today, or email me at thomas.britt@bwmllc.net.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

By Richard W. Stout III

Our clients’ successes are the reason we do what we do. Because our relationships with our clients are built on deep understanding, mutual respect, and earned trust with one another, we celebrate our clients’ successes as if they were our own (which, in our eyes, they are). Below, we describe how we helped one couple, Martin and Claire, (1) weigh the pros and cons of a seemingly attractive opportunity to choose the best option that would help them achieve their goals.

The Client

Martin and Claire were in their early 50s and had been clients of our firm for five years. Claire worked as an executive at a Fortune 100 financial services company, while Martin owned and managed their multi-generational, family-owned commercial real estate company. Both are very good at what they do, but their jobs required them to sacrifice precious time with each other and their family. They dreamt of retiring early so they could enjoy as much time as possible together.

The Goal

The scenario we’re about to describe began when Claire was recruited by another financial services institution that made her an attractive job offer. At face value, the offer appeared to be a wonderful opportunity. This position granted a larger salary than what she was currently making plus an enticing sign-on bonus. At the time, it seemed like a no-brainer that she should accept.

However, given the time and sacrifices they had each made in their careers, one of the couple’s biggest priorities was to be able to retire early, which we had built into their comprehensive financial plan. Their goals also included paying for their child’s college education, purchasing a retirement home in Arizona, and being able to live comfortably even after retiring early.

Before making a decision about the job offer, Martin and Claire called us to discuss how this transition might impact their goals, especially in terms of early retirement.

How We Helped

To help Martin and Claire sort through the complex nuances of this decision, we reviewed the solid financial plan we had built and maintained to work toward the important goals they have. We decided to evaluate the positives and negatives of Claire’s new opportunity, as well as how their future goals might ultimately be affected if she were to take it.

We discovered that the greatest benefits to the new position were the higher salary and the signing bonus. The negatives, however, included the fact that Claire would forgo substantial stock awards if she left her current employer. Additionally, the tax implications of the signing bonus were significant, especially when combined with the loss of the stock awards.

The Outcome

We determined that if Claire took the new position, the net impact would result in a high probability that the couple would not be able to retire at their target age of 58 with their desired income level. As stated before, this is and has been one of their top priorities.

Initially, the new job opportunity appeared like a great “next move” for Claire’s career and the couple’s financial goals. But upon conducting a full, informed analysis using their existing financial plan as the blueprint, the better long-term option was for Claire to remain in her current position.

This outcome was not what Claire and Martin had initially expected, but the couple used the planning process to determine and understand the consequences of the two options. Having a good command of all variables—and the interplay between each variable—enabled this couple to make a decision based on reason and probability rather than emotion and the initial attractiveness of the “up-front money” from a higher salary and signing bonus.

Subsequent to this decision, Claire elected to stay at her current employer and was actually soon promoted to an internal position. With her increased compensation from the promotion, Claire and Martin further solidified the likelihood that they would be able to meet their goals, most importantly, early retirement.

Helping You

Throughout your life, you’ll be confronted with various opportunities or difficulties that will have an impact on your goals for the future. The decisions you make will almost never be black or white and will often consist of multiple intertwined variables. Unsurprisingly, our emotions are not always the best guides when it comes to making these decisions. So if you can’t rely on your emotions, what can you do?

At Benchmark Wealth Management, LLC, we’re committed to helping you examine each and every component of your possible decisions to determine the most appropriate outcome that will help you reach your goals. Instead of relying on intuition, let us help you approach your tough decisions using principles of reason and probability. To find out how we can help you, please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

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(1) Names changed for confidentiality

By Thomas Britt

Currently the housing market is booming, thanks to record-low inventory, low interest rates, and high demand, (1) so many of us have houses on the brain. It’s no secret that many joys come along with being a homeowner, but there’s also no denying the hefty price tag. As most of us are unable to purchase a house in full, we are encumbered with a mortgage as soon as we lay down the welcome mat. This debt is unavoidable, so now the question becomes how to handle it moving forward.

The basics regarding debt are common sense: debt reduction is a healthy financial goal (especially when it comes to high-interest debt such as credit cards or student loans), and it’s important to minimize debt for plenty of reasons. But do these principles also apply to mortgages? Is it better to put every extra dollar toward your mortgage or invest that money instead? Like most financial decisions, the answer will depend on your unique situation.

Let’s discuss some pros and cons of each strategy.

The Best Use of Your Funds

If you are considering paying off, or paying extra on your mortgage, we can assume you have extra cash each month, or a lump sum you need to make a decision with. Of course, leaving additional funds sitting in a savings or checking account where you’re earning less than a percent of interest would never make good financial sense. You want your money to work for you, so the question to ask is, “What option will give me the biggest payoff?” Many clients choose the simple comparison between their mortgage rate and the rate of return on their investment or portfolio. However, the decision goes far beyond that. Paying down your mortgage is akin to investing more into your home. How will your home’s appreciation compare to that of your portfolio? What role will that appreciation play in your long-term goals?

Like most financial decisions, there are plenty of factors that could affect the outcome. And as we all know, even the best estimates aren’t guaranteed. It is important to run a thorough analysis and consider a variety of factors: the current interest-rate environment, potential taxes on new investments, the loss of mortgage interest deduction (if applicable), your risk tolerance, private mortgage insurance, among the other elements of your financial life. An experienced financial planner can provide the needed guidance and direction when it comes to such a decision.

Weigh Your Options

There are some pros and cons to each choice that go beyond the raw math. Liquidity is a significant pro for investing since you’ll have greater access to the funds in case of an emergency or for your other financial goals. By placing the money toward your mortgage, thereby investing more in your home, your options become more limited. The only way to access those funds would be to sell your house or refinance your mortgage.

The advantages to paying down your mortgage are obvious. The additional cash flow created from the savings can be redirected to your longer-term goals or strengthen your monthly budget once retired. The savings created could also potentially be used to offset your healthcare or long-term care coverage once retired as well.

Is Being Debt-Free Important to You?

Paying off your mortgage can have other non-financial benefits as well. Transitioning into retirement debt-free often provides clients with peace of mind at a time when they are feeling financially vulnerable. Living solely off one’s investments or Social Security can be intimidating, and having one fewer obligation can help with that transition. So while the numbers don’t lie, they often don’t tell the whole story.

It’s Not All or Nothing

So after considering these options, which is the best for you? For some, a combination of these two choices may make the most sense. This could mean adding more money to each mortgage payment to bring down the principal while still putting the bulk of your extra money toward other investments.

Before taking any action, it’s important to take several variables into consideration. And as with any major financial fork in the road, it’s always wise to first consult with a financial planner. So before you pay off your mortgage, we at Benchmark Wealth Management would love to help you evaluate your options. We can provide personalized financial planning advice, and maybe even show you alternative investment strategies you hadn’t considered. After all, our goal is for you to enjoy your home without worry keeping you up at night.

To see if we are the right fit to help you navigate this financial decision—and all the others on the road to your ideal financial future, please call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

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(1) https://www.forbes.com/sites/forbesrealestatecouncil/2021/03/22/2021-housing-market-trends-what-buyers-need-to-know/?sh=1adaad8c40b3

By Richard W. Stout III

Are you tired of hearing the word “unprecedented”? Unfortunately, it’s really the best word to describe what we’ve all lived through this past year. A global pandemic marked by nationwide lockdowns—who could have seen that coming? Political, economic, and social unrest, as well as the stress of adapting to new work schedules and environments…probably not what you expected. Perhaps you or someone you know has experienced a job loss or a change in company structure. After a year of our lives being turned upside down by COVID-19, change and uncertainty have become the norm rather than the exception. To say this is a stressful and confusing time is an understatement.

But the good news is that you have someone on your side who is committed to you, your life, and your finances. No matter what happens, you have us to rely on.

Do your friends and family have this kind of support system?

Guidance in Hard Times

Social distancing and isolation measures have resulted in many of us spending much more time at home with our families. At the same time, we’ve been separated from our extended families and social support systems. This has all served to remind us of the importance of friendship and community and forced us to learn how to be there for each other in new ways. We know that you are not just concerned about yourself, but also your loved ones.

There is a lot of fear in our world right now, and fear can make people do unwise things with their money. Our goal is to see you and those you care about weather this storm with confidence and come out the other side ready to move forward and work toward your goals.

If you have friends or family members who are in need of financial guidance during this stressful time, we’d love to be there for them like we are for you, analyzing and evaluating their financial picture and sharing solutions to help them stay on track to reach their goals despite market turmoil and economic uncertainty.

We Are Here for Your Friends and Family…Virtually

We want to let you know that we at Benchmark Wealth Management are still working and operating our business…just not in the same way as before. Whether you are quarantined, sheltering-in-place, or adhering to social distancing guidelines, you are not alone. If you or your loved ones have any questions or concerns about finances, goals, asset allocation, risk, what the markets are doing, or anything that’s causing financial stress, we are available virtually or in person, if needed. Contact us anytime at 860.434.6890 or email me at richard.stout@bwmllc.net and let your friends and family members know we offer a complimentary introductory meeting!

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

By Richard W. Stout III and Thomas Britt

We are pleased to announce the launch of our updated website, redesigned to offer a fresh focus on who we are and what we do.

Our Why

Our hope is that our redesigned site conveys our commitment to unparalleled service. Providing fiduciary care is the starting point of what we do, and we take this very seriously. But the level of care and attention we give our clients is what we believe truly sets us apart. We love what we stand for and we know from all of you that you do too. We wanted our goal – the delivery of unsurpassed wealth management – front and center on the new site. Did we hit the mark?

We also wanted our mission to come across loud and clear! When you work with a financial planner, you develop a long-term relationship with them that only grows as you weather life’s storms. That means that in addition to highlighting the services we offer, it’s important for visitors to be able to get a sense of who they will be working with and the mission and vision of the firm to ensure that who we are and what we do aligns with their philosophy.

Exciting Features

Our updated site features photography by Kim Tyler of Kim Tyler Photography, who made us look far better than we deserve. We also invite you to check out two featured videos, created by Pat Lore and her team at Headline Productions. The main video provides an overview of our firm, while the second highlights our community involvement, something to which we are firmly committed. Video is a new format for us – let us know what you think!

We’re especially excited about what we hope you’ll find is an interesting new feature in our “Resources” section: recommendations from Rick and Tom on books and podcasts that made them think, sparked new ideas, grabbed their attention, and ones they feel will add value to your life (and they aren’t all about finances)!

The vast majority of prospective clients have no idea that what we provide and deliver exists. We hope that after clicking around our site, meeting the team and watching the videos, a visitor’s interest will be piqued and perhaps a new relationship formed.

We invite you to share our website with friends, family, and coworkers. We truly hope you enjoy what we’ve created and welcome any feedback you’d like to share! Take a live tour now!

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.