Redmond Financial Investment Services: What They Are and Why You Need Them

Seattle Web Design
Small Business Websites
13 min readMar 20, 2023

--

Redmond is a vibrant city with a diverse economy and a high demand for financial services. Whether you are looking for financial planning, portfolio management, pension consulting, tax preparation, or any other financial advice, you can find a variety of qualified and experienced financial advisors in Redmond who can help you achieve your goals. With Eric J. Linger, a Registered Investment Advisor (RIA) and the principal of Sherwood Investments, based in Redmond, WA, you can achieve your financial dreams and simplify your life.

No matter your financial situation or objectives, a financial advisor in Redmond, WA, will help you make informed decisions and optimize your financial performance. However, before hiring any advisor, it is essential to research, compare different options, check their credentials and references, and understand their fees and services. A good financial advisor should be transparent, trustworthy, knowledgeable, and aligned with your best interests.

What are financial investment services?

If you have money to save or invest, you may wonder what financial services can help you achieve your goals. Financial investment services are a broad economic activity category that involves managing money and providing financial products for individuals and businesses. In this blog post, we will explain what financial investment services are, what types of services they offer, and why they are essential for your economic well-being.

Financial investment services are the activities performed by financial professionals and firms that help people and organizations decide how to allocate their money, grow their wealth, and plan for their future. Some examples of financial investment services are:

Financial Planning What It Is and Why You Need It

Financial planning is the process of creating a roadmap for your money and your goals. It helps you understand where you are today, where you want to be tomorrow, and how to get there.

Financial planning is not a one-time event but an ongoing process that requires regular review and adjustment. Your financial plan should reflect your changing circumstances, goals, and needs.

You can create a financial plan on your own or with the help of a professional. Online services like robo-advisors have also made getting assistance with financial planning more affordable and accessible than ever.

Whether you do it yourself or hire someone else, financial planning can benefit anyone who wants to achieve their financial goals. Creating a comprehensive plan covering all aspects of your financial life and having professional management of your investments can reduce stress, increase confidence, and simplify your financial life.

Note: Unlike some planners, I don’t create a big comprehensive plan. I wouldn’t put too much emphasis on them. I understand clients’ objectives and risk adversity through discussions. I use questionnaires to help understand the clients, but discussions are key. Financial plans are out of date the moment they are handed to the client. After understanding clients, I can successfully invest and grow their $$.

Retirement Planning Why It Matters and How to Start

Retirement planning is the process of preparing for life after you stop working. It involves setting goals, estimating expenses, saving money, investing wisely, and managing risks. Retirement planning can help you achieve financial security, peace of mind, and fulfillment in your golden years.

Why Retirement Planning Matters

Retirement planning matters because it can affect your future quality of life, health, and happiness. Here are some reasons why retirement planning is essential:

- You may live longer than you expect. According to the Social Security Administration, a 65-year-old man can expect to live until 84 on average, while a 65-year-old woman can expect to live until 86.5 on average. That means you need to fund 20 years or more of retirement income.
- You may face higher costs of living. Inflation can erode your purchasing power, making goods and services more expensive. For instance, the average inflation rate in the U.S. over the past century (1913–2013) was 3.22% . That means a dollar today would be worth only 4 cents in 100 years at that rate.
- You may need more health care services. As you age, you may encounter more health issues that require medical attention, prescription drugs, or long-term care. According to Fidelity Investments, a 65-year-old couple retiring in 2022 would need $300,000 to cover health care costs in retirement.
- You may need more income sources. Compared to previous generations, you may need access to a defined benefit pension plan that guarantees you a certain amount of monthly money for life. But fewer companies are offering pensions. Therefore, you may have to rely on your savings, investments, and Social Security benefits that may need more to cover your needs.

How to Start Retirement Planning

Retirement planning can seem daunting at first, but it doesn’t have to be complicated if you follow these steps:

  • Know when you want to retire and how much income you’ll need. This will help you determine how much money you need and how long to save.
    - Choose the proper retirement accounts and investments for your situation. Many options are available, such as individual retirement accounts (IRAs), 401(k)s, Roth IRAs, and annuities. Each has advantages and disadvantages depending on your income level, tax bracket, and risk tolerance.
    - Save as much as you can and start early. The sooner you start saving for retirement, the more time your money has to grow with compound interest. Save 10% to 15% of your annual income for retirement.
    - Review your plan regularly and make adjustments as needed. Your goals, expenses, income sources, and investment performance may change due to life events or market conditions. You should review your plan at least once a year or whenever a significant change in your situation occurs.

Retirement planning is not a one-time event but an ongoing process that requires discipline and diligence. By following these steps, you can create a realistic and achievable plan to help you confidently enjoy your retirement years.

Estate Planning Estate Planning: Why It Matters and How to Get Started

Estate planning is preparing for what happens to your assets and obligations when you die or become incapacitated. It may not be the most pleasant topic to think about, but it is essential for protecting your loved ones and ensuring your wishes are respected.

With proper estate planning, you may make a good for your family. They may go through a lengthy and costly probate process, pay unnecessary taxes and fees, face inheritance disputes, or even lose some of their assets to creditors or lawsuits.

To avoid these scenarios, you need to create an estate plan that covers four main aspects:

- A will: This legal document specifies who gets what from your estate, who takes care of your minor children or pets, and who executes your choice (the executor).
- Beneficiary designations: You fill out forms with your financial institutions or insurance companies to name who receives your accounts or policies when you die. These include retirement accounts, life insurance policies, bank accounts, and investment accounts.
- Trusts: These are legal entities that hold and manage assets for the benefit of one or more beneficiaries. You can use trusts to avoid probate, reduce taxes, protect assets from creditors or lawsuits, or provide for special needs.
- Powers of attorney: These documents authorize someone else (the agent) to act on your behalf in financial or medical matters if you become incapacitated.

To create an effective estate plan, consult an experienced estate planning attorney who can advise you on the best options. You should also regularly review and update your plan to reflect changes in your life circumstances or preferences.

Estate planning may initially seem daunting, but it is worth the effort. Sherwood Investments will work with you and your attorney to assist you and help assure it is financially viable. By taking charge of your legacy now, you can save yourself and your loved ones a lot of trouble later.

Investment Management: What It Is and Why You Need It

You may wonder how to make the most of your money. Whether you want to save for retirement, education, a large purchase, or any other goal, you need a strategy that suits your needs and preferences. That’s where investment management comes in.

Investment management is the process of building and maintaining a portfolio of stocks, bonds, and other assets based on your goals, risk tolerance, and time horizon. It can also include financial planning, tax optimization, and advice on your financial life.

You can manage your investments or hire a professional investment manager to do it for you. Managing your investments can be rewarding but requires time, knowledge, and discipline. You must research the market, select suitable securities, monitor their performance, and adjust your portfolio.

Hiring a professional investment manager can save you time and hassle. An experienced investment manager will assess your situation, create a personalized plan, execute trades on your behalf, and report on your progress. They will also help you stay on track with your goals and adjust your strategy when necessary.

There are different types of investment managers available for different needs and budgets. Some examples are:

- Robo-advisors: These online platforms use algorithms to create and manage portfolios based on your answers to some questions. They typically charge low fees and require low minimums.
- Online brokers: These platforms allow you to buy and sell securities with minimal guidance. They charge commissions or fees per trade or account.
- Financial advisors are human professionals who provide comprehensive financial planning and investment management services. They may charge fees based on a percentage of assets under management (AUM), an hourly or flat fee.
- Wealth managers are specialized financial advisors catering to high-net-worth individuals with complex needs. They offer holistic services that cover all aspects of wealth management, such as estate planning, tax planning, philanthropy, and more.

No matter which type of investment manager you choose, ensure they are reputable, transparent, a financial fiduciary who is aligned with your interests. Before hiring, you can check their credentials, reviews, and regulatory records. Note: We should explain what a financial fiduciary is.

Investment management is not only about buying and selling stocks. It is about making smart decisions that help you achieve your financial goals while minimizing risks. Choosing the right investment manager lets you enjoy peace of mind knowing that your money is working hard for you.

Social Security and Medicare

Social Security and Medicare: What You Need to Know

If you are approaching retirement age or living with a disability, you may wonder how Social Security and Medicare work together. These two federal programs provide vital benefits for millions of Americans but have different eligibility requirements, enrollment periods, and coverage options. Here are some key facts to help you understand how these programs can support your health and financial well-being.

What is Social Security?

Social Security is a program that pays monthly income benefits to people who are retired, disabled, or survivors of workers who have died. The amount of your help depends on your earnings history, age, and disability status. You can start collecting Social Security retirement benefits as early as age 62, but your use will be reduced if you claim before your full retirement age (which varies depending on your year of birth). You can also delay claiming until age 70 to increase your benefit amount.

To qualify for Social Security benefits, you must have enough work credits based on how much you earn and pay in payroll taxes. You need 40 credits (10 years of work) to be eligible for retirement benefits, but the number may be lower for disability or survivor benefits. You must also be a U.S. citizen or lawfully present in the country.

What is Medicare?

Medicare is a health insurance program that covers people 65 or older and younger people with specific disabilities or chronic conditions. Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).

Part A covers inpatient hospital stays, skilled nursing care, hospice care, and home health care services. Most people get Part A for free if they or their spouse have paid Medicare taxes for at least ten years.

Part B covers doctor visits, preventive services, lab tests, medical equipment, and outpatient services. Part B has a monthly premium that varies depending on your income level.

Part C (Medicare Advantage) is an alternative way to get Medicare coverage through private insurance companies that contract with Medicare. These plans include all the benefits of Part A and B, plus additional services such as vision, dental, and hearing care. Some plans also include Part D prescription drug coverage.

You can enroll in a standalone Part D or Medicare Advantage plan with drug coverage. Part D covers prescription drugs through private plans that contract with Medicare. Part D plans have monthly premiums that vary depending on your chosen plan.

How do I enroll in Social Security and Medicare?

You can apply for Social Security benefits online at ssa.gov, by phone at 1–800–772–1213, or in person at your local Social Security office. The best time to apply depends on when you want to start receiving benefits and whether you qualify based on age or disability status.

You can enroll in Medicare online at medicare.gov, by phone at 1–800-MEDICARE (1–800–633–4227), or through the Social Security Administration if you already receive Social Security benefits. The best time to enroll depends on whether you are automatically enrolled based on your age or disability status or whether you need to sign up during an initial enrollment period (IEP), a general enrollment period (GEP), or a particular enrollment period (SEP).

If you are automatically enrolled in Medicare when you turn 65 or after receiving disability benefits for 24 months, you will receive your Medicare card in the mail about three months before your eligibility date. You will be enrolled in Part A and B unless you opt out of Part B.

If you are not automatically enrolled in Medicare when you become eligible, you need to sign up during an IEP that lasts seven months: three months before your 65th birthday month,

Pension Buyouts: What You Need to Know

If you are a retiree or an employee with a defined-benefit pension plan, you may have received or will receive an offer from your employer to buy out your pension. A pension buyout is a financial transaction in which your employer pays you a lump sum or a series of payments in exchange for giving up your pension payments.

Why do employers offer pension buyouts?

Employers may offer pension buyouts for various reasons, such as reducing their long-term liabilities, improving their balance sheets, saving on administrative costs, or exiting a struggling industry. Pension buyouts can also benefit employees who prefer more flexibility and control over their retirement income or who need immediate cash for other purposes.

However, pension buyouts also have drawbacks and risks that you should consider carefully before accepting them. Here are some of the pros and cons of pension buyouts:

Pros:

  • You get access to a large amount of money you can use for any purpose, such as paying off debt, investing, buying a home, or starting a business.
    - You can choose how to invest and manage your money according to your risk tolerance and goals.
  • - You may end up with more money than your pension would have paid you
    - You can reduce your taxes by rolling the lump sum into an IRA or another qualified retirement plan.
    - You may be able to leave more money to your heirs if you die before exhausting your lump sum.

Cons:

- You lose the guaranteed lifetime income that your pension provides, which can protect you from longevity risk (the risk of outliving your savings) and inflation risk (the risk of rising prices eroding your purchasing power).
- You may end up with less money than your pension would have paid you if you invest poorly, incur high fees, withdraw too much too soon, or live longer than expected.
- You may lose other benefits from your pension plan, such as health insurance subsidies, cost-of-living adjustments (COLAs), survivor benefits, or early retirement options.
- You may face tax consequences if you do not roll over the lump sum into an IRA or another qualified retirement plan within 60 days.

How to decide whether to accept a pension buyout?

The decision whether to accept a pension buyout depends on many factors, such as:

- Your age and life expectancy
- Your current and future income needs
- Your other sources of retirement income (such as Social Security, personal savings, annuities)
- Your health status and medical expenses
- Your marital status and family situation
- Your tax situation
- Your investment skills and preferences

There is no one-size-fits-all answer to this question. Therefore, it is advisable to consult a financial planner who can help you evaluate the pros and cons of each option based on your specific circumstances. A financial planner can also help you compare the value of the lump sum offer with the present value of your future pension payments using actuarial assumptions and interest rates.

A general rule of thumb is that if the lump sum offer is less than 75% of the present value of your future pension payments, it may not be worth taking it. However, this rule may only apply in some cases. For example, if you are in poor health or have a short life expectancy, taking the lump sum may make more sense than waiting for monthly payments that you may not live long enough to enjoy.

Pension buyouts are becoming more common as employers seek to reduce their exposure to volatile markets and uncertain liabilities. While they can offer some advantages for employees who want more flexibility and control over their retirement income, they also entail giving up guaranteed lifetime income that can provide security and peace of mind in retirement. Therefore, before accepting any offer, weighing all the pros and cons carefully and seeking professional guidance from a qualified financial planner is essential.

About Eric J. Linger Principle of Sherwood-Investments

Eric J. Linger is a Registered Investment Advisor (RIA) and the principal of Sherwood Investments Is this the right url? Regarding financial services, he values close and personal contact with every client.

Before founding Sherwood Investments, Mr. Linger was the branch manager of a significant Edward Jones investment office in Somerville, NJ. He started his career as an electrical engineer at Bell Labs and advanced to senior executive positions in financial planning and analytical areas at AT&T.

Mr. Linger received a Bachelor of Science in Electrical Engineering (BSEE) from Penn State, a Master of Science in Electrical Engineering (MSEE) from New York University, and an MBA from Monmouth University.

--

--