Frequently Asked Questions

At Plotkin Financial Advisors, LLC our goal is to provide comprehensive financial planning and investment management solutions. Below are some frequently asked questions that are answered for your benefit. Please feel free to contact us today if you have additional questions or would like to speak to one of our financial advisors.


Your initial meeting with us is an opportunity for us to discuss your financial goals and concerns. There is no fee or obligation associated with this consultation. We focus on how we can help answer your financial questions by getting to know you. The objective of this initial consultation is for you to become comfortable with our advisors.

Individuals come to us for help understanding their finances. Some feel overwhelmed by too many investment options, want to maintain their current lifestyle in retirement, or are uncertain how to reach their financial objectives. For these reasons, we find it necessary to understand your goals in order to help you sustain your ideal lifestyle without depleting your resources.

If you have specific questions, you are welcome to bring some of your financial information. This information will help us understand from a comprehensive perspective your current situation. To more effectively answer your questions, we ask that you bring:

  • Most recent investment statement(s)
  • Most recent income tax return(s)
  • Estate planning documents (if applicable)
  • Existing Life Insurance and Long Term Care Insurance policy information

We will then review, discuss and fully address your questions with this information in a subsequent meeting.

We encourage you to schedule a meeting to learn how we can help you. Please feel free to schedule this initial meeting by emailing or calling us directly.

Yes, Plotkin Financial Advisors, LLC (PFA) is a hybrid RIA because PFA provides clients fee-only and commission based solutions. Products on which we receive a commission will not be charged a management fee.

We believe in offering our clientele access to as many financial solutions as possible, which is why we use fee-only investments as well as commission-based products. As a result of this complete offering we are able to meet our clients’ investment, financial planning, tax and insurance needs.

If you would like to learn more about our solutions, please feel free to contact us.

Our primary custodian is Charles Schwab Institutional and our secondary custodian is TD Ameritrade Institutional. Through our platform, you will have the benefits of institutional access to your investment accounts. For example, our clients do not incur transaction costs on Charles Schwab’s platform for buying or selling their investments.

We will work with you to establish retirement and non-retirement investment accounts as well as implement retirement plan rollovers to our custodian’s platform. Furthermore, our partnership with Charles Schwab Institutional and TD Ameritrade Institutional offers our clientele:

  • 24/7 online access to view your account(s)
  • Regular statements (mailed or emailed)
  • Institutional account reporting

Having these custodians provides our clients transparency on investment performance, fees, and when transactions occur. To schedule a consultation or to learn more about our firm please feel free to contact us.

As your financial advisor, you have granted us discretionary authority to manage your investment accounts, and this discretion permits us to invest in opportunities that best meet your objectives, time horizon and fits within your risk tolerance.

We allocate your accounts using a disciplined approach that accentuates short and long-term trends. We analyze the following trends to identify investment opportunities:

  1. Secular – long-term trends and themes
  2.  Macro – current health of the global economy
  3. Tactical – opportunistic investments that depend on the economic cycle

After identifying these opportunities, we screen, select and benchmark specific investment vehicles to capitalize on the underlying investment themes we have identified. Collectively, these trends and investment vehicles offer clients portfolio diversification and the potential to take advantage of short and long-term opportunities. To monitor these investments, we have an investment committee that meets monthly to address the market and monitor how the underlying investments (positions) are performing. If a position is underperforming its benchmark, we analyze it further to determine the cause and make a determination if it still meets our selection criteria.

If you would like to learn more about our investment advisory services, please feel free to contact us.

Financial well-being is often complex and met with frustration because individuals and families are usually overwhelmed by all the options and opinions available. A simple “google” search on any financial question will present a myriad of potential solutions offered by individuals. That said, just as you should set an appointment with a doctor for health concerns or retain an attorney for legal matters, you should also consult with a CERTIFIED FINANCIAL PLANNER™ (CFP®) when it comes to your personal finances. CFP® professionals must pass the comprehensive CFP® Certification Examination, pass CFP Board’s Fitness Standards for Candidates and Professionals Eligible for Reinstatement, agree to abide by CFP Board’s Code of Ethics and Professional Responsibility and Rules of Conduct which put clients’ interests first and comply with the Financial Planning Practice Standards which spell out what clients should be able to reasonably expect from the financial planning engagement. (“CFP Certification Requirements | CFP Board.)

A CFP® will be your financial quarterback to help coordinate your personal finances to meet your goals and objectives. When it comes to selecting your advisor, you should ask how he or she is compensated as well as the scope of their investment choices. Lastly, CFP®’s have a fiduciary obligation to remain objective and to align recommendations to meet each client’s goals and objectives.

Your financial situation is as unique as you are, and this requires a customized approach to alleviating your concerns and putting a plan in place for your goals. The biggest difference most clients notice by retaining a CFP® is that they have a purpose when it comes to their finances. Yes, you may contribute to your retirement plan and IRA, save for your child’s college education, but do you know how much you need to save or the investments that may help you reach your objectives? Your CFP® will answer these questions, put a plan in place, monitor your ongoing progress and be there for any questions along the way.

Asset Management

Put simply, yes. The rationale for this is simple in that when you invest too much of your portfolio to one particular investment; you over-expose yourself to the underlying risks associated with that investment. The goal of successful investing is to plan to minimize your downside risk while seeking to maximize your upside potential. Less risk and better returns is also known as alpha, and better risk-adjusted returns can be made possible through diversification. However, diversification does not ensure a profit or protect against a loss in a declining market.

Our advisors at PFA adhere to this concept by building diversified portfolios to improve the likelihood of consistent annual returns while aiming to reduce overall portfolio volatility. It is true that the more concentrated a portfolio, the greater the probability of an outsized return, but the opposite may just as likely occur to the downside – thus, as long-term investors we try to reduce the chance of binary outcomes through diversification. However, to have the best of both worlds – the return potential of a concentrated portfolio and the consistency of a diversified portfolio – we optimize portfolios that utilize a core and satellite holding approach that aligns with a client’s risk tolerance and goals. This “core and satellite” approach consists of building a core strategy in a portfolio that allocates a majority of its holdings to a “core” diversified strategy while implementing a smaller percentage of the portfolio to a given sector or strategy as a complimentary “satellite” holding. This creates a risk-reward dynamic in that you may benefit from the upside potential of overweighting a sector or strategy, however, if that strategy underperforms, it does not drastically reduce the overall return of your portfolio. The other side to diversification is rebalancing, whereby you sell the existing winners of your diversified portfolio and purchase shares of the underperforming investments so that you can maintain a consistent allocation consistent with your investment objectives. In a diversified portfolio, this allows investors to be more systematic in taking gains and reinvesting those gains back into their portfolio.

The advisors at PFA help individuals and their families invest towards their goals. We aim to achieve this through crafting diversified portfolios that enable returns to be more consistent, aligning portfolios per each client’s risk tolerance and ensuring portfolios are rebalanced to keep the initial asset allocation consistent. Without diversification, this would not be possible because we would overexpose clients to unnecessary risk, portfolio volatility and would not be systematic about portfolio maintenance through rebalancing. If you would like to learn more about how we can diversify your portfolio or are wondering if your portfolio is diversified via a complimentary analysis, please feel free to contact us.

One of the most important considerations that one should make when deciding on investments in their retirement portfolio is their time horizon. Specifically, depending on how far away retirement is for an individual will dictate how aggressively they can invest their portfolio. Younger investors with several decades away from retirement will be able to invest more aggressively than an individual or couple nearing retirement. An aggressive allocation invests a majority of the portfolio to equities, and as an asset class equities/stocks tend to be the most volatile. However, if held over a decade, stocks historically offer the highest annualized returns compared to other asset classes. This is why younger investors benefit from an aggressive allocation because they have a long enough time horizon to temper short-term portfolio volatility. However, since stocks are volatile in the near-term, it is nearly impossible to gauge where they will be in the immediate future or even over a couple of years. It is for this reason that a couple nearing retirement will need to begin transitioning their retirement accounts’ objectives from growth to preservation and income.

The other consideration for how you should allocate your retirement account(s) is determining how dependent are you on your retirement savings. For example, is your IRA or 401(K) your only retirement resource, or do also have a pension to compliment these other assets? Outside of social security most retirees are not fortunate enough to have a pension or another guaranteed source of income for life, and will, therefore, need to withdraw funds from their retirement accounts to supplement their lifestyle in retirement. Also, if your portfolio is invested incorrectly in retirement and you need monthly or annual distributions from your accounts, you may be forced to sell at inopportune times such as taking distributions after the market has sold off. To buffer against this it is important to transition your portfolio to generate income so that the underlying investments can offer enough income to meet your needs without having to sell the underlying shares invested in the account. To do this, you will need to identify investments where income is an objective. For example, income generating assets include bonds, dividend paying stocks, or alternative investments like Real Estate Investment Trusts (REITs) or oil and gas limited partnerships that focus on income.

The other risk for your retirement portfolio is inflation, which is also known as purchasing power risk. The best way to protect against this is via stocks, TIPS (Treasury Inflation Protected Securities), or real assets such as real estate that appreciate with inflation. However, it remains necessary to know your time frame so that you can align your overall portfolio to meet your retirement needs. Allocating your retirement account is certainly complex because not only do you have to maximize how much you accumulate and save, but you also have to be vigilant about not creating too much risk in your portfolio – either from being too conservative because of inflationary risk or too aggressive by creating volatility risk.

Plotkin Financial Advisors, LLC has been working with individuals and their families over the past two decades by helping them manage and plan for retirement. If you are unsure if your portfolio is correctly invested based on your time horizon, or if you are wondering how to generate income in your portfolio, please feel free to contact us today.

Yes, we offer a complimentary analysis to individuals either wanting to learn more about their portfolio or just seeking a second opinion. This analysis allows you to better understand the risk and reward to your portfolio, its underlying volatility, current yield, and the underlying expenses of your investments. Furthermore, we have the ability to stress test your portfolio to show you how it may have performed in a bull market year such as 2013, or in a recessionary economy such as the one experienced during the Great Recession from fall 2007 through March of 2009.

Why is it important to have an analysis of your portfolio? It is important to have this analysis performed as it will allow you to see if you are on track with your investments or if there are areas of your portfolio that can be improved. Most importantly, this analysis allows you to see if you are invested aggressively or conservatively. For example, if you are a conservative investor, it would be helpful to see how aggressively your portfolio is allocated as well as how it may perform in a best case or worst case scenario as outlined earlier. If you feel uncomfortable with the outcome than the portfolio review was well worth it as you will be able to modify your allocation to meet your risk tolerance. Conversely, if you are saving for retirement and want to maximize your long-term returns, our advisors can identify the investments that offer the highest potential annualized returns. For example, if you have several investment choices on your employer’s retirement platform, our analysis will show you which allocation has the highest probability to meet your long-term investing objectives.

Our advisors have significant experience and qualifications to analyze and suggest necessary improvements to your current portfolio. We welcome you to reach out today for a complimentary portfolio analysis.

Typically, most clients meet with our advisors at least annually or semiannually. However, we are completely flexible to cater this around you and your schedule. It is important to meet with your advisor as this will give us an opportunity to see if anything has changed with your personal situation or career that may impact how your portfolio is currently managed. As financial advisors, we realize that goals change, and it is for these reasons that we make it a priority to be sure we are managing your assets to complement these changes.

At Plotkin Financial Advisors, LLC (PFA) we focus on maintaining our client relationships and are always available should any questions arise. Furthermore, meeting with our advisors allows you to see the progress you are making towards your financial goals. This helps you to stay on track with long-term goals as well as discuss options around certain unexpected occurrences that may temporarily derail your long-term goals.

PFA is here to be a trusted resource for you as you move towards your goals as well as an objective voice when you are unsure of what makes the most sense when it comes to your finances. Please feel free to reach out to Plotkin Financial Advisors, LLC today to learn more about our solutions.

Plotkin Financial Advisors, LLC (PFA) offers its clients an open architecture platform. Specifically, we have the ability to screen an unlimited number of investments to identify the most competitive offerings for your portfolio. Typically, most of our clients will have accounts that consist of the following:

  • Exchange Traded Funds (ETFs)
  • Unit Investment Trusts (UITs)
  • Mutual Funds
  • Equities
  • Bonds

In addition to the traditional investments mentioned above, we also can offer our accredited and qualified clients, investment opportunities in the following:

  • Public Non-traded REITs
  • Oil & Gas Limited Partnerships
  • Private Equity

Having virtually an unlimited amount of options allows our financial advisors to create customized solutions for our clients. We can position these accounts for growth if a client is seeking capital appreciation or can implement an income-focused portfolio for a client at or near retirement. In addition to the investments offered above, we also have the ability to offer clients tax differed investments via variable or fixed annuities for clients seeking additional income choices. Also, PFA can customize portfolios for individuals and families that are still accumulating assets by establishing automatic deposit and dividend reinvestment programs. Conversely, we structure portfolio’s for retirees to receive money at the beginning of each month to meet their living expenses.

We offer this customized solution because we realize that no individual or family is the same when it comes to investing towards their goals, and it is for this reason that we find an open architecture platform is essential for our clients. If you would like to learn more about our investment options or our platform, please feel free to contact us today.

Financial Planning

Before investing it is necessary first to ensure you have an adequate emergency fund and you have paid off any unnecessary credit cards or high-interest consumer debt. If you are single or married with one income, it is recommended that your emergency fund is sufficient to meet six (6) months of living expenses. If you are married or have two sources income three (3) months of living expenses in an acceptable amount for your emergency fund.

Once these first two criteria are met by reducing debt and saving for and emergency fund, you should contribute to your employer-sponsored retirement account and individual retirement accounts. Examples of a employer-sponsored retirement plans include: 401(k), 403(b), 457 and TSP’s. If you do not have the opportunity to contribute to an employer-sponsored retirement account or you have additional reserves, you may contribute to an Individual Retirement Account (IRA). There are two main types of IRAs, Roth and Traditional. Of these two Roth IRAs are subject to income phase-out and are made with after-tax contributions. Furthermore, Roth IRAs are not subject to required minimum distributions when you reach age 70.5, and distributions are tax-free after the age of 59.5. You may contribute to Traditional IRA’s pre-tax, but unlike Roth IRAs, they are taxable in retirement and RMD’s begin for these after age 70.5. That said, if you have funds available after contributing to your company’s retirement plan then you should make it a priority to contribute to you and your spouse IRAs. Limits for individual and spousal IRA contributions are $5,500 to each account or earned income, which is less. If you are over the age of 50, you are eligible to make a catch-up contribution of $1,000, increasing the contribution limit to $6,500.

If you can fully maximize your retirement accounts and have sufficient reserves, you then may contribute to non-retirement accounts, education planning accounts, etc. The rationale for allocating your savings first to retirement accounts then to non-retirement accounts is that you give yourself an opportunity for tax-differed growth while maximizing your savings to accounts that you will need when you are no longer earning income. Furthermore, by eliminating debt and establishing an emergency fund, you will be prepared for an unexpected expense or job loss. For example, imagine if you had not established an emergency fund and unexpectedly had several repairs and medical expenses. Without the emergency fund, you would most likely need to sell your investments for these expenses, whereby most likely creating a tax liability or incur a loss by selling at an inopportune time. This is why the longer your money can stay invested the better it will perform long-term.

Over the years Plotkin Financial Advisors, LLC has worked with individuals and their families creating investing programs that align with their cash flow while helping to prioritize savings strategies. If you have questions on establishing retirement accounts or how you should be investing your savings, please feel free to reach out to one of our advisors today.

One of the most prominent financial goals for many households is accumulating enough resources to be able to pass your wealth along to family members as well as supporting them in their endeavors.  However, whether you are supporting family or transferring wealth, it remains important to be vigilant of gift tax implications.  That said, most gift around the following circumstances:

  • Education
  • Support or wealth transfer
  • Down payment on a house
  • Medical necessity

Currently, the maximum amount any individual can gift another individual is $14,000 per year.  If you are married, you can gift jointly for a maximum amount of $28,000 to another without incurring a gift tax liability.  If you gift above these exclusion amounts you will create an income tax liability, and will need to plan for this liability with your tax preparer.  Yet, depending on your gift’s purpose, it can be given without incurring a gift tax.  Below are a few examples:

  • If you remit payment directly to an educational institution for another individual you will not incur a gift tax liability.  For example, you and your spouse can directly pay the education institution your grandchild attends while also jointly gifting $28,000 to him or her without incurring a gift tax liability.
  • If you are helping a loved one or family member save for college you can establish a 529 college savings plan.  These plans allow you to contribute 5 times the current exclusion amount without incurring a gift tax liability, however you must wait at least 5 years after the gift before gifting any other funds to that beneficiary.  For example, an individual may gift his or her grandchild’s 529 plan a lump sum amount of $70,000 without incurring a gift tax or a couple may jointly gift $140,000 without incurring a gift tax.  In addition to these savings, individuals may also benefit from state income tax deductions for the respective state the 529 plan is established.
  • You can pay a medical facility or institution directly for another individual without incurring a gift tax liability for that gift.  For example, if a family member has an emergency medical expense at hospital in the amount of $25,000, you can pay the bill directly without creating a tax liability.

Lastly, if you’re helping a family member purchase a residence you are still subject to gift tax rules.  It is encouraged to also discuss the matter with a tax professional to be aware of your options.  Also, if you’re planning to loan these funds to a family member, you need to be sure that you are charging an appropriate interest rate, which is also known as the Applicable Federal Rates (AFR) per the IRS. The IRS offers a monthly table of these rates on their site.  You can review these rates by following this link to the IRS website.

If you have additional questions on gift planning, establishing a 529, or general planning questions please feel free to contact one of our advisors today.

Understanding your cash flow is one of the most important planning components when it comes to building long-term wealth or managing your resources in retirement. This analysis is necessary because it forces you to address if your income is sufficient to meet your monthly expenses and savings goals. To analyze your cash flow, you first need to determine the following:

  • Net Income (after-tax income) as well as other income sources
  • Discretionary expenses
  • Fixed expenses

Your net income is the income you receive after paying federal and state income tax as well as social security and Medicare. Some people also contribute to their employer’s retirement plan and have insurance deducted before arriving at their net income. You can determine your annual net income by multiplying your most recent net paycheck by the number of paychecks you receive on an annual basis (assuming each check is consistent). Most individuals are either paid bi-weekly or bi-monthly. If you are paid bi-monthly, you will receive 24 paychecks per year, and if you are paid bi-weekly, you will receive 26 paychecks per year. Next, you will need to multiply your net paycheck by 24 or 26 depending on if you are paid bi-weekly or monthly to determine your annual net pay (note you will need to determine if your income is above social security phase-out). Your annual net income can then by divided by 12 (number of months in the year) to arrive at an average amount of net income you will receive per month.

After arriving at your average monthly net income you receive per month, you then will need to review your monthly fixed and discretionary expenses. This is usually an eye-opening experience for most individuals and families because annualizing certain expenditures such as dining out can be both surprising and substantial. Fixed expenses have little variation and are necessary expenses you cannot avoid, and these include monthly mortgage or rent, auto and homeowner’s insurance, household utilities, student loans, etc. Discretionary expenses are variable and depend on your habits as a consumer, and these include dining out, clothing purchases, gym memberships, credit card bills, etc. Once you determine these expenses, you will need to annualize these expenses and divide them by 12 to arrive at your average monthly expenses. Yes, certain expenses are paid annually or semi-annually rather than monthly. However, you can keep your monthly accounting consistent by prorating them to a monthly amount.

Finally, after determining your monthly expenses, you then can subtract your net monthly income from your monthly expenses to determine if you are cash flow positive or negative. If you are cash flow positive, you will need to determine if the excess funds meet your savings goals. However, if you are cash flow negative, you will need to reevaluate your spending. The outcome of cash flow analysis is it allows one to plan around a budget if his or her spending needs adjusting. Further, it allows individuals and families better plan how they invest their excess savings. This planning includes action items such as prioritizing contributions to retirement and investment accounts monthly or proactively paying down consumer and household debt. Regardless your situation, Plotkin Financial Advisors, LLC has been helping individuals and their families coordinate their cash flow. Please feel free to contact us today to learn more about how we can help you attain your financial goals.

The Roth IRA is one of the most tax-efficient retirement savings vehicles available. However, individuals and married couples may not be eligible to contribute to a Roth IRA if their earned income is too high or if they do not have qualified earned income. Specifically, single filers with an Adjusted Gross Income (AGI) above $132,000 are ineligible for Roth contributions, and joint filers with an AGI above $194,000 are also ineligible. A Roth IRA allows your account to appreciate tax-free while you are contributing funds and subsequent withdrawals from the account in retirement are entirely income tax-free so long as you are above the age of 59.5. This is useful because they help to keep your income tax liability hopefully lower in retirement than what it was during your career. Roth’s do not have required minimum distributions (RMD’s), which allows more flexibility for when you withdraw the funds. Also, Roth IRA’s are beneficial for estate planning because they do not carry the same tax ramifications for the beneficiary as does the Traditional IRA. It is for these reasons that many consider converting their existing Traditional IRA’s to the more tax efficient Roth IRA.

To implement a Roth conversion, you transfer a percentage or all your Traditional IRA into an established Roth IRA. The consequence of this transfer is you will pay ordinary income tax on the gains accumulated in the Traditional IRA and any pre-tax contributions. It is for this reason that it is important to have an accounting of your contributions over the years. For example, if you have a traditional IRA with a balance of $150,000 and you contributed $100,000, you will owe income tax on the $50,000 while your basis ($100,000) generates no income tax liability so long as your basis was contributed with after-tax dollars. The benefits of the conversion as outlined above can be significant, but we encourage an analysis to determine if the income tax liability incurred from the conversion makes the strategy beneficial for your circumstance. Also, for individuals over 70.5, they cannot use their RMD’s to fund a Roth or any tax-advantaged retirement account.

The ideal time to consider a Roth conversion is when one has little or no income as well as when the markets slump and lower your Traditional IRA account value(s). Often the time when income is least is after retirement before you are eligible for social security and well enough in advance before you need to begin taking your RMD’s. The conversion process can be implemented over several years versus all at once, which may offer an optimal tax savings strategy. Also, if you decide you do not want to convert your Traditional IRA to a Roth IRA, you usually can recharacterize or undo the conversion back to the traditional IRA by October 15 of the following year the conversion was made.

The Roth conversion is certainly a planning technique many individuals and married couples explore ahead of retirement or in retirement, but it is certainly important to carefully analyze the benefits and drawbacks ahead of moving forward with the conversion. If you have additional questions on Roth conversions or would like to explore if it would make sense for you, please feel free to reach out to one of our financial advisors today.

There are many different life insurance products available to individuals and their families. The product that is most appropriate for the individual should be determined by their rationale for being insured as well as their personal situation. That said, one of the most affordable life insurance policies available to individuals and families is term life insurance. Insured policyholders pay a relatively small premium compared to the coverage offered by a term policy.

The key disadvantage to term life insurance is there is no cash accumulation as there would be in a universal or variable life insurance policy. Term policies are usually beneficial for younger individuals or persons seeking coverage for a specified timeframe, which is why it is called “Term” insurance. Term policies can be incorporated meaningfully into financial plans to help protect individuals and families from the following unforeseen circumstances:

  • Income Replacement – Younger parents often haven’t accumulated enough savings or wealth to support their family if the primary income earner passes away while still supporting his or her family. A term life insurance policy can cover the period while his or her children will need to be supported as well as offer enough of a cushion for the spouse to begin a career.
  • Mortgage Protection – Often the largest debt for a couple or family is the mortgage. Consequently, a significant portion of earned income is used on servicing this debt over a period of 15 to 30 years. Therefore, purchasing mortgage protection should be considered if satisfying the monthly payment is not feasible without a spouse. One way to implement this strategy would be to match the policy with the years remaining and principal amount of the mortgage.
  • Education Funding – One of the best gifts parents can give their children, is education as it helps foster their development and offers an opportunity for a career of their choosing. However, a college education is expensive, and tuition will most likely continue to appreciate in the future. Saving for college may take parents up to 18 years from the time their child is born, and if a parent should pass away during those years, it will make saving for college even more challenging and perhaps not possible. Allocating even a percentage of a term policy to go towards education planning will certainly go a long way for your child should the unexpected occur.
  • Benefit Protection – Single life annuities usually offer the highest payment to the account owner. It is important to note that this comes at a price if you are married because if you should predecease your spouse, he or she will be without any income. Couples may purchase term insurance to offset the loss of this pension benefit. However, before selecting this strategy, you should determine if the cost of insurance still makes a single life annuity beneficial. For example, one may find a joint annuity to be optimal after factoring the cost of insurance.

Regardless your situation, term insurance should be compared with other policies in planning for the unexpected. If you would like to learn more about insurance planning or have additional questions on term insurance, please contact one of our advisors today.

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