WrapManager's Wealth Management Blog
When life changes, we can help you thoughtfully respond.

Michael J. O'Connor

CWS®, Vice President Investments

Recent Posts

How to Successfully Roll Over Your 401(k)

Posted by Michael J. O'Connor | CWS®, Vice President Investments

August 29, 2018

When a person leaves a job to retire or to join another employer, there are often decisions about what to do with your 401(k). Should you leave it where it is, and just not mess with it? Should you roll it over to your new employer’s plan? Should you roll it into an IRA?

Those three questions, in fact, present three distinct options for an investor to potentially choose from. In this post, we’ll examine each option, detail the pros and cons, and in the process, hope to provide you a road map for how to successfully manage your 401(k).

After all, there’s no reason for an investor to not do something with their 401(k) because it just seems too hard to move without incurring penalties. Our biggest suggestion though is that – unless it’s absolutely necessary – you resist the temptation to cash out. Cashing out of a 401(k) and taking it as a distribution means potentially incurring a sizable tax burden, and if you are under the age of 59 ½ your distribution will also be subject to an early distribution penalty of 10% unless an exemption (such as medical costs) exists.

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401(k) Rollover 401k

Writing Your Will – Ensuring Your Wishes are Known and Followed

August 1, 2018
Our estate planning hats are on this week, and we have two fundamental but essential questions for readers: (1) Do you have a will? and (2) If you do, have you updated it in the last year? If the answer to either of those questions is no, we have five reasons it should be yes: Don’t Let State Laws Determine Who Gets Your Assets – when a person passes, and it is determined that he/she did not have a written will, then state laws will usually determine how the person’s property will be distributed. Though the state will generally opt to distribute property amongst family and close relatives, the fact that the state is making the decisions is problem enough. You work hard for the assets you accumulate over a lifetime. It should be up to you how those assets are distributed. [+] Read More

4 Healthy Financial Habits Everyone Should Have

July 25, 2018
Oftentimes when it comes to investing, there are habits/tasks we know we should do, and habits/tasks that we’d maybe prefer to do. Saving 20% of every paycheck and keeping cool during volatile markets are examples of things we should do. Splurging on a trip to Europe and selling stocks to “wait out” the downside volatility might be examples of things we’d prefer to do. For many savers and investors, there is a constant tension between these two, even though we know that the clearest path to long-term success is saving more, spending less, and investing prudently. Much like losing weight, the formula for success is fundamentally simple – but the execution and follow-through can be painstakingly hard.   The fundamental question, then, is: what can we do to shift our behavior? What can we do to form better, lasting habits that lead to long-term financial success? [+] Read More

How Jobs and Financial Markets Intersect

July 11, 2018
How important are jobs and the unemployment numbers to financial markets? So important that strict rules were put in place over 30 years ago in an effort to prevent the numbers from being prematurely released to the public. Generally speaking, the only people with access to the numbers – before their official release – are the staff of the agency issuing the data, and the President of the United States and his executive team. Since the jobs numbers are considered “market-moving data,” it makes sense that the data should be treated, in a sense, like insider information. Here’s how it works: The Bureau of Labor Statistics (BLS) releases its monthly employment report on the first Friday of the month, at 8:30 AM. But the night before, the president and several senior administration officials — including the Treasury secretary and the chairman of the Council of Economic Advisers — are briefed on the numbers. By rule, no one can discuss the numbers at all before the official release at 8:30 AM. In fact, the data is considered so sensitive that staffers are supposed to wait until a full hour after the release to make any public comments about it.  [+] Read More

It’s the 2nd Longest Economic Expansion in U.S. History – How Long Can It Last?

June 6, 2018
Through April of this year, this economic expansion is now 106 months old. If the US economy continues to grow through May – which seems all but assured – it would make this economic expansion the second longest in US history. Looking out even further, if the economy continues to grow through July 2019, it would become the longest period of growth in the history of the country. There’s a real chance it could happen – in a recent poll of global fund managers by Bank of America Merrill Lynch, only 13% of them thought a recession was likely in the near term. Using Corporate America (earnings) as in indicator, the numbers also support the case for more growth: in Q1 2018, the blended earnings growth rate for S&P 500 companies is 24.5% as of this writing, which would mark the highest earnings growth rate the economy has seen in nearly eight years. [+] Read More

Don’t Confuse 401(k) Withdrawals with 401(k) Rollovers – It Could Cost You

May 9, 2018
One of the reasons investing gets confusing for most people is that there are too many rules, requirements, products/options, and terms. The website “Investopedia” claims to have a “comprehensive financial dictionary with over 13,000 terms and counting.” Insanity! The world of retirement planning – which is just a subset of investing – is not much better. But the definitions do matter. A 401(k) withdrawal, for example, could mean paying penalties and taxes that could cost you dearly if done wrong, or done at the wrong time. A 401(k) rollover, on the other hand, could provide you with several benefits and advantages for moving your retirement plan in the right direction. In this case, a single word makes all the difference – and not knowing it could cost you. [+] Read More

The True Cost of Homeownership

April 11, 2018
The act of buying a first home is often framed as a wonderful, life-changing experience. And to be sure, it almost always is. But it’s the process of buying the home that’s not always so picture-perfect, and in fact usually comes with an odd set of juxtaposed emotions: joy and frustration, surprise and shock, relief and anxiety, a feeling of stability but then also a feeling of uncertainty. In short, it’s somewhat of a wild ride for first-time homebuyers! Much of the ‘negative’ side of the emotion equation stems from a common source: unexpected costs. Many first-time homebuyers simply aren’t aware of the extensive list of fees and costs associated with buying a home, which is why a recent survey by TD Bank found that nearly 50% of homebuyers incurred more than $2,000 in unexpected charges during the home buying process. 10% of those surveyed said they spent at least $5,000 more than expected.[1] [+] Read More

US Economy: The Current State of Affairs

March 14, 2018
When it comes to the current state of the US economy, it is difficult to find many problems. In fact, the data and trends appear to support the case for continued growth in the coming year – both for the economy and for corporations. Below, we dig into the data. Let’s start with the classic growth measure, GDP growth. According to the Bureau of Economic Analysis, a “second estimate” of US Real GDP growth in Q4 2017 showed an annual growth rate of 2.5%, which marked a slight but not significant drop from Q3 2017’s 3.2%. [+] Read More

How Living Longer Should Impact Retirement Planning

March 7, 2018
If your financial advisor insisted on creating an investment plan that projected you and/or your spouse to live past 100, you might be skeptical. Few people at or near retirement expect to live to be 100. But retirees would be wise to start thinking that way! The Social Security Administration finds about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. There’s also a 4% chance one person in a couple will live past 100. That’s a low percentage, sure. But it is still a possibility very much worth planning for.  [+] Read More

Why High Income Earners Can Still Benefit from a Budget

January 23, 2018
A high-income earner can benefit from a having a budget much like a professional athlete can benefit from having a personal trainer – even though the extra help and attention may not be completely necessary, it can serve to make a good situation even better. Much better. Consider that, simply put, two goals of closely maintaining a budget are to: Minimize waste Maximize efficiency Isn’t that what everyone wants when it comes to your hard-earned dollars? Let’s start with minimizing waste. One of the first steps in creating a budget is to itemize each and every monthly expense you incur. Mortgage payments, insurance, cable and internet, phones, memberships, subscriptions, utilities, food, entertainment, and so on. When was the last time you sat down and closely scrutinized all of these expenses? Doing so could very well reveal fat that needs trimming. [+] Read More