Echo Blog

Echo Blog

Saving for College

By Tyler Lodahl and Echo Huang, CPA, CFP and CFA

As the former President of South Africa and Nobel Peace Prize recipient, Nelson Mandela, once said: "Education is the most powerful weapon which you can use to change the world." And even while obtaining an education is integral to our world, planning for a child’s education can be an exciting, yet daunting task. Thankfully there are some tax-advantaged strategies you can consider:

1.       Qualified Tuition Programs/529 plans

2.      Coverdell ESA (Education Savings Account)

3.      Roth IRA

4.      American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit

What is a 529 plan and what are the benefits of utilizing one?

 A 529 plan is a tax-advantaged savings plan designed to encourage savings for future college or other post-secondary education expenses.  529 plans, legally known as “qualified tuition plans”, are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. A major benefit of 529 plans is that anyone is able to make contributions regardless of their annual earnings.

Echo and Steve Passed the CFA Level III Exam

By Echo Huang on August 30, 2016

When I founded Echo Wealth Management in early 2015, I had a vision in mind for my new company: take complexity out of wealth management while helping clients gain the confidence to follow their dreams.  And over the past 18 months, through investing in cutting edge technology, and bringing Steve Drost and Tyler Lodahl aboard as associate wealth managers, I am thrilled by what we have achieved together: over $59 million in assets under management and 50 clients.  In addition, I continue to invest in education and technology to enhance the services to clients.

The big news this month:  Both Steve and I passed Level III of the CFA (Chartered Financial Analyst) exam!  I am in the process of submitting the professional references to the CFA Institute in order to be awarded the charter.  Steve passed all three levels of the exam in his first attempts and will apply for the CFA charter in June of 2017 when he meets the required four years of qualified work experience. 

New Team Member at Echo Wealth Management

By Echo Huang on August 23, 2016

I am excited to announce the addition of Tyler Lodahl to the team at Echo Wealth Management.  Tyler works closely with me and Steve Drost in creating and maintaining the Echo Dashboard, the customized client homepage for each client.  In addition, he is responsible for managing efficient business operations by leveraging new technologies in serving our clients. 

What You Need to Know About Long-Term Care Insurance

By Echo Huang on July 29, 2016

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  1. You should not rely on Medicare to pay for your long term care expenses.  Many people believe they can rely on Medicare to pay for any long-term care services they will need. However, Medicare only pays for long-term care if you require skilled services or recuperative care for a short period of time. Medicare does not pay for what comprises the majority of long-term care services - nonskilled assistance with Activities of Daily Living.
     
  2. Many of you cannot count on Medicaid. Medicaid is the joint federal and state program that pays for the largest share of long-term care services, but only if you meet financial and functional criteria. Other federal programs such as the Older Americans Act and Veterans Affairs pay for some long-term care services, but only for specific populations and in specific circumstances.  On an aggregate basis, the biggest share of long-term care, 49 percent, is paid for by Medicaid. On an individual basis, however, "who pays for long-term care" can look very different. This is because people with their own personal financial resources do not qualify for Medicaid unless they use up their resources first paying for care, so-called "spending down." If you have reasonable income and assets, most likely you will be paying for care on your own.

To Rollover or Not Rollover Your 401(k) - It Depends

One of the biggest decisions many of our clients face is what to do with their 401(k) plan when they leave their employer. There is no clear cut answer as to whether you should roll over your 401(k) plan to an IRA, another employer’s 401(k) plan, or simply to leave it where it is, because it involves several different factors, including long term investment costs and the availability of investment options within the plans. Both can impact the long term performance of your retirement plan. However, the most critical factor that can have a big impact, both short and long term, are the tax implications of a rollover.  Understanding these implications is essential before making any decision regarding your 401(k) plan.

Here are some of the more common tax complications that arise from a rollover:

What Are Your Portfolio Performance Expectations?

In the story of Alice in Wonderland, Alice arrives at a fork in the road and wonders aloud which road to take. A smiling Cheshire Cat appears and asks her what her destination is, to which she replies, “I don’t know.” The toothy cat then proffers the only possible response, “Well, then it doesn’t matter.”

While it’s not the type of exchange that might actually occur in our lives, it should, especially as we consider our financial future. For many people, who have yet to clearly define their financial destination, it probably doesn’t matter to them which path they choose, if they choose a path at all. That may be one way to explain why many Americans are not on track to meeting their retirement goals, or worse, why most couldn’t tell you where they stand today in relation to their goals.

Now hiring an Associate Wealth Manager starting in summer 2016

Company Website: www.EchoWealthManagement.com

About the Company

Echo Wealth Management is an independent, focused wealth management firm located in Plymouth, Minnesota that takes the complexity out of wealth management.  We offer integrated, comprehensive strategies that address every facet of our clients’ financial lives.  We do this by building the highest levels of trust, integrity and respect while always collaborating using a team approach.  Our clients range from corporate executives planning a secure retirement, to families looking to preserve their assets for future generations, to businesses seeking expert investment advice.    Echo Wealth Management was formed in February 2015 as a Registered Investment Advisor (RIA) and is looking for an Associate Wealth Manager to join a growing firm and support the founder of this firm who has over 20 years of experience. 

2016 Could Be a Bumpy Ride

The Start-of-the Year Selloff Reflected Fear More than Fundamentals

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In 2016, greater risks on a number of fronts are likely to increase the frequency and magnitude of volatility spikes for investors. 

Help Build a School Soon by Obtaining a Matching Donation of $25,000

More than five years ago, a client of mine who is a physician introduced me to Dr. Abul Sharah, who retired early from corporate life in Minnesota in 1999 and founded the International Village Clinic (IVC).  I learned that Abul had been born a fatherless, impoverished boy in Uttar Pradesh, India’s poorest province.  By chance, brains, and hard work, he got an education and rose to senior engineering and marketing positions at Honeywell and MTS Systems over a 27-year career.

In 1996, while on a business trip to Calcutta, India, Abul scheduled in time for a visit to Mother Theresa’s Home for Dying Destitutes.  By coincidence, he arrived at the hour when the nun received visitors.  After learning of his humble Indian roots and success in the United States, Mother Theresa urged Abul to pursue a mission of “love and human service.”  After retirement, he returned to the poor villages of Uttar Pradesh - where he was born - in northern India, to help establish a medical clinic, create nutrition, vaccination and health education programs, and employ qualified medical personnel in an area where illiteracy and disease are rampant. 

Donor Advised Funds (DAFs) - a Simple, Smart & Meaningful Way to Support Your Favorite Causes and Charities

Recently a client of mine told me that he really liked how simple it is to use the Donor Advised Fund I helped set up at the American Endowment Foundation (AEF).  He said requesting grants online was easy to use and the charities received the money quickly.  The best part: he no longer needs to organize various individual donation receipts right before preparing his tax returns.

Donor Advised Funds can be set up easily to accomplish both tax savings and charitable giving goals.  Most people think they need to have a big sum of money before considering setting up their own family charitable fund.  But Donor Advised Funds are the most popular charitable vehicles for donors at many levels of wealth.  You can start your own donor advised fund with as little as $10,000.  I generally recommend a minimum of $50,000 to my clients if they plan to request grants from the Donor Advised Funds to their charities within a short period of time, however.  I would like to discuss how to use DAFs in various situations in this article.

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