Avalon Capital Advisors

There are many important financial milestones that you need to keep in mind. This quick reference guide covers key milestones to keep in mind that cover child-related income taxation, catch-up contributions, retirement plan withdrawals, Medicare, and Social Security.

Do you know where you stand with your financial goals?

Create an investment plan to achieve your goals today. This is a free analysis. Click the link below to start. There is no obligation.

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Do you know where you stand with your financial goals? Use this free tool to see how close you are to hitting your goals and to create a financial strategy. Request a consultation with a financial professional if you'd like to create a plan.

Although stocks have had a rough week, the S&P 500 has still yielded 15.9% year-to-date.

The best performing sectors year-to-date are:
Real Estate -> 27.2%
Energy -> 25.6%
Financials -> 24.0%

The worst performing sectors year-to-date are:
Utilities -> 4.6%
Consumer Staples -> 4.8%
Materials -> 9.3%

Business owners have many options when establishing retirement plans. Several key factors, specific to each company’s unique situation, must be considered in order to select the appropriate plan or combination of plans.

To help differentiate between the most commonly adopted retirement plans, we have created this chart. As a business owner, you can use this guide when comparing plan options and discussing your company’s goals regarding:

Maximizing retirement savings
Incentivizing employees
Managing costs and administrative complexity
Optimizing income tax planning

If you need help choosing and establishing the right retirement plan for your business, or if you would like pension plan options available to you, send me a message today, and I’ll be happy to provide you with those options as well.

𝐃𝐨 𝐘𝐨𝐮 𝐆𝐞𝐭 𝐚 𝐓𝐚𝐱 𝐑𝐞𝐟𝐮𝐧𝐝 𝐄𝐯𝐞𝐫𝐲 𝐘𝐞𝐚𝐫? 𝐒𝐭𝐨𝐩 𝐈𝐭! 𝐆𝐞𝐭 𝐒𝐨𝐦𝐞 𝐇𝐞𝐥𝐩!

I know; I know. It feels so good getting that annual tax refund. It’s almost like winning the lottery once a year.

However, I will invoke my best impression of the basketball legend Michael Jordan and implore you, “Stop it! Get some help!”

You are keeping yourself from accomplishing your financial goals more quickly. You are needlessly reducing your monthly cash flow.

This year, according to a report from the National Taxpayer Advocate (NTA), the average federal tax return for the 2020 tax year was $2827.

With that tax refund, you could have been halfway toward maximizing contributions to an individual retirement account (IRA). As of this year, IRA annual contributions limits are $6,000 ($7,000 if you're age 50 or older).

That $2827, could have increased in value from capital appreciation in stocks or exchange-traded funds (ETFs). Furthermore, you could have earned even more money from interest from dividends paid from those stocks or ETFs.

Between 2010 and 2020, Goldman Sachs noted that the S&P 500, a stock market index tracking the performance of 500 large companies, has done slightly better than the historic 10-year average, with an annual average return of 13.6% in the past 10 years. The dividend yield over that same period of time for the S&P 500 has averaged about 1.95% per year.

Now, of course, past performance is no indication of future returns, but that $2827 in simple interest terms based on the historical returns of the S&P 500 could have yielded you $384.47 in capital appreciation and $55.13 in interest from dividends increasing your balance from $2827 to $3266.60 over the course of the year.

So, I ask you. 𝐈𝐬 𝐠𝐞𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐚𝐭 𝐭𝐚𝐱 𝐫𝐞𝐟𝐮𝐧𝐝 𝐞𝐯𝐞𝐫𝐲 𝐲𝐞𝐚𝐫 𝐰𝐨𝐫𝐭𝐡 𝐥𝐨𝐬𝐢𝐧𝐠 𝐨𝐮𝐭 𝐨𝐧 $389.60 𝐨𝐧 𝐚𝐯𝐞𝐫𝐚𝐠𝐞?

Many of my clients have strong opinions one way or the other about this.

I believe in matching tax withholding to tax liability.

What are your thoughts on receiving a tax refund? I’m interested in your opinion.

Let us work with you to help build a personalized estate plan built by estate planning experts with over 10 years of experience, holding Certified Estate Planner™ or Accredited Estate Planner® certifications, and reviewed by local attorneys in your relevant state, all for a very affordable price.

If you are ready to start, or have questions about setting up an estate plan for you and your loved ones, contact us today.

Taxable Accounts vs. Tax-Advantaged Accounts － Where Should My Investments Go?

At Avalon Capital Advisors, oftentimes, one of the financial objectives for our clients is to achieve real, after-tax returns, and an important aspect of this goal is maximizing tax efficiencies by allocating certain assets to tax-advantaged accounts where securities that tend to lose more of their return to taxes would fair better in the long run.

In order to determine an asset allocation strategy and investment strategy, we must first determine which types of securities should be allocated to taxable accounts, and which securities should be allocated to tax-advantages accounts.

For illustration purposes, let’s make the following distinctions between taxable and tax-advantaged accounts:

Tax-Advantaged Accounts
-Traditional IRAs
-401Ks
-529 Plans - Education Savings Accounts
-Deferred Annuities

Taxable Accounts
-Standard Brokerage Accounts

In order to maximize the tax efficiency in the tax-advantaged accounts, ideally, we want to hold less tax-efficient securities in the tax-advantaged accounts, and more tax-efficient securities in the taxable accounts. The table below illustrates a basic asset breakdown between taxable and tax-advantaged accounts along with the types of securities that should be held in each:

What are your thoughts on this? Do you structure something different?

Avalon Capital Advisors brings affordable estate planning to clients via partnership with Helios Integrated Planning

Irvine, California — If 2020 and the COVID-19 crisis taught us anything, it’s that nothing is certain. We need to help our clients plan ahead for every eventuality. And that means encouraging each of our clients to have an estate plan in place.

That’s why we’re excited to announce our partnership with Helios Integrated Planning (HIP). We can now offer easy, quick, and affordable estate planning services to our clients.

Estate planning is one of the most misunderstood elements of financial planning — people assume they need millions in assets to create a plan, or they think the legal documents are too expensive and time consuming. Our partnership with Helios allows us to debunk these myths once and for all.

“Estate planning is an important yet often overlooked part of a financial plan. However, a comprehensive financial plan is not complete without an estate plan, and we are thrilled to have an opportunity to educate our clients and help them facilitate something so important. Many of our clients are uncomfortable with inexpensive do-it-yourself estate plans; however, they feel that hiring an estate planning attorney might be overkill for their simple needs. So, our new partnership with Helios will help bridge the gap between DIY options and hiring an estate planning attorney,” said Michael Frick, President of Avalon Capital Advisors.

Our clients will simply answer questions around five big issues:
1. Who they want to inherit their assets.
2. How they want that transfer to go.
3. Who they want to take care of their finances if they can’t.
4. Who they want to take care of their health if they can’t.
5. Who they want to take care of their kids if they can’t.

In many ways, answering these questions is the hardest part. Helios not only has a team of estate planning experts creating and reviewing legal documents, they also partner with legal teams locally to make sure every estate plan complies with state and local rules. Documents are optimized as much as possible for tax savings and are created to incorporate as many “what if” scenarios as possible.

Clients ultimately receive a will, trust, certification of trust, general transfer, property agreement (if needed), financial power of attorney, medical power of attorney (or advanced health care directive), and HIPAA release. We’ll go over these documents with clients, and provide notary services, so the entire process is seamless and easy-to-understand.

In addition to estate planning services, Avalon Capital Advisors plans to provide valuable resources and blog posts to help clients better understand how estate planning works and why it’s helpful.

Contact information:
Michael Frick
Avalon Capital Advisors
949-503-8020
[email protected]

Do you think that your CPA has you covered with regard to maximizing the tax deductions for your business? Think again!

Download our FREE handbook highlighting 10 ways to maximize your tax deductions

10 Ways to Maximize Your Tax Deductions

Happy 245th Birthday, America! Wishing Everyone a Safe and Happy 4th of July!

Our offices are closed on July 5th, so that our employees can enjoy this special weekend with friends and family. We will be back in the office on Tuesday, July 6th.

Civic duty completed! No waiting. Get out there and vote!

What Should I Consider if I Experience a Sudden Wealth Event?

People can experience a variety of wealth events that lead to a financial windfall, including the sale of a business or real estate, an inheritance, lottery winnings, or a legal settlement. An increase in wealth, especially when unexpected, large, and/or sudden, requires thoughtful planning.

What Should I Consider If I Experience A Sudden Wealth Event? People can experience a variety of wealth events that lead to a financial windfall, including the sale of a business or real estate, an inheritance, lottery winnings, or a legal settlement. An increase in wealth, especially when unexpected, large, and/or sudden, requires thoughtful planning. This ar...