Financial Services

Financial Services

Services

Let us help you develop a savings and investment plan that will let you secure your future You have heard it said that “Failing to plan is planning to fail”. In terms of securing your financial future this is maybe unfortunately true. The good news is that it is not hard to develop a plan and anyone can do it regardless of income. All it takes is a little self discipline and a well thought out plan with realistic goals and milestones. We can help.

Call and mention that you would like to speak with someone about developing a financial plan to meet your goals. We will meet several times to formula a strategy to make it happen.

You may need:

Our Partner

HD Vest Investment ServicesSM

Our licensed advisors are affiliated with an independent broker/dealer continuously focused on our support and success. Since its inception in 1983, HD Vest Investment ServicesSM has supported an independent network of tax and non-tax professionals who provide comprehensive financial services solutions, including securities, insurance, money management services, and banking solutions. Approximately 4,500 independent contractors manage more than $38 billion in assets for some 1.8 million individuals, families, and small businesses in all 50 states*. HD Vest is one of the only broker-dealers with a focus on helping accounting professionals establish and grow financial services practices.

*As of January 1, 2015

Investments

As a Certified Public Accountant and Registered Investment Advisor Michael Drews CPA has an educational and experienced background that most traditional financial planners lack. Each year our firm sees hundreds of different financial plans and products from various sources. Over time we have become good at identifying the good, the bad and the ugly. Furthermore as a non- affiliated Registered Investment Advisor Michael Drews CPA has no motivation to try to sell you any particular product line. Our interests are directly in line with yours… minimizing risk and maximizing return.

We can offer a wide-range of investment options for our clients. Michael offers traditional investments, such as stocks, bonds, mutual funds and, annuities, as well as alternative investments, including Unit Investment Trusts UITs) and Structured Products. Structured Products have been around for over twenty years, but they have only recently increased in popularity. They include such investment-types as Principal Protection, Enhanced Yield, Access, and Leverage. We also often handle the set up and administration of retirement account rollovers, set-up various employer-sponsored plans, such as 401[k]s, SEPIRAs, SIMPLE IRAs, and Defined Benefit Plans.

Investment and Financial Planning Services are offered by Michael Drews through their affiliation with HDVest.

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College Funding

Michael Drews CPA believes that many parents want to contribute to their children’s education. For some families this represents the second largest lifetime expense after a home. We recognize that parents have varying value systems when it comes to this topic and we respect that.

Today, there are numerous ways to fund college or private high school with tax-free growth. Michael recommends either the Education Savings Account (ESA) or the 529 plan. For business owners, employing your children while they are in college can be a real win-win-win situation. For the business owner/parent, the wages paid to the child are tax-deductible, for the child/student, he is usually in a low tax bracket while in college, often resulting in no tax owed on the wages received. In addition, the student may also then be able to take advantage of the education credits that the parents could not have because their income is too high.

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Life Insurance Trusts

Current tax law allows the transferring of up to $5,000,000.00 in estate assets per person over a lifetime. For some people this is not enough. One of the most powerful tools in estate planning is the Irrevocable Life Insurance Trust (ILIT). Properly structured, insurance held inside of an ILIT provides tax-free growth over the owners’ lifetime. And, unlike life insurance held outside of an ILIT, the proceeds are estate tax free.

Life insurance proceeds are free from income taxes when they are paid to one's survivors. However, the death benefits on policies are included in one's taxable estate. This is often overlooked when people estimate the size of their estate, since life insurance is not always counted as an asset at face value.

The idea of an irrevocable life insurance trust is to remove the policy proceeds from one's taxable estate. An irrevocable life insurance trust avoids estate taxes because it is a separate legal entity in which the individual retains no interest. In order to obtain this benefit, however, one must forfeit all control and ownership rights to the life insurance policies held in such a trust, which is why the trust is "irrevocable."

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Term Life Insurance

Adequate insurance planning is an important, yet often overlooked, component of a financial plan. At Michael Drews CPA our comprehensive approach includes an analysis of your life insurance needs based on your individual situation. Whether Michael recommends term insurance or permanent insurance will depend upon what you are trying to accomplish with the policy. Life insurance planning is an integral part of any financial plan. Let us show you the various options available.

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Permanent Life Insurance

Unlike term insurance, permanent life insurance policies do not expire. The first permanent insurance policies were Whole Life and Universal Life. In recent years, a far superior permanent life insurance plan was developed, the variable universal life (VUL) insurance policy.

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Long Term Care

With health care costs rising and longer life expectancies, funding long-term care needs is an increasing concern for millions of people. According to the U.S. Department of Health and Human Services, about 9 million Americans, now 65 or older, will require long-term care. HHS expects that number to rise by 25 percent -- to 12 million -- by 2020. Most people can purchase long term care insurance for approximately $3,000.00/year.

The average annual cost of nursing home care is $74,806, according to Genworth Financial's 2007 Cost of Care Survey, but that figure can fluctuate depending on the level of care required, and the state in which the care is provided. Michael Drews, CPA wants you to understand how the cost of long term care could affect your financial future, and he wants to help you plan for the possibility of this expense.

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Annuities

Life spans in the United States have been increasing for over a hundred years. It is now common for people who reach retirement age to live 20 years or more in retirement -- most of those years in good health. It’s good to live a long and full life, but you want to be sure that your income lasts as long as you do, and its purchasing power is as strong as you are. How can you manage the risk of “outliving your assets?"

Annuities are a unique financial product that, along with Social Security, employer pensions, your 401(k) plan, IRA and other assets, can enhance your retirement security. Call our office at (805) 484-4008 to discuss Annuities and to find out how they fit into your comprehensive retirement strategy.

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Retirement Planning

It is never too early to start planning for retirement. If you want to live the same lifestyle--or an even better one--than you do now, you need to start planning for retirement as early as possible. Michael Drews CPA can analyze your projected income and expenses and suggest investment funding techniques to help you make sure that your golden years 10, 20, and even 50 years from now live up to your expectations. Michael can even help you decide on the specific investments to make.

If you’ve changed jobs or are retiring, rolling over your retirement assets has tax implications if not done correctly. Michael educates and assists his clients in transferring assets easily with the purpose of maintaining tax-deferred growth. Done correctly, a rollover is a non-taxable event and gives you access to a wide range of investments. Benefits Include:

401(k)s

The most popular retirement plan in America, the 401(k) plan is named after the IRS code section creating it. Like most things, the 401(k) plans of today are vastly different from the 401(k) plans of even just 10 years ago. Previously, 401(k) plans were only for the very largest corporations as the plan administration costs were prohibitive for smaller companies. Today, there are various types of 401(k) plans, including “safe harbor” plans which do not require annual testing and the “solo” or “single” 401(k) plans designed for just a few employees. These plans are inexpensive to administer and offer the same tax benefits of the larger plans. Perhaps the biggest change is the introduction in 2006 of the Roth 401(k). This feature allows participants to invest their funds in tax-free “Roth” accounts. In fact, participants can mix and match which portion of their retirement contribution goes into a traditional tax-deferred account and which goes to the tax-free Roth account.

A SEP-IRA (Simplified Employer Pension) allows a company to defer up to the lesser of 25% or $45,000 of an employee’s salary (deferral amount is for 2007). As with all qualified accounts, the money is a pre-tax contribution and the account grows tax-deferred until distributions are taken.

A drawback to SEP-IRAs is the requirement that the company must contribute the same percentage of each employee’s salary (given that the employees meet certain criteria relative to length of service and hours worked). Therefore, a SEP is a good solution if you are self- employed or if the business owner is comfortable making equal contributions, on a percentage basis, for all of its employees.

If your company employs fewer than 100 people and is considering adding a qualified retirement plan (pre-tax contributions and tax-deferred growth), a SIMPLE-IRA Plan (Savings Incentive Match Plan for Employees) is one of the most hassle-free and inexpensive means of doing so. SIMPLE Plans are certainly not a misnomer. From an administrative aspect, implementing a SIMPLE plan couldn’t be easier.

IRAs

An IRA is a personal savings plan that provides income tax advantages to individuals saving money for retirement purposes. The Individual Retirement Account brings together two powerful forces, both of which benefit you: 1) tax-deferral, and 2) tax savings. If you have money that you can afford to invest for the long term, there's really no reason not to open an IRA. Any individual can open and make contributions to a traditional or Roth IRA, as long as you, or your spouse (if you file a joint return), received taxable earned compensation during the year and you were not 70 ½ years old by the end of the year.

Defined Benefit Plans provide small business owners with a means of deferring more income than 401K, SIMPLE and SEP-IRA plans. These plans are being implemented less frequently by big businesses, but they are growing in popularity with certain types of small businesses, such as law firms, medical practices and consulting firms. If you have a limited number of employees and wish to defer amounts in excess of $50,000, it may be a solution worth considering.

Both Qualified Plans and IRAs typically involve fees, expenses and services that should be compared when considering a qualified plan rollover.

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