Page 42 - BusinessWest October 2, 2023

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ESG
Planning
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and negative) to disclose both how they are applying those tools and the results.
Is this something to have on your radar? Yes, for reasons both positive and negative. As always, please reach out to our office to discuss your current plan and any concerns.
This material is intended for information- al/educational purposes only and should not be construed as investment advice, a solicita- tion, or a recommendation to buy or sell any security or investment product. Investments are subject to risk, including loss of principal.
Environmental, social, and governance cri- teria are a set of non-financial principles and standards used to evaluate potential invest- ments. The incorporation of ESG principles provides a qualitative assessment that can factor heavily into the security selection pro- cess. The investment’s socially responsible focus may limit the investment options avail- able to the investor. Past performance is no guarantee of future results. Please contact your financial professional for more informa- tion specific to your situation. BW
This article was authored by Brad McMillan, CFA, CAIA, MAI, managing principal, chief investment officer, at Commonwealth Financial Network, and presented by James E. Durand, CPA
of MountainOne Investments, where he analyzes the financial markets and researches stocks, mutual funds, and
other investments. He is also responsible for managing many of MountainOne Investments’s fee-based investment accounts. Durand holds his FINRA Series 4, 7, 24, 63, and 86 securities registrations as an investment adviser representative
of Commonwealth Financial Network. He earned the Chartered Financial Analyst designation in 2003. He has also served on the board of directors for the Northern Berkshire United Way since 2005; (413) 664-4025; james.durand@ mountainoneinvestments.com
The financial advisors of MountainOne Investments offer securities and advisory services through Commonwealth
Financial Network, member FINRA/
SIPC, a registered investment adviser. Fixed insurance products and services offered through CES Insurance Agency. MountainOne Bank is not a registered broker-dealer or registered investment adviser. MountainOne Bank and MountainOne Insurance are not affiliated with Commonwealth. Insurance and investments are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Funds are subject to investment risks, including possible loss of principal investment.
erate $6,000 per month in cash to spend in retirement. Each client couple generates $3,000 per month in Social Security after paying for Medicare. Client couple A each has a Roth IRA and draws the remaining $3,000 per month out of one of their accounts to meet spending needs. Since withdrawing from Roth accounts is non-taxable after age 591⁄2, they would pay $0 in fed- eral and $0 in Massachusetts state taxes.
Client couple B has only taxable retirement accounts. They draw the needed $3,000 from one of their taxable accounts. If there are no other factors, according to 2022 federal tax tables, they could owe approximately $4,500 in federal taxes and $1,600 in the state of Massachusetts, for a total of more than $6,000 in total income tax!
As a financial planner, I would need to generate an addition- al $500 per month to cover client couple B’s taxes. If client cou- ple B withdraws a standard 4% from their retirement accounts in retirement, they would need to save another $150,000 during their working years compared to client couple A.
Proper tax planning should be a very important part of retire- ment planning. Many times, income taxes cannot be avoided, but they can be managed efficiently. Working with your CPA and finan- cial planner is always a good place to start. BW
Barbara Trombley, CPA is managing partner at Trombley Associates. Securities offered through LPL Financial. Member FINRA/SIPC. Advisory services offered through Trombley Associates, a registered investment advisor and separate entity from LPL Financial. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own, separate from this educational material.
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