Financial Advisor News

Piedmont, CA

Financial Advisor News


Piedmont, CA



(510) 601-1935

Oakland, CA | Best Financial Advisors East Bay Use Tax Planning

Tax Planning is a Key Component in the Financial Planning Process:

At First and Main Financial we have a detailed financial planning process. As part of this process, we collect 2-3 years of tax returns and review them in detail to best understand a client’s full financial situation.  Once all their financial information is collected and analyzed, we develop a detailed tax strategy.  The goal of the strategy is to include the current tax picture, but also project what a future tax situation will look like.  To this end, assets are broken down into 3 separate tax allocation categories.

Allocation Type Description Account Examples
Taxable Post-tax funds are invested – capital gains, interest, dividends are taxed when they occur Bank, Brokerage, Money Market Accounts
Tax-Deferred Tax-break now, funds grow tax-free, taxes paid at withdrawal Traditional IRA, 401k, 457, 403b Retirement Accounts
Tax-Free Pay taxes now, funds grow tax-free, no taxes at withdrawal Roth IRA, Health Savings Account

We have experienced that many clients can have up to 75-90% of their retirement savings positioned in tax-deferred accounts (ie Traditional IRA, 401k, 457, 403b accounts).  This money will continue to compound over time and can create a significant tax bill when the tax-deferred money must be withdrawn via Required Minimum Distributions (RMDs) at age 72.  Also, worth noting is that the IRS will charge a 50% penalty based on the full annual distribution amount if the RMD is not taken, so it is imperative to withdraw the full required amount each year.  This required withdrawal amount is added to other forms of income (ie Social Security benefits, pension income, real estate rental income, etc) to determine your taxable income each year.  Adding in a large RMD amount can significantly increase your tax liability and once you turn 72, your options to help reduce your taxable income are much more limited.  This makes it very important to do tax planning prior to retirement, when there are tools and strategies that can help address this situation.

One tax strategy which can reduce future tax liability is the Roth conversion.  This strategy involves converting ‘Tax-Deferred’ dollars over to the ‘Tax-Free’ category.  You will pay taxes in the year the conversion takes place, but then the converted money will grow tax-free and not be taxed when it is withdrawn.  Also, RMDs do not apply to Roth accounts, so the money that is converted will continue to grow tax-free and does not have to be withdrawn. In addition to potential tax benefits, Roth accounts are also a great option for transferring tax-free wealth on to heirs.

Roth contributions can be withdrawn at any time without penalty, while conversion amounts do have a 5-year waiting period before they can be withdrawn.  You can also avoid the early withdrawal penalty when the earnings are used for qualified education expenses, but the earnings will be taxable if taken out prior to 59 ½. And lastly, having access to tax-free money in retirement can create flexibility with managing Social Security taxes and Medicare costs.  These types of expenses can be impacted by higher taxable income due to higher RMD withdrawals.  Accessing tax-free income to help cover large expenses in retirement can help reduce taxable income, as needed.

The laws and tax rates may change over time but it is important to understand the benefits and flexibility of having tax-free money accessible in retirement and how it can be applied to your own financial situation.

If you are looking for financial guidance, whether it be for a one-time financial plan or continuing advice on your investments, we invite you meet with a First and Main financial planner for a free consultation.  We would be more than happy to sit down with you, assess your current financial health and review with you our services to help navigate your future.


Oakland, CA | Best Financial Advisors East Bay Use a Financial Planning Process …

Using the Financial Planning Process to Prepare for Retirement:

The financial planning process can play a key role in making future financial decisions.

A couple recently came to our firm to gain a second opinion on their financial well-being. They wanted to assess how different scenarios would impact their overall financial condition.  The clients were 58 and 54 years old and approaching retirement.  They were looking for guidance regarding their retirement expenses and wanted to feel more comfortable about their future.

After an initial meeting and subsequent data gathering phase, a thorough analysis and review was prepared.  We act as fiduciaries for our clients and have each client go through the six steps of the financial planning process before making any recommendations or providing guidance.

The financial planning process contains the following steps:

  1. Establishing and defining the client relationship
  2. Gathering data and developing financial goals and objectives
  3. Analyzing and evaluating your financial situation
  4. Providing and reviewing recommendations
  5. Implementing the recommendations
  6. Monitoring progress

This process is critical for being able to provide the type of guidance that is in the client’s best interest.  For the client mentioned above, we met and presented a comprehensive financial plan that captured a snapshot of their current financial condition and included specific action items that addressed their financial goals and objectives.  We then were able to add additional scenarios to their model to assess the overall impact to their financial plan.

One example was that they wanted to understand the impact of selling their home at different price points and potentially renting for a time period before buying their permanent retirement home.  We ran through different options and shared a dollar amount difference for total assets and net worth at end-of-life depending on which scenario we chose to model.

We were also able to show our clients the overall financial impact associated with taking Social Security early at age 62, waiting until their full retirement age (FRA) or delaying until age 70 to get the maximum amount.  Many factors come into play when evaluating this opportunity.  Depending on the availability of other sources of income, it may make sense to allow investments to stay invested and continue to compound over time and use Social Security income earlier to help cover expenses.  One interesting take away is that there is always a break-even point which makes the most financial sense.

We were able to provide key information regarding the reimbursement of college expenses.  Our clients had a large balance left in their children’s 529 funds.  They paid for a portion of the expenses with non-529 funds and they also had a child who received a scholarship.  We provided advice on how to access their existing 529 funds in these situations.  The result would allow them to make qualified withdrawals from their 529 funds without paying any additional taxes.

If you are looking for financial guidance, whether it be for a one-time financial plan or continuing advice on your investments, we invite you meet with the First and Main Financial advisors for a free consultation.  We would be more than happy to sit down with you, assess your current financial situation and review with you our services to help you navigate your own financial future.

Oakland, CA | Top Rated Financial Planner East Bay 4th Quarter Market Summary

Q4 2019 Market Summary—

7.97% – U.S. momentum stocks                                           1.70% – Global high yield bonds

11.05% – Emerging markets stocks                                        0.32% – Core bonds

10.72% – International profitability stocks                             0.34% – Core municipal bonds

11.70% – U.S. large stocks

12.00% – U.S. small value stocks

11.17% – U.S. Hi Relative Profitability

2019 Totals:

27.25% – U.S. momentum stocks                                         25.14% – Global high yield bonds

14.89% – Emerging markets stocks                                       7.99% – Core bonds

24.49% – International profitability stocks                            8.10% – Core municipal bonds

31.42% – U.S. large stocks

21.47% – U.S. small value stocks

33.11% – U.S. Hi Relative Profitability

Large U.S. stocks fell 4.43% in 2018 with a 14% drop from September 20th to the end of that year.

There was no obvious reason for the sharp drop at the end of 2018 and we ended the year at a relative low from which to bounce and get highly unusual return figures for 2019. Large stocks returned 31.42% last year, nearly three times the long run average (10.7%). But if you measure from before the drop at the end of 2018 until 12/31/19 the gain was 10.4%.

Adjustments aside we did wind up having a very nice 2019 which has pretty well carried on into 2020.

Not too many months ago fears of recession were rampant with speculation not as to if, but when. Odds were being placed by the “experts” and at one point I saw a media station with the headline “Countdown to Recession.”

Fear sells but if we bought into the madness and sold when fear was on high our wealth would have been permanently impaired.

We can’t predict the future but we do know that if we stay invested, we are highly likely to experience returns very close to the long run average if our holding period is sufficiently long.

The longer we hold and experience positive returns the more our wealth compounds to new highs.

Some definable baskets of stocks have been shown over time to return more than large U.S. stocks, but over the last decade this has not been the case. We carry meaningful weights of these baskets in all of our clients’ accounts which was a drag last year and has been for some time. However, like not knowing if a recession is imminent, we have no way to determine when the baskets of stocks that have gotten behind will again have their day in the sun.

We do know some of the things that increased the chances of recession have subsided to some degree.

Trade relations with China have improved and Brexit looks to be well on course for 2020. With economic growth and progress comes increased global wealth (and less poverty). One can only hope that Brexit will push the other large economies in Europe to enact meaningful structural reforms allowing them to experience stronger growth.

I think it’s also worth noting our Federal Reserve Bank very quickly lowered rates to stave off recession which seemed to help in creating a more stable environment from which we could keep moving forward and not dip into a more fearful state.

We remain in one of the best labor environments, ever, in the history of our country.

We may yet have a recession. There are always risks and unknowns but at the moment things look quite good and thus the march to new highs for U.S. stocks. Sometimes people say to me they are certain markets have to fall because we’re hitting new highs, but the opposite is generally the case. New highs often beget new highs and markets move higher not because things are bad, but that expectations are for a better future.

As always, we appreciate the trust you put in us to manage your investments. We are always available for a conversation should questions arise.


Erik S. Wolfers, MBA, CFP®




Oakland, CA | Best Financial Advisors East Bay Plan for 2020

It usually happens at the start of the New Year – people setting goals to get in shape, eat well and do something to improve their lives.  For this year, especially since it’s 2020, you might consider also getting financially organized.  Yes, we realize that reviewing your budget probably falls into the same fun and exciting category of exercise and diet, but with even a few small changes in your financial life, you could make a huge impact on your future.  Here are just a few suggestions you can do to kickoff 2020:

1.  Review any recurring subscriptions. Yes, you may not believe it, but we’ve had clients who have forgotten that they subscribe to certain services they don’t even use anymore.  With more online purchases that we all make nowadays, you too may be paying for something you don’t even enjoy!  So take a moment to review those credit card and bank statements to make sure you are not giving your money away.

2.  Check for any expenses that you might be able to eliminate. While you are checking your credit card and bank statements for those subscriptions, go ahead and review your budget.  Yes, this task definitely falls into the diet and exercise category of things we may not want to do, but is there something you might be able to give up so that you can put just a little more money into your retirement account?

3.  And while we are talking retirement, figure out your plan for funding retirement for 2020. Now’s a great time to also set a goal for retirement funding in 2020.  Did you take advantage of the “free money” your employer gives you when matching your retirement contributions?  Take a moment to make sure that you have a plan in place to fund your retirement as best you can in this new decade.

4.  Check your medical Flexible Spending Account (FSAs). Have you submitted those receipts to be reimbursed for certain qualifying medical expenses using your pre-tax dollars through your annual FSA election?  You made this election over a year ago, so make sure you are using up that money you set aside for 2019.  Depending on plan rules, you may lose it if you don’t use it or you may be able to roll over $500 to the next year.

5.  Finally, call your service providers to see if you can get a better price. If you have some time before watching that holiday movie, take a moment to call the cell phone provider, the cable TV provider, etc. to see if they offer a better price package.  You may even be able to get rid of the cable TV service if you’ve completely moved to online streaming of your favorite shows.  You never know what money you can save.  And with that money you save, you can even splurge for some peppermint hot cocoa to enjoy while watching that holiday movie!

These are just a few suggestions for getting financially organized for the New Year.  If you are looking for some more financial guidance, whether it’s for a one time financial plan or continuing advice on your investments, we invite you to meet with the First & Main Financial advisors for a free consultation.  We work with a variety of clients who are looking for a relationship with a knowledgeable and trustworthy advisor.  We would be more than happy to sit down with you, assess your current financial situation, and review with you our services to help you navigate your own financial future. Happy New Year!


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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.

235 Wildwood Avenue,
Piedmont, CA 94610, USA

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Piedmont, CA 94610, USA

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.