Category: Uncategorized

Abundance: Mango and Ahi (hopefully!)

You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. -JIM ROHN

As a financial advisor, we take our cues from our valued clients and the stock market. In that order. Right now, it is financial chaos, a tumultuous time for the macro, world economy. But personal planning still needs to take place; even more so now than ever. Earlier today, I just helped a 57-year-old female obtain long term care insurance. That’s smart protection, if you can qualify #1 and afford it #2. After that client, I rebalanced one of my client’s portfolios. Like many other investors, he is deeply concerned. Fortunately, he, unlike others, does not need his money right now. It’s a tough time if that’s the bucket you need to pull income from. Put it this way, ‘sequence of returns risk‘ is alive and well; it is all too real. Anyway, on to something more fun. Just like the market, deep sea fishing is volatile and unpredictable. Anytime you can get a leg up and capitalize on worthy intel, take it. Some information is more quantifiable than others.

One bit of information I’ve heard over the years from fellow anglers is that bumper crop years of mango here in the islands will equate to one huge thing for us offshore fisherman, and that is the venerable ahi. The prized fish; at least in my book. Aku, ono, mahi, etc. are all good too. Ask my boat neighbor and friend, Won, his thoughts and this expert bottom fisherman will inevitably say, a 30lb. onaga is mo’ betta (trumps it). That’s the beauty of fishing. You have choices to make. Lots of them. Again, just like life. It’s about making good choices that work for you. It’s your boat, you decide. I like that idea. And like life, sometimes you catch, sometimes bolohead (you don’t). I heard one old timer say that fishing is ’40 per cent luck, 30 per cent skill and 30 per cent hustle’. And then there is passion. The love of it. Today is Monday and already I can’t wait until Saturday, but I will. At least we’re fueled up and ready to take the Manu-o-Ku approx. 25+ miles offshore to the FADS (buoys) in search of bird piles and the big buggas that lurk beneath. A few weeks ago, my 1st mate (older brother, Milt) brought ono, ripe mangoes from his trees up on Kaleipohaku (St. Louis Heights) to share with our family. These were epic, sweet mango. It has been years since mango (aka, ‘the king of fruit’) has been this plentiful. Makes it that much more appreciated; big smiles for sure. In Civil Beat, I read Denby Fawcett’s article, “Is There Such A Thing As Too Many Mangoes?” Nope. No way. Freeze it if you must; we never do, we just eat ’em! But if I had enough to freeze, I would too (i.e., who doesn’t like mango bread, smoothies, whatever).

Then I received an e-newsletter from Jim Hori, of Lokahi Fishing. He reinforced my ideas of fishing and mango. He recently put out a ‘Lokahi Summer Forecast’. He states, “The summer fishing is heating up with the West Side Ahi tournament this past weekend really kicking off the Ahi hunt for the islands. With the heavy rains this past fall, and the huge mango bloom not like we have seen in several years, local knowledge indicates this could be an excellent summer season of Ahi and shoreline fishing including numerous schools of Halalu, early runs of Oama, abundance of Ika and balls of Nehu from shoreline to offshore.. The marlin have been biting off Kona and we should expect to see quantity and quality fish across the islands over the coming months.” I’m hoping and praying Jim’s prediction is on the money. I want it to be. The good news is that maybe it has just begun. The fact is Jim’s forecast has bore itself out with an actual monster catch by my friend, Butch Farm (Mary K). Butch and his crew recently landed an 1,168lb blue marlin off Oahu. Yep, a grander plus. And it couldn’t happen to a nicer guy; Butch (owner of Hobietat in Palolo Valley) helped me outfit the Manu-o-Ku, taught me to drive the boat and sold me quality island made rods equipped with Tiagra 80’s. And over the past few years, Butch–a former commercial fisherman–has given me numerous newbie pointers. Very cool guy. Here’s to mango, ahi and good friends. Remember this: You’ll never know, unless you go…hanapaa!

Sharks Still Circling the Military Bases: Life Insurance Sold as “Investments”

Back in 2001, I was naive. I joined a financial services group that focused on selling cash value life insurance policies to U.S. Service members. So this article come from personal experience, not textbooks. But I learned and changed for the better. After coming to the realization that several other companies had a handful of bad actors (agents) who masqueraded as, “Financial Planners” (who in retrospect were only life insurance peddlers), I couldn’t stand it any longer. I pivoted to the civilian world where I became a Investment Advisor (securities licensed series 65) and I’ve been ever since. I bailed because these bad actors were often misleading the very people who were fighting for our continued freedom. Sickening. And by 2003, my eyes were wide open on their indiscretions, and I needed to pivot away from what was a negative scene. Then came validating confirmation–with articles and lawsuits–of my beliefs and it was refreshing that others’ saw it too. Here’s a scathing article one from acclaimed Kiplinger: https://www.kiplinger.com/article/investing/t048-c000-s002-taking-aim-at-military-scams.html

In fact, in 2006 right here in Hawaii, we have scary living proof. The Securities and Exchange Commission (SEC) filed a lawsuit against a group who had their business sales offices at the ‘back gate’ of USMC K-Bay. Back gate operators are on every single military installation from Kaneohe to Pensacola, Florida. According to the article, the American Amicable Life Insurance Co. was found misleading buyers of its Horizon Life insurance product. By the way, the managers involved in this despicable actions are still hustling business here in Hawaii! The Honolulu Advertiser article goes on to say that the lawsuit alleges that, “American Amicable agents used deceptive sales pitches and mislead servicemembers into buying policies they didn’t need”. How did this come about? Some young, smart soldier reported these crooks. My piece of advice: Google advisors, companies and agents; you’ll be surprised with what you find. If it’s my money, I’d take those extra steps and protect myself. You should too! Here’s what just five minutes browsing got me in the way of facts. Read the case file and do you due diligence: https://www.casemine.com/judgement/us/59146dadadd7b04934327dd8

The most egregious element is how easy it is for responsible servicemembers to believe the agent selling these sometimes-fraudulent policies. Why? Because the agent selling the insurance policy to these young soldiers is also a higher-ranking VETERAN! The facts prove this to be true. https://www.military.com/money/insurance/supplemental-life-insurance/fraudulent-life-insurance-policies.html

A study by the National Association of Insurance Commissioners (NAIC) found that many oftentimes younger, gullible junior enlisted servicemembers would buy life insurance policies they didn’t need from an insurance agent that was a veteran, because they saw them as an authority figure. Makes sense. Like shooting fish in a barrel. But these are not fish; they are hard-fighting service members. Damn, right?!

There are good advisors out there, just use your common sense. There is no rush; do your due diligence! https://www.militaryonesource.mil/military-life-cycle/friends-extended-family/learn-the-warning-signs-of-military-scams/

And don’t get me wrong. I have colleagues who are properly licensed “Fiduciaries”, and any service member would be lucky to get their help. It’s the high-pressure, loud mouths who use their previous active duty ranking to deceive our troops. Caution is key because scams never stop; just new players come on post. As this Elgin Air Force Base article (“Navigating financial mind fields”) points out, “Scams do not die, they hibernate. The best way to protect one’s self when they arise again is to know what they were like before they went into hibernation.” Well put. Read about it for yourself: https://www.eglin.af.mil/News/Commentaries/Display/Article/902949/navigating-financial-mind-fields/

Buyer beware! Fast forward 20+ years and to my dismay, it is still happening on Hawaii soil in a huge way. I have learned the Schofield Barracks has a weekly indoctrination, a “Newcomers Event” organized by Army MWR here on Oahu, Hawaii and there are 2-3 insurance companies—some very reputable—showing up weekly to have soldiers complete lead forms so they can ‘help them’. Too bad the good agents have been bundled in with the bad. But think about it, how do you distinguish the qualified trusted advisor (hopefully a ‘Fiduciary’) from the shark (i.e. a ruthless, high-pressure tactics agent)? My advice: Don’t ever feel pressured to sign a darn thing. Trust your sixth sense. As Pres. Reagan put it, “Trust but verify”. Here’s a valuable resource, entitled ‘Troops Against Predatory Scams’: https://www.ilsos.gov/publications/pdf_publications/sec336.pdf

Here are some ‘Red Flags’ to be wary of; straight from this insurance industry watchdog, check it out: https://www.naic.org/documents/topics_military_life_report_to_congress.pdf

  • Agents pushing insurance products as so-called, ‘investments’ or ‘savings’ products. Insurance is not an investment no matter what they tell you!
  • Avoid allotments ‘handled’ for you; here’s another casefile on improper allotments: https://www.govinfo.gov/content/pkg/USCOURTS-paed-2_03-cv-04327/pdf/USCOURTS-paed-2_03-cv-04327-0.pdf
  • Non-military (former NCO’s and veterans) posing as financial advisors on veterans’ benefits.
  • Ex-military personnel acting as investment advisors in a group or classroom.
  • High pressure tactics to rush you to complete the purchase of a life insurance policy.
  • Finally, do not buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy. If you will not hold it for 15-20 years, you’ll be on the losing end!

Of course, the powers to be could help curb this wrath, but MWR needs the funds to give our troops fun stuff and take care of the ‘liberty’ time. This all takes money. For MWR, it must be hard to walk away from sponsorship dollars’, is what one local Hawaii MWR representative told me. Way back in 2008, this report (see link) was published. For a time being, it seems to have made an impact. Now I’m not so sure. Are we reverting backward? Are our defenses down? Again, it’s the top brass that needs to protect their service members. Without a doubt, I know they care about their hard-fighting teams and want to protect them. The question is, are they? 21st century systems are available; most are not high-tech, it’s common sense. On base marketing events needs to be tightened up. As a comparison, when we conduct educational events in the civilian world (i.e. most recently for doctors at a hospital) the administration of the healthcare facility dictates that webinar participants need to request the advisors information. Not the other way around, as is the case with the miltary at MWR events. I know this because I see it happening right now here in Hawaii. In high-level ‘education-oriented’ circles, the reputable organizations restrict the information given to advisors and the make the rules of engagement super clear (i.e. we as advisors don’t get the digits and email addresses). If the doc’s want to see us for planning, they reach out to us. We cannot chase them down, as is the case with military base events, in my experience. We respect doctors enough to treat them this way; why not soldiers, sailors and the Marines who actually fight for the freedom doctors have to do their great work? Don’t ask me; ask the top dogs in the military. https://media.defense.gov/2008/Apr/07/2001713266/-1/-1/1/08-075.pdf

“The Services are providing some personal financial training, but could improve
their consumer awareness training to alert Service members of unscrupulous
practices and inappropriate products before Service members arrive at their first
duty station.


Five Army, Air Force, and Marine Corps bases we visited provide 2 to 16 hours
of personal financial education from the time recruits begin training until they are
assigned to their first duty station. This personal financial education covers a
basic understanding of pay and entitlements, banking and allotments, and
checkbook management. However, the bases did not provide adequate consumer
awareness training to military Service members prior to arriving at the first duty
station on sales practices that have been declared false, misleading, deceptive, or
unfair for life insurance products considered inappropriate for most junior enlisted
Service members.”

In conclusion, the onus is on YOU. You need to learn about the various kinds of life insurance policies that are out there and pick the one that is best for you. My advice is to contact your base installation’s Financial Readiness Office. At Schofield Barracks, Hawaii, that would be the Army Community Services that has seen this type of shark-infested waters for much longer than many of you have been alive (it’s been going on at least since at least the 1980’s). Yup, this is nothing new. Protect yourself and your financial future. Educate yourself. Compound interest (‘Rule of 72’) takes time; but it also involves being in the right “investment” and not being misdirected into thinking cash value life insurance can ever replace a true equity investment in the long term. If what you need, and desire is an investment. If, on the other hand, life insurance is what you need, than consider your many options. Always remember, ‘the best life insurance program is the one that is in-force when you die’. So if you can’t afford to keep paying on an expensive permanent policy (can be $1000/mo.+), then you may need to reassess it in a serious way. Again, do your homework; due diligence, my friend.

And as they say, Caveat emptor, which means “let the buyer beware.”  That’s you. Be careful. I only bring it up because I care. Before I leave you, I want you to know that I have ‘no horse in the race’–I don’t market to the military here in Hawaii and I have no affiliation with any agents or licensed financial advisors(fiduciaries) who do. Here’s to you making good choices that serve you and your family; not the hard-selling hustlers. To be crystal clear: there are some very advisors out there, but you need to do your homework and above all, trust your gut, it’s probably right. Every industry has a few bad apples. Financial advice and insurance sales is not immune. My goal is to get them out of the proverbial barrel. In the meantime, good luck and thank you for your service to our great country. -mgw

Disclosures:

M. Garrett Wheeler/The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.

The Great Resignation: Rolling over a Retirement Plan Account (i.e., 401k, 403b, etc.)

Have you heard of the Covid-19 phenomenon referred to as the Great Resignation? Statisticians tell us that the U.S. workforce had over forty million resignations in 2021 (approx. 3.95 million per month!). Yes, it represents a new annual record. Experts in the know say that trend will continue through 2022. If you are in this group, what is your intent with your retirement plan account sitting in your soon-to-be former employer’s plan? Are you happy with your current investments? Just remember, rolling over a retirement plan account (i.e., 401k, 403b, etc.) after changing jobs is commonplace. But avoid ‘cashing it out.’ Before we met, a flight attendant client of mine who is single told me that she had all intentions to cash out and just buy a Waikiki apartment, leasehold! And she was only 55 years old. With no income rolling in, how will the maintenance fee get paid? And of course, you want to eat, right? On top of that, it’s seven years before her social security kicks in. With no other income to speak of, she could not afford to wait beyond 62 and earn an additional 8% annually. And with money as cheap as it was (as of 3/24/22 interest rates going up), why tie it all up? With no pension, she needs a fund that can eventually create a guaranteed retirement income. IMHO, she needs to continue to accumulate funds; not cash out prematurely. Every client is different, but it sure helps to have a guaranteed income plan in retirement.

Disclosures:

The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.

Retirement Decision Making: Beyond Financial

I have been in the overall financial planning industry for quite a long time—21+ years. And over those two decades I have had the privilege of being able to sit down with thousands of people and hear the anxiety that people have with retirement issues. Yes, big time anxiety. They are worried and most should be. It is one of the reasons I do what I do professionally. To quell their anxiety and provide those whom I am fortunate to call my clients with solutions for a more enjoyable retirement.


As a licensed financial advisor, I believe that a successful retirement planning program must go beyond providing just facts and figures to help our kamaaina (Hawaii residents) make good decisions. As planners we need to recognize that emotional considerations can override what might be considered rational, logical decision processes. We need to be sensitive to employees fears and concerns surrounding retirement and counteract them with ‘educational’ (not salesy) programs designed to build positive visions of retirement. Through skillful assessment, and quality financial education, we at The Wheeler Group LLC are able to assist employers to increase employee self-confidence and bolster their perceived control over the retirement decision making process.

Hawaii employers can play a vital, critical role in supporting the retirement readiness and educational programs that help employees address the financial issues such as Social Security claiming strategies, generating income in retirement from savings, making the most of pensions (if they’re available) and investment considerations that are tax-relevant to retirees.

In the past, studies have traditionally focused on how finances affect ones decision to retire. But I have long held onto the concept of “life planning,” which invariably involves non-financial factors that have significant impact on the retirement decision. The retirement decision process requires a holistic and integrative perspective that considers factors in all three domains: finances, health, and psychological well-being. Not just financial. It is our lives.

Stanford University developed what they call a 3-D model of retirement decision making. The 3-D model posits that retirement factors fall into three primary (and semi discrete domains), each of which involves a specific question:
1. Can I afford to retire? (Financial)
2. Do I need to retire? (Health)
3. Do I want to retire? (Psychological well-being)

My goal is simply to provide practical advice for improving the retirement decision process. If we are fortunate enough to make your acquaintance, the questions above will be addressed with you. So do not be afraid or apprehensive to reach out to me. You will be surprised. As unique as your situation is; there are some commonalities we all think about—have I saved enough to retire? Can I afford to retire? Will my money last as long as I do? Let’s talk about it.

Consider this: Yesterday, I had a client meeting with a flight attendant who found me online. She commented, ‘you are not that scary…I am glad I called you.’ She is right, I am here to help. Let us discuss your unique situation and see if there is a good fit between what we do for our clients, and exactly what you are in search of from a trusted advisor. We will start by gathering details and discussing ways to revamp your tax planning strategy. Sound good? If so, let’s set up a no-cost, no obligation appointment today. I cannot wait to help you keep more of your money working hard for you. 

Disclosures:

The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.

Bolster Your Retirement Accumulation through Tax Planning

Here is the premise I hang my hat on at The Wheeler Group LLC. And that is, tax planning can give a nice boost to your finances. We have all heard it before: Death & Taxes. With both there are strategies to live longer and legally pay less taxes. To be clear, tax planning is a complex and comprehensive process. And to muddy the waters even more, tax laws change frequently. Remember most recently in 2020? 

There are some common financial trends that apply to most of my clients. These come to mind: the desire to invest for retirement, the need to protect those they love and figuring out ways to legally pay less taxes now and in retirement. When it comes to your specific tax planning strategy, it is unique to you and your circumstances alone. No two plan are alike, period. Everyone has different financial problems, needs, desires and concerns (PNDC’s). My goal is to help you maximize your financial plan to set yourself up for financial success both now and into the future.

It is straightforward enough, the more money you save in taxes, the more you can reinvest in your family’s future goals. So, how can you do this? At The Wheeler Group LLC, we typically share a few suggestions with our clients. But one strategy reappears in the plans we create for clients. And that is, QCD’s.  Make the most of QCDs for charitable giving purposes.

My 21+ years of experience and more importantly, my passion to help kamaaina families put me in a unique position to help Hawaii residents set up their taxes in the most tax-efficient manner. Prior to meeting me, many of my clients thought about their taxes only around April 15th when the tax man cometh.  Preparing your taxes is different than planning for your taxes. We do not provide tax preparation services, rather we work with our clients throughout the year on intentional tax strategies. If this is something you want more information on, please reach out to me. We will share more applicable tax planning ideas. In the meantime, call (808-216-414seven), or email me (garrett@garrettwheeler.com) a request to receive your FREE RESOURCE, which summarizes everything you need to know about your taxes in 2022.

Let us discuss your unique situation and see if there is a good fit between what we do for our clients, and exactly what you are in search of from a trusted advisor. Let us start by gathering details and discussing ways to revamp your tax planning strategy. Sound good? If so, let’s set up a no-cost, no obligation appointment today. I cannot wait to help you keep more of your money working hard for you. 

Disclosures:

The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.

The Power of Resiliency: Bouncing Back in a Changing World

In these tough economic times–hopefully ‘post-pandemic–times here in Hawaii, we all need to be reminded that our perseverance and resiliency in the face of insurmountable challenges is the key to our success. It is said that failure is only absolute when you give up. Everyone gets knocked down; the question is, will you get up? Now is the time to take action, not make excuses. Whether it’s pursuing a ‘passion’ project, some sort of ‘side-hustle’ or more mundanely, starting a retirement savings account or protecting your family with life insurance. Whether you just got a huge bump in pay (and responsibility), or you just got, “The Box” (i.e. fired), change and figuring the next best steps can be uber-stressful. Start at the beginning: Believe in #1…yep, that’s you.

I’ve read where experts say that the number one challenge in ‘change management’ is not so much the adoption of new ways of doing things—it’s the misperception that change is a negative judgment on one’s past performance. Not true. Change happens for a million reasons. But of course, all that matters is how it affects you. But do yourself a favor, open yourself up to see other opportunities. Ask yourself, ‘what do I want?’ We all need to be clear about the outcome we want to achieve or we’ll be flailing.

Brace yourself–shameless plug ahead: I won’t overdo it, but here’s an excerpt from my favorite author’s book, The Power of Resiliency: Bouncing Back in a Changing World. [Yes, written by well-known Hawaii writer, my mother, Dr. Linda Andrade Wheeler]. While this article is designed and written with my financial planning clients in mind, it is certainly a universal thing this notion of ‘change.’ My hope is that these ideas will help propel you from the shock of change, to taking action and achieving the exultation of victory because you were forced to change and did it on your terms. Change is one of life’s universal laws. Google it, you’ll find way too many quotes on it. Here’s a succinct one that I like: “Change is the only constant in life.” -Heraclitus

In my financial advisory practice, solutions are paramount. In the same way, the following are seven (7) practical tips on how to bounce back from life’s challenging situations:

1. Develop a personal philosophy that makes you the owner of your destiny rather than a victim of the circumstances. When you passionately believe in yourself, you have the personal power to hang on and do whatever it takes to attain your dreams.

2. Be optimistic. Having a can-do attitude makes all the difference in how you view and handle change.

3. Goal setting for goal-getting. Creating tomorrow by the actions you take today. Because change is such a personal matter, once you are aware of the tremendous power you have to control and manage your life, the more likely you will appreciate[1]ate and use your unique talents, knowledge, and skills to attain your goals and follow your dreams.

4. Get a sharper focus of what you want and go after it with an action plan and pure passion. When you have a clear picture of what you want to accomplish, you inspire others through your attention to your goal. Everyone admires a person who knows what he or she wants and knows how to get it.

5. Make a conscious effort to change what is not working in your life. Go through the weed and seed process to set your priorities for immediate and long-term commitments. Remember, time has a way of changing your assets into liabilities. Remember, time has a way of changing your assets into liabilities. If you want different results, you have a to act differently.

6. Finding Opportunity Out of Crisis. Change offers both uncertainty and opportunity. How you manage yourself will make all the difference in viewing the changes that occur in your life.

7. Develop habits of change. Why not make change a habit? Why not make your life a little more fun by learning to live with change instead of routine? Once you do something well, you need to figure out a way to do it better.

The book I recommend Ain’t Life a Artichoke? is all about personal excellence—the process of self-discovery and self-renewal as you interact with others in building healthy and happy relation-ships. It is about acquiring the attitudes, skills, and knowledge to be at your best with everyone, every time. That is your most valuable contribution in life—to be at your personal best. It is the gift you give yourself and others throughout your life. Check it out!

SPECIAL OFFER TO READERS: As a no-cost service, we would like to offer you, at no obligation, a thorough review which analyzes all of your potential financial problems, needs, desires and concerns. We’ll start by simply talking all about you and your vision for the best life possible. We’ll then review your existing programs. While a policy review or investment/portfolio analysis may or may not reveal the need for change (in coverage or asset allocation approach), it will help you determine whether or not you’re going down the right path in order to meet your financial goals. To benefit from this service, please feel free to contact me with any questions at (808)216-414seven, or email me at garrett@garrettwheeler.com.

Lastly, my mentor (and mom, Dr. Wheeler) shared with me long ago that ‘your greatness will be felt in the way you serve others. So get out there, go make your life’s impact in the way your connect and help people. It is only then that we all will be able to endure a lot of what life throws at us. Here’s to making change work for you, get get ’em!

Copyright The Wheeler Group LLC 2011 All Rights Reserved

What We Kamaaina Need to Know about Hawaii Inheritance Law

Estate planning is important for most of us; not just for the uber-wealthy. However, most Americans have no plan in place. We need to rectify this. The good news for us kamaaina (and by the way, if this term is unfamiliar, then this article may be irrelevant) is that the state of Hawaii has no inheritance tax. Don’t celebrate, yet. Because the bad news is that Hawaii happens to be one of only twelve states with an estate tax. My goodness, this is getting complicated. What’s the difference? So let’s talk straight: First off, as a fiduciary and financial advisor, I do not provide tax advice. But I choose to work with island families because it’s my heritage. My family has been a part of the Aloha State for over 150 years and I delight in looking out for my island neighbors. Ohana is a very big thing here, so let me introduce some basic inheritance laws so that it can be beneficial to the hoi polloi. But make no mistake about it, estate planning is a hyper-complex endeavor. Estate planning is not a DIY project; be forewarned. At minimum, work with someone you trust, but go further and make sure they’re a ‘fiduciary’, Hawaii-licensed financial advisor. Together you can seek out and engage an estate planning attorney to help you navigate these complex waters.

Again, Hawaii does impose an estate tax on island residents. Remember, Hawaii is a very ‘Blue’ state and the democratic ideal (some say, ‘welfare state’) is prevalent in it’s laws too. Here’s what I mean, the Hawaii estate tax is clearly a ‘progressive’ one. That is, the tax percentage gets progressively higher the more you earn. Whereas, lower-income earners aren’t hit as hard. Fair enough. Irregardless of income, the exemption is set at $5.49 million deaths taking place in 2021. Therefore, if you call Hawaii home and leave behind more than $5.49 million, your estate may receive a Hawaii estate tax bill. It doesn’t stop there. The ‘federal estate tax’ is separate from the ‘Hawaii estate tax’. The federal estate tax is levied only on estates worth more than $11.7 million (again, for deaths occuring in 2021).

NOTE: A Hawaii estate tax report must be filed for estates valued at more than $5.49 million. This includes everything one has from the value of their real estate portfolio, to bank accounts, investment portfolios, life insurance policies, qualified and non-qual retirement accounts, as well as other assets.

At our firm, we often get the question of whether an individual should a have will or a trust. Both are estate planning tools that can help ensure your assets are protected and bequeathed to your heirs, (besides your spouse, which is generally not an issue). One thing is for certain, it is always best to create and leave a valid will and last testament. It’s about control, that is, it provides you with the most control over how and to whom your estate is distributed. A will is simply a written document expressing a deceased person’s wishes. Trusts take it a step further and offer more control of your assets. Yes, a trust is more expensive, but it does more and is actively managed. Whether you choose to leave behind a will or a trust depends on your circumstances. My professional advice is to seek the counsel of, and guidance from an estate planning attorney licensed in Hawaii.

So, what if you die without a will? Well, it’s called intestate. The state of Hawaii will get involved, and it is not the best route for you to take. Why? Because it is not about your express wishes. As I half-jokingly tell a few clients who dismiss the need for a will. I say, ‘get one, because if you don’t, the state of Hawaii has one for you…but you just might not like it.’ Instead take control of your personal wishes. Yes, the distribution of your assets is vitally important too; but your carrying out your wishes are the intangible, invaluable.

Do I need a trust? Is it expensive? What are they? These are common questions we frequently hear. For starters, there are many types of trusts. However, taking a high-level view, it comes down to having two categories: living and testamentary. You’ll find a lot of information on both categories online. One huge difference between a will and a trust comes down to ‘privacy’. A will goes through ‘probate'(term meaning, ‘to prove’), essentially proving in court that a deceased person’s will is valid. Upon your death, your will goes through probate(read publicly), and a trust does not. A living trust passes property outside of probate court; privately not publicly read. Another benefit is that there are no attorney fees after the trust is established. Your property can be passed immediately and directly to your named beneficiaries. 

As you can see, overseeing your own estate, or supervising the fine points of inheriting money from the estate of a loved one, can quickly get problematic. To alleviate the pain, I suggest people start by seeking out a trusted advisor. Better yet, hire a fiduciary–that is, the legal requirement for financial advisors to work in their customers’ best interest. Estate planning can be overwhelming. We recommend you speak with your financial advisor. 

Do You Know Your Social Security Options?

Social Security payments are a big part of many people’s retirement income –
and that may be the case for you.

If you’re nearing retirement or are already retired, you probably have several questions as it pertains to your Social
Security payments:
• How much could I receive in monthly benefits?
• What if I start taking my Social Security payments before I reach my full retirement age?
• What if I wait until my full retirement age to begin drawing my benefit? What will my benefit be?
• If I continue to work, how much of my Social Security benefit would be withheld?
• What happens when my spouse passes away?

How Are My Worker Benefits Calculated?
You can become eligible for Social Security benefits by working at a Social Security covered job for at least 10 years or until you have accumulated 40 quarters in the workforce. To calculate your benefit, 35 of your highest earnings years are averaged (if you haven’t worked for 35 years, your benefit will be averaged over the years you’ve worked, with the years needed to reach 35 counting as zero). In general, the more years you spend in the workforce and the higher your income, the higher your retirement benefit.

When Can I Start Receiving Benefits?
You can begin receiving Social Security payments at age 62, but if you do file at that age you’ll only get 75 percent of your full amount. If you wait past your full retirement age to begin receiving payments, you’ll get more than 100 percent of your benefit amount. File earlier; receive a smaller check for a longer period. Wait to file, and potentially receive a larger check and a larger survivor benefit for your spouse. An 8 percent delayed retirement credit will be added to your benefit for each year you delay receiving benefits after your full retirement age, which may enhance your benefit by as much as 32 percent.

Check this out!

Let us help YOU!

CONTACT M. Garrett Wheeler today. No cost/no obligation planning session with NO STRINGS ATTACHED.

As Mr. Wheeler points out, “Investments are a matter of opinion. Taxes are a matter of fact. When we are engaged by a client to deliver on our fee-based planning services, we start by making it 100% all about the client; not us!”

Wheeler goes on to say, “we focus on providing my clients with tax-reduction advice and strategies. Not on the latest financial product or investments (i.e. Crypto…).”

Understanding more about the U.S. tax system, how it works and getting ideas to help you maximize your income in retirement may be a conversation that you want to have. If it is the case, feel free to reach out to us. We can help you with all of this and make it relatively painless. We look forward to discussing your needs. Aloha!

LONG-TERM CARE INSURANCE

A long-term care policy does many things. For one, clients tell me that they feel it is a great way to help them avoid being a ‘burden’—having to rely on family members for care. It’s not what they choose to be remembered for. But LTCi also enables you to remain in your home as long as possible. Many of my clients tell me, this is critically important, to remain in their homes. And then there is the ‘financial’. Additionally, it transfers this real ‘risk’ to the insurance company, instead of the high cost of care depleting your ‘life savings’. Let us help you protect your retirement nest egg.

You worked hard to plan for a comfortable retirement. Spending your life savings on long-term care services isn’t on your to-do list. Contact me to learn how long-term care insurance can help you protect your future.

Ask me about these strong LTCi features and benefits:

1. Cash Benefit with No Elimination Period: Our LTCi plan provides cash to pay for any cost associated with LTC expenses.
2. Stay-at-Home Benefit: Includes multiple benefits to help people stay at home as long as possible.
3. Partnership-Qualified Policies: Gives LTCi policyholders a Medicaid safety net.
4. Inflation Protection Options as Low as 1%: Allows you to reach a client’s desired premium.
5. Partner-Friendly Benefits: Includes benefits for partners who purchase identical coverage.


Disclosures: https://www.mutualofomaha.com/long-term-care-insurance

Handling Market Volatility

Volatility
Garrett Wheeler says, “Hawaii investors who are nearing, or like my parents, are in retirement should use market volatility as an impetus to re-examine their portfolios. Let’s be clear, I’m not saying to transfer your entire holdings to a cash position. But I do suggest that our island retirees’ and those near-retired take a strong second look at their asset allocations. Retirement income planning, including withdrawal rates, are crucial given the expected longevity of our seniors’.” He suggests talking to your Financial Advisor.

The stock market was a solid one for investors in 2019, with several major indexes reaching record highs. But fear of an economic decline topped the list of CEO concerns heading into 2020. A global economic slowdown could mean increased market volatility.

When markets are volatile, sticking to a long-term investing strategy can be a challenge. But there are ways to help keep market turbulence from distracting you from your goals. First, have a game plan. Second, check your asset allocation. Third, use market volatility to fine tune your portfolio. A well-thought-out investment plan can help keep emotion from driving your decisions. For example, you might decide in advance to take profits when the overall market rises by a predetermined percentage. You might try to hedge the risks of one investment by buying something else that may profit if that investment struggles. Or you might use a buy-and-hold strategy for core investments, but be more flexible with other assets. Next, check your asset allocation. Has it changed because of market forces? If one type of asset now represents too small—or too large—a piece of your portfolio, you might want to rebalance.


If you want to adjust your allocation but are worried about making sudden moves at the wrong time, you don’t have to do everything at once. Dollar cost averaging into or out of investments lets you spread your risk over time and could help you reposition your portfolio gradually. Third, use market volatility to your advantage. Market cycles offer both obstacles and opportunities. For example, if you missed out on an investment in the past because it was too expensive, the price might be lower now. If you have losses in a taxable account, you may be able to use them at tax time to reduce the amount of income tax you’ll owe. And some investments are designed specifically to profit from market swings, though they may not be suitable for every investor.


Remember, markets go up… and down. Everyone faces investment setbacks; good investors learn from them.
All investments are subject to market fluctuation, risk, and loss of principal. When sold, investments may be worth more or less than their original cost. Asset allocation is a method used to help manage investment risk; it does not guarantee a profit or protect against investment loss. Dollar-cost averaging does not ensure a profit or prevent a loss. Such plans involve continuous investments in securities regardless of fluctuating prices. You should consider your financial ability to continue making purchases during periods of low and high price levels. However, this can be an effective way for investors to accumulate shares to help meet long-term goals.

BROADRIDGE “FINRA reviewed,” Reference: FX2020-0130-0266/E Org Id: 114212

  1. Handling Market Volatility (#VCA_Mark_Vol_2020)
    Rule: FIN 2210