Best Financial Advisors in Davis

Frequently Asked Questions

• Introduction

  There are many titles for financial professionals, so it's challenging to track what each one means. A financial advisor is probably the term you've heard most often. Financial advisor is a broad term for a professional who helps individuals or companies manage their finances, including investment choices. There are over 100 certifications that financial advisors can obtain.
  

  • Financial planners, wealth managers, and investment advisors are all financial advisors with different focus areas.
  • A financial planner helps an individual or a company make a plan to achieve long-term financial goals.
  • A wealth manager helps individuals maintain their wealth through various disciplines and services, such as taxes, estate planning, and investment advice.
  • An investment advisor offers investment advice and recommendations to individuals or organizations.
    

  There’s a misconception that you have to be extremely wealthy to use a financial advisor. In reality, they can be beneficial for people from any income level. Keep reading to find answers to the most commonly asked questions about financial advisors, so you know which type can fit your specific needs.
  

• How does the SECURE Act 2.0 affect Roth IRAs in Davis?

  The SECURE Act 2.0 has revised rules that affect contributions and distributions for Roth accounts in Davis. For instance, Roth 401(k) and 403(b) employer retirement plan holders no longer have a minimum distribution amount. Additionally, people with 529 education savings plans can now roll their funds over to a Roth IRA starting in 2024, which can help boost their retirement savings.

• Which education costs in Davis are considered qualified expenses for a 529 plan?

  In Davis, some fees are deemed eligible for a 529 college savings plan. Tuition and other fees, books and materials, peripheral equipment, board lodging (if the student attends school more than half-time), and special needs expenditures related to attendance or enrollment are all included. Foreign schools are likewise deductible as long as the institution is included on the U.S. Education Department's list.

• How can real estate investment trusts (REITs) help you with your investments in Davis?

  REITs can help Davis investors boost their asset allocation and diversify their investments because its shares do not necessarily track the fluctuations of bonds and stocks. In addition, equity REITs have maintained higher dividend yields than stocks and 10-year treasury notes over the past decade. However, just like any other investment, there are risks involved in REITs. Consult a financial advisor before putting your funds into REITs.

• Which among the different types of mutual funds should you invest in Davis if you are risk averse?

  If they are risk averse, Davis residents can invest in money market funds or municipal bonds. Commercial paper and certificates of deposit, which give a set return rate, are examples of money market funds. Investors can utilize these to settle brokerage transactions or as a cash alternative. Municipal bonds, on the other hand, provide federal tax-free income as well as state tax-free income if issued in the investor's home state.

• Is it still ideal for you to open a 529 account in Davis if your child is a few years away from college?

  Even if your child is only a few years away from college, opening a 529 plan in Davis can help you save for it. You have the opportunity to save for your kid's education for a few more years by starting a 529 account and making monthly contributions until their junior year of college. Any earnings from that plan can be utilized for college-related expenses tax-free.

• Are financial advisors worth it?

  Whether or not a financial advisor is worth it depends on your personal situation. If your finances are fairly straightforward, then you may be better off handling it on your own. But if you have substantial assets or a complex investment portfolio, then hiring someone to handle it for you can be well worth the cost.