Best Financial Advisors in Amherst

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.
  

• What is a tax-efficient way to save for your child’s college education in Amherst?

  To save for your child’s college education in a tax-efficient way, consider investing in a 529 College Saving Plan. Your contributions are federally taxable, but your distributions in the future will be tax-free. The 2006 Pension Protection Act stipulates this tax-free procedure. By the time your child needs the funds, and when the tax rate may be higher, you won’t have to pay taxes on the fund. Speak with your Amherst financial advisor about integrating a 529 plan into your portfolio.

• What are the advantages of hiring a fee-only financial advisor in Amherst?

  The fee-only compensation model offers you particular benefits, including transparent fees, and disclosure of any conflict of interest when it comes to financial products being offered. There will be no surprise costs. Also, advisors working fee-only in Amherst do not earn commissions from third parties. They're able to provide you with unbiased guidance regarding investments and are not motivated by how much commission they can earn.

• How do tax deductions, and non-refundable and refundable tax credits benefit your financial plan in Amherst?

  Tax deductions minimize your taxable income, and tax credits minimize the taxes you need to pay. An experienced Amherst financial advisor can recommend investments and retirement or savings plans that take advantage of tax deductions and credits. Getting refundable tax credits is particularly beneficial. If your refundable tax credit is more than your taxes, the residual credit can actually be returned to you as a refund. Meanwhile, non-refundable tax credits don't give you back the residuals.

• What are the benefits of getting your own disability income insurance if you already have group disability insurance from your employer in Amherst?

  Having your own standalone disability income insurance means not having your coverage cut when you change employers. Also, benefits from an individual policy are not taxable since you are the payor. Meanwhile, the benefits you’ll receive from group insurance are taxed and capped to a certain amount. Some group insurances in Amherst do not cover commissions and bonuses. Having an individual policy is a great way to supplement these income gaps while you're injured or sick.

• Why should you hire a divorce financial advisor in Amherst?

  A divorce financial advisor can help divorcing couples manage the financial aspect of the process, including conducting an asset inventory, sorting out pension and insurance benefits that need division, providing guidance on the tax implications of divorce, and advising on debt settlement. The Amherst financial advisor can also help plan for an ex-spouse’s cash flow and expenses post-divorce.

• 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.