Is It Time to Hire a Financial Advisor? | 5 situations when the answer could be yes

Is It Time to Hire a Financial Advisor? | 5 situations when the answer could be yes



A financial advisor is a professional who is in charge of guiding an individual or entity towards their financial goals in the most efficient way. At Merriman, we love taking on the burden of financial planning so our clients can get back to spending their time and energy doing the things they love.


Thrive Global describes the financial sector as complex and dynamic, with assets and trends changing and interdependent with other factors, and a financial advisor has the skills required to study these processes and trends. However, only 17% of Americans hire a financial advisor, with the rest either managing their own finances or simply winging it. But in a time where debt and living expenses are increasing, having and following a financial plan is more important than ever. If you find yourself in any of the following situations, you should consider hiring a financial advisor:


You’re starting a new business

Starting a new business can be a costly endeavor, as it involves expenses and procedures you wouldn’t immediately be aware of, such as filing for a certificate of formation and providing initial reports and paying their respective filing fees. A financial planner can advise you on the best structure to form your business in, taking into account startup costs, annual taxes, and filing fees. LLCs in Washington need to be aware of the taxes they need to pay at the federal, state, and local levels, as well as a sales tax and state employment tax. All of these can become overwhelming to keep track of, especially if you’re a budding business, and a financial planner can help you get it all sorted out.


You’re a DIY investor

A simpler investment plan is usually better; however, this isn’t true with financial planning. An overall financial plan should also consider factors such as retirement planning, tax planning, and insurance planning. Market Watch explains that DIY investors would still need a financial advisor in order to be sure that nothing is being missed out. Clients don’t realize that an advisor will do more than just manage their portfolio and help with investment plans. Financial advisors can take charge of a range of money-related management tasks, such as making a comprehensive saving and spending plan and guiding the client towards making sensible financial decisions.


You’re starting a family

Raising a child is not cheap: It costs an average of $233,610* to raise a child for the first 17 years of their life. Having a financial advisor can help you review your finances to see if you can actually afford being a parent. An advisor can also help you plan when to start saving for your child’s college expenses, while also keeping your retirement plan on track and leaving space for a growing family. They can help settle any future inheritance as well as ensure that your children will be taken care of.


You’re close to retirement age

Though you may have a retirement plan, the financial decisions you make in retirement might be more complex than the decisions you’ve had to make in the years leading up to it. A financial advisor can help you consider what you should do so you don’t end up outliving your money. Even when you’re already in retirement, a financial advisor can help you manage a spending plan. You might even consider an investment plan as well, and an advisor will help you make decisions that won’t sacrifice what you already have.


You’re financially illiterate

There is a financial literacy crisis in America, but financial advisors can help solve this problem. Americans would rather talk about anything else, such as religion, politics, even death, rather than personal finances. Aside from the embarrassment, another major factor that makes money talk taboo is that it is considered rude to talk about it with other people. However, talking about money is the first step to being a financially literate person. Advisors let their clients ask anything without judgment, creating a learning environment that empowers people to expand their knowledge about their own financial situation.


The circumstances requiring a financial planner aren’t just limited to the points discussed above. Overall, it’s important to plan for your financial future. Read our “Why Do I Need a Financial Plan?” for a deeper understanding of why a financial advisor is the right person to develop a financial plan for you. And to learn more about the value that a financial advisor can provide, check out the “10 Reasons Why Clients Hire Us.” If you would like to start looking for an advisor to help you with your plans, get in touch with us to discuss the necessary steps.

Article written by Ellie Hartwood
Exclusively for Merriman


Source: *, married-couple,Where does the money go?

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Stimulus 2.0: What Is (and Isn’t) Included in Consolidated Appropriations Act (CAA) of 2021

Stimulus 2.0: What Is (and Isn’t) Included in Consolidated Appropriations Act (CAA) of 2021


On December 21, 2020, Congress passed the second round of major stimulus as a follow-up to the CARES Act passed earlier in March 2020. President Trump initially balked at signing the new legislation, citing that he wished to see a higher Recovery Rebate payment for families, but ultimately he signed the legislation as presented on December 27, 2020. While the CAA expanded on some of the relief provided in the earlier CARES Act, it was also notable for a few specific provisions it didn’t include.

Here are some highlights included in the bill:

Recovery Rebate: Qualified families are eligible for an additional advanced rebate of $600 per taxpayer and $600 for each qualified child (compared to $1,200 per taxpayer and $500 per child under the CARES Act). The income thresholds remain the same as under the CARES Act, with phaseouts beginning at $75,000 for Single or $150,000 for Married Filing Joint.

Extended Federal Unemployment Benefits: The earlier CARES Act authorized additional federal unemployment benefits to be paid on top of state unemployment benefits to help individuals affected by the pandemic. However, those federal benefits were set to expire in December 2020, but the CAA extended the benefit for another 11 weeks at a reduced rate of $300 per week (down from the original $600 per week). Employees as well as self-employed individuals remain eligible for the extended federal unemployment benefits.

Enhancements to Paycheck Protection Program (PPP) Loans: The CAA provides significant relief to businesses impacted by the pandemic. In addition to expanding the list of qualified expenses eligible for loan use, the CAA opened the doors for businesses to obtain a second PPP loan. These loans may be forgiven if used to pay for qualified expenses such as wages, rents, utilities, and now certain operational expenditures, property damage due to vandalism, and worker protection expenditures. Also of note, the act specifically allows businesses to deduct expenses paid with PPP loan proceeds, even if the loan is later forgiven.


Equally notable are the provisions NOT addressed in this bill:

No Extension of the 2020 RMD Waiver: Taxpayers will need to resume their Required Minimum Distributions in 2021.

No Extension of Coronavirus-Related Distributions (CRD) into 2021: Last year, individuals affected by the coronavirus could access retirement accounts (IRAs, 401(k)s, etc.) for up to $100,000 without being subject to the 10% early distribution penalty if they were under age 59 ½. Furthermore, these distributions could be paid back within 3 years to “undo” the income. Unfortunately, the CAA did not extend this withdrawal provision into 2021, so be careful when accessing retirement accounts before age 59 ½.

No Further Student Loan Relief: Federally backed student loan payments had been suspended under the CARES Act and through executive order through January 31st, 2021, but the CAA did not further extend this relief.


President Biden has already indicated that a third round of stimulus will be needed, so we are likely to see more legislative changes this year. We will continue to stay on top of the changes impacting our clients, but please reach out to your advisor at any time if you would like to understand how these changes may impact you.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Getting the Most From Your Health Savings Account (HSA)

Getting the Most From Your Health Savings Account (HSA)


Are you aware of the many planning aspects of HSAs? We’d like to share some of the more in-depth aspects with you here so you can get the most from your HSA. However, if you’re unfamiliar with HSAs or need a quick reminder about them and high-deductible health plans (HDHP), then we encourage you first to read our blog article: A New Perspective on Health Savings Accounts.

HSAs are more tax efficient than other retirement accounts.

HSA accounts are often referred to as “triple tax-exempt” because your contributions, earnings, and qualified withdrawals are not taxed. This triple tax-exempt nature of HSAs makes them more attractive than other retirement accounts that are only double tax-exempt, including 401(k)s, IRAs, and Roth IRAs.


Employee HSAs could be considered quadruple tax-exempt.

Additionally, if you’re an employee and make HSA contributions via payroll deduction, then you have an added benefit of avoiding FICA (Social Security and Medicare) and FUTA (unemployment) taxes on those contributions. Contributions to your 401(k) via payroll deductions don’t avoid these taxes.


Don’t use your HSA for current medical expenses and invest the funds.

In order to fully benefit from the triple or quadruple tax-exempt nature of an HSA, you’ll need to let the account grow. It’s important to leave your contributions in your HSA and to invest them for the most potential growth.

Note: This means you’ll need to pay for medical expenses out of pocket, which can get expensive when you have a high-deductible health plan (HDHP).


Save receipts for current medical expenses to reimburse yourself in the future.

There is no time limit for reimbursing yourself for qualified medical expenses, so you can reimburse yourself in the future—even 30 years from now—for expenses incurred today. You must keep records of these expenses, so it’s important to keep your receipts. You’ll have plenty of medical expenses in retirement, so saving receipts for small expenses may not be worth the effort. Consider saving receipts for larger current expenses.

Note: You can’t reimburse yourself for medical expenses incurred before the HSA account was established or for medical expenses deducted on Schedule A of your tax return as itemized deductions.


Maximize your catch-up contributions in a family HDHP.

You can make an annual $1,000 catch-up contribution to your HSA beginning at age 55. If you have a family HDHP or two separate HDHPs, then you can potentially make two catch-up contributions—one for each spouse who’s 55 or older if the catch-up contributions are made to each of their separate HSA accounts.

Note: Most family HDHPs are set up with one HSA account in the employee’s name. If the spouse doesn’t have their own HSA account, then they will need to open one in order to make their own catch-up contribution.


Contribute after you stop working and before you enroll in Medicare

Unlike an IRA or Roth IRA, you don’t need to have earned income to be able to contribute to your HSA. You can contribute to your HSA if you have an HDHP and haven’t yet enrolled in Medicare. If you retire before Medicare age, then you’ll need to either continue your coverage through your employer with COBRA or get individual coverage. If either of these coverages is an HDHP, then you can contribute to an HSA.

Note: You can’t contribute to an HSA once you enroll in Medicare because Medicare is not an HDHP. Enrollment in Medicare includes enrollment in any Medicare coverage—Parts A, B, C, D, or a Medigap plan.


Contribute tax-free funds from your IRA in a one-time rollover.

You can make a one-time rollover from your IRA to your HSA up to your contribution limit for the year. If you wait to perform this rollover until you’re age 55, you can rollover both the maximum annual contribution and your catch-up contribution. This rollover must be transferred directly from your IRA into your HSA in order to be tax-free.

Note: A good candidate for this rollover would be someone who has a large IRA and might already be looking for openings to convert some of their IRA to after-tax accounts, such as a Roth IRA.


Use your HSA to pay for certain insurance premiums.

You can use your HSA to pay for certain health insurance premiums that are considered qualified expenses, including long-term care insurance (subject to limits and restrictions), healthcare continuation such as COBRA, healthcare coverage while receiving unemployment benefits, and Medicare or other healthcare coverage at age 65. Premiums for a Medicare supplemental policy are not considered a qualified expense.

Note: The annual amount of qualified long-term care premiums is limited and based on your age, which ranges from $420 for those age 40 and younger to $5,270 for those age 71 and older. The long-term care policy must also meet certain requirements itself to be qualified.


Non-qualified withdrawals after age 65 aren’t penalized.

Withdrawals for qualified expenses for yourself, your spouse, and your dependents are not taxable and not subject to a penalty. Non-qualified withdrawals are subject to a 20% penalty and tax, but the 20% penalty no longer applies once you reach age 65. Non-qualified withdrawals after age 65 are taxable, making them comparable to IRA withdrawals. While you’ll lose the triple-tax exempt nature of an HSA, your contributions and growth were tax-free.

Note: If you must take taxable distributions and you aren’t yet 65, then consider distributing funds from an IRA before distributing funds from your HSA to avoid the 20% penalty. Keep in mind that there is a 10% penalty for IRA withdrawals prior to age 59 ½.


Qualified distributions for a deceased owner are non-taxable within one year of death.

If you pass away and your beneficiary is your spouse, then they can continue the HSA as their own. If the beneficiary is not your spouse, then the value of your HSA at the time of your death is distributed and deemed taxable income for them. However, your beneficiary can use the HSA to pay for your outstanding qualified expenses within one year of your death. Funds used for this purpose by a non-spouse beneficiary are excluded from the value of the account, thus lowering their taxable income.

Note: Discuss your outstanding qualified expenses with your beneficiary. They can only use the account to pay for your expenses after your death if they have the necessary information and records.


Getting the most out of your HSA can be difficult, especially while trying to do so over a long period of time. It’s important to integrate HSA planning into your overall financial goals and retirement plan. As financial advisors, we love to help our clients accomplish these things, so please reach out to us if you have any questions. We’re here to help!



Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

What Women Need to Know About Working with Financial Advisors | Tip #5

What Women Need to Know About Working with Financial Advisors | Tip #5


I want to acknowledge that all women are wonderfully unique individuals and therefore these tips will not be applicable to all of us equally and may be very helpful to some men and nonbinary individuals. This is written in an effort to support women, not to exclude, generalize, or stereotype any group.


I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. Having worked in the financial services industry for nearly two decades, this is unfortunately not surprising to me. But it is troubling, largely because it’s so preventable.

Whether you have a long-standing relationship with an advisor, are just starting to consider working with a financial planner, or are considering making a change, there are some simple tips all women should be aware of to improve this relationship and strengthen their financial futures.


Tip #5 – Go to the Meetings


I haven’t seen any studies on whether or not women attend fewer meetings. However, if two-thirds of women don’t trust their advisors, I have to believe they aren’t eager to sit in a room with someone they don’t trust for an hour. I sometimes hear that one spouse “just isn’t interested in finances” so they don’t attend meetings. It’s perfectly fine to not be interested. My spouse isn’t! One thing I always find fascinating about working with couples is seeing all the different ways we decide to divide and conquer household tasks. Those lines are often logically drawn based on who has the most interest or the most time. However, even if you completely trust your spouse to handle the finances and you don’t have any interest, it’s important that you are part of the big picture conversations. You may not have any opinion on whether you invest in mutual fund XYZ, but you may have goals that aren’t even on your spouse’s radar or strong opinions about whether your entire portfolio is invested conservatively or aggressively. I find that when one spouse “just isn’t interested in finances,” it means that they attended meetings with other advisors in the past where the conversation wasn’t properly framed to address their goals, or they felt uncomfortable asking questions.

In addition to making sure your financial plan properly addresses your goals and takes your comfort level into account, it’s also important to build a relationship with your advisor so that if you do have questions, if you separate from your spouse, or if they pass away, you have someone you trust to turn to for help.

Be sure to read our previous blog posts for additional tips to help women get the most out of working with a financial advisor. You may notice that all five of these tips are easier to follow when you follow tip #1—work with an advisor you like. There are many different considerations when hiring an advisor: Are they a fiduciary? Do they practice comprehensive planning? How are they compensated? What is their investment philosophy? They may check off all your other boxes, but if you don’t like them, you are unlikely to get all you need out of the relationship. If you’re looking for an advisor you’re compatible with, consider perusing our advisor bios.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Happy New Year!

Happy New Year!


2020 brought many expected and unexpected challenges – on top of a political election year, we faced a pandemic, a challenged economy, and turbulent markets, to name a few.

We don’t yet know what 2021 will bring for the economy, for markets, or for our own lives, but there are still some things we can control.

As we welcome in a new year with hopeful expectations, let’s take a moment to recommit to those factors within our control:


Sharing Our Dreams and Values

As we reflect on the strange and challenging times this year, many find themselves wondering what their families did in the past to get through difficult times. We may remember snippets of stories told by our elders or passed on through our family, but often wish we knew more.

As wealth advisors we know firsthand the importance of legacy planning through legal documents. We also believe in the value of sharing the essence of who you are, your values, and experiences for future generations to come, through the creation of a Family Legacy Letter.


Building Better Financial Behaviors

Too many investors focus on markets when they should focus on themselves, their hopes, their goals, and their dreams. Identifying the choices in our control isn’t just a good financial lesson, it’s a great life lesson dating back to ancient Greece, when the Stoic philosopher Epictetus said:

“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control.”


Understanding Our Biases

Daniel Kahneman and Amos Tversky are famous for their work on human behavior, particularly around judgment and decision making. We can apply much of their discoveries to investor behavior. While we can’t completely eliminate biases, we can learn about them and how they impact our decision making, allowing us to take action to address them and avoid costly mistakes.


May you and your family enjoy the warmth this season has to offer and a new year filled with hope, love and success!



My Journey to Sustainable Investing | An Advisor’s Perspective

My Journey to Sustainable Investing | An Advisor’s Perspective


During my senior year in high school, I was invited to go backpacking in Yosemite with the Yosemite Institute. I had been backpacking many times before with my father all over California. We even climbed the tallest mountain in the continental United States (Mount Whitney) when I was 14. I loved the adventure and challenge of backpacking. In those early years, I didn’t realize the importance of being in nature. It wasn’t until the Yosemite trip that our guides taught us about the history of the national parks in the delicate balance between the visitors and the surroundings. They also taught us the importance of taking care of our planet. When my classmates and I stopped in a McDonald’s on the way home from Yosemite, I remember taking the Big Mac out of the Styrofoam container and asking them to reuse it. Back in the 80s, I don’t think climate change was on many people’s radars. Today, the science of climate change makes me want to do everything possible to care for the planet for the generations to come. I’ve always done my part but drew the line when it came to investing sustainably. My thought has always been to maximize returns in my investment portfolio and give charitably to causes that fight climate change.

I just didn’t believe that I’d be able to diversify enough (too risky). I believed that returns would be lower in part due to higher expenses. I also got confused about the differences between being socially responsible and sustainable investing. There are also a lot of acronyms and terminology to understand, such as SRI (Socially Responsible Investing) and ESG (environmental, social, and governance).

The history of Socially Responsible Investing (SRI) goes back as early as Moses in 1500 BC. In more modern times, the 1950s saw the first mutual fund, the Boston-based Pioneer Fund, to avoid “sin” stocks: companies that dealt in alcohol, tobacco, or gambling.

While I don’t love to support alcohol, tobacco, and gambling, my values aim to focus on investments that help the planet. My values seek to focus on the “E” in ESG: the environment. Doing well while doing good.

Sustainability investing is a choice and investors decide whether aligning their investment decisions with their environmental values is right for them.  At Merriman, we believe that, all else being equal, a sustainability investing strategy should generally reward companies for acting in more environmentally responsible ways than their industry counterparts. This belief is in contrast to many other sustainability investing approaches that exclude entire industries regarded as the worst offenders.  Sustainability strategies place greater emphasis on companies considered to be acting in more environmentally responsible ways while also emphasizing higher expected return securities. This approach enables investors to pursue their environmental goals within a highly diversified and efficient investment strategy.

It feels like we have both been on the same journey to the top of the mountain to build a portfolio that focuses on the environment without sacrificing risk-adjusted returns. Merriman recently announced major changes to our values-based portfolio, and I have moved all of my investments into our new portfolio. When I combine a sustainable portfolio with charitable giving, it is one small way to do my part in “leaving no trace behind.” If you would like to learn even more about our approach, you can read “Incorporating Environment and Social Values into Your Merriman Portfolio”.