Anna came to us with a large amount of money from another institution. The money had been sitting in cash earning very little in interest. Due to her religious beliefs, Anna did not want to invest in certain industries. Anna may want to consider a customized portfolio that is well diversified but avoids the industries that do not align with her values. In addition, due to market volatility, we might suggest investing the money in equal amounts over a 10- month period.

Robert, who recently retired, would like to roll over his 401(k) into his IRA. However, Robert is only 56, so we would encourage him to explore other options. If he waits to roll over his 401(k), for example, he can withdraw money from his 401(k) without penalty (Rule of 55). Rolling the account over would result in a penalty should he withdraw funds before he turns 59 ½. One important aspect of our investment process is to make clients aware of all their options.

Mary, who held a very large, concentrated position with a low-cost basis recently passed away. Her daughter, Meghan, inherited the account. In this situation, Meghan could take advantage of a step-up in cost basis for the inherited shares and sell them with little to no adverse tax consequences. This would allow her to invest the proceeds in a more diversified portfolio, in turn reducing her exposure to unsystematic risk.

Anne-Marie, a 55-year-old widow was the sole beneficiary of her husband’s IRA. Her financial plan indicated that she needs access to that account to fund her current goals. Rather than rolling that account into an IRA in her own name, as is often the default for surviving spouses, we suggested leaving this as an inherited IRA, at least for a while.  Doing so allowed her to take penalty-free withdrawals from the account right away. If the account were rolled to her own name, she’d have to wait until she turned 59.5 to avoid an early-withdrawal penalty.