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  • Writer's pictureJulie Bare

Financial Planning with Gerry O'Neill

Updated: Mar 16, 2020

Financial planning isn't everyone's idea of a fun Saturday afternoon but a little planning now can insure that you're able to have lots of fun once retirement hits! On Saturday, February 8th, 2020 Women in Hort members gathered at Common Space in Ardmore to learn about financial planning from Gerry O'Neill. Gerry is the President and Owner of GJO Financial. Based in Chalfont, GJO specializes in retirement planning, college planning, estate planning, small business solutions, and getting your financial house in order. Gerry is also a professor in accounting and finance in the MBA program at his Alma Mater, LaSalle University. Gerry's colleague Jim McDermott was also on hand to help with the presentation.

Before the presentation began, Gerry clearly stated that this wasn't a sales pitch, he was there to give advice. Gerry explained that he is a fiduciary, someone who is legally obligated to do the best thing for his client. He tries to help people fulfill their goals in retirement. Everyone's situation is different and there's no universal answer.

We spent two hours with Gerry and he gave us a crash course in creating a budget, different types of retirement plans (401(k), 403(b), Roth IRA, etc.), how to plan for life insurance, and more. I think everyone left feeling empowered and armed with knowledge to make smart decisions.

When I thought about attending this financial planning presentation, I knew it would be informative but I did not expect it to also be fun! Gerry was a lively presenter who had us laughing the whole time. He started off his presentation by taking out a dollar bill and asking us "What is this?". People shouted out "money", "a dollar bill", "cash". Gerry then proceeded to ask us who gets a cut of this. When someone said "the government" he said yes! and tore a piece of the dollar off representing what goes to the government for taxes. Then he tore off another piece for healthcare and another for kids and another for bills. What was left after all of that was a very small piece of the bill. Gerry used this to illustrate how so much of your salary is immediately accounted for and what is left is what you have to live on.

Gerry stressed that things are changing and times are different. Myths and misconceptions from the "old world" can cause harm to you in the "new world". The financial advice that may have worked for your parents and grandparents most likely doesn't hold up today. People used to receive pensions when they retired, most companies don't give pensions anymore. We also might not have social security to rely on in the future. Social security came out in the 1930's when the average life expectancy was 62 years old but you couldn't collect SS until you were 65. Today people are living longer. So it is important to look at your realities and figure out a plan that works for your situation.

When discussing finances, it's important that you take the emotion out of it. Let the numbers speak for themselves. Filter out the myths, misconceptions, misunderstandings, and emotions then you can make decisions based on facts and logic. What are your retirement dreams vs. reality? Gerry starts off financial planning by asking what are your dreams and goals and helps you determine if will you have enough money to experience the retirement you dreamed of. Then you need to start constructing your fiscal house. What's the most important part of any house? The foundation. But before you even start building your "house" you need the blueprint, or a budget. Creating a household budget is one of the best things you can do. You can think of the foundation as your safe money, money you can't lose. Examples: CDs, Bank Deposits, Government Bonds, and Fixed Index Annuities. As you plan, you want to make sure that you have a strong foundation of safe money. Next you have the walls, they represent income, cash flow, inflation protection. These are not 100% guaranteed but are pretty consistent. Examples: Corporate and Municipal Bonds, Bond Funds, Secured Debt (Income in the form of Annuities and Pension Plans), REITs, and Hard Assets (such as gold and silver). Finally you have the roof or your growth-type investments. Examples: Stocks, Mutual Funds, EFTs, Options, and Commodities. These tend to be a bit riskier, so it is important to build a solid foundation so you don't have to rely on these if bad times come. In 2008 the market went down 38%. For the last 11 years the market has had an upward trend. This has never happened in the history of the stock market and a correction in the market is coming. You don't want to have your money in the stock market when it crashes unless you are young enough that you can ride the wave until it comes back up. You want to protect your money in principal protections, fixed-income security that guarantees a minimum return equal to the investor's initial investment, like a CD (Certificate of Deposit). Always remember that higher returns = higher risks. Younger people can be a little more risky when it comes to investments, they have more time to recover if the investments don't pan out.

Do you know why retirements plans are called 401(k)? It means it's the 401 line in the tax code, section k. Gerry recommended that everyone put away as much as you can toward retirement. With a 401(k) or 403(b) plan you put money in pre-tax and taxes are taken out when you take the money out. Don't think of these as a savings account, it's important to think of it as a retirement account. The government will penalize you if you take the money out before you are 59 years old. You will need 85% of what you are making in retirement. Consider contributing to a 401(k) or 403(b), as well as, a Roth IRA. With a Roth IRA you don't have to take the money out at a certain age like you need to do with a 401(k) or 403(b). The money that goes into a Roth IRA is taxed, so you don't have to pay taxes when you take it out. There are limits the government sets to how much you can put into these retirement accounts. Gerry recommended maxing out your Roth every year if you can. Pay today's tax rates. He said that taxes are likely to go up, so by paying taxes on the money now and putting it into an IRA you are saving money in the future. Think of it like a savings vehicle for retirement.

Gerry recommended that if you work for a small non-profit that doesn't contribute to or match your retirement account, you should figure out how to put away $25 (or any amount you can afford) per pay check into a Roth IRA. He said that that can seem like a lot of money at first but you will adjust to it and the benefit in the long term is worth it.

Another thing Gerry stressed was always make sure your beneficiary forms are up to date. Beneficiaries always override whatever your will says. Check your beneficiaries often and print screen and store that in a file with your other important documents.

We want to extend the most sincere thank you to Gerry O'Neill and GJO Financial for presenting for WinH! Also thank you to Louise Clark for suggesting we have Gerry as a presenter. This was an incredible introduction to the world of financial planning. As Gerry said, most people learn about financial planning through the school of hard knocks. So do what you can to educate yourself now and literally invest in your future.

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