Frequently Asked Questions
- About Barber Financial Group
How does Barber Financial Group get paid?
We get paid by you, our client. You will never feel like you’re being sold a product because we do not accept kickbacks from any product sponsors nor do we receive any commissions. Instead, we are paid a low percentage of your assets if we are managing your money.
We also get paid on a consulting basis if you choose to add on one of those services. These services will be discussed on an individual basis and will be based on the amount of work involved. We are a fee-only firm.
What are your fees?
Our fees are based on the percentage of assets that we manage for our clients. That percentage will be determined by the type of portfolio that is developed specifically for you, and the amount of work involved in managing the portfolio. These can range anywhere from .5% to 1.5%. All fees are disclosed upfront and in writing so that there are never any surprises. We believe that fees will only ever be an issue in the absence of value.
What makes Barber Financial Group different from other financial firms?
The terms financial advisor, investment advisor, and wealth manager are widely used in our industry. While the majority of financial advisors either sell a product or simply manage money, we are quite different.
Our process starts with a comprehensive financial plan that encompasses all aspects of your life. Our offices in Lenexa, Lee’s Summit, and North Kansas City all have in-house specialists including CPAs, CFP’s, Estate Planning Attorneys and Insurance Specialists. These specialists work hand-in-hand with our advisor teams on your behalf to help ensure all financial components are working together to help you live the retirement life you’ve always wanted.
We believe that your financial advisor should be a real financial advisor and not someone who is prospecting for new business or filling out paperwork. We have a dedicated staff that supports each advisor team so that your team can do what you hired them to do, which is work for you.
What do you mean you have “Advisor Teams”?
We feel that it’s really important that our clients feel that they’re not just another small fish in a big pond when talking to their wealth manager. In order for this to happen, we limit the amount of clients each advisor team can manage.
Each team consists of a Partner of Barber Financial Group, two additional financial advisors, an Estate Planning Attorney, a CPA, and a service team of 10 or more employees. This means that when you have questions or need to speak with someone about your accounts or concerns, someone on your dedicated advisor team will be there to help you.
What is a fiduciary?
In the financial services industry there are two types of advisors. The first type are the financial advisors who work on a suitability standard. Simply put, the suitability standard requires the advisor makes sure that the investment they suggest for you is suitable based on your unique situation, but does not require the investment to be in your best interest.
Secondly, is the fiduciary standard. The fiduciary standard requires that your advisor put your interests ahead of their own interests, 24 hours a day, seven days a week, 365 days a year. In order for the advisor to act in the capacity of a fiduciary, they truly have to understand everything about your financial life. Their goal is to help you make the best decisions in every area of your financial life. At Barber Financial Group, we live by the fiduciary standard.
Are you selling anything?
We do not have products to sell. Instead, what we do offer are services besides investment management. Our services range from comprehensive financial planning to tax planning and tax preparation, insurance analysis and solutions, as well as a complete estate plan for both simple and complex estates. Each of these services are discussed on an individual basis after considering your overall financial plan.
What is a retirement analysis?
A retirement analysis is an analysis of your current situation. We take a look at how much money you want to spend in retirement, what resources you have accumulated to this point, and how much you have to devote to saving for retirement in the future. This is a straightforward analysis that lets you know whether you’re on track to achieve your goals or if adjustments need to be made. Each retirement analysis is performed by one of our experienced wealth managers.
How much is a retirement analysis?
A basic retirement analysis is provided with no cost or obligation. Should you choose to move forward and go through a comprehensive financial planning session, which would include a thorough analysis of all of your investments, current and future tax situations, insurance policies, and your estate plan, a flat fee will be charged. This will depend on the amount of work involved in your personal situation. We will not begin working on a complete financial plan until all fees are disclosed and you are comfortable with those fees.
How much time does it take to set up a financial plan?
Financial planning is and should be complex. In order to prepare a complete financial plan, there are a few steps we will need to take.
First you have the discovery phase, which is an open and honest conversation with your financial advisor team to let them know everything that’s going on in your financial life and what is truly important to you and your family.
You will then be asked to share all resources that you have accumulated up to this point as well as at least two years of prior tax returns, financial statements, insurance statements, estate planning documents and any risk management documents that you have. You will be provided a list of all the documents required to help you in gathering everything necessary in order for us to begin setting up your personal financial plan.
Lastly, you will be presented with a full comprehensive plan that has carefully considered your needs and goals that encompass all areas of retirement planning in order to help you achieve the most favorable outcome.
How long have you been in business?
Dean Barber started his career in financial planning in 1987. Barber Financial Group was formed in 1996.
Do you use annuities?
While we believe that in some cases annuities may work we do not sell annuities. However, there may be an occasion where we suggest that a client use an annuity. In this case, we prefer to direct you to annuities that do not have surrender charges. In other words, any time you want to move your money away from the insurance company who issued the annuity, you can do so free of charge. Barber Financial Group will not receive compensation for these annuities.
- Retirement Planning
Can You Really DIY Your Retirement?
When it comes to planning for your retirement, we all know there are thousands of online resources and books that claim to teach you how to DIY (do-it-yourself). So is it really possible and does it work?
DIY retirement planning requires advanced knowledge and understanding in the following areas: investments, tax planning, insurance and estate planning. Not to mention, it would also be beneficial to have substantial knowledge… Continue Reading »
How Does High Inflation Affect My Retirement?
When something is referred to as a “silent killer”, oftentimes you assume it’s a disease or health crisis that is being talked about. In our industry however, the silent killer is inflation. Much like heart disease or osteoporosis, inflation can slowly creep up unnoticed for years, even decades, until serious problems arise that cannot be ignored. What was once affordable is now too expensive.
Inflation will most likely never cause a frugal person to go broke but it can cause a frugal person to live like they are broke. When you put your retirement plan together, make sure to plan for an inflation rate that is along the lines… Continue Reading »
- Tax Planning
How Do I Pay Less Taxes?
Everyone in America who pays taxes feels like they have paid their fair share, and in some cases, far more than their fair share. This causes people to be very shortsighted when it comes to reducing your tax bill.
Most CPAs are tasked with the difficult duty of trying to find ways to save you money, on your current tax returns. The problem is, it’s too late! At this point, all of your taxable income and investment assets have made their money, and it’s almost impossible for the CPA to affect the amount… Continue Reading »
How Do My Investments Affect My Taxes?
The relationship between investments and taxes is perhaps one of the most overlooked areas of retirement planning. Decisions that are made on the investment side of your retirement plan will most likely have some type of impact on your tax return. Typically an investor will have three different tax buckets that they can place money into. They will have the tax-deferred bucket, the tax free bucket and the taxable bucket.
First we will address the tax-deferred bucket…. Continue Reading »
Will my tax bracket change in retirement?
During retirement your tax situation will most likely become far more complex than when you were a simple W-2 employee. You will have different tax rates on Social Security, dividends and capital gains, as well as ordinary income and distributions from your retirement plans. While ordinary tax brackets for retirees remain the same as people who are working, it’s the source of which you take income that determines how much tax you pay in retirement. Perhaps one of the most complex parts of a financial plan is creating an efficient distribution strategy to minimize one’s taxes.
- Social Security Planning
Should I wait to take Social Security?
The answer as to when and how a person should claim their Social Security is a very personal question. It depends on what other sources of income you have, your life expectancy, your spouse’s life expectancy and your overall tax situation. We’ve seen many situations where it makes sense to begin taking Social Security as soon as possible. We’ve also seen other situations where delaying it as long as possible is the best strategy. There is no simple one-size-fits all answer; only a thorough analysis of your entire financial situation can give you answers about when and how to claim your Social Security.
How has Social Security changed over the years?
Social Security has undergone many changes over the years. One of the most recent changes took away the “file and suspend” option and will gradually take away the restricted application option. These are two popular strategies that have been used since the late 1990s when President Clinton signed them into law. However, these are only two of many claiming strategies that can allow you to get more out of the Social Security system. There are still hundreds of options available to you and your financial advisor can help you discover your best option.
Is Social Security going to last?
As a whole, Social Security is fully funded until 2034, and after that is only about three-quarters financed.* However the fix for Social Security is not as dramatic as what some in Washington would lead you to believe. There is no question that changes need to be made to the system and the longer Congress is unwilling to address those issues, the more dramatic those changes could be. At this point, simply pushing back the age in which you can apply for Social Security for younger Americans, along with a small increase in the Social Security tax, could make Social Security solvent to the end of this century.
- Estate Planning
How do I protect my Assets?
There are many ways to protect your assets depending upon the nature, characterization, and value of each asset. Various types of insurance, federal, and state statutes, as well as certain types of trusts may be used to protect your assets.
What is a “Revocable Trust”?
According to investopedia.com, a revocable trust is a trust whereby provisions can be altered or canceled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries.
Do I need a trust?
Because of their many advantages, revocable trusts are popular estate planning tools. Depending on your particular circumstances, a revocable trust may be beneficial in planning your estate. Revocable trusts are very flexible. You can make changes to the trust or revoke the trust at any time for any reason, as long as you are mentally competent. Further, there are few restrictions on the choice of trustees and beneficiaries. Finally, when drafting a revocable trust, you have many options regarding the management and distribution of your assets to your beneficiaries upon your death.
Will a trust avoid probate?
One of the main advantages of a revocable trust is the avoidance of probate upon your death. A revocable trust can help avoid probate because assets that have been placed into a revocable trust are considered owned by your trust at the time of your death, rather than you personally. Therefore, assets in trust will not be subject to probate. Because probate fees are generally based on the value of the assets that must go through probate, the use of a revocable trust will reduce those fees.
How do beneficiary IRAs work?
Beneficiary IRAs allow the beneficiary to “stretch” the Required Minimum Distributions (RMDs) over the beneficiary’s life expectancy. This IRA is treated as an inherited IRA. The use of a trust as the IRA beneficiary gives the individual beneficiaries protection from creditors and even potential divorces.
Should I be listed jointly on my parent’s accounts?
Some things to keep in mind If a parent or other relative adds your name to his or her account (e.g. to plan for incapacity or avoid probate), is the account could now be subject to your creditors or potentially subject to division in your divorce. Further, that parent or relative has made a gift to you, subject to gift tax, upon the addition of your name to that account.
How do I handle my parent’s financial accounts?
A Durable Power of Attorney is a document in which you legally appoint another person to act on your behalf on financial, legal or personal matters during times when you are incapacitated or disabled. This person is generally referred to as an “Attorney in Fact” or an “Agent.”
Do my parents need a Power of Attorney?
A Durable Power of Attorney is essential if you wish to provide a degree of stability in your affairs during times when you are disabled or incapacitated. The person whom you entrust as your Attorney in Fact will ensure that your bills are paid on time, your legal affairs are in order, and equally important, that your wishes with regard to medical treatment are respected and followed.
- Insurance Planning
Do I need Long-Term Care coverage?
Statistics will tell you that approximately 50% of retirees will spend some amount of time in a long-term care facility or will need some sort of in-home healthcare. However, we advise to not let this be the reason for buying long-term care insurance. To determine whether long-term care insurance is needed you must first complete a comprehensive retirement analysis. If your retirement plan works with both spouses staying healthy until end-of-life, then we can simply “stress test” your plan with the assumption that one spouse will spend some time in a long-term care facility. If the plan fails for the surviving spouse then it will make sense to look into long-term care insurance. Not all long-term care policies are created equally and it is best to consult a qualified financial planner who understands how to integrate insurance planning into your overall retirement plan. Any insurance, whether it’s life insurance or long-term care insurance should never be sold to you, it should only be purchased by you to cover a very specific need that makes sense with your unique situation.
How I do I buy health insurance?
There are a number of ways in which you can buy health insurance with the most common being the open enrollment period of your employer’s plan. After retirement however, our options change. The days of your employer covering you (and your spouse) at a reduced rate is most likely not going to be an option. One thing to consider is that if you retire early (before the age of 65), you will not be eligible for Medicare and you will need to explore purchasing individual health care coverage. Remember, it is important to not let your coverage lapse because if you have an accident or become ill, your only option to cover this expense may be to drain your retirement accounts that you’ve worked so hard to save.
When do I file for Medicare?
You are required to file for Medicare at the age of 65.
What is Medicare Supplement Insurance?
A Medicare Supplement policy (Medigap), can be purchased through private companies. They are intended to assist you with health care costs and other things that regular Medicare doesn’t cover. Some examples of things Medigap might cover would be copayments, deductibles, or medical care when traveling, but it’s also important to remember they don’t cover everything. For more information, visit www.medicare.gov.