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Financial advisors use new tools to help you plan for the future

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Richard Ferrari, a financial advisor at Edward Jones in Wheaton, talks over investment planning with a client. | DENISE MORAN ~ FOR SUN-TIMES MEDIA

Updated: October 24, 2012 1:34PM



For most people in the private sector, pensions have become a thing of the past.

Three years after United Airlines filed for Chapter 11 bankruptcy protection in 2002, Bankruptcy Judge Eugene Wedoff approved United’s plan to terminate employee pensions. It was the largest corporate default in American history.

Disappearing pensions, coupled with the ongoing poor economy, the loss of jobs, foreclosures and rising prices of just about everything from fuel to food, have left many people seeking financial innovations to help them fund their retirement years.

They are also looking for financial experts who possess the necessary knowledge needed in order to make the right financial decisions.

“People are very concerned regarding their retirement,” said Richard Ferrari, a financial advisor at Edward Jones, 600 South County Farm Road in Wheaton. “Plans such as pensions are not being provided very often. There is more responsibility on people to save for their retirement through retirement plans and outside savings.”

Over the last five years, Edward Jones has developed a financial assessment tool known as FAST.

“We can sit down with a client and assess where they are at and make projections,” Ferrari said. “We can determine if their retirement savings plans are on track. The Saving for College Calculator that is within FAST can take a child’s age, look at the rate of inflation, amount saved, and project potential college cost shortfalls for that child in the future and determine if they are saving enough.”

Jim Keller, CFP practitioner, a partner with OnPath Financial LLC at 100 Illinois Avenue, Suite 201, in St. Charles, has been a financial professional for the past seven years. His career motivation came in 2005 when his 80-year-old mother, who was working with her stock broker, gave him a call.

“She called me up and said ‘Jimmy, I know you are involved in the stock market. Why am I being charged $800 for two stock trades a month?’ It was at that point that I knew I wanted to become an advocate for investors.”

“As the investment landscape has changed from a commission-based to a fee-based model, I believe client and advisor objectives are more aligned than they had been in the past,” Keller said. “In the example of my mother, she paid 10 times more in the commission model on an annual basis than she would have on a fee-based model. My practice is innovative since I created the “Return on life” planning program which helps me connect with clients not only on a financial level but on a very personal advocate level.”

“I believe a well-rounded client needs to address their physical, emotional, spiritual, social and family goals in order to lead a truly fulfilled life. Money by itself does not buy happiness. By being a Certified Financial Planner, I feel I am making a difference in my clients’ lives.”

The presidential election has raised concerns about how the struggling economy and people’s financial resources will be affected by it. If Congress does not intervene to keep numerous tax incentives from expiring at the end of 2012, the following changes will take effect on Jan. 1, 2013:

All personal income taxes will increase, and the 10 percent bracket will be eliminated.

Long-term capital gains will increase to 20 percent, up from the 15 percent most taxpayers now pay.

Qualified dividends will be subject to the applicable ordinary income rate instead of the lower long-term capital gains rate.

The $5.12 million estate and gift exemptions will drop to approximately $1 million, and the top rate will return to 55 percent.

The 2 percent reduction in the employee FICA rate, which also applies to those who are self-employed, will expire.

Edward Jones suggests that, depending on the person’s unique situation, they should consider “owning a variety of investments with different tax treatments and using tax-favored accounts to help manage the impact of ongoing tax changes; opening a traditional or Roth IRA of, if you already have an IRA, increasing your contributions; and using such tax-advantaged ideas such as dividend-paying stocks, advisory programs that offer tax management features, and tax-free municipal bonds.”

The best advice for individuals and companies interested in investments, according to Keller, is to “develop a financial plan, implement it, monitor your progress and then adjust.”

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