Why are IRA Owners from All Over the Country Coming to a Small Western PA Office for Advice?
If you’re like most IRA and retirement plan owners, you do not have a true masterplan for growing and protecting your wealth. And now, with the SECURE Act, followed by COVID-19, and the CARES Act, the urgency to develop a personalized masterplan is greater than ever.
A masterplan is an integrated plan involving legal, tax, accounting, and investment expertise. That combination of expertise was simply unavailable under one roof, until now. That’s why savvy IRA owners from all over the country are flocking to our elite team of CPAs, estate attorneys, and money managers.
We can help you add substantial safety to your legacy in these turbulent times, minimize your tax liability, and make the dream of generational wealth a reality.
One critical component of developing a masterplan is running the numbers. “Running the numbers” is our shorthand for testing a variety of strategies to see which strategy or more likely which combination of strategies will work best for you and your family. We are confident that we use the best combination software programs available to aid us in this analysis, but it is really the advanced, experience, and skill of the CPA/number runner that makes this process so valuable.
We provide you with our analysis projecting the outcomes from different planning/taxation scenarios. What we don’t give you is 70 pages of computer-generated mumbo jumbo. Our projections are clearly summarized in a few pages outlining which scenarios seem best for your situation and why. We also give you the spreadsheets to see how we arrived at our conclusions. Ultimately, you get to choose your path, but we are guiding you through the entire process which empowers you to make better decisions. Our process is quite unique and requires highly skilled CPAs, the same CPAs who helped with the quantitative analysis in this book. Because we would never be able to find enough CPAs qualified to handle this level of work, we will never scale and be a huge company, but that is okay with us.
Most IRA and retirement plan owners have “plans” that grew out of a series of decisions all of which made sense at the time they were made. But upon detailed analysis, those unconnected decisions usually end up costing you money in the long run or leave you vulnerable to unforeseen hazards.
When you started working, you may have consulted with someone to determine which retirement plan options were available to you and how and what to invest. When kids entered the picture, you may have had an attorney draft wills and trusts. You may also have met an insurance salesman and bought some life insurance. Down the line, you invested in stocks, bonds, or financial products outside of your retirement plan. Maybe you hired a CPA who, when asked, gave you limited tax advice. Maybe you did some leg work about Roth IRA conversions and converted some of your IRAs to Roth IRAs.
Each decision probably made sense at that time, but they were not part of an integrated plan. The sum of the parts does not add up to something greater than the whole. This disconnected process fails to optimize your retirement plan or your legacy plan. Worse, this mode of operation has likely left your wealth vulnerable in a world gone mad.
Unfortunately, many providers are like a hammer and everyone they meet is a nail. If you sell life insurance, it seems every prospective client needs a large whole-life insurance product. If you are an attorney, everyone needs wills and trusts. And, since you essentially know only a handful of plans, you pick a plan from among the most common estate planning forms that seems to be the best fit for your client.
If you are a CPA, you are likely an excellent historian that accurately reports income from the prior year, but that doesn’t make you a tax strategist. If you are a financial advisor, you are likely trying to get the highest return with the least risk. You may have seven sample portfolios and you try to squeeze each client into one of those portfolios. Or worse, you may recommend financial products that often provide the advisor with a commission, especially if you do not hold to a fiduciary responsibility to your client.
Multiple providers, multiple strategies, no integration. They each talk to you but not to each other. If this sounds familiar, don’t blame yourself. Join the crowd. But it does not have to be that way.
When you choose to work with us, we commit to looking at your entire financial picture. We and our affiliates work closely together to develop a specific masterplan for you. The left-hand knows what the right hand is doing. We are all familiar with the principles of this book because we wrote it and have applied them for many years, even before the SECURE Act was passed into law. So, instead of a disorganized and scattered approach, every component of your wealth is integrated into a clear, strategic Financial Masterplan.
If your ideal is like most people’s, you want to make sure you never run out of money and hope to pass on whatever is left. But, do you have an optimal plan for doing that?
When we “run the numbers” and project scenarios for your financial future, we quantify what you have and what you could have with strategic planning. Incidentally, you are in the room, either in person or these days virtually, when we do much of the work. So, you know how and why we arrive at the recommendations we make for you. We typically narrow the possibilities to a few choices and then together we identify the decisions that will best fit your needs and comfort level.
On the topic of comfort…
One of our primary objectives is to provide our clients with financial peace of mind—we want you to sleep well at night. So, in addition to passing the numbers test, our strategies must also pass the stomach test. In other words, can you stand the solution? Often the best solution does push your comfort level, and we may indeed push your comfort level, but you are the boss, we are just the advisors.
Here is an example. It would probably pass the math test, but not the stomach test.
Let’s say that the following factors suggest a Roth IRA conversion:
- The market is down.
- Your income is down because there is no required minimum distribution this year.
- You are married filing jointly now, but will likely file single after one spouse passes, increasing your tax rate.
- You think taxes, in general, will go up.
- You don’t want to put more money in the market but are concerned with long-term taxation for you and your family.
These factors would, in theory, favor a Roth conversion. But, let’s assume you don’t have the liquidity or after-tax dollars to pay the tax on the Roth conversion, but you do have a paid-up house.
We could run numbers that would suggest you should make the Roth conversion, and pay for the conversion with a home equity loan (a HELOC). Are you going to feel comfortable with that decision? After struggling for so many years to have a paid-up house, many IRA and retirement plan owners would not feel comfortable going back in debt. That solution might not pass the stomach test for some but for others, it would. And that is fine. Sleeping well at night is more important than getting the quantitatively ideal solution.
Deep strategic analysis will persuade you that there is a better way to realize your hopes and aspirations. If you have ever tried making financial projections with Excel or other spreadsheets, you will be amazed by how comprehensive and revealing ours are. We have the advantage of knowing and using the best software and, more critically, the skill of our CPAs running the numbers. Finally, when we think we have the best financial masterplan, we double-check our results by recreating your tax return with our preferred solution to give us and you additional reassurance that we picked the best path.
Lange CPAs, estate attorneys, and our affiliated money managers work as a team to optimize individualized plans and strategies for your benefit. Notice the emphasis on “team.” Our firm is driven by collaboration. It is what sets us apart from other estate planning and financial firms. Our CPA firm “runs the numbers,” our law firm prepares wills and trusts, we review plans annually, and we work in concert with respected low-cost investment advisors who manage the money. Our proprietary quantitative analysis provides definitive answers to questions like these, and more:
- How much money can you afford to spend without worrying about running out of money?
- Should you, and if so, how much and when should you convert from your IRA to a Roth IRA?
- Does gifting make sense and if so, in what form, how much, and when?
- What is your best Social Security strategy?
- Whose name or names should be on a particular asset?
- What is the best way to provide for your heirs?
- What is the best estate plan for your situation?
- What is the best way to provide for the causes/charities you support?
- What are the most tax-savvy solutions for you and your family?
What comes to light in this process can be surprising. You may have many more options to grow your wealth and protect yourself and your family than you ever imagined. We can also help answer questions with facts, not suppositions. Perhaps you think you can’t afford to both maintain your existing house and buy a second home in a warmer climate. We can run the numbers and find out. You might discover it is financially feasible to become snowbirds and get the best of both worlds. Observations like these have been life-changing and liberating for our clients.
Some have found they have enough money to retire immediately. Others prefer to continue working but on their own terms. One professor who found financial freedom through our process stated it colorfully and with passion: “I’m not going to quit tomorrow, but I’m not going to take any *%! from the chair anymore.” She ended up in much happier working conditions because she no longer feared the financial consequences of asking for (and getting) what she wanted both in terms of money and working conditions.
Our Provider-Client Match
We don’t try to be everything to everybody. Some firms aggressively court any prospective client who has a certain amount of investable assets. We, on the other hand, choose to focus on providing comprehensive integrated tax, financial and estate planning services to a specific type of client.
We provide the most value to clients who have the majority of their investable assets in their IRAs and retirement plans. This type of portfolio requires radically different strategies than a portfolio where IRAs and retirement plans play a much smaller role. Americans who have more money in their IRAs and retirement plans than they do outside of those plans have unique tax, retirement, estate, and financial planning needs. They can take advantage of unique opportunities, but they are also at risk of falling into costly quagmires. We understand those needs. In fact, we have concentrated our research, analysis, and practice in this area for the last twenty-five years.
I wrote the first peer-reviewed article on Roth IRA conversions in 1997, even before the Roth IRA conversion law became effective in 1998. In that same article, we advocated the flexible estate plan that is now known as Lange’s Cascading Beneficiary Plan, ideal for many retired IRA and retirement plan owners. The plan gained huge attention and has since been referenced in The Wall Street Journal multiple times, Financial Planning magazine, and many other places. Just Google “Cascading beneficiary plan” and you can see it is all over and most of the sources point back to us. Ask us about it at your initial consultation (see below).
We predicted the “death of the stretch IRA” five years ago and I have written three previous books on the topic. We were implementing and recommending “workarounds” for our clients to compensate for the loss well before it became law.
Over the past three decades we have developed and honed proven solutions to address the needs of clients with large IRAs and retirement plans, and serving those clients is what we do best.
Who Manages the Money?
Lange Financial Group, LLC does not manage money. We focus on what we do best: number-crunching and tax and legal strategies to guide your decision making. We leave the money managing to our joint venture partners so they can do what they do best.
We work closely with an elite group of top investment advisory firms that bring the same kind of dedication and concentration to their field as we do to ours: DiNuzzo Wealth Management, Fort Pitt Capital Group, and Buckingham Strategic Wealth.
The magic happens when we all work together with a complete focus on achieving the best outcome for our clients.
DiNuzzo Wealth Management
Since 1989, DiNuzzo Wealth Management has specialized in Wealth Planning, Financial Planning, and Investment Management. Regarding Investment Management, DiNuzzo’s core belief is based upon “Efficient Market Theory” and accessing its many benefits through indexing. DiNuzzo invests in the capital markets based on enhanced indexing; specifically in institutional, low-cost mutual funds developed by market leader Dimensional Fund Advisors (DFA).
DFA’s genesis, history, and continued advancements are rooted in academia, not Wall Street or Main Street. Their fundamental tenets are empirical and evidence-based. Historically, access to invest in DFA’s institutional mutual funds was reserved for major institutions. DiNuzzo was one of the first 100 Registered Investment Advisor (RIA) Investment Managers in the U.S. to receive permission and remains among a limited group, approved by DFA to offer Dimensional Funds to individual investors like you.
DiNuzzo performs the Wealth Planning and Investment Management, while Lange Financial advises clients in retirement planning estate planning, Roth IRA conversions, Social Security, and other tax-saving strategies—all 100% legal—and we combine forces to work in the best interest of our mutual clients.
DiNuzzo places an equal emphasis on their fiduciary process and financial education. In particular, they share my belief that an informed and knowledgeable client sets the foundation for a long and successful client/advisor relationship.
I have seen DiNuzzo turndown opportunities because the prospective client was not a good fit. And I have seen DiNuzzo morph a big opportunity into a modest opportunity because it was the right thing to do for the client.
DiNuzzo and their team pride themselves on relationship management and as such, strive for frequent communication with our mutual clients. I believe they have always been extremely pro-active in getting in front of our clients, but they have been particularly diligent with client communication during these recent turbulent times.
DiNuzzo Wealth Management also has an excellent strategy for protecting pre-retirement and retired investors with what they refer to as a “Glide Path.” Yes, if the market has a thirty-year bull market after you retire, you will not do as well by following DiNuzzo’s glide path. But, if the markets are volatile and/or take a major downturn, as they did recently, and they take many years to recover, there will always be food on the table, a shelter over your head, gas in the car, and a little money for Saturday night. I never worry that a client that I refer to DiNuzzo will end up broke because they didn’t sufficiently plan for a potential downturn. That said, DiNuzzo additionally presents a compelling case against too much money in fixed income (bonds and cash) because of the lost opportunity danger of taxes and inflation.
Fort Pitt Capital Group
Lange also partners with the active money managers at Fort Pitt Capital Group.
Fort Pitt communicates its investment strategies for each Lange client openly, clearly, and simply. They do not engage in flagrant “market timing.” Their team designs investment portfolios to be flexible enough to capitalize on good prospects when it makes sense, yet stable enough to preserve your legacy for the long-term.
Fort Pitt investment advisors manage your money with thoughtfulness and analytical rigor. Through the market’s ups and downs, Fort Pitt sticks to the plan and doesn’t chase fads of the industry. They are always ready to explain their decisions and work with clients to establish a clear understanding of objectives and outcomes.
Fort Pitt can help you increase your wealth with a diversified investment portfolio that’s focused on growing your money for the long term. As a fiduciary, your financial security is their top priority.
Buckingham Strategic Wealth
Buckingham Strategic Wealth, a $35 billion-dollar company, is an independent wealth management firm with an office in Pittsburgh.
Like DiNuzzo, Buckingham has Dimensional Funds—managed by Dimensional Fund Advisors (DFA) at the core of their portfolio. Buckingham also offers a selection of additional investment options that are not available through our other partners. Just yesterday I received this email from Adam Yofan, “The bond market is more screwed up than stock market. Yesterday rates for AAA munis [municipal bonds] paying are paying TWICE the CD rate. After-tax, obviously much more.” This sounds like smart advisors looking for opportunities for their clients to me.
They have a dedicated team that buys and sells approximately $2 billion in bonds and FDIC insured CDs annually on behalf of their clients. As a fiduciary, Buckingham is always obligated to put client interests first. For fixed income, this means no hidden markups or commissions when buying bonds or CDs. By buying individual bonds or CDs, this also means that their clients may be able to avoid costly mutual fund expenses by not using bond funds.
When it comes to CDs, Buckingham uses FDIC insured Brokered CDs, which may offer better rates and/or terms than the rates you can get at your local bank.
Buckingham has a proprietary process to guide your finances through the rest of your life. They offer 40 activities that help minimize taxes, maximize cash flow, and protect your assets. The recommendations they make are based on decades of peer-reviewed financial research and contemporary market analysis. Their long-view combined with current research gives them the judgment and power to make optimized and strategic investments—they know how to invest.
The cornerstone of Buckingham’s approach is their evidence-based investment philosophy, which is built on a deep understanding of how to best capture the returns of the financial markets. Buckingham’s approach is based on facts and evidence, not opinions. They are not swayed by “flavor of the month” speculation.
The advisor most clients will work with is Adam Yofan, who heads up the Pittsburgh office. Prior to heading the Pittsburgh office of Buckingham Strategic Wealth, Adam served as President of Alpern Wealth Management for 13 years. Before that, he was a financial advisor for Smith Barney for five years, and a senior manager for Deloitte & Touche for 12 years. He has earned his Personal Financial Specialist and Certified Public Accountant designations. The PFS designation is only available to CPAs who meet extra requirements, which helps make him so rare. In sum, he is an excellent advisor working for an excellent company that offers our favorite set of investments on the planet.
How Our Partnerships Work
The arrangement we have with all three money management firms is essentially the same. Our partner money-management firm develops an investment plan, and with the right hand knowing what the left hand is doing, our team develops a comprehensive retirement and estate plan. Then we help you—now our mutual client—implement the overarching plan.
But our involvement doesn’t end there. All good plans need to be modified and adjusted due to changing circumstances—portfolios increase and decrease because of market conditions, tax laws change, children marry, grandchildren are born, and divorces happen. That’s why you’ll meet at least once annually to update your masterplan with the person from our firm who helped develop it. Of course, these days these meetings are virtual.
You’ll also meet with the money management firm’s team on a regular basis to review portfolio performance and integrate the strategies that our firm develops. Even better, all of these integrated and value-added services you receive from us and our partner firm are included as part of the management fee you pay to our partner firm.
What Advantages Does Our Arrangement Offer You?
When you become a client of Lange Financial Group, LLC, you benefit from the integrated experience of our world-class financial professionals¾all of whom have different but complementary expertise. In essence, you are getting what we think are the best retirement, estate planning, and money management strategies available anywhere for a combined fee that is likely less than you would be paying for the sole services of a money manager.
You get the benefit of our award-winning retirement and estate planning strategies on an ongoing basis and premiere integrated money management services all for one reasonable fee.
That sounds great, but how much does this cost?
You pay one fee (depending on how much money is invested) that is typically between 50 basis points (one-half of one percent) and 1% of the money we manage. It is the identical fee that you would pay any one of our money managers if you had not met us first. The money manager and our firm then split the fee.
The Next Step
We have put our hearts and souls into this book and hope you find it a valuable resource. We also hope that it inspires you to consider some of the charitable techniques mentioned in this book, to help raise a billion dollars for charity.
Most importantly, I hope reading the book has motivated you to take action. I heard an interesting definition of “learning” recently, which is that learning leads to “a change in behavior through experience, instruction, or study.” So, by that definition if you found the information in this book interesting, but you aren’t ready to take any action, then you haven’t actually “learned” anything. That may be a bit harsh, but my larger point is that if you learn something and don’t take action, especially when it comes to your family’s long-term security, you haven’t accomplished anything.
If you are a do-it-yourselfer and would rather have a root canal than pay an advisor a fee for services, I genuinely hope you found value in this book. But again, don’t just read it and think “that was great information, maybe I’ll do something about it later.” Because “later” usually means “never.” Take action now. Make the changes that signify learning.
If, on the other hand, you see the value of working with a team that will implement the best strategies in this book on your behalf, you might love to have the people who put this book together work with you to develop and implement your financial masterplan. I urge you to take advantage of the Retire Secure Initial Consultation which at this point is still with me, by checking the box and responding in one of the ways indicated below.
 Preparing wills, trusts, and IRA beneficiary designations is only available for Pennsylvania residents. Although we cannot draft wills and trusts for out of state clients, we can review a client’s wills and trusts and then work with local attorneys to implement the legal strategies we think will work best for the client.
 To qualify for this free consultation, which is now held by phone or Zoom, you must have $1 million or more in investable assets that you would consider placing under management with Lange Financial Group—assuming you like our retirement planning and tax-saving strategies as well as our money manager and his process and investment options.
 We help you develop a financial masterplan for $7,500, potentially more for $10 million and larger estates, but you handle the investments and implementation of the plan.