Investment Options

  Whether you roll over or transfer an existing account held at a former employer or from another brokerage account, we can help with the transition. The benefit of consolidating investment accounts under single management is:

• The asset allocation and risk tolerance decisions involving your investments should be evaluated by viewing qualified and non-qualified accounts together.
  
  
• Retirement distributions from investment accounts can be mandatory (i.e., RMD’s, Beneficiary IRA’s). If both qualified and non-qualified accounts are part of your portfolio, tax considerations can play a big role in where you receive distributions from.

Investment products offered through Carr Wealth Management, LLC are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.

TYPES OF ACCOUNTS

Qualified Accounts

Qualified accounts receive the benefit of tax deferral on the investment earnings and gains from sale of investments not distributed. Examples are employer savings plans such as 401K, or individual retirement accounts (IRA’s). Tax deferral enhances the powerful effect of compounding growth:

Click to See Rollovers & Transfers

Traditional IRA’s – Created by individual contributions. Distributions are taxed at ordinary income tax (10% penalty applies if taken before 59½). Minimum distributions from IRA are required beginning no later than April 1, following the year you turn 72.

Rollover IRA’s – Investments that are rolled over from either an employer plan (401K, 403B, 457B) or from another IRA. Contributions, tax impact on distributions, and minimum distribution rules are the same as they are for Traditional IRA’s.

Beneficiary IRA’s – Investments inherited from deceased owner of an IRA. Non-Spouse beneficiaries cannot contribute to a beneficiary IRA and must begin distributions or withdraw money soon after the death of the IRA owner. Spouses who are beneficiaries have more options – rollover into their own, for example.

Roth IRA’s – Investments that allow tax free distributions of earnings from the account once certain conditions are met: a) must wait at least 5 years from contribution, and b) must be at least 59½. However, while the earnings are non-taxable, the contributions are not tax deductible.

College 529 Plans – Investments that are similar to Roth IRA’s in that the distribution from earnings are tax free provided the funds are used for higher education purposes. Contributions are not deductible.

Non-Qualified Accounts

Individual Accounts – Taxable investment accounts. Since these accounts generate taxable income on earnings and gains of sales, focusing on tax-savings strategies while maintaining long-term growth objectives can be challenging. If you have both qualified and non-qualified accounts, there are also potential tax savings depending on which account specific investments are placed. For instance, a bond which pays semiannual interest may be best suited to the qualified, tax-deferred accounts.

Joint Accounts – Taxable Accounts that are set up jointly with a spouse or another individual. Titling of the accounts can have an impact on family transfer goals and tax basis following the death of one of the joint owners.

Trust Accounts – Family trust accounts are taxable non-qualified accounts (revocable living trusts or irrevocable trusts). Living trust accounts can ensure that your assets pass to your desired beneficiaries without the need for probate and provide management of assets in the event of you or your surviving spouse's incapacity.

Which Investment Companies Do We Use?

There are over 9,500 mutual funds offered in the United States by approximately 80 mutual fund companies. We believe achieving positive long-term investment results is better accomplished through low-cost investment vehicles that take advantage of market returns by essentially tracking various market sectors.  Carr Wealth Management has predominantly  used investments from two companies over the past twenty years – Dimensional Fund Advisors (DFA) and Vanguard.

Both Dimensional Fund Advisors  and Vanguard share our investment philosophy of providing clients investment solutions based on academic research and a commitment to disciplined investing. Some of the major characteristics of the investments used by Carr Wealth Management:

• Low-Costs
• Liquid
• Diversified
• Transparent
• Built to Capture Long-Term Appreciation

Publicly Traded Investments

  We manage client investments that are traded exclusively on national exchanges (i.e., N.Y. Stock Exchange, American Stock Exchange, etc.). Stocks or bonds traded on public exchanges have the following benefits:

• Liquidity-describes the degree to which an asset or security can be quickly bought or sold in the market without impacting the asset's price. Typically, a security that is sold on a public exchange requires approximately three days to settle. Private equity investments such as private real estate ventures, private stock ownership, hedge funds, or various business partnerships may require notice and additional time to liquidate (sell) holdings of the respective investment. We feel that for most investors, the risk of not having quick access to funds outweigh the potential expected returns of private equity investments.

• Transparency - The investment strategies guiding the path to your financial objectives should be clear, distinct, and built around answering the who, what, where, and why. We believe long-term returns are based on the level of risk you accept, and properly managing risk requires a thorough understanding of each asset in your portfolio. The strict requirements to publicly register an investment and the rigid oversight of the markets requires investment transparency that is typically greater than that of private equity markets.
  
  
• Diversification - A major benefit of engaging in publicly traded markets is the ability to achieve what is probably the most important requirement of a successful investing experience – Diversification! The act of combining different asset classes together does not assure investment success, but it certainly improves the chances of reducing total portfolio risk without sacrificing returns. Private equity investments, on the other hand, typically invest in assets that are narrower in scope (i.e., one company, real estate only, sectors, etc.).   

TD Ameritrade Institutional - Third Party Custodian

 The Third-Party Custodian where client funds are held and trades are executed is the institutional division of TD Ameritrade, Inc. They neither offer proprietary products nor services to the general public. They make available to independent Registered Investment Advisors, like Carr Wealth Management, the necessary platform to provide independent advice that is legally required to be in the client's best interests. Their online access is user friendly and they support clients and advisers alike with state-of-the-art technology.

Click to See TDA's Security & Asset Protection Limits