Military Officer - November 2007 - (Page 67)

spreadsheet. The soon-to-be newlyweds are pleased they will start their new lives together on ﬁrm ﬁnancial ground. NAME: CAPT. CHRIS CODDINGTON, USAF SitRep: Coddington is married with two young daughters and wants to invest the money from his home’s sale. Planner: Buzz Livingston, CFP, of Livingston Financial Planning Inc. in Santa Rosa Beach, Fla. oving forward: Capt. Chris Coddington, USAF, is a pilot stationed at Eglin AFB, Fla. His wife, Yvette, is an adjunct professor at the University of Maryland. When Chris was reassigned to Eglin, they had a nice windfall from the sale of their previous home. According to Chris: “[We] didn’t want to make any mistakes with that money. We had just come out of a bad relationship with a previous advisor and were skeptical of anyone claiming to have our best ﬁnancial interests in mind.” They chose to work with Buzz Livingston, CFP, of Livingston Financial Planning Inc., in Santa Rosa Beach, Fla. His ﬁrm appealed to them because he provides investment management along with ﬁnancial planning on a strictly hourly basis — and accepts no commissions of any type. “After we did a comprehensive plan for [the Coddingtons], the ﬁrst area we agreed that needed to be addressed was the mutual fund choices inside their IRAs,” Livingston says. He recommended DFA Funds’ 100-percent Global Equity fund to replace the couple’s Fidelity Destiny II. “By using a no-load fund, which trades without a 5.75-percent up-front fee, we were able to lower their annual cost to fund their IRA by $460 a year along with the annual fees charged by the previous provider. DFA does not charge a 12b-1 marketing fee, so the Coddingtons could lower their annual expense ratio by two-thirds. In addition, we were able to diversify their portfolio by including asset classes such as emerging markets and U.S. small caps,” Livingston says. For their taxable account, Livingston recommended the Coddingtons use low-cost index funds or Exchange Traded Funds in lieu of individual stocks. Livingston pointed out there is too much risk in trying to choose stocks, and it is difﬁcult to get the necessary diversiﬁcation into small or international companies with individual stocks. Livingston also encouraged Chris to increase his TSP contributions. “The TSP is one of the best retirement plans Selecting Your Own Financial Advisor: Important considerations when selecting a financial advisor are experience, competence, and compensation. Consider looking for an advisor with several years of experience and one or more of the following designations: CFP, CPA/PFS, ChFC, CFA, or RFC. Financial advisors are compensated in a variety of ways — commission, fee plus commission, and fee-only (which can include hourly fees, retainer fees, or a percentage of assets under management). There are pros and cons to each compensation method — not every method is right for every consumer. Regardless of compensation method, an advisory should act as a ﬁduciary, with your best interests foremost. Both the Garrett Planning Network and the National Association of Personal Financial Advisors have excellent advisor interview forms available for download at their respective Web sites, www.gar rettplanning.com and www.napfa.org. M available,” he says. He also recommended future contributions include the ﬁxed income option inside Chris’ TSP to reduce portfolio volatility. Although Chris had a will from when he was stationed at Okinawa, Yvette did not have one. Livingston recommended Chris update his will and Yvette prepare one, along with a health care directive and medical power of attorney. One weakness Livingston noted was that no beneﬁciaries were designated for Chris’ TSP. Without a designated beneﬁciary, the survivors would face a burdensome income tax liability that could approach $10,000. With a beneﬁciary designation, this liability could be deferred. He also had the Coddingtons update the beneﬁciary designations on IRAs that Chris had funded prior to his marriage and recommended their two daughters be included as second beneﬁciaries. The Coddingtons are pleased with the sound advice they received from Livingston. “We now feel more secure ﬁnancially and have a good grasp on what we need to do to meet our ﬁnancial goals,” says Chris. NAME: LT. MARK TURNER, USN SitRep: Turner is married and currently does not have any children; he and his wife have an adjustable-rate mortgage on their new home. [CONTINUES ON PAGE 85] NOVEMBER 2007 MILITARY OFFICER 67 http://www.garrettplanning.com http://www.garrettplanning.com http://www.napfa.org

Table of Contents Feed for the Digital Edition of Military Officer - November 2007

Military Officer - November 2007 Contents From the Editor President’s Page Your Views MOAA Directory Rapid Fire Washington Scene Chapters in Action Financial Forum Ask the Doctor Cover Story: Commanding the Corps With Love, From Home Financial Guidebook Financial Tuneups Banking on Your Time Pages of History MOAA Scholarship Recipients Faces of MOAA MOAA Scholarship Donors Member Books Advertising Index MOAA Calendar Sounding Taps MOAA Member Services Encore

Military Officer - November 2007

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