From debt payment to investments to long-term saving, getting the help of a financial advisor to address your financial profile can allow you to target a course of action to fulfill your needs and help you make significant progress towards achieving your financial goals. A financial advisor is a professional who offers guidance and services specific to the financial circumstances of their clients. This means that regardless of your financial needs or situation, a financial advisor will help work with you individually on your own financial profile. 

In retirement saving, as with many other forms of long term financial planning, understanding and mapping out what portion of your financial profile will be devoted to your savings is crucial. Although different savers have different needs and different levels of understanding of how this long-term planning should go, it’s always useful to enlist the aid of a financial advisor (or, as it pertains to retirement savings, a retirement advisor), who can provide individualized guidance and input on how this process should go. Selecting an advisor who will fulfill your needs and help you meet your retirement goals can help you make a big step towards your future, so considering your circumstances and the services offered by the retirement advisor is imperative.   

In today’s competitive job market, where the top companies are competing for the top talent, employers use every tool at their disposal to attract and retain the best of the best. More and more often, these compensation packages go way beyond salary and factor in other employee benefits, such as top of the line health insurance plans, a 401(k) plan with a company match, and for those in the more senior roles, shares of company stock in the form of Restricted Stock Units.

In each episode of the ACap ReCap, we go beyond the blog to answer your financial questions. Ara & Matt explain the basics and differences in 401k account types, including the growth opportunities of contributing.

The 2017 deadline for self-employed individuals to fund their Individual 401k accounts is 12/31/2017. As a reminder, the maximum amount that can be contributed to the 401k as an employee is $18,000 for 2017 ($24,000 if age 50 or older).

Can my employer limit my 401k contribution?
Yes and no. The maximum amount you can contribute to your 401k plan is the lesser of $17,500 (for 2014) or 100 percent of your compensation. Your employer cannot further limit how much you can contribute to your 401k plan because these are IRS imposed limits; however, your contributions may be disallowed and returned to you if you are considered a Highly Compensated Employee ($115,000 / year or own more than 5 percent of the business). 401k plans must undergo annual compliance tests to ensure highly compensated employees are not the only employees benefiting from the 401k plan; therefore, the Department of Labor imposes rules that prevent highly compensated employees from contributing to their 401k accounts if not enough non-highly compensated employees in the same company/business are contributing to their 401k accounts as well. If you are a highly compensated employee and you want to max out your 401k plan, encourage the younger and/or non-highly compensated employees to contribute too - it will help you and them in the long run.

1. Can I use my credit card to pay my mortgage or student loan?
This question comes up for those savvy credit card users who want to accumulate as much reward points as possible. It's not possible to directly pay your mortgage or student loan with your credit card, but there are some online companies out there who offer such services. The service is not cheap and usually entails a high percentage charge. ACap generally discourages consumers to use debt to pay debt, especially if you use a revolving unsecured debt like a credit card to pay an amortizing secured debt like a mortgage. If you choose to pursue this route, you MUST be very diligent with your credit card debt and make sure to pay off your entire balance every month.

1. Can I convert a portion of my IRA to a Roth IRA?
Most people assume that if you convert a Traditional IRA to a Roth IRA, you must convert the entire Traditional IRA balance. However, you can decide how much of your Traditional IRA you want to convert to a Roth IRA rather than converting the entire amount all at once. There are benefits to converting gradually because when you convert a Traditional IRA to a Roth IRA, you must report the converted value as income and pay tax. The option to gradually convert can be especially helpful if you have a large traditional IRA balance and you don't want to report the entire amount as income in one year, but would instead prefer to spread your tax liability over a few years. Just remember to complete IRS form 8606 when doing the conversion to accurately capture cost basis.

1. Can I reverse a Roth IRA contribution because my income was higher than I expected?
Yes. It is actually very common for people to make a Roth IRA contribution in the beginning of the year and realize later that they do not qualify for a Roth IRA. The solution is very easy and usually involves just filing out a form. Your custodian (the firm that holds your Roth IRA and sends you monthly statements) will have a form for you to complete. You can either reverse the Roth IRA contribution entirely or recharacterize the contribution as a non-deductible IRA. The non-deductible IRA option may be more appealing, especially if you want to do the backdoor Roth IRA.