The Peaceful Planner –

A hero who helps clients see the humanity in the numbers

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My mom is a nurse, and my dad was a helicopter mechanic, so they’ve always served, and so it was just something that was really important to me.

– Kendra Erkamaa

ome people may have heard the quote, “Those who fail to plan, plan to fail,” and thought it was a clever turn of phrase; our hero, Kendra Erkamaa, CEO of Triangle Financial Services, has made it a life principle. When thinking back to her early days, Kendra remembers, “Inherently, I was a planner from the beginning, since I was 16 years old and using my first Franklin Covey day planner.” This passion for planning would lead her on her journey of serving others, helping them find peace in life’s storms, and building wealth to make a difference.

Kendra’s parents first instilled in her the drive to serve others. Her mother, a nurse, and her father, a helicopter mechanic, taught her the importance of helping others. She followed this call to service, which ultimately led her to become a financial advisor. With a foundation in science and math studying chemical engineering in college, she discovered she had a mind for analytics and using metrics to break down complex problems. It would be this analytical mindset that pushed her toward taking some financial planning courses. Once she had her foot in the door, she went on to earn a degree in Business Administration and started her career in event catering management. Kendra says: “What I really loved about management was the numbers – analyzing the reports, and figuring out what actions we could take to manage those numbers and outputs.”

After graduating from college, Kendra went to work immediately on her management career, but it was short-lived. Only two years in, her position was eliminated. Kendra used this time to reflect and ask herself the critical question, “What kind of career do I see myself in for a lifetime?” Her passion for planning came in handy as she compiled a list of jobs that met her criteria: she needed something that could feed her analytical side while allowing her to help and serve others. She ultimately landed on becoming a financial advisor. Kendra performed what she calls “occupational interviews,” where she would cold-call financial advisory firms daily and inquire about what they did. She looked to see what types of firms met her passions and would give her the greatest opportunities to succeed.

After a number of these conversations, she eventually connected with the founder of Triangle Financial Services, Ton Stam. As Kendra remembers it, “He told me that ‘It’s not just about making money while playing golf, but that it’s really about seeing clients reach their goals. Truly seeing them, through a lifetime of changes, and get them to realize all of those dreams and hopes.’ That is what ultimately drew me to Triangle and the financial advisory profession, and how I have been able to make a positive impact on people’s lives.”

It is really an absolute joy to be trusted, to be a steward for their wealth and their finances, and to be able to walk through their lives together, through the ups and downs, through the joys as much as the difficult times.

Kendra went on to join Triangle in 2004, building a solid book of business and learning the ins and outs of the industry. As she grew into the role, the opportunity presented itself to buy the company from Ton three years later. He was looking to move on and start another business as a chocolatier. At 27 years old, Kendra was now in charge of the firm – with the Great Recession right around the corner. It was a tumultuous time, but Kendra, who has a reputation for being calm, shifted her focus to her clients. Kendra was able to navigate the crisis by keeping her clients at the heart of everything she did while using statistics as her guide. She recalls overcoming this historical challenge by “showing up, staying optimistic, and letting the data from the past guide us to know that we will get through this.”

Kendra believes, “It is really an absolute joy to be trusted. To be able to walk through their lives together, through the ups and downs, through the joys as much as the difficult times.” From making calls to talk one-on-one with her clients, to sending out survival bags containing little things to help with stress, such as stress balls and lollipops, she found a way to help her clients weather the storm. She searched for the humanity in the numbers and presented it to them – this has truly been a hallmark of her career.

I get to help manage that pool of money to be able to bring into their life what’s really important, and really get to focus it. So kind of like that magnifying glass, right? We get to focus it on what’s important.

Kendra’s ability to use the numbers to help ease personal issues has allowed her to impact lives in her work and community outreach. She is a member of the International Academy of Collaborative Professionals, a group of various professionals ranging from lawyers to therapists and financial professionals – who take a multi-dimensional approach to one of life’s toughest challenges: divorce. She has many success stories, but one of her favorites came from a collaborative mediation. A couple came to Kendra for help – the pair were going through a separation and had varying views on how to divide their assets. By taking an analytical approach in reviewing their financial information, Kendra was able to transition the pair from an emotional conversation to a pragmatic one. The two started to see the other’s side in the meeting, and as the talks progressed, they started asking to run numbers to make sure the other had enough to live off of and comfortably retire. It’s in these moments Kendra discovered that everybody’s interests can be honored as they look for peace.

As a planner, Kendra gravitates toward outreach to help people manage their financial habits, enriching them for the future. She and her firm volunteer at Beacon of Life, a transitional home that helps women coming out of incarceration or struggling with poverty. She and her team serve as the residents’ budget counselors, helping them get the financial footing to achieve a brighter future. Additionally, she is a board member of the Jumpstart Coalition for Personal Financial Literacy, an organization looking to bring financial literacy to schools. She also serves as a troop leader for the Girl Scouts of Greater Iowa. With so much going on, Kendra’s planning-centric mindset has enabled her to succeed while improving the lives of those around her.

Securities and Advisory Services offered through Harbour Investments, Inc. Member SPIC

As 2020 closes on one of the most transformative years for our country, can we agree that not much has gone as any of us planned? For just about everyone, life and any intentions we may have had for the year to this point have been altered in one way or another. Our jobs, finances, school, relationships and even how we shop—all of these may look a little, or a lot, different these days.

As a professional, I’ve built my career on planning—for myself and my clients. I have witnessed, and even experienced for myself, plans that have been completely derailed without notice. When this happens, it’s hard not to just throw in the towel figuring the focus and energy spent on the initial planning was completely wasted. I’ve also seen some planners completely scrap their well thought-out and beautifully crafted strategies and watched as their previous efforts spoil, the result of being overwhelmed by tasks left undone. 

Unfortunately, some people believe changing the original goal or adjusting their priorities in a plan is the same as quitting. This couldn’t be further from the truth. A GOOD plan is a process, and while it may fluctuate, it is a reliable system that you can revisit in order to readjust and refocus. When life goes sideways—and trust me, it will—a plan is something solid that can be molded to respond to current situations. Although the direction may change, the work done to date is not wasted.

In fact, the BEST plans are ones you stay actively engaged with and revisit often enough that they become a practice, a habit and a way of living. Even if it changes somewhat, the practice creates certainty and ease in the face of massive change. During 2020, I’ve personally had to review and edit my task, priority, and goal lists weekly, daily and sometimes hourly. It has been a year to polish the art of making choices, and most of those decisions weren’t ones we even wanted to make. 

So, like many of you, I have found myself often in the struggle to find the sweet spot of remaining committed to important goals I’ve created, flexible enough to re-adjust my expectations, while also constantly reminding myself of why. This often comes down to the passion for the work I do, the life I want to live, and my own values. As life circumstances changed, I chose to grow because of it and make the necessary adjustments in order to stay the course. 

The key? Don’t run from a foiled plan. Instead, find a little self-kindness and grace for yourself. These times are HARD. It’s not changing quickly. For me, practicing some patience with myself and the circumstances we’re in is important because decisions made in frustration are not likely to carry me where I want to be. We are the designers of our lives and of our own plans. The vast majority of what is on our lists, we have placed there ourselves. We may do so unconsciously, or we can do so intentionally. Re-visit your plans, and make purposeful adjustments to help you get back on track.

Thank you 2020 for reminding us that we are not always in complete control, but we do still have the  power to re-write our own stories when life doesn’t go as planned. I hope we can all look forward to 2021 with renewed optimism and a little well-earned wisdom—we can get through massive life change even when it isn’t easy or part of the initial plan. 

Wishing you a 2021 filled with joy, love and kindness for yourself and all in your community.

The I.R.S. is giving you three additional months to file and pay.

Provided by Triangle Financial Services, Kendra Erkamaa, Lindsey Taylor, and Jessica Dillon

The Internal Revenue Service knows that many taxpayers have had a stressful spring. So, it has reset the federal tax deadline. You now have until July 15 to file your 1040 form. July 15 is also the deadline to pay any federal taxes owed for 2019.¹

Beyond these important details, there are others to note. Keep in mind: this article is for informational purposes only. It’s not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your strategy.

The extended tax deadline still falls on October 15. This year, the 6-month extension is now a 3-month extension. If you owe federal taxes, you must still pay them by July 15.²

The July 15 deadline also applies to fiscal year filers and many businesses. It applies to any individual or business entity that would normally have to file or pay by April 15.²

How about those who pay quarterly taxes? On April 9, the I.R.S. set a new July 15 deadline for both first-quarter and second-quarter estimated tax payments. The Q3 and Q4 estimated tax deadlines remain set at September 15, 2020 and January 15, 2021, respectively.³

You have three additional months to make a 2019 IRA or HSA contribution. Do you still need to do this? Ordinarily, your deadline to do so would be April 15, 2020, but just as the federal income tax filing deadline has been pushed forward to July 15, so has this deadline.¹

The July 15 deadline also applies for gift taxes. While the federal estate tax deadline fell on April 15, Forms 709 (the Gift and Generation-Skipping Transfer Tax Return) and related payments are not due until July 15. An extension to file as late as October 15 is permitted; though, gift and GST taxes owed will still be due on or before July 15.⁴

Many state tax deadlines have also been extended to July 15. A few states have given taxpayers even more time. In Hawaii, the filing deadline is July 20. In Iowa, state income taxes may be filed as late as July 31. In Colorado, taxpayers have until October 15 to file their returns, with any taxes owed due by July 15.⁵

Things are a bit different in three other states. Mississippi has pushed its state tax deadline forward, but only to May 15. New Hampshire has offered extensions to “qualifying taxpayers” affected by the coronavirus crisis who were unable to pay state taxes by April 15. Virginia has given taxpayers an automatic 6-month extension to file; if taxes owed are not paid by May 1, interest will be charged, but late penalties will be waived if taxes are paid by June 1.⁵

There are reasons to send in your return well before July 15. Do you think you will owe money? The earlier you determine what you owe, the more time you have to plan your tax payment. If you are owed money, filing earlier can bring you a refund earlier.

As a reminder, this article is intended to present general information, not tax advice. Talk with a tax or legal professional about your particular tax situation before modifying your strategy.

Kendra Erkamaa & Lindsey Taylor may be reached at 515-282-8962 or Kendra@TriangleFSinc.com / Lindsey@TriangleFSinc.com
Jessica Dillon may be reached at 515-371-8201 or Jessica@TriangleFSinc.com
www.TriangleFSinc.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and Advisory Services offered through Harbour Investments, Inc.

Securities licensed in IA, AZ, CA, CO, CT, FL, HI, IL, KS, KY, MN, MO, NC, ND, NE, NJ, NY, OR, TX, WI

Citations.

1. Kiplinger.com, March 30, 2020
2. IRS.gov, April 10, 2020
3. Forbes.com, April 9, 2020
4. The Internal Revenue Service, April 2020
5. MSN.com, April 6, 2020

Jamie Hopkins Contributor
Retirement
Director of Retirement Research and Managing Director of Carson Coaching

Roth conversions can be a powerful tax and retirement planning technique. The idea behind most Roth conversions is to take money from an IRA and convert it to a Roth IRA. Essentially, you’re paying taxes today instead of paying taxes in the future.

The Tax Cut and Jobs Act lowered taxes for many Americans and with the SECURE Act Roth IRAs became even more powerful as an estate planning vehicle to minimize taxes, so it’s a convenient time to take advantage of Roth conversions. However, Roth conversions can come with some issues. Before you engage in one, be aware of these common problems as it can be hard to undo the transaction.

Conversions After 72

IRAs and Roth IRAs are both retirement accounts. It’s easy to assume Roth Conversions are best suited for retirement, too. However, waiting too long to do conversions can actually make the entire process more challenging.

If you own an IRA, it’s subject to required minimum distribution rules once you turn 72, as long as you had not already reached age 70.5 by the end of 2019. The government wants you to start withdrawing money from your IRA each year and pay taxes on the tax-deferred money. However, Roth IRAs aren’t subject to RMDs at age 72.

If you don’t need the money from your RMD to support your retirement spending, you might think, “I should convert this to a Roth IRA so it can stay in a tax-deferred account longer.” Unfortunately, that won’t work. You can’t roll over or convert RMDs for a given year. So, if you owe a RMD in 2020, you need to take it and you cannot convert it to a Roth IRA.

Despite the fact you can’t convert an RMD, it doesn’t mean you can’t do Roth conversions after age 72. However, you need to make sure you get your RMD out before you do a conversion. Your first distributions from an IRA after 72 will be treated as RMD money first. This means, if you want to convert $10,000 from your IRA, but you also owe an $8,000 RMD for the year, you need to take the full $8,000 out before you do a conversion.

Aggregation Rules

When converting an IRA to a Roth IRA, some people attempt what is called the backdoor Roth IRA. Income limits are attached to the ability to contribute to a Roth IRA each year. Individuals whose earnings exceed those limits can get around the rule if they contribute a non-deductible amount to an IRA and then subsequently convert the IRA to a Roth. Since the non-deductible contribution is after-tax money, no taxes are owed at time of conversion, unless there was some investment gain already.

The backdoor Roth IRA works well to get around the income phase-out ranges attached to Roth IRA contributions if there is no other tax-deferred money in any other IRA owned by the same individual, including traditional IRAs, SEP and SIMPLE IRAs. When you do a conversion of an IRA to a Roth IRA, you convert a proportional share of the conversion amount as non-deductible and deductible contributions across all of your IRAs.

Let’s say you put $5,000 into a new IRA as non-deductible and convert it. You also have an IRA with $50,000 of tax-deferred money, and another IRA, which you rolled your 401(k) into a few years prior, with $445,000 of tax-deferred money. You have a total of $500,000 across all IRAs. This means your non-deductible percentage is only $5,000/$500,000 or 1%. When you convert the $5,000 non-deductible IRA, the rules actually treat you as if you’re doing a proportional conversion across all IRAs. As such, 99% of your conversion is actually tax-deferred money and only 1% is after-tax money. This means you will end up paying taxes on most of your conversion if you forget about the aggregation rules and try to do the backdoor Roth conversion.

Five-Year Rule(s)

When you take a distribution of a Roth IRA and get investment gains tax-free, you must meet a few different requirements. First, you must have a Roth open for at least five years. Next, you need a triggering event. The main triggering events for qualified withdrawal of investment gains from a Roth IRA are reaching age 59.5, death of account owner, disability of account owner and $10,000 of first-time homebuying expenses.
Let’s say you start your first Roth IRA by doing a conversion and your investments do well, and a few years later you decide to empty out the account. Your converted money will come out without ordinary income taxes being owed. The reason? You paid those during the conversion that built up a basis in your Roth IRA. However, your investment gains could be subject to ordinary income taxes upon distribution.
There’s a second five-year rule to also remember. This rule is from the time of conversion and is related to a potential penalty tax of 10% of early withdrawals from your retirement accounts. Withdrawals of money from a conversion of a traditional IRA or 401(k) to a Roth IRA will be subject to a 10% penalty tax if the withdrawal occurs within five years of the conversion.
The five-year period begins on the first day of the tax year in which the conversion took place. If you convert in December 2019, the five-year rule tacks back to January 1, 2019. The 10% penalty could also apply to any investment gains that you took out that were not a qualified tax-free Roth distribution if you did not otherwise meet one of the applicable exceptions to the 72(t) penalty 10% tax.
Some common exceptions to the 10% penalty tax for IRA and Roth IRA withdrawals include reaching age 59.5, death, disability, first time home buying of $10,000, and college education expenses. If you took money out of your Roth IRA within five years of a conversion, but were over age 59.5, you don’t need to worry about paying the penalty on the converted amount.
While these tax rules can create hurdles and challenges for Roth conversions, you shouldn’t walk away from this article thinking Roth conversions are harmful. In fact, the opposite is often true. Many people need more tax diversification between after-tax money, tax-deferred money and Roth tax treatment money. Roth conversions can help you pay lower taxes today and have more control over your investments, because they are not subject to RMD rules at 72. Any Roth conversion should be done in conjunction with an overall tax and financial plan. It’s advisable to speak with a qualified financial professional and tax planner before engaging in a Roth conversion so you understand the current tax implications and any future issues that could arise.