Frequently Asked Questions
Financial Planning
A budget (spending plan) is a plan for how to distribute your income, for example, to rent and other bills and other obligations, to savings, and to entertainment. A financial plan, by contrast, doesn’t just determine how you spend your money now but also helps you to plan for the future and meet goals.
Financial planning centers on big-picture aspects of your financial journey. It can help you with identifying things like financial goals, spending plans, debt elimination, tax minimization, funding for further education, identifying the best insurance options, retirement planning, and more. Our financial planners are ultimately like life coaches, therapists, and accountability buddies – guiding you every step of the way. This can help on your Path to Financial Freedom, regardless of the stage you’re in. Investment Management is primarily related to our Formation Stage, as it focuses on wealth accumulation.
Anyone at any stage of their financial journey can benefit from the services of a financial planner. Your financial needs may be different at each step on the path, but a financial planner can help you no matter where you are to maximize what you have. Whether you have financial goals you’d like to meet or have assets you want to protect, a financial planner can guide you through achieving those goals more quickly.
There is no minimum amount of money that you need before you get a financial planner. Anyone at any stage of their financial journey can benefit from the services of a financial planner. Whether you have lots of debt and no savings or are already in the process of growing investments, a financial planner can help you to make your financial goals a reality.
Financial planning and investment management isn’t free. At AllGen, our financial planners are fee-based. The financial planning fee is an investment in growing your finances and meeting future financial goals. Hiring a financial planner can therefore be worth the fee. AllGen is also a Registered Investment Advisor (RIA firm), which means that we have a fiduciary responsibility to act in your best interest. Learn more on our fiduciary advisors page.
A financial planner asks questions to determine where you currently are with your finances and what your goals for the future are. Then, the financial planner creates a plan to help you meet those goals, both short-term and long-term. From there, the financial planner will also act as a coach and guide you through following the financial plan. Lastly, the financial planner will make adjustments to the plan as-needed over time – because life happens!
It’s important to seek out a financial planner who is bound by fiduciary duty. A fiduciary has to take the best possible action for their clients, not just any good action. A CFP (Certified Financial Planner) working at a financial services company, for example, is doubly bound by fiduciary duty because both the CFP certification and the financial services company have a fiduciary-level responsibility to their clients.
There are two ways to check that a prospective financial planner is a fiduciary. The first is to just ask them. The second is to check that they’re either a Certified Financial Planner with the CFP Board or that they are registered with the SEC. Either one requires that the financial planner be bound by fiduciary duty. In some cases, a financial planner is required by both to be a fiduciary.
A financial planner and a financial coach are essentially the same thing. Both will help you to create a financial plan that meets your needs and guide you through the process of following it as well as making adjustments as needed. A financial planner functions like a coach to help you meet your financial goals. A Certified Financial Planner is part of the CFP Board and is bound by fiduciary duty specifically.
AThe primary purpose of financial planning is to help you meet any type of financial goal. This could be paying off debt, buying a house, saving for retirement, going to college, paying off your mortgage, and more. Anyone at any stage of their financial lives can benefit from financial planning.
Yes. A financial planner’s clients can be individuals, businesses, families, or organizations.
While both financial planners and CPAs can help you with your taxes, the two are not the same. CPAs prepare and file your tax return for the taxes that you already owe and focus on helping you save money on those taxes now. A financial planner focuses on the future to help you build wealth and save money in both the short and long term. Your financial planner will strategize about your tax situation to see if is prudent to save on your taxes now or try to save on your taxes later. The financial planner’s intention is to help you build/optimize wealth and achieve all of your short- and long-term financial goals.
Contact a financial planner today to build a plan and take charge of your financial future!
Investment Management
Investment Management is the management of financial assets in a portfolio. A person can hire AllGen to manage investments on their behalf, which includes researching market trends, making investment decisions, and implementing strategies.
AllGen can manage a variety of investment accounts ranging from non-retirement individual and joint accounts, custodial accounts for minors, rollover and Roth IRAs, SIMPLE and SEP IRAs, and even self-directed brokerage retirement accounts.
A custodian is a financial institution such as a broker dealer or bank, that holds customers securities for safekeeping. Examples of custodians are Charles Schwab, JP Morgan, Fidelity, Robin Hood, etc. AllGen currently chooses Charles Schwab as the custodian to house client assets. They have been providing services since 1975 and are highly respected in the industry. Charles Schwab is the largest provider of investment services for registered investment advisors (RIA firms). They provide our clients with access to more than 15,000 mutual funds and nearly all ETFs, stocks, bonds, and fixed income investments. Schwab charges no account management or custodian fees to our clients.
Yes, AllGen serves clients in a fiduciary capacity. A fiduciary will act on behalf of another, placing client interests above their own with a duty to preserve good faith and trust. For more information, visit our fiduciary advisors page.
Yes, AllGen is an active money manager and will make strategic decisions in the handling of financial assets based on research and analysis. While most people (including fund managers) do not beat their respective index, we aspire to be like the 20% of those professionals that consistently outpace their respective portfolio indexes’ net of fees. We strive for this goal through extensive research and active money management strategies. Since this requires a high commitment of time and resources, most individuals should do index or passive investing if they are managing investments by themselves.
After your accounts are set up, AllGen will fully manage your investments on your behalf. This includes market research and implementation of investment strategies, as well as the ongoing trading in client accounts.
Clients looking to set up direct deposit to their managed AllGen accounts can connect them using their Charles Schwab routing number and account number. Providing this information to your HR or payroll department can start the process.
AllGen is a fiduciary and charges a tiered rate for investment management which is billed directly from your accounts on a quarterly basis. The tiered rate is a percentage based on the value of your account and is structured so that when you do better, we do better. To learn more about fiduciaries, click here.
AllGen does not collect commissions on the sales of investment products. While some of AllGen’s advisors are licensed for insurance products, our investments are managed on a fee basis and we typically outsource any insurance needs clients may have. Those needs may be discovered during the financial planning process. To learn more, visit our financial planning page.
AllGen uses exchange traded funds (ETF), mutual funds, and individual stocks in our portfolios. ETFs and stocks are traded throughout market hours and executed immediately, whereas mutual funds will calculate net asset value (NAV) at the end of the trading day when orders are then completed. When we research the funds to invest in, we are looking for the best net return (the net return is calculated after fees). Sometimes we might strategically pay a little more in fees if the investment has historically had returns significantly higher than low-fee options.
Dividend income is typically reinvested into the position on the date it is received.
Average annualized returns will depend on the client’s individual financial situation and tolerance for risk. Clients who are more risk-averse can expect lower returns on average than clients who are more risk-accepting.
No. Our clients pay us to use our extensive research and industry knowledge to select stocks for them. If you would like to pick stocks yourself, we recommend you open a separate account where you won’t be charged for management.
AllGen can help you open a custodial account if the child is under the age of 18 years of age. If the child is over 18 years old, they will be able to open their own accounts.
AllGen can manage joint accounts for you, as well as help you designate beneficiaries.
AllGen can manage corporate accounts as well.
AllGen can open a donor advised account that allows for a select list of investment options provided by Schwab Charitable. We can help you decide which funds to choose based on your investment goals.
Currently AllGen does not directly manage client HSA accounts through Investment Management but can provide investment guidance based on your plan or individual situation.
It’s never too late to start investing, however there are important things to consider first. A good foundation like adequate emergency reserves and little to no consumer debt, as well as having basic insurance can have a greater impact on achieving your investment goals. An AllGen Financial Advisor will help you address these points and make sure you have the basics covered before investing.
No. Although you need to be 18 to open an investment account, there are ways to begin investing sooner. An AllGen Financial Advisor can explore options whether it be opening up a custodial account, or a Trust, we will determine what works best to achieve your goals.
AllGen currently serves over 1,000 clients and counting!
AllGen works with small business owners and individuals of all generations, hence the name: “All-Gen.” Our clients are from all walks of life and we believe everyone has the right to good financial advice, no matter age, race, or income.
AllGen has no account minimums and welcomes all people seeking prudent, objective financial advice.
An IRA Rollover is an individual retirement account that holds tax-deferred dollars. Clients may “roll-over” previous employer sponsored retirement plans (like a 401k) into these accounts. They can often do this without a tax penalty and the assets may still grow tax-deferred. For more information, visit our IRA and 401k Rollovers page. You can also find information about a basic rollover here.
AllGen develops diversified portfolios for clients by incorporating investments of multiple asset classes and sectors. We strive to optimize risk and reward through proper asset allocation, diversification, and strategic rebalancing. These strategies have historically reduced risk in portfolios over time. For more information, you can review our blog and video about rebalancing.
Everyone has different investment goals. We want to hear yours so we can develop a plan that can put dreams into reality. Our team of advisors, planners, and analysts will work together to determine specific action steps for you, so you can be financially free one day.
Investment Management focuses on wealth accumulation and is predominantly in the Formation Stage of the Path to Financial Freedom. Financial Planning focuses on big-picture aspects of your journey to financial freedom and can range from budget planning and debt elimination (debt snowball), to determining best life insurance options, tax minimization, education funding or retirement planning. Our planners can sometimes serve as therapists, life coaches, accountability partners and much more than just financial related stereotypes.
Financial Freedom is the intersection between the life you want to live and your ability to live it! AllGen prioritizes the concept of Financial Freedom and often uses this language instead of just “retirement” as a way of acknowledging the many different goals people may have throughout their lifetime.
Contact a financial advisor today to take charge of your financial goals and make your Financial Freedom a reality!
Trying to decide what to do with your 401(k) from your previous employer?
There are several options to consider carefully. The right decision could save you a lot of money, but the wrong one could end up costing you instead.
A 401(k) rollover is the process of moving money from an old employer-sponsored retirement plan into another qualified retirement account, such as an IRA or a new employer’s 401(k) plan.
For many people, this decision happens after changing jobs, retiring, or reviewing old retirement accounts that have been left behind. A rollover can help simplify your financial life, but it should be reviewed carefully so you understand the tax rules, investment options, fees, and how the move fits into your long-term retirement plan.
When you leave an employer, you generally have four options for your old 401(k):
- Leave the money in your former employer’s plan, if the plan allows it.
- Roll it into your new employer’s retirement plan, if available and accepted.
- Roll it into an IRA
- Take a cash distribution.
Each option has advantages and trade-offs. The right decision depends on your age, account balance, investment choices, plan fees, tax situation, and whether you want to consolidate your retirement accounts.
An IRA is an Individual Retirement Account. There are four types of IRAs:
- Traditional IRA
- Simple IRA
- Roth IRA
- SEP IRA
IRA accounts are similar to 401(k) accounts in that they’re tax-advantaged and there’s a 10% penalty if you withdraw money from them prior to age 59½. Some types of IRAs may also be subject to your current tax rate if you take money out early as well.
An advantage to having an IRA is that a wide variety of asset types can be included:
- Stocks
- Bonds
- Mutual funds
- ETFs
- Real Estate
- Private Placements
- Tax Liens
The type of IRA available to you depends on your employment status as well as taxable income. If you are opening the account as an individual, you may be able open an IRA: traditional or Roth IRA. If you’re a small business owner or if you’re self-employed, you may be able to open a simple or SEP IRA.
Traditional IRA
Your traditional IRA contributions are typically tax-deductible if you and/or your spouse are not covered by a plan at work. If you and/or your spouse are covered by a plan at work, your deduction is tied to certain income thresholds. Below is a table of the phase-out income ranges for tax deductions – if your income is above the listed ranges, your contribution is not tax deductible.
Filing Status Phase-Out Range for Tax Deduction Single or Head of Household $79,000 – $89,000 Married Filing Jointly or qualifying widow(er) $126,000 – $146,000 Married Filing Separately $10,000 When you reach what the government calls “full retirement age,” you’re required to begin taking money out of your traditional IRA. Your “full retirement age” is based on the year you were born, as the table below shows. These deductions are called required minimum distributions (RMDs) and are calculated based on your life expectancy. Even if you’re required to take RMDs, you can still contribute so long as you’re still working. If you don’t take out the required amount, then there could be a tax penalty of up to 50%.
Year Born RMD Age June 30, 1949, or earlier 70½ July 1, 1949 – December 31, 1950 72 January 1, 1951 – December 31, 1959 73 January 1, 1960 or later 75 In addition, there are contribution limits for Traditional IRAs. In 2023, the max contribution limits are $6,500 for those under 50 years of age and $7,500 for those over.
Roth IRA
With a Roth IRA, contributions aren’t tax-deductible and there are no RMDs. Another feature is that any monies contributed to a Roth can typically be withdrawn at any time without any taxes or penalties. When you withdraw any gains, however, before age 59½ and do not use it on a qualifying expense, then you may have to pay a 10% penalty.
Yet some types of qualified distributions are tax- and penalty-free:
- Distributions from accounts opened for 5 years or longer as long as you are 59½ or older
- Distributions of contributions only (no gains)
- Distributions for qualifying expenses such as first-time home purchases, college expenses, and birth or adoption expenses.
There is also an income phase-out that determines whether you can contribute up to the maximum amount allowed.
Filing Status Phase Out Range for Tax Deduction Single or Head of Household $150,000 – $165,000 Married Filing Jointly or qualifying widow(er) $236,000 – $246,000 Married Filing Separately $10,000 As with the Traditional IRA, the same contribution limits apply.
Self-Directed IRA
A self-directed IRA (whether traditional or Roth) allows you to have more options for what kinds of investments you want to include in your IRA, including tax liens, private placements, and real estate. These are not as common and are only offered by a few institutions as they require more bookkeeping, depending on the types of investments held.
Rolling over a 401(k) into an IRA may give you more flexibility, a broader range of investment options, and the ability to bring old retirement accounts into one coordinated plan. This can make it easier to manage your retirement strategy, investment allocation, beneficiaries, and future income planning.
However, an IRA is not automatically the best choice for everyone. Some 401(k) plans offer low-cost investment options, access to certain protections, or features that may be valuable depending on your situation. Before making a rollover decision, it is important to compare fees, investment options, services, tax implications, and your overall financial plan.
Rolling an old 401(k) into your new employer’s plan may be a good option if your new plan accepts rollovers and offers strong investment choices, reasonable fees, and helpful plan features.
This option can keep your retirement savings in one workplace plan and may make it easier to track your progress. It may also be helpful if you want to preserve certain 401(k) plan features that are not available in an IRA.
Before choosing this path, review your new plan’s investment lineup, administrative fees, withdrawal rules, Roth options, and whether the plan accepts rollovers from a previous employer.
A direct rollover moves your retirement funds directly from your old 401(k) plan to another qualified retirement account, such as an IRA or a new employer’s plan. Because the money does not come directly to you, a direct rollover is often the cleaner and simpler approach.
An indirect rollover happens when the funds are distributed to you first. You generally have 60 days to deposit the money into another qualified retirement account. If you miss the 60-day deadline, the distribution may become taxable and may be subject to penalties.
For many people, a direct rollover helps reduce the risk of tax mistakes.
Cashing out a 401(k) can create immediate tax consequences and may reduce the amount available for your future retirement.
In many cases, a cash distribution from a traditional 401(k) is treated as taxable income. If you are under age 59½, you may also owe an additional 10% early withdrawal penalty, unless an exception applies. A cash-out may also interrupt years of potential tax-deferred growth.
Because of the potential tax impact, cashing out is usually a decision that should be reviewed carefully with a financial advisor and tax professional.
The 60-day rollover rule means that if retirement funds are paid directly to you, you generally have 60 days from the date you receive the distribution to roll the money into another eligible retirement account.
If the funds are not deposited within that window, the IRS may treat the amount as a taxable distribution. If you are under age 59½, an early withdrawal penalty may also apply.
Because timing and withholding rules can create complications, many investors prefer a direct rollover instead of receiving the money personally.
A properly completed rollover from a traditional 401(k) to a traditional IRA or another qualified retirement plan is generally not taxable at the time of the rollover.
However, taxes may apply if you roll traditional pre-tax 401(k) funds into a Roth IRA. This is commonly known as a Roth conversion, and the converted amount is typically included in taxable income for the year of the conversion.
Roth and traditional funds should be handled carefully so each type of money goes to the correct account.
Yes. If you have a Roth 401(k), you may generally roll those funds into a Roth IRA or another employer plan that accepts Roth rollovers.
If your old plan includes both traditional and Roth 401(k) money, those balances may need to be rolled into separate accounts: traditional funds into a traditional IRA or qualified plan, and Roth funds into a Roth IRA or qualified Roth account.
This is an important detail because mixing account types incorrectly can create tax complications.
A traditional IRA is generally funded with pre-tax money, and withdrawals in retirement are typically taxed as ordinary income. Traditional IRAs are also subject to required minimum distributions, known as RMDs.
A Roth IRA is funded with after-tax money. Qualified withdrawals may be tax-free if IRS rules are met. Roth IRAs also do not require lifetime RMDs for the original account owner, which can make them useful for long-term retirement and legacy planning.
The right account depends on your current tax situation, future income expectations, retirement timeline, and estate planning goals.
No. A rollover from a 401(k) into an IRA does not count toward your annual IRA contribution limit.
IRA contribution limits apply to new annual contributions, not rollover money. For 2026, the IRA contribution limit is $7,500, or $8,600 if you are age 50 or older. Rollovers are treated separately from those annual contribution limits. (IRS)
Traditional IRAs and most pre-tax retirement accounts are subject to required minimum distributions. Under current IRS rules, RMDs generally begin at age 73. Roth IRAs do not require lifetime RMDs for the original owner. (IRS)
If you are near or already taking RMDs, it is important to plan the timing of a rollover carefully. RMDs generally cannot be rolled over, and taking the wrong steps may create tax issues.
The IRS one-rollover-per-12-month rule generally applies to IRA-to-IRA rollovers, not direct trustee-to-trustee transfers and not most rollovers from a 401(k) to an IRA or another qualified plan. (IRS)
Because rollover rules can vary based on the type of account and how the funds are transferred, it is important to confirm the process before initiating a rollover.
Before rolling over a 401(k), consider:
- Investment options available in your current plan, new plan, or IRA
- Account fees and advisory fees
- Tax impact, especially with Roth conversions
- Access to your money and withdrawal rules
- Creditor protection differences between 401(k)s and IRAs
- Required minimum distribution rules
- Beneficiary planning
- Whether consolidation makes your financial life easier
- How the rollover supports your retirement income plan
A rollover is not just an account transfer. It is a retirement planning decision.
A Roth conversion is the process of moving money from a pre-tax retirement account, such as a traditional IRA or traditional 401(k), into a Roth IRA.
When you convert pre-tax retirement dollars to a Roth IRA, the amount converted is generally treated as taxable income in the year of the conversion. In exchange, the money has the opportunity to grow tax-free, and qualified withdrawals from the Roth IRA may be tax-free in the future if IRS rules are met.
A Roth conversion can be a helpful retirement planning strategy, but it should be reviewed carefully because it may increase your tax bill in the year you convert.
A Roth conversion may make sense if you expect to be in a higher tax bracket later, want to reduce future required minimum distributions, or want to create more tax flexibility in retirement.
It may also be worth considering during lower-income years, after retirement but before Social Security or required minimum distributions begin, or as part of a long-term estate and legacy planning strategy.
However, a Roth conversion is not right for everyone. The decision depends on your current income, tax bracket, retirement timeline, cash available to pay taxes, investment goals, and overall financial plan. Before converting, it is important to understand how the added taxable income could affect Medicare premiums, tax credits, deductions, and your broader retirement income strategy.
At AllGen Financial, we help clients evaluate whether a Roth conversion fits their bigger financial picture—not just for this year’s taxes, but for the future they are building.
At AllGen Financial, we help you look at your 401(k) rollover decision in the context of your full financial picture.
That means we review more than the account balance. We help you think through taxes, investment strategy, retirement income, risk, beneficiaries, and how this decision supports the life you are building for yourself and the people you care about.
Our goal is to help you move forward with clarity, confidence, and a plan that fits your path.
You may want to speak with a financial advisor if you recently changed jobs, are retiring soon, have multiple old 401(k)s, are considering a Roth conversion, are unsure about tax consequences, or want help coordinating your retirement accounts into one plan.
A rollover can be simple, but the decision behind it matters. Getting guidance before you move the money can help you avoid unnecessary taxes, missed opportunities, and decisions that do not match your long-term goals.