Author: Jon Powell

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Fiduciary Financial Advice

Is Your Financial Advisor a Fiduciary?

Is Your Financial Advisor a Fiduciary

It’s not hard to find a financial advisor. Google will spit out results in your area that can make your head spin. The challenge is finding the right financial advisor, someone you can trust to provide honest advice and help you achieve your goals.

Unfortunately, whether someone calls themselves a financial advisor, financial planner, wealth manager, or financial consultant, it doesn’t tell the consumer anything about the standard to which the advisor is held.

This can be incredibly confusing for many people. Rather than looking for a particular job title, it’s important to ask your current or prospective financial advisor whether or not they are held to the fiduciary standard.

Their answer will let you know if they truly have your best interests at heart.

Terms, Defined

If you’ve ever researched financial advisors, you may have noticed there are many different types of advisors from which to choose. Some of the most common types of financial advisors are brokers, fee-only fiduciaries, and independent financial advisors.

It’s important to know the standards each type of advisor is held to as you’re deciding who to hire.

Here’s the breakdown:

  • Brokers manage your portfolio but also sell financial products such as mutual funds or insurance policies, for which they earn a commission. They are not held to a fiduciary standard, so they may not always act in your best interest.
  • Fee-only fiduciaries may charge a flat fee, or a percentage of your portfolio, but they are always held to a fiduciary standard, in which they are required to act in your best interest.
  • Independent financial advisors have started their own financial firm. Most independent advisors act as fee-only fiduciaries, but some may act as fee-based advisors and sell additional financial products on a commission basis.

More About Fiduciaries

In general terms, a fiduciary is a person or entity who has the power to act for another in situations that require complete trust. When it comes to the financial industry, financial advisors who work for a Registered Investment Advisor firm must always act as a fiduciary for their clients.

CERTIFIED FINANCIAL PLANNER™ professionals are also held to this duty when providing financial advice to their clients. By law, a fiduciary advisor must be completely transparent and always act in their clients’ best interest.

They are also obligated to avoid and disclose any potential conflicts of interest.

Additionally, the ongoing services and investment monitoring they provide also falls under the fiduciary duty. In other words, their job doesn’t end after the initial meeting or purchase.

They must regularly review your accounts to help ensure your investments are in your best interest.

There are financial professionals whose services do not fall under the fiduciary standard. This doesn’t mean that they are out to steal your money and can never be trusted—far from it. These financial professionals who register with FINRA are held to a standard known as Regulation Best Interest (Reg BI).

This is a step in the right direction, but doesn’t take things as far as the fiduciary standard for Financial Advisors who work for a Registered Investment Advisor firm that registers directly with the Securities and Exchange Commission.  

Why Should I Work With a Fiduciary?

There are several benefits to working with an advisor who serves in a fiduciary capacity. For one, they are open and transparent. Aside from the obvious goal of maximizing value for your money, working with a fiduciary will give you confidence that your advisor is working in your best interests rather than their own.

They’ll give you their true, professional opinion (even if it’s not the answer you want to hear). This is extremely valuable when you’re facing a big life decision, whether it’s purchasing a second home, transitioning into consulting work, or retiring earlier than anticipated.

By working with an advisor who holds to the fiduciary standard, you can be confident in your financial future. Clients have the power to ask questions and to demand the highest value for the service that advisors are providing.

Reviewing your entire financial picture, an advisor can show you the impact a decision may have on your future and how you can pursue certain goals.

As a Registered Investment Advisor firm, we understand people’s reservations or even negative connotations toward the underlying motivations of some advisors. We want to assure you that you can trust in the fact that our relationship with you is built on integrity and putting your interests above our own.

Comprehensive Coordination

Independent, fiduciary advisors do so much more than just pick your stocks. Working with an experienced financial expert can be a realistic sounding board to help provide you with a litmus test when you have questions or face a big financial decision.

They actively coordinate the accumulation, distribution, and transfer of your wealth, as well as between the estate, tax, and financial planning areas of your retirement plan.

An advisor who looks at the big picture of your financial life can help you optimize income and mitigate taxes in retirement. 

For example, this type of advisor helps you create a retirement income plan that strategizes when you take your withdrawals and what accounts you take them from first.

Not to mention, they also design a social security strategy that optimizes your benefits, minimizes medicare confiscation, and addresses long-term care so you can feel confident that you’re on the right track as you pursue your long-term goals.

The objective advice of an independent fiduciary advisor can make an incredible impact on your financial situation in retirement. 

Do I Need a Fiduciary?

If you want to feel empowered to make the best decisions for yourself and your finances, the answer is yes. 

At Ferguson Johnson Wealth Management, we pride ourselves on being fiduciaries and upholding the highest integrity.

We are passionate about providing unbiased advice that puts our clients first, and we consider it a privilege to carry some of their financial burden and educate them so they can make empowered decisions for their future.

Whether you’re looking for an advisor for the first time or have been burned by bad financial advice in the past, we’re here to help you create a solid plan that helps you achieve your goals.

To get started planning wisely so you can live fully, reach out to us at 301-670-0994 or by email.  

Categories
Financial Planning

Financial Pitfalls Federal Employees Should Avoid

Financial Pitfalls Federal Employees Should Avoid

By Jon Powell, CFP®

We all face financial pitfalls. Not having a financial plan, starting to save for retirement too late, not being aware of your expenses, and being underinsured are just a few. If you’re a federal employee, however, there are specific financial pitfalls you need to avoid to ensure your financial future stays on track.

Let’s discuss a few points that can help you navigate some of the intricacies involved with your specific financial situation and special benefits.

Thrift Savings Plans

One important benefit federal employees are entitled to is a thrift savings plan (TSP). A common financial pitfall among these retirement savings plans has to do with how they are invested. The federal employee must understand that TSPs are intended for long-term investing, not just to the point when retirement begins, but through retirement.

Because of this, the federal employee must invest in specific funds that align with that long-term investment approach. The funds that are allowed inside a TSP are not available to the general public. Some of these funds are titled C, S, I, L, F, and G funds.

With this long-term approach in mind, the federal employee should check how the TSP is invested, making sure that it is allocated more so with stock funds (C, S, and I). However, if you are in the later years of retirement, it’s important to ratchet down the allocation of stock to an increased allocation of the fixed-income funds (F and G).

In addition to how the funds are invested, it’s equally important to do your best to contribute the maximum amount allowed when you are younger and when you reach age 50 (eligible to contribute an additional “catch-up” contribution).

Failure to Include or Update Beneficiary Designations

Some of the special accounts or forms that federal employees may have to be aware of include the following:

  • Unpaid compensation and unused annual leave of a deceased federal employee
  • Federal employees group life insurance
  • Thrift savings plan
  • CSRS or FERS

The financial pitfall that we typically see here is not including or updating beneficiary designations on the above-mentioned accounts or forms. This is important, especially if the federal employee gets married, has children, gets divorced, or experiences any other major life change.

Emergency Funds

Having adequate emergency funds applies to all individuals, but this point is also important to make when considering pitfalls for federal employees. While federal employees have very strong job security, emergency funds still play a major part in their financial plan.

The reason for this is because of the potential for a government shutdown, which could eliminate certain sectors or lay off less-tenured employees.

Failure to Stay Informed

Benefits for federal employees can get complicated and they may change over your career. Because of this, many federal agencies offer multi-day seminars for mid-career employees and employees nearing retirement.

To stay abreast and more informed, it’s a great idea to attend and actively participate in such seminars when possible. The earlier you start understanding the nuances that federal employees are faced with, the better off you will be to make decisions today that have a big impact on your financial future.

Take the Next Step

At Ferguson Johnson Wealth Management, we work closely with our clients to design a financial plan that provides confidence and clarity while also helping to safeguard their future. We help our clients plan wisely so they can live fully by building the retirement they’ve been dreaming of.

If you’re nearing retirement, are already enjoying your golden years, or are a government employee and you don’t already have an advisor helping you on your financial journey, reach out to us at 301-670-0994 or by email. 

 

Categories
Retirement Solutions

How Will Inflation Affect Your Government Pension?

By Jon Powell, CFP®

Inflation is all over the news these days along with constant talk of how your purchasing power is being washed down the drain. If you’re like many of our clients, you’re probably wondering what this means for your government pension and if there’s any way to protect your savings.

At Ferguson Johnson Wealth Management, we’re here to answer your questions about inflation and guide you through this troubling time. Here’s everything you need to know about how inflation might affect your government pension.

What Is Inflation?

Inflation is the general increase of prices and goods, which can lead to an erosion of your purchasing power over time. It essentially means that every dollar you earn today is worth less than it was yesterday.

The Consumer Price Index (CPI) is a common measure of inflation. The most recent CPI report from January 2022 shows that inflation has risen an astounding 7.5% over the past year!

 That is significantly higher than the typical 2% rise we see in an average year, and it’s the highest 12-month increase since February 1982. 

So, how does inflation affect your government pension? Well, the answer really depends on whether you are still accruing benefits, or if you have already retired. 

Inflation & Your Pension Before Retirement

Before you retire, the money paid into your pension is invested in various assets throughout the stock market, which helps your benefit grow faster than inflation. Though the exact rate of return you will achieve is specific to your pension plan, the stock market as a whole has averaged a 10% historical return. Using this amount as an example, we can see how inflation affects your pension over time.

At a 10% annual return, your pension would have only grown 2.5% (10%-7.5%) in real terms from January 2021 to January 2022. Now imagine that your pension only grew 8% over the course of the year, while inflation remained the same.

Your real rate of return would only be .5%! Over time this can drastically affect how much money you have saved when it comes time to retire. Not only that, but prices will also be higher when you do retire (thanks to inflation) and your already weakened savings will be further reduced when it’s withdrawn.

Inflation & Your Pension After Retirement

In retirement, you will receive annuity payments based on the total benefit amount accrued during your working years (contributions and earnings). At this point, you have locked in the value of your plan and you are guaranteed a set income for life. 

Government employees retiring under the Federal Employee Retirement System (FERS) will also receive cost-of-living adjustments (COLA) that are meant to offset the rate of inflation. However, it doesn’t solve the inflation problem entirely due to provisions in the law.

If inflation is 2% or less, your annuity payment will be adjusted by the full COLA. But if inflation is greater than 2%, your annuity payment will get the COLA minus 1%. This can have a significant impact on your purchasing power over time, especially because your ability to earn additional income is reduced in retirement.

Another issue to consider is deciding when to retire and start your pension benefits. This can be a tricky decision, especially in a high inflation environment. You may feel pressured to take your benefits sooner rather than later out of fear that inflation and poor market performance could devalue your savings.

On the other hand, you may want to wait in order to recapture earnings when inflation subsides and the market levels out. Regardless of which option you’re considering, choosing when to retire is a decision that should be thoroughly assessed in the context of your overall financial plan.

Protect Your Savings From Inflation

There are several ways to protect your savings from the risk of inflation. Working longer, contributing to other forms of savings, and diversifying your income are just a few options.

We at Ferguson Johnson Wealth Management can help you navigate the current high inflation environment so that you can retire with confidence. If you would like to learn more about how we empower retirees to make wise decisions for the future, reach out to us at 301-670-0994 or by email. 

Categories
Retirement Solutions

401(k)s and Pension Plans: What’s the Difference?

A Man With Glass Of Mug In His Hands Looking At The Drafts

By Jon Powell, CFP®

With many kinds of retirement plans out there, it can be hard to tell the differences among them at first glance. Two of the most popular types of retirement plans offered by employers are the 401(k) plan and the pension plan.

An employer typically provides one or the other, but not both. While it’s unlikely that you’ll have a choice between the two, you’ll probably come across one of these plans throughout your working years, so it’s essential to understand how they work and what they mean for your retirement. 

What Is a 401(k)?

A 401(k), or defined-contribution plan, is a common retirement plan offered by employers. With a 401(k), you elect to contribute part of your salary into a retirement account. You can choose from a range of investments such as index funds, mutual funds, and target-date funds.

You also have the ability to change your investments, however, they are limited to the investments your employer offers. You can contribute up to $20,500 (as of 2022) each year, and if you are 50 years of age or older, an additional $6,500 catch-up contribution.(1)

Your employer may also choose to match your contributions up to a certain amount. The total limit for employee and employer contributions is $61,000.

There are two types of 401(k) plans: a traditional 401(k) and a Roth 401(k). In a traditional 401(k), your contribution is taken from your salary pre-tax. Your traditional 401(k) grows tax-deferred, and you only pay taxes when you withdraw from the account in retirement.

Because these contributions are tax-deferred, contributing to a traditional 401(k) means you lower your taxable income at the time you contribute. 

A Roth 401(k) is funded with money after you’ve already paid taxes on it. The money in your Roth 401(k) grows tax-free in your account, and since you’ve already paid taxes on your contributions, when you withdraw funds, you withdraw them tax-free.

Thus, the key difference between the two boils down to when you pay taxes. If your employer offers both, you need to decide whether it makes sense for you to pay taxes now or when you retire.

401(k) plans are also generally subject to required minimum distributions, meaning you will need to begin withdrawing from your plan when you reach age 72.(2)

What Is a Pension Plan?

A pension plan, or a defined-benefit plan, is an employer-sponsored plan that guarantees an amount of income in retirement. The amount you receive in retirement is determined by a few factors, such as your length of employment, your salary, your age at retirement, and any other specifications set by the employer. 

Your employer is responsible for contributing to the plan and all the investment risk is on them as well. However, you may need to work several years at the organization before you are eligible for a pension plan. Additionally, with a pension plan you have no control over how it’s invested.

Depending on the plan, you may be allowed to contribute part of your salary as well. You are also guaranteed regular payments for the rest of your life, though the plan might offer you the choice of a lump-sum payment.

Which Plan Is Better: 401(k) or Pension Plan?

Both plans have their advantages and disadvantages. Pension plans have been around longer, however, 401(k) plans are much more common today. In fact, as of March 2021, 52% of employees had access to a defined-contribution plan such as a 401(k), while only 3% had access to only a pension plan (12% had access to both).(3)

If you have a 401(k), it is up to you to save for your retirement. You have more control but more responsibility as well. With a pension plan, your employer is responsible for funding the plan.

If you like knowing you will have a guaranteed income in retirement and prefer not having to contribute any of your own money, a pension plan will be more attractive to you. If you’d rather have more control over how much you put toward retirement, a 401(k) may be a better fit for you. 

Setting Yourself Up for Success

Planning for retirement can feel daunting—but you don’t have to figure it out all by yourself. Choosing the right partner as you plan for the future can help you set yourself up for success in retirement. And finding a financial advisor that understands your unique situation and goals doesn’t have to be difficult.

At Ferguson Johnson Wealth Management, our mission is to simplify navigating the complexities of retirement, helping you plan wisely so you can live fully.

We understand that retirement plans are not one size fits all. That’s why we work with you to develop a plan tailored to your needs. Reach out to us at 301-670-0994 or by email. 

Categories
Managing Investment Risks

All-Time Highs & The Lows That Sometimes Follow

Investing in the Stock Market at All-Time Highs

“Every past decline looks like an opportunity; every future decline looks like a risk.”

-Morgan Housel

As we close the book on 2021, another year of generally excellent investment returns, we revisit the recurring anxiety of “what if this is the peak?”

It’s certainly not an uncommon feeling. Many investors may think a market high is a signal that stocks are overvalued or have reached a ceiling. However, they may be surprised to find that the average returns one, three, and five years after a new month-end market high are similar to the average returns over any one-, three-, or five-year period:

 

Performance after a New Stock Market All-time high

Source: Dimensional Fund Advisors, S&P 500 Index Returns 1916-2021.

Reaching a new high doesn’t mean the market is destined to retreat. Stocks are priced to deliver a positive expected return for investors, so reaching record highs regularly is the outcome one would expect. New highs are necessary for long-term investors to make money in the markets.

As such, it’s a good thing that markets have been constantly achieving new highs. Here’s the number of new all-time highs that were hit per year over the past decade:

Year # of New Closing Record Highs
2012 0
2013 45
2014 53
2015 10
2016 18
2017 62
2018 19
2019 36
2020 33
2021 70

Source: Morningstar S&P 500, 1/1/2012 – 12/31/2021.

As I’m sure you’re aware, January has been anything but kind to investors, so far – seemingly refuting the evidence laid out above. But, we know when investing in financial markets that drawdowns are a possibility. Much like the regularity of new market highs above, we see regularity with market drawdowns, as well.A new all-time high isn’t a unique occurrence or uncharted territory – it’s kind of the norm.

Going back to 1950, we have seen a drawdown of at least 5% in nearly every year. Even declines of greater than 10% have been observed in most calendar years.

Magnitude of Decline Frequency
5% or more 96% of years
10% or more 62% of years
20% or more 25% of years
30% or more 10% of years
40% or more 4% of years

Source: Morningstar S&P 500, 1/3/1950 – 12/31/2021

There’s a lot weighing on markets: Will inflation continue? Will the Federal Reserve tighten monetary policy, raising interest rates? Will new tax legislation ever happen? What about COVID? Climate change? China? Tensions around Russia and Ukraine? Cryptocurrencies? Meme stocks? SPACs?

I get it – It’s a lot. But, it’s always a lot. Remembering the Morgan Housel quote at the top: “Every past decline looks like an opportunity; every future decline looks like a risk.”

Less than two years ago, we were in the early days of the COVID-19 Pandemic. People were afraid to leave their house. We left packages by the front door for several days to “disinfect”. We stood around in socially-distanced circles with neighbours for “happy hour” on Friday evenings (I kind of miss that part of it, actually).

Anyway, the S&P 500 fell 34% in the span of a month. Since then, the index had gained 114% to the most recent high that was hit on January 3rd1. Unintuitively, it turned out to be a marvelous investment opportunity, but it certainly didn’t feel that way in the moment.

The markets today may seem scary. The truth is the magnitude of a correction, when it will occur, and how long it will last is unknown. Have we already taken the first steps toward a depression?

Or will we be achieving new highs again in February or March? I can’t say. I’m pretty confident that however things play out, we will look back on this period with the same attitude of “well, that ended up being a good investment opportunity.”

We allocate the investment portfolios we build based on the capacity each individual client has to bear risk. Those portfolios are built with the expectation of declines. The financial plans are built with the expectation of declines.

The retirements we forecast are not an elaborate house of cards that fold as soon as the wind changes direction. If the anxiety and worry become too much to handle, then let’s explore what it really means for you.

1 Source: Morningstar. Data from 2/19/2020 to 12/31/2021.

Categories
Financial Planning

We’re Never Too Busy to Help Someone You Care About

By Jon Powell, CFP®

What’s your top priority right now? I bet it feels impossible to pick just one, right? We’re all juggling countless priorities, but only a select few make it to the top of the list. Is it family? Or maybe health or a sense of purpose? Money might not top your list, but don’t underestimate its importance.

It’s been said that money isn’t everything, but everything needs money, and it’s true: money affects every part of your life and can give you the security and stability that positively impacts the things that matter most. Due to its far-reaching impact, managing money often leads to stress and worry.

That’s why a investment advisor plays one of the most prominent roles in a person’s life, forming a long-lasting relationship and providing objective counsel.  

But how do you find an advisor you can trust and with whom you’ll want to work for the long haul? We at Ferguson Johnson Wealth Management understand this can be an overwhelming and intimidating process.

Trusting someone with your hard-earned money is not a decision you take lightly. Knowing this, we are honored to have the opportunity to continue serving more and more families and individuals who conscientiously choose to let us in on their financial journey. 

We place the utmost value on our clients, and we greatly appreciate the opportunity to serve the important people in their lives as well. We gladly welcome the chance to connect and get to know new clients who may benefit from the services we provide. As an integral part of our continued growth, your referrals are the highest compliment.

The FJ Wealth Management Difference

We’ve been fortunate to work with a wide range of clients who refer their colleagues, friends, and family members to us. We believe so many people have referred others to us for a few different reasons:

  1. A personalized real-world approach. No two individuals’ financial service needs will be the same, which is why we create a plan focused on your financial goals. We take the time to outline a tailored strategy based on your specific needs, goals, and circumstances. 
  2. Strong relationships. We prioritize a hands-on client-centered approach, which has led us to build long-lasting relationships with so many of our clients. We’re proud to serve as a go-to resource and support system when someone faces a tough decision or goes through a life transition.
  3. A long-term commitment. We recognize that financial planning and investing is not a static process since life changes happen and investment objectives can shift over time. That’s why we provide ongoing guidance and support. Whether it’s saving for your children’s college education, planning for retirement, or preserving assets for future generations, we seek to provide the financial service resources and continuous management necessary to keep you working toward your goals.
  4. A dedicated team. With a diverse team of seasoned professionals who maintain a high-touch and personalized experience, we strive to help our clients simplify complex decisions about their money. We hope you feel more confident as you navigate life’s challenges and planning opportunities with a dedicated team on your side.

The People We Serve Best

We at Ferguson Johnson Wealth Management desire to partner with you and help carry your financial burden, aiming to make your wealth work for you, not the other way around.

Because we like to form trusted and close relationships with our clients, we strive to work with people whom we believe we can best serve, from working professionals, government workers, and executives to business owners and retirees.

While they come from a variety of backgrounds and professions, they want to delegate their financial matters to a trusted professional who offers stewardship and guidance so they’re free to focus on what’s important. 

Do You Know Someone Who Could Benefit From Our Services?

Our goal is to help our clients plan wisely, so they can live fully. This means we don’t just want to take financial matters off already full plates, but we also value providing personalized attention and care to each of our clients—as well as their loved ones. In fact, this is one of the reasons we work with a select number of clients!

We’re here to help answer questions about your portfolio or strategies, walk you through a new life milestone, and help build your dream retirement. Do you know someone who needs answers to their questions or unbiased advice? We’re never too busy to help!

If you’re a client with our firm and you’ve enjoyed working with us, we hope you’ll refer a friend, colleague, or family member who may benefit from our services. Consider sending this article to them, and if they’re interested in partnering with us, they can schedule their complimentary introductory meeting by calling 301-670-0994 or emailing 

Categories
Financial Planning

Why I Became a Financial Advisor

Why I Became A Financial Advisor

By Jon Powell, CFP®

For many people, finances are a major cause of stress. And sometimes that stress, coupled with financial insecurity, can negatively impact relationships and decisions.

As I saw this play out in those around me, I became determined to pave a different path for my life and relationships, pursuing financial literacy so money stress would not rule my life. 

I took some classes on the topic, and my passion for financial planning began to take shape. What started out as a personal pursuit has turned into a fulfilling career, one where I get to help others manage their finances and become educated about their options so they can focus on what’s most important to them. 

Building My Career

With a clear goal in mind, I obtained a bachelor’s degree in financial planning from Virginia Polytechnic Institute and State University and earned the CERTIFIED FINANCIAL PLANNER™ certification. After graduation, I spent a handful of years gaining experience and knowledge in investment, risk management, and financial planning at local wealth management firms. 

I joined the incredible team at Ferguson Johnson Wealth Management almost a decade ago, and now, as a financial planner and portfolio manager, I have the privilege of building long-lasting relationships with my clients, helping them carry their financial burdens and walking with them through life’s ups and downs.

With a focus on personalized services and objective advice, I strive to put my clients first and organize, develop, and deliver customized plans. 

I spend my days serving clients who are nearing or just entering retirement, helping them prepare for this pivotal milestone and ensuring that every piece of their plan is in place so they can retire the way they want to, without fear or uncertainty.

Why I Love What I Do

I became a financial advisor because I didn’t want to see people’s lives affected by money stress. And today, 10 years later, the most fulfilling part of what I do is seeing the relief on my clients’ faces when they build a financial foundation and walk out of my office with a road map to their goals.

The best part of my days is when I can sit down with clients, teach them what’s needed to secure their finances, and show them how they can experience financial confidence. 

If you want to walk into your future with excitement instead of worry, I’d love to help. Take the first step by reaching out to us at 301-670-0994 or by email.

About Jon

Jon Powell is a financial planner and portfolio manager at Ferguson Johnson Wealth Management, an independent, fee-only fiduciary firm that has been helping clients plan for and enjoy retirement for more than 40 years.

With more than 10 years of experience, Jon is passionate about providing unbiased advice that puts his clients first. He considers it a privilege to carry some of the financial burden for his clients and educate them so they can make empowered decisions for their futures.

Jon is also the primary author and curator of the Ferguson-Johnson Wealth Management blog. 

Jon graduated from Virginia Polytechnic Institute and State University with a bachelor’s degree in financial planning and holds the CERTIFIED FINANCIAL PLANNER™ certification.

When he’s not serving his clients, you can find Jon spending time with his wife, Erica, and their pets, a black lab named Nugget and an orange tabby cat named Kiwi.

He loves to play tennis and golf and won’t turn down a good board game. Jon is a diehard fan of D.C.- area sports teams; you might see him at a Washington Nationals game. To learn more about Jon, connect with him on LinkedIn.

Categories
Financial Planning

Annual Enrollment for Federal Employees

By Jon Powell, CFP®

It’s that time of year again when you start getting notices about open season and all the changes coming to your employee benefits. Even though you’d probably rather turn a blind eye and keep going on with your life, too many people set their benefits and forget them and miss out on opportunities to update their coverage. 

The open enrollment period for your 2022 coverage is fast approaching, beginning on November 8th and going until December 13th. This is your chance to review your benefits, learn about any coverage or cost changes, and make some decisions. 

Here’s what you need to know about the annual enrollment period for government employees.

Does Open Season Apply to Me?

If you are enrolled in the Federal Employees Health Benefits (FEHB) program, the Federal Employees Dental and Vision Insurance Program (FEDVIP), or you take advantage of the Federal Flexible Spending Account Program (FSAFEDS), you should pay attention to this annual enrollment period. The life insurance and long-term care insurance programs are not included during this time. 

What Can I Do During Open Season?

For both the FEHB and FEDVIP programs, federal employees can enroll, change their plan, make adjustments to their plan options, update enrollment type if your family’s coverage needs have changed, or cancel your plan. If you choose to do nothing, your plans will automatically continue.

That is not the case with the various federal FSA programs. If you do not re-enroll during open season, your FSA will lapse. Even if you don’t want to contribute for 2022, keep in mind that any unused funds from 2021 will not carry over if you don’t re-enroll.

What’s Changing?

Every year there are typically some increases in premium costs and individual plans may change their option. The U.S. Office of Personnel Management (OPM) will announce specific details and the new 2022 premium rates on their website closer to the start of open season. You will also be able to compare plans and find information applicable to your job or status (active employee or retired).

Start preparing now by thinking about the health needs you experienced this year and whether or not your health insurance met those needs. Then think ahead to next year. Are there any life changes coming your way? Will you be getting married? Adding to your family? Do you take new medications now? If so, consider increasing your coverage or adding coverage for your spouse.

The Takeaway 

In the midst of what sometimes feels like a world gone mad, take some time to prioritize your employee benefits. The government provides these as a thank-you for your hard work, so make sure you maximize them and use your open enrollment period to make decisions that align with your life. 

And if you haven’t heard anything about open enrollment, reach out to the human resources department at your work to find out if there is a scheduled meeting or webinar to highlight this year’s benefits. Remember, your HR department is there to walk you through these decisions and answer any questions. 

At Ferguson Johnson Wealth Management, we specialize in helping government employees manage their finances and prepare for retirement. If you have questions about your government benefits or have yet to start planning for your future, we’d love to help. Please don’t hesitate to call our office at 301-670-0994 or email us. 

Categories
Financial Planning

Why I Became a Financial Advisor (Derek Johnson)

By Derek Johnson, CRPC®

When I was a college student dabbling in the investment world, I had no idea my interest in the markets would turn into a lifelong career. This personal experience of researching investments and watching my money grow inspired me to do the same for others. So I switched my major to finance—and the rest is history! 

The Journey

After graduating with a bachelor’s degree in finance from the University of Maryland, I started working as an investment advisor representative at Ferguson Johnson Wealth Management, where, more than 20 years later, I serve as principal, director, and Chartered Retirement Planning Counselor™ (CRPC®).

As the son of a successful small business owner, I understand and appreciate the value of money and the hard work that goes into building wealth. I take that understanding into my client relationships, striving to design financial plans that are customized and built for the long term.

My pre-retiree clients come to me with questions like “When can I retire?” or “How much do I need to save so I can retire without worrying about running out of money?” And my retiree clients want to make sure they have a solid distribution plan in place so they can enjoy their hard-earned golden years.

I spend my days helping my clients address these concerns—and the ones they haven’t even thought of yet. 

As head of our investment committee, I also develop portfolio strategies and implement the best funds and products to suit our clients’ needs. I make it a point to stay in contact with leading academics in the areas of portfolio and wealth management so we can continue to provide the right investment opportunities that get you closer to your goals. 

The Best Part

I still feel like the motivated, excited young adult who discovered what investments can do for your money. I love knowing that my skills and knowledge help others experience confidence so they can look forward to their future.

There’s nothing like celebrating with my clients when they reach a goal or seeing the relief on their faces when they realize they aren’t alone on their financial journey.

If that’s something you want to experience as well, reach out to our Ferguson Johnson Wealth Management team at 301-670-0994 or by email.

About Derek

Derek Johnson is an investment advisor representative and is the principal and director at Ferguson-Johnson Wealth Management, an independent, fee-only fiduciary firm that has been helping clients plan for and enjoy retirement for more than 40 years.

Derek also serves as head of the investment committee; in this capacity, he is in regular contact with leading academics in the areas of portfolio and wealth management and has presented research on the benefits of asset class allocation to the American Association of Individual Investors (AAII).

He holds the Chartered Retirement Planning Counselor™ (CRPC®) professional designation.

Derek is known for providing honest advice and excellent service to his pre-retiree and retiree clients and feels privileged to be a trusted resource and support his clients can rely on.

Derek has more than 20 years of experience and earned a bachelor’s degree in finance from the University of Maryland. Outside of work, Derek enjoys spending time with his wife, Tiffany, and their two daughters, Sloane and Adalynn. He also loves football and traveling. To learn more about Derek, connect with him on LinkedIn.

Categories
Financial Planning

What We Do and How We Help

By Derek Johnson, CRPC® and Jon Powell, CFP®

Retirement is arguably one of life’s most significant milestones. But, with so many questions about health, life circumstances, and even the economy, how do you plan for retirement in a way that leaves you feeling confident? In other words, how can you dream big and plan accordingly so all your bases are covered? 

These are legitimate concerns and the reason that Ferguson Johnson Wealth Management exists. We offer personalized financial planning and wealth management advice that is built on relationships. By building a relationship with you, we can help you navigate your life journey.

What We Do

Ferguson Johnson Wealth Management is a fee-only, independent financial advisory firm that partners with you to help set you up for the retirement you’ve been dreaming of. Our personalized and client-centered services allow you to plan wisely so you can live fully. 

We make this a reality by building a foundational understanding of your life—your dreams, concerns, and challenges. We leave no stone unturned as we look at your current situation and assess how we can help you get from point A to point B. All of our services—from retirement planning and investment management to charitable giving and tax strategies—are customized to your specific goals and values.

That means, your portfolio won’t look like anyone else’s because not only is your timeline and risk tolerance unique, but so is your vision of an ideal retirement. And, as a fiduciary firm, we can use the best suited funds and products available and tailor them to your needs. 

We also follow a long-term, steady approach. Life is unpredictable—and so are the markets. We’ll build your portfolio with a big-picture view that will not only protect it from major swings but also keep it academically researched and robust.

Our comprehensive, personalized touch will help you find the confidence to live your best life right now and look to the future with excitement.

Who We Serve

In order to provide the highest quality services and support, we specialize in serving pre-retirees, retirees, and government employees. We can help you prepare for retirement and design a plan that helps your money last as long as you need it to—no matter what life throws at you. 

Are you a government employee? Our 40 years of experience in the Washington, D.C., area has uniquely positioned us to understand federal retirement benefits and we are equipped to educate you on your options and optimize your benefits to secure your future. 

Regardless of their backgrounds or professions, our clients have a few things in common: They’ve worked hard their entire lives and are looking for guidance and assurance as they reach the end of their working years. They want to continue to steward their money wisely and know that they’ve done everything they can to plan for retirement. 

The Ferguson Johnson Difference

We know there are plenty of advisors out there. What sets us apart are the long-term relationships we build with our clients and the objective perspective we bring to the table.

Our clients know they can rely on us to listen, care, be available, and give them the knowledge they need to feel prepared. We pride ourselves on our proactive, authentic approach and the invaluable order we bring to peoples’ financial lives. 

We Are Here for You

You can’t put a price on confidence. If you have questions or concerns about your money, whether you’re on track to reach your goals or something is causing you financial worry, reach out to us at 301-670-0994 or by email. We can’t wait to hear from you. 

About Derek

Derek Johnson is an investment advisor representative and is the principal and director at Ferguson Johnson Wealth Management, an independent, fee-only fiduciary firm that has been helping clients plan for and enjoy retirement for more than 40 years.

Derek also serves as head of the investment committee; in this capacity, he is in regular contact with leading academics in the areas of portfolio and wealth management and has presented research on the benefits of asset class allocation to the American Association of Individual Investors (AAII). He holds the Chartered Retirement Planning Counselor™ (CRPC®) professional designation.

Derek is known for providing honest advice and excellent service to his pre-retiree and retiree clients and feels privileged to be a trusted resource and support his clients can rely on. Derek has more than 20 years of experience and earned a bachelor’s degree in finance from the University of Maryland.

Outside of work, Derek enjoys spending time with his wife, Tiffany, and their two daughters, Sloane and Adalynn. He also loves football and traveling. To learn more about Derek, connect with him on LinkedIn.

About Jon

Jon Powell is a financial planner and portfolio manager at Ferguson Johnson Wealth Management, an independent, fee-only fiduciary firm that has been helping clients plan for and enjoy retirement for more than 40 years.

With more than 10 years of experience, Jon is passionate about providing unbiased advice that puts his clients first. He considers it a privilege to carry some of the financial burden for his clients and educate them so they can make empowered decisions for their futures.

Jon is also the primary author and curator of the Ferguson Johnson Wealth Management blog. 

Jon graduated from Virginia Polytechnic Institute and State University with a bachelor’s degree in financial planning and holds the CERTIFIED FINANCIAL PLANNER™ (CFP®) professional designation. When he’s not serving his clients, you can find Jon spending time with his wife, Erica, and their pets– a black lab named Nugget and an orange tabby cat named Kiwi.

He loves to play tennis and golf and won’t turn down a good board game. Jon is a diehard fan of D.C.-area sports teams; you might see him at a Washington Nationals game. To learn more about Jon, connect with him on LinkedIn.