Author: Brian Colvert

Self-Employed Retirement Planning: How to Maximize Tax Savings and Wealth

Posted on by Brian Colvert

Retirement planning can feel overwhelming for self-employed business owners, especially when juggling income, taxes, and growth. But here is the good news: being self-employed actually opens the door to powerful retirement strategies that traditional employees do not always have access to. With the right plan, you can reduce your tax bill today and build substantial wealth for the future.

Whether you are a consultant, contractor, freelancer, or small business owner, this guide will walk you through the top self-employed retirement planning options available. You will learn the benefits, contribution limits, and strategic uses of each so you can make informed choices that suit your goals. Let’s get started.

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Why Retirement Planning for the Self-Employed Is So Powerful

One of the biggest misconceptions among business owners is that retirement planning is just a tax strategy. In truth, it is both a tax advantage and a long-term wealth-building tool.

When you are self-employed, you are not limited to the same options as W-2 employees. You have more flexibility, higher contribution limits in some cases, and the potential to structure plans creatively. That means more money in your pocket now and in retirement.

Let us start by breaking this into two key goals:

  1. Lower your taxable income today

  2. Grow tax-advantaged wealth for tomorrow

With this lens in mind, let us explore the most effective tools available.

Traditional and Roth IRAs

The Basics

IRAs are available to just about everyone with earned income, including the self-employed. These are often the starting point for many business owners who are just beginning their retirement planning journey.

  • Traditional IRA: Contributions may be tax-deductible depending on your income and participation in other retirement plans.

  • Roth IRA: Contributions are not tax-deductible, but your money grows tax-free and qualified withdrawals in retirement are also tax-free.

Head to this page to get the most up-to-date annual contribution limits for each plan. Head over here to dig deeper into the difference between a Traditional IRA and a Roth IRA.

Why IRAs Work for Business Owners

While the contribution limits are relatively low, IRAs are easy to set up and require no ongoing employer maintenance. They are especially useful when used in combination with higher-limit plans like Solo 401(k)s or SEP IRAs.

SEP IRA: Simplified Employee Pension Plan

What It Is

The SEP IRA is a favorite among solopreneurs and business owners without employees. It allows you to contribute a percentage of your business income directly into your retirement account.

Key Benefits

  • Contributions are tax-deductible

  • Flexible contributions (you can vary or skip them from year to year)

  • Very easy to set up and maintain

Things to Watch Out For

If you have employees, SEP contributions must be made equally for them. For example, if you contribute 10 percent of your salary for yourself, you must contribute 10 percent for eligible employees too. This makes the SEP less ideal for growing teams.

Solo 401(k): A High-Powered Option

What It Is

A Solo 401(k), also known as an Individual 401(k), is available to business owners with no full-time employees (except for a spouse). It combines features of both a traditional 401(k) and a profit-sharing plan, making it a powerful vehicle for self-employed retirement planning.

Roth Option

One of the best parts of a Solo 401(k) is that it offers a Roth component. You can choose to contribute post-tax dollars, which then grow tax-free.

Advantages

  • Much higher contribution limits than IRAs

  • Option to go pre-tax or Roth

  • Ability to add profit-sharing

  • Loans are allowed from the plan

When to Use It

Solo 401(k)s are ideal for business owners who are trying to contribute the maximum possible each year and want flexibility in tax treatment. They do require more paperwork than IRAs, but the benefits are significant.

SIMPLE IRA: For Business Owners with Employees

What It Is

A SIMPLE IRA is designed for small businesses with fewer than 100 employees. It is easier to administer than a 401(k) and allows both the employer and employee to contribute.

Pros and Cons

This is a good solution if you want a low-cost retirement plan for you and your employees. However, it lacks the higher limits and Roth options of other plans.

Cash Balance Plans: Supercharging Late Starters

What It Is

Cash balance plans are defined benefit plans that allow large contributions well above those of 401(k)s or SEP IRAs. They are best suited for high-income earners looking to accelerate retirement savings.

Contribution Potential

Depending on your age and income, contributions can range from $100,000 to over $300,000 per year. This makes it one of the best options for late starters or those looking for a big tax deduction.

Ideal Candidates

  • Consultants

  • Attorneys

  • Solo medical professionals

  • Business owners earning $500,000+

Cash balance plans are complex and must be administered carefully, but they are unmatched when it comes to high-limit contributions.

Multi-Plan Strategy: Yes, You Can Combine

If you have multiple businesses or streams of income, you may be able to layer plans and contribute more overall. Here is how:

  • Max out your 401(k) as an employee in one business

  • Use a SEP or Solo 401(k) on your 1099 income from a different, unrelated business

The salary deferral limit applies once across all plans, but employer contributions (like profit-sharing) can be made separately as long as the businesses are unrelated.

This strategy is ideal for high earners who wear multiple hats and want to optimize every angle of self-employed retirement planning.

Self-Employed IRA Rules: What You Need to Know

When using any of these plans, it is crucial to understand and follow the IRS rules that govern self-employed IRAs. A few key rules include:

  • Contribution deadlines: IRAs and SEP IRAs can be funded up to the tax filing deadline (including extensions). Solo 401(k)s must be established by year-end.

  • Eligibility: Your business income must be earned and reported. Passive income (like rental income) typically does not qualify.

  • Catch-up contributions: Catch-up contributions are available for those 50 and older on most plans.

  • No employees: For Solo 401(k)s and cash balance plans to stay simple and beneficial, you should not have full-time employees.

Always work with a financial planner and/or tax professional to confirm that your contributions and setups follow current IRS regulations.

Supercharge Your Wealth: Tips for the Self-Employed

Ready to take your self-employed retirement planning to the next level? These tips are designed specifically for self-employed business owners who want to do more than just check a box. Whether you’re just getting started or looking to accelerate your savings, these strategies can help you make the most of your income, reduce taxes, and build lasting wealth.

  1. Start now: The earlier you begin, the more compound growth works in your favor.

  2. Work with a pro: Designing custom plans (like cash balance or multi-plan strategies) is worth doing right.

  3. Reevaluate annually: Income changes? Business structure shifts? Your retirement plan should adjust too.

  4. Think long term: Do not just aim to reduce taxes this year. Plan for distributions, Required Minimum Distributions, and tax brackets in retirement.

  5. Consider layering: Use IRAs alongside SEP or Solo 401(k)s for maximum flexibility.

Final Thoughts

Self-employed retirement planning is not just about saving for the future. It is about taking control of your finances, minimizing taxes, and building serious wealth as a business owner. Whether you are earning $80,000 a year or $800,000, there are strategies you can implement now to change your financial future.

Next Steps

If you are unsure where to start or want help designing a custom retirement plan that fits your income and lifestyle, reach out to our team at Bonfire Financial. We specialize in helping business owners make the most of every dollar they earn. Schedule your call now.

What to Do After Maxing Out Your 401k

Posted on by Brian Colvert

Maxing out your 401k is a major milestone when investing for retirement. It shows commitment to long-term financial planning, a proactive mindset, and an understanding of the power of compound growth. But it also leads to the inevitable question: What do I do next?

If you’re asking this, congratulations, you’re already ahead of the pack. And you’re in the right place to explore your next best steps.

Today, we’ll walk through a structured framework for what to do after maxing out your 401k, diving into Roth IRAs, taxable brokerage accounts, backdoor Roth strategies, and how to think about liquidity, flexibility, and tax planning in your broader investment picture.

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Step 1: Confirm You’ve Truly Maxed Out the 401(k)

First things first: let’s define what “maxed out” means. Check the annual contribution limits < This page is updated annually to make sure you have the most up-to-date numbers.

But here’s a nuance: maxing out your 401k isn’t just about hitting the annual limit. It’s also about making sure you’ve taken full advantage of your company match. Never leave free money on the table. If your employer offers a match (say 100% of the first 4% of your salary), make sure you’re contributing at least that much.

Once you’ve contributed to the max and received the full match, then it’s time to move on to the next vehicle.

Step 2: Explore a Roth IRA

The Roth IRA is often the first recommendation for clients who are looking to invest beyond their 401k, and for good reason:

  • Tax-free growth: You fund a Roth IRA with after-tax dollars, and in exchange, your investments grow tax-free.

  • Tax-free withdrawals: Once you’re 59½ and the account has been open for at least five years, you can withdraw both contributions and earnings tax-free.

  • No required minimum distributions (RMDs): Unlike traditional IRAs and 401(k)s, Roth IRAs don’t require you to take distributions in retirement.

There are annual contribution limits here too.

But don’t worry. There’s a workaround.

Step 3: Consider a Backdoor Roth IRA

If your income is too high for a regular Roth IRA, you may still be able to contribute through a Backdoor Roth IRA. This involves:

  1. Contributing to a non-deductible traditional IRA (after-tax money).

  2. Converting it to a Roth IRA.

Seems simple, but there are a few caveats:

  • If you have existing traditional IRA balances, the IRS uses a pro-rata rule to calculate taxes, meaning some of the conversion may be taxable.

  • Timing matters. It’s smart to consult a tax advisor or financial planner to execute this properly.

For many high earners, the backdoor Roth can be a powerful tool for adding tax-free growth to their portfolio.

Step 4: Open a Taxable Brokerage Account

Once your tax-advantaged options are maxed out and you want to continue investing for retirement, it’s time to consider a taxable brokerage account. Don’t let the term “taxable” scare you. This type of account actually offers some key advantages:

Advantages of a Taxable Account:

  • Unlimited contributions: Unlike retirement accounts, there’s no cap on how much you can invest.

  • No income limits: Anyone can open and fund one.

  • No early withdrawal penalties: You can access funds at any time.

  • Wide investment flexibility: You can invest in stocks, bonds, mutual funds, ETFs, real estate trusts, private placements, and others.

  • Liquidity: Need to fund a real estate purchase? Pay for a wedding? Start a business? This account gives you that flexibility.

Tax Considerations:

Growth in a brokerage account is taxed, but how it’s taxed matters:

  • Capital gains tax applies to investments held over one year (long-term).

  • Ordinary income tax applies to gains on assets sold within one year.

  • Dividends may also be taxable depending on their classification.

But there are strategies to reduce taxes, like:

  • Tax-loss harvesting: Selling underperforming assets to offset gains.

  • Asset location: Placing tax-efficient investments in your taxable account and tax-inefficient ones in your tax-deferred accounts.

Step 5: Think Flexibly with Your Future in Mind

A common mistake is viewing investment accounts in silos. Instead, think about them as tools that serve different purposes and timeframes.

Here’s how it breaks down:

Account Type Best For Key Benefit
401k Long-term retirement savings Tax-deferred growth + employer match
Roth IRA Long-term + tax diversification Tax-free growth + no RMDs
Brokerage Acct Flexibility + early retirement + legacy planning No contribution limits, no penalties for early withdrawals

If you plan to retire before age 59½, a taxable account becomes even more important. It gives you penalty-free access to funds while your retirement accounts keep compounding in the background.

Step 6: Use Brokerage Accounts for Creative Planning

Let’s take it a step further.

Real Estate Opportunities

Thinking about buying a rental property? A brokerage account can be tapped to fund a down payment without penalties. This is especially helpful for investors who want to diversify into real estate assets without triggering retirement withdrawal rules.

Tax Bracket Optimization

Planning to retire early? You may enter a lower tax bracket before Medicare or Social Security kicks in. You can draw from brokerage accounts strategically, keeping income low and managing your bracket for Roth conversions or to reduce long-term tax exposure.

Collateralized Lending

Did you know you can borrow against your taxable account? Many custodians offer lines of credit backed by your portfolio. This can be helpful for:

  • Avoiding the sale of appreciated assets (and the taxes that come with it)

  • Making time-sensitive investments

  • Helping family members (like a child’s down payment) without touching the principal

It’s not for everyone, but for high-net-worth individuals, this can be a sophisticated strategy to create liquidity without triggering taxes.

Step 7: Automate and Grow

Just like your 401k, your brokerage account can benefit from automation. Set up monthly contributions to stay disciplined and consistent. Over time, this can grow into a substantial pool of capital.

We often see clients fund these accounts with:

  • Annual bonuses

  • RSU or stock option sales

  • Proceeds from home sales

  • Inheritance windfalls

  • Business profits

By treating it like your 401k, with regular contributions and a long-term mindset, you’ll build serious wealth over time.

Bonus: Don’t Forget the Other Vehicles

401(k)s, Roth IRAs, and brokerage accounts are the main trio when investing for retirement, but depending on your goals, you might also explore:

  • Health Savings Accounts (HSAs): HSAs are triple-tax advantage (pre-tax contributions, tax-free growth, tax-free withdrawals for medical expenses).

  • 529 Plans: For tax-advantaged education savings.

  • Cash-value life insurance: Life insurance can be a niche tool for legacy or advanced planning.

  • Real estate LLCs or syndications: Direct ownership or fractional investments.

Each tool has its own benefits, risks, and tax implications, so work with a financial planner to build a strategy tailored to your life.

Final Thoughts

If you’ve maxed out your 401k as you are investing for retirement, you’re doing something right. But don’t stop there. Understanding what to do after maxing out 401k contributions opens the door to a wider world of wealth-building strategies that are more flexible, tax-aware, and goal-driven.

Here’s a quick recap:

  1. Max out the employer match and annual limit in your 401(k)

  2. Open a Roth IRA or explore a backdoor Roth

  3. Build out a taxable brokerage account

  4. Think long-term and flexible, especially for early retirement or large life events

  5. Use tax strategies and automation to make your plan efficient and consistent

At Bonfire Financial, we work with clients every day who want to optimize their savings and make the most of their money. If you’re ready to go beyond the basics and build a plan that’s personal, strategic, and forward-thinking, we’re here to help.

Ready to take the next step?

Schedule a free consultation. Let’s map out your next move.

Investing in CDs: A Low-Risk Strategy You’re Probably Overlooking

Posted on by Brian Colvert

If you’re looking for a low-risk, predictable way to grow your money, investing in CDs (Certificates of Deposit) might be worth a second look. While they might not be the flashiest option in your portfolio, CDs offer stability, security, and in today’s market, surprisingly decent returns. Let’s break down what CDs are, how they work, and why they might deserve a spot in your financial plan.

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What Is a CD (Certificate of Deposit)?

A Certificate of Deposit is a financial product offered by banks and credit unions. It allows you to deposit money for a fixed period, typically ranging from three months to five years, in exchange for a guaranteed interest rate. In return, you agree not to withdraw your funds during that term without paying a penalty.

The trade-off?

A higher interest rate than you’d typically earn from a traditional savings account. Plus, your investment is protected by FDIC (Federal Deposit Insurance Corporation) insurance, up to $250,000 per depositor, per bank, which provides peace of mind and a sense of financial security. CDs are often seen as a great way to safeguard cash that you want to grow without exposure to market volatility. They’re straightforward, easy to understand, and come in a variety of terms that fit most savings goals.

Why CDs Are Gaining Popularity Again

In recent years, low interest rates made CDs less appealing. But as interest rates have risen, so have CD yields. In some cases, one year CDs have offered rates exceeding 5%, which is competitive with many bonds but with less risk and complexity. In a time when inflation and market volatility are top of mind for investors, CDs have become a compelling option. With guaranteed returns and federal insurance backing, they offer peace of mind in uncertain times.

Another reason for renewed interest is that CDs can serve as a temporary parking place for cash you may not need immediately. For example, if you plan to buy a home in the next year or want to set aside funds for a child’s tuition, a CD allows that money to earn more than a savings account while remaining protected.

Understanding CD Laddering: A Smart Strategy

One challenge with investing in CDs is that your money is locked up for a set time. That can create issues if you need liquidity. Enter: CD laddering.

CD laddering is a strategy that involves opening multiple CDs with different maturity dates. For example:

  • 3 month CD
  • 6 month CD
  • 9 month CD
  • 12 month CD

As each CD matures, you reinvest the money into a new 12 month CD. Over time, you’ll have a CD maturing every quarter, providing access to your funds without sacrificing returns. This strategy gives you the best of both worlds: higher returns from longer term CDs and consistent access to cash.

Why laddering works:

  • Provides ongoing liquidity
  • Takes advantage of rising rates
  • Reduces the impact of rate fluctuations
  • Helps maintain a balanced, conservative cash management approach

Laddering is especially effective when you’re managing cash for short to medium term goals but still want to earn something meaningful on your money.

The Safety Net: FDIC Insurance

One of the biggest advantages of investing in CDs is the built in safety net: FDIC insurance. If your bank fails, the federal government covers your deposit (up to $250,000 per depositor, per bank). This makes CDs one of the safest investment vehicles available.

Want to invest more than $250,000? You can still stay insured by spreading your CDs across multiple banks. For high net worth individuals, brokered CDs, offered by firms like Schwab, Fidelity, or Merrill Lynch, allow you to manage large CD portfolios and stay within insurance limits.

Brokered CDs vs. Traditional Bank CDs

Traditional CDs are offered by your local bank or credit union. Brokered CDs, on the other hand, are sold through investment firms and allow you to:

  • Access CDs from multiple banks
  • Get competitive rates
  • Stay within FDIC insurance limits
  • Integrate CD investing into a broader portfolio with a financial advisor

However, brokered CDs may have less flexibility for early withdrawals. If you need to cash out early, you’ll likely have to sell it on the secondary market, and that could result in a loss if rates have risen since your purchase. That’s why brokered CDs are better suited for those who are confident they won’t need to touch the funds before maturity.

What Happens if You Need to Cash Out Early?

CDs aren’t known for their liquidity. If you break a CD before it matures, you may face penalties:

  • Bank CDs: Early withdrawal fees, typically a portion of the interest earned.
  • Brokered CDs: You’ll need to sell on the open market, where prices fluctuate with interest rates.

That’s why planning your liquidity needs is critical. CD laddering can help here, but make sure you have other liquid assets available for emergencies. A good rule of thumb is to keep 3 to 6 months of living expenses in a highly liquid account, like a savings or money market account.

Comparing CDs to Other Investments

Bonds vs CDs:

  • CDs are FDIC insured; most bonds are not.
  • Bonds may offer higher returns but come with credit and market risk.
  • Bonds fluctuate in value; CDs pay a fixed return if held to maturity.

Savings Accounts vs. CDs:

  • CDs generally offer higher interest rates.
  • Savings accounts offer better liquidity and flexibility.
  • CDs require committing to a time period; savings accounts do not.

Money Market Accounts vs CDs:

  • CDs can have better fixed rates.
  • Money markets offer variable rates and check-writing privileges.
  • Both may be FDIC insured but have different liquidity profiles.

When Do CDs Make Sense?

CDs are ideal if:

  • You’re saving for a specific short to mid term goal
  • You’re risk averse and want principal protection
  • You don’t need immediate access to the funds
  • You’re looking for a place to earn interest on cash you’ve already set aside

Common use cases:

  • Emergency reserves (when laddered)
  • Saving for a home, car, or large future purchase
  • Parking cash during market volatility or downturns
  • Stashing business reserves for tax or payroll obligations

Risks and Downsides of Investing in CDs

While CDs are low risk, they’re not risk free:

  • Inflation Risk: If inflation rises significantly, your CD’s return may lose purchasing power.
  • Liquidity Risk: Your money is tied up unless you’re willing to pay a penalty or take a loss.
  • Opportunity Cost: If interest rates rise after you lock in a CD, you miss out on the higher return.

The key is balance. CDs shouldn’t be your only investment, but they can serve an important role alongside more aggressive or growth-focused strategies.

Maximizing CD Returns

To get the most from CD investing:

  • Compare rates across institutions and platforms
  • Use CD ladders to maintain flexibility and manage cash flow
  • Look into brokered CDs if you’re managing large balances
  • Reinvest matured CDs at new, higher rates if available
  • Avoid tying up all your liquid cash,  keep a buffer in savings

Online banks and credit unions often offer higher CD rates than brick and mortar institutions. Keep an eye on rate changes, especially in a rising rate environment.

Final Thoughts: Are CDs Right for You?

Investing in CDs isn’t going to make you rich overnight, but they can be a smart, low-risk part of your portfolio, especially when rates are attractive. Whether you’re building a ladder, protecting a cash reserve, or just looking for a better alternative to your savings account, CDs offer a blend of security and predictability that’s hard to beat.

As always, your overall financial goals, timeline, and risk tolerance should guide your decision. CDs are one tool in the toolbox, but when used strategically, they can help you sleep better at night, knowing your money is working for you.

Next Steps

If you want help deciding if CDs fit your financial plan, let’s talk. Schedule a consultation call today!

The Difference Between Permanent Life Insurance and Term Life Insurance (and Why It Matters)

Posted on by Brian Colvert

Which to choose? If you’ve ever felt confused about the difference between permanent life insurance and term life insurance, you’re not alone, and today were are here to help you cut through the noise. When it comes to life insurance, few topics are more misunderstood or misrepresented. Many people find themselves signing up for a policy based on fear, a persuasive pitch, or a recommendation that doesn’t actually suit their needs. The good news? Understanding the difference empowers you to protect your loved ones without overpaying or being misled. Let’s dive in.

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What Is Term Life Insurance?

Term life insurance is exactly what it sounds like: coverage for a specific period of time, often 10, 20, or 30 years. If the policyholder dies during that term, the death benefit is paid out to the beneficiaries. If the term ends and the policy hasn’t been used, it simply expires with no payout.

Pros:

  • Affordable premiums: Term insurance provides the most coverage for the lowest cost.
  • Simple to understand: You pay for a set number of years; if you die during that term, your beneficiaries receive the payout.
  • Ideal for younger families: It covers you when you have the most financial obligations—mortgage, children, and debt.
  • Customizable terms: You can choose a term that aligns with your needs, like the length of your mortgage or years until your kids are financially independent.
  • Convertible options: Some term policies allow you to convert to permanent insurance later, without new underwriting.

Cons:

  • No cash value: Unlike permanent insurance, there’s no savings or investment component.
  • Expires: If your policy ends and you still need coverage, a new policy may be more expensive due to age or health changes.
  • No refund: Unless you purchase a return-of-premium rider, the money you pay into the policy is gone if you outlive the term.

What Is Permanent Life Insurance?

Permanent life insurance lasts your entire life, as long as you pay the premiums. This category includes whole life, universal life, variable life, and others. These policies often come with a cash value component that can grow over time.

Pros:

  • Lifetime coverage: Your beneficiaries are guaranteed a death benefit, no matter when you die.
  • Builds cash value: You can borrow against it or even use it to pay premiums.
  • Can offer tax advantages: In some cases, the cash value grows tax-deferred.
  • Flexible options: Some types, like universal life, allow you to adjust your premiums or death benefit.

Cons:

  • Expensive: Premiums are significantly higher than term insurance for the same death benefit.
  • Complex: Fees, interest rates, investment risk (depending on type), and policy rules can be hard to follow.
  • Lower ROI: Often marketed as a savings vehicle, but you may do better investing elsewhere.
  • Sales-driven: Many policies are sold with incomplete information about long-term costs or downsides.

The Sales Pitch Trap

One of the biggest problems in the insurance world is the sales pitch. Many permanent life insurance policies are sold using emotionally charged scenarios:

  • “Don’t you want to make sure your kids are taken care of, no matter what?”
  • “This policy builds wealth while protecting your family.”
  • “It’s a forced savings account with tax advantages.”

These statements can be true, but only in the right context. Understanding the difference between permanent life insurance and term life insurance is important. For many people, especially younger families, a term policy covers their needs more appropriately, while allowing them to invest elsewhere with higher returns and more flexibility.

Real-Life Scenario: The General

One particularly painful example is that of a retired general who, as a young enlisted servicemember, was sold a permanent life insurance policy. It sounded good at the time, but as years passed, he couldn’t keep up with the premiums. Eventually, the policy lapsed, and he had to pay money just to get out of it.
This is not an isolated case. Many financial advisors have stories of clients who unknowingly signed up for policies that made more sense for the insurance agent than for the client.

When Does Term Life Insurance Make Sense?

Term life insurance is a great fit when:

  • You’re in your 20s, 30s, or 40s
  • You have young children
  • You have a mortgage or other debts
  • You’re the primary income earner
  • You’re still building wealth
  • You’re looking for the highest death benefit at the lowest cost

Many people choose a 20- or 30-year term that lines up with their working years, their mortgage, and their children’s timeline to adulthood. A typical example:

  • Age: 35
  • Kids: Ages 3 and 5
  • Mortgage: 25 years remaining
  • Goal: Provide income replacement until kids are grown and debt is paid off

In this case, a 30-year term policy with a $2–3 million death benefit may cost a few hundred dollars a year. After 30 years, ideally, you’ve built enough wealth that insurance isn’t as necessary.

When Does Permanent Life Insurance Make Sense?

Permanent life insurance might make sense when:

  • You have a family history of medical issues and want guaranteed lifetime coverage
  • You need coverage for estate planning purposes (e.g., estate tax mitigation)
  • You’ve maxed out other tax-advantaged accounts like Roth IRAs and 401(k)s
  • You need a tool for legacy planning or charitable giving
  • You’re extremely high net worth and looking for a unique tax-advantaged vehicle

Even then, it should be carefully evaluated with an advisor, not just purchased because it “sounds good.” Also consider:

  • Trust planning: Permanent policies can be structured within irrevocable life insurance trusts (ILITs) to reduce estate tax burdens.
  • Business succession: Some owners use permanent policies for buy-sell agreements or to fund key person insurance.

Key Questions to Ask Before You Buy Life Insurance

  • What is the purpose of this insurance? Is it for income replacement? Paying off debt? Estate planning?
  • How long do I need coverage? Do you just need protection while raising kids and paying off your house, or lifelong?
  • Can I afford this long-term? Many permanent policies are expensive and can lapse if not maintained.
  • Have I maxed out other savings tools? If not, insurance shouldn’t be your investment strategy.
  • Do I fully understand the fees, structure, and returns? If it sounds too good to be true, it usually is.
  • What happens if I need to cancel or pause my policy? Know the surrender charges, risks of lapsing, and options for flexibility.
  • Is the recommendation coming from a fiduciary advisor or a commission-based sales rep? This distinction matters a lot.

Life Insurance in a Holistic Financial Plan

Life insurance is not a standalone decision. It should fit within a bigger picture of your overall financial life.

  • Budgeting: Ensure the premium fits your cash flow.
  • Investing: Term insurance frees up funds to invest in retirement accounts or taxable brokerage accounts.
  • Debt management: Life insurance can ensure debt doesn’t burden your loved ones.
  • Legacy goals: Permanent insurance might support charitable gifts or leave behind wealth.
  • Retirement: Term policies typically expire as you near retirement, ideally when your need for income replacement is reduced.

How to Review Your Existing Policy

If you already have life insurance, it may be time for a checkup. Ask yourself:

  • Does this policy still fit my current needs?
  • Have my income, debts, or family circumstances changed?
  • Am I paying too much for too little?
  • Have I been properly informed of all the features and downsides?
  • Could I switch to a more cost-effective or appropriate policy?

Work with a fiduciary advisor to evaluate your options before canceling or replacing any policy.

Final Thoughts:

What’s right for you now that you’ve reviewed the difference between permanent life insurance and term life insurance? There’s no one-size-fits-all answer, but for many people, term life insurance provides the protection they need at a cost they can afford, especially when they’re just starting out, raising a family, or growing their career.

Permanent life insurance has a place, but it’s more of a niche solution. If someone is pushing it on you before fully understanding your financial picture, that’s a red flag. As with most things in financial planning, the key is to stay informed, ask the right questions, and work with someone who’s willing to walk through your goals and your numbers, not just sell you a product.

Need Help Deciding?

At Bonfire Financial, we walk clients through life insurance options in a way that’s educational, not sales-driven. We’ll show you the actual numbers and help you choose what works best for your stage of life and financial goals. Schedule a call with us today!

Learn More About Choosing the Right Term Policy

If you’re ready to dive deeper into your options, check out our guide to the Best Term Life Insurance. It breaks down the top providers, features to look for, and how to get the most value from your policy.

Your Medicare Choice Might Be Permanent – Here’s What to Know (with Medicare Specialist Andrew Mersereau)

Posted on by Brian Colvert

When it comes to your Medicare choice, the decisions you make at age 65 (or even slightly before) can have long-lasting consequences. Yet many end up choosing a plan based on general advice, slick marketing, or a brief conversation with their benefits department.

To help cut through the confusion, we sat down with Andrew Mersereau, a Medicare specialist with over 24 years of experience guiding individuals through enrollment, plan selection, and strategy. Andrew is known for his no-nonsense, education-first approach to Medicare and has helped countless clients avoid costly mistakes.

Today we’re breaking down everything you need to know to make a confident, well-informed Medicare choice that fits your needs, especially if you’re financially secure, still working at 65, or considering a Roth conversion or property sale that could spike your income.

Let’s dive in.

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What Is Medicare, Really?

Before diving into strategies, it’s helpful to revisit the basics. Medicare is a federal health insurance program for people 65 and older, as well as some younger individuals with disabilities. But “Medicare” isn’t one plan, it’s a collection of parts:

  • Part A: Hospital coverage (inpatient)

  • Part B: Medical coverage (outpatient care, doctor visits, preventive services)

  • Part C: Medicare Advantage plans offered by private insurers as an alternative to A and B

  • Part D: Prescription drug coverage

Original Medicare (Parts A and B) is provided by the federal government. To cover additional costs and services, many people add Part D and either a Supplement (Medigap) policy or an Advantage plan.

The Big Decision: Supplement vs. Advantage

This is the crossroads most people face, and it’s not as straightforward as it seems.

Medicare Advantage (Part C)

Medicare Advantage plans are offered by private insurance companies and typically include Parts A, B, and D bundled together. These plans often tout extra perks like dental, vision, gym memberships, or transportation to doctor visits.

But those extras come with trade-offs. Advantage plans often:

  • Have narrow provider networks

  • Require referrals for specialists

  • Use prior authorizations for many procedures

  • Limit care to a specific geographic region

These plans are appealing due to their low or zero-dollar premiums, but you may find yourself paying more out of pocket when you actually need care.

Medicare Supplement (Medigap)

Medigap policies work alongside Original Medicare to pay for out-of-pocket costs like coinsurance, copayments, and deductibles. They do not include drug coverage, so you’d add a standalone Part D plan.

Key benefits of Medigap plans:

  • See any provider in the U.S. who accepts Medicare—no referrals needed

  • No network restrictions

  • Predictable costs with limited out-of-pocket expenses

For frequent travelers, snowbirds, or anyone who wants maximum freedom in choosing providers, Medigap is often the better long-term choice.

“People often pick Advantage for the low monthly price, but later regret the restrictions,” Andrew warns. “Your Supplement choice may cost more monthly, but it gives you far greater control.”

Why Your First Medicare Choice Might Be Permanent

Here’s the part most people don’t realize: the choice you make when you first sign up, especially between Supplement and Advantage, can be extremely hard to reverse.

Under federal law, you’re guaranteed acceptance into any Medigap plan only during your initial enrollment period (usually the six months after you enroll in Medicare Part B). After that window closes:

  • Insurance companies can ask health questions

  • They can deny you based on preexisting conditions

  • Approval becomes much more difficult as you age or develop medical issues

Andrew says it plainly:

“In my experience, 80% of people who try to switch from Advantage to Supplement later are denied.”

This is why the decision you make when you first sign up is so critical. Switching may not be an option later.

IRMAA and Income Traps: What Affluent Retirees Need to Know

Medicare premiums aren’t fixed for everyone. If your income is high, you may be subject to the IRMAA (Income-Related Monthly Adjustment Amount). This surcharge applies to Parts B and D and is based on your Modified Adjusted Gross Income (MAGI) from two years prior.

Here’s what can trigger IRMAA:

  • Roth conversions

  • Selling a business or property

  • Large capital gains

  • Taking large IRA distributions

A Common Scenario:

Janet, 64, sells her investment property and earns a $300,000 gain. Two years later, she’s shocked to find her Medicare premiums more than double, she’s now in an IRMAA tier that costs her over $500 more per month.

These are avoidable surprises, but only with proper planning.

Still Working at 65? Don’t Assume You Can Delay Medicare

Many people working past 65 wonder if they can delay Medicare enrollment. The answer: only if you have credible employer coverage.

Your plan must:

  • Cover 20 or more employees

  • Be deemed creditable by Medicare

  • Meet specific drug coverage standards

If it doesn’t, and you delay enrolling, you may face lifetime penalties based on your Medicare choice.

Mersereau’s advice: always confirm with HR in writing that your coverage meets Medicare’s standards, and compare your total healthcare costs before making a decision.

Important: If you’re still contributing to a Health Savings Account (HSA), enrolling in any part of Medicare makes you ineligible to keep contributing.

Medicare Doesn’t Cover Everything. Here’s What’s Missing:

Even the best Medicare plans don’t cover everything. Here are the biggest gaps that surprise people:

  • Hearing aids

  • Routine dental care

  • Eyeglasses and eye exams

  • Long-term care (like assisted living)

  • Home modifications or private-duty nursing

  • Unlimited rehabilitation or therapy

You may need private insurance, Medicaid, or a long-term care policy to bridge these gaps. Supplement plans won’t help with most of these either, they’re for traditional medical expenses only.

For Snowbirds and Travelers: Choose Wisely

If you live part of the year in Florida and the rest in Colorado, or travel often, your plan choice is especially important.

Advantage plans are often limited to regional networks, so out-of-state care may not be covered. Supplement plans allow access to any Medicare provider in the country, making them ideal for travelers or dual-state living.

Timeline: What to Do at 63, 64, and 65

Turning 65 is a major milestone, not just for birthdays, but for healthcare decisions that can impact your financial future. To help you stay ahead of deadlines and avoid costly missteps, here’s a step-by-step timeline of what to focus on at ages 63, 64, and in the months leading up to your Medicare choice and enrollment.

Age 63:

  • Begin tracking your income to anticipate IRMAA brackets

  • Evaluate if Roth conversions, property sales, or business exits are better done now

  • Schedule a financial planning session to model different Medicare scenarios

Age 64:

  • Research Medicare basics using Medicare.gov

  • Make a list of your doctors and medications to compare plan compatibility

  • Talk to a Medicare specialist or broker, ideally one who is fee-transparent and non-commission focused

3-6 Months Before Turning 65:

  • Enroll in Medicare Parts A and B via Social Security

  • Choose either a Supplement and Part D or an Advantage plan

  • Get proof of credible coverage from your employer if you’re deferring enrollment

Red Flags to Watch For

  • Too-good-to-be-true Advantage ads
    “Free this” and “zero-dollar that” often hide tight restrictions and surprise bills.

  • Advice from friends
    Everyone’s situation is different. What works for one person could be a disaster for another.

  • Brokers pushing one plan type
    A good broker will help you compare, not sell you the highest-commission product.

  • Skipping Part D because you take no meds
    This can result in penalties later. It’s often smarter to enroll in the lowest-cost plan anyway.

FAQ: Quick Medicare Questions Answered

Q: Is it ever smart to go with just A and B?
A: Rarely. Without a Supplement or Advantage plan, your out-of-pocket costs are unlimited.

Q: Can I change my mind later?
A: With drug plans (Part D), yes. With Supplement plans, possibly, but you may be denied.

Q: What if I have a concierge doctor?
A: You can keep them, but you’ll still need A and B, plus coverage for hospitals, specialists, and serious illnesses.

Q: Does my state affect my ability to switch plans?
A: Yes. Some states have more lenient rules, but most follow the six-month initial enrollment protection rule.

Final Thoughts: The Smartest Move is an Educated One

Andrew Mersereau emphasizes that education, not advertising, should guide your Medicare choice.

“Don’t just follow an ad or assume what worked for a friend will work for you. Take the time to understand what you’re buying and why.”

And remember, using a Medicare broker doesn’t cost you extra. Rates are set by law, and a good broker can help you avoid expensive mistakes.

Whether you’re helping a parent, preparing for your own retirement, or simply curious about your options, the takeaway is clear: Medicare isn’t something to wing. It’s a decision that affects your access to care, your costs, and your peace of mind for years to come.

Need help navigating Medicare?

You can contact Andrew’s team at 719-955-4991. They offer education-driven guidance with no pressure.

Making It Count: How to Balance Living for Today and Saving for Tomorrow

Posted on by Brian Colvert

“Live for today.” It’s a popular phrase, often used to justify a spontaneous purchase, a once-in-a-lifetime trip, or even just a splurge on a fancy dinner. But when you’re trying to plan for the future, that mindset can feel risky. So, how do you walk the line between enjoying life now and being responsible about your future?

In this post, based on insights from our recent episode of The Field Guide, we explore what it really means to live for today while still planning for tomorrow. We break down why the balance is more of an art than a science, how risk tolerance and personal experience shape financial choices, and ways to build a plan that supports both joy and security.

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The Myth of the Perfect Equation

Too often, financial advice is reduced to formulas: save X% of your income, invest in Y, and you’ll be fine. But that one-size-fits-all approach rarely works. Why? Because everyone has a different comfort level, past experience, and vision for what makes life fulfilling.

What makes one person feel secure could leave another anxious. For example, traditional advice suggests keeping three to six months of expenses in an emergency fund. But if you lived through a financial crisis, lost a business, or faced long-term unemployment, that might not feel like enough. You might want a year or more of expenses in cash. And that’s okay.

Financial planning must account for human nuance. It has to be personal. That means accepting that your version of “right” might not look like anyone else’s. Instead of seeking a perfect algorithm or rigid formula, the real strategy lies in flexibility, adjusting as your life, income, goals, and even the economy change.

What It Means to Live for Today

Living for today isn’t about reckless spending. It’s about aligning your financial choices with what brings you meaning and joy. That could be:

  • Taking a family vacation
  • Learning a new skill or hobby
  • Traveling to experience new cultures
  • Hosting a big family reunion
  • Attending a cooking class or enrolling in art school
  • Starting a small side business based on passion

These experiences create memories and fulfillment that can never be duplicated. And while they might not offer a monetary return, their emotional ROI is priceless. Money is a tool, not the goal. The balance sheet is important, but it isn’t where life happens. No one wants to reach retirement with a full bank account but a list of regrets.

When you invest in experiences that feed your soul, the returns go beyond numbers. They improve mental well-being, strengthen relationships, and offer a sense of purpose.

Your Lifestyle Is the Starting Point

When making spending decisions, always start with your lifestyle. If your current standard of living includes mid-range hotels and coach flights, that’s the baseline you should work from. It’s easy to fall into the trap of upgrading everything because “it’s a special occasion.” But if you can’t afford luxury in your everyday life, why stretch to afford it on vacation?

Instead of chasing someone else’s version of the good life, define your own. Choose experiences that truly resonate with you. If you hate wine, don’t waste your money on a vineyard tour in Tuscany. Do what you love, in a way that fits your means.

Your lifestyle should guide your choices and that includes how you travel, dine, shop, and even give. If you’re giving up your future stability to appear wealthier in the present, you’re not living for today. You’re borrowing from tomorrow.

Timing Matters More Than You Think

We all assume we have time. Time to travel. Time to learn. Time to reconnect. But what if you don’t?

As we age, physical limitations, unexpected health issues, or just the demands of life can chip away at those opportunities. A dream trip put off for “someday” may not be possible when that day finally comes.

Living for today is also about recognizing the fragility of time. If there’s something meaningful you want to do, find a way to do it now, even if it’s on a smaller scale.

Even delaying by a few years can change your capacity to fully enjoy an experience. Climbing a mountain or hiking Machu Picchu might not feel as doable at 70 as it would at 50. Your energy, enthusiasm, and ability to embrace adventure evolve with time.

How to Spend Without Regret

Spending money isn’t bad. Overspending is. And often, regret doesn’t come from what we buy, but how we buy it.

Here are a few ways to spend without guilt:

  • Plan ahead: Build the experience into your budget. Save for it in advance.
  • Stay within your lifestyle: Enjoy what’s aligned with your means.
  • Get creative: Use points, miles, and off-season deals.
  • Focus on meaning: Choose experiences that deeply matter to you or your family.

Most people don’t regret the experiences they invest in. They regret the ones they missed.

Remember, spending isn’t just about dollars, it’s about values. Make sure your money is going toward things that truly reflect your priorities, not someone else’s expectations.

The Financial Foundation

Enjoying the present doesn’t mean abandoning your future. It means building a strong financial foundation that gives you the freedom to enjoy life today.

Make sure you:

  • Max out retirement contributions (401(k), Roth IRAs, etc.)
  • Keep a realistic emergency fund
  • Manage excess debt wisely
  • Invest consistently over time
  • Revisit your financial plan at least once a year
  • Consider creating a “fun fund” for guilt-free spending

Think of it this way: responsible planning gives you permission to spend. When the basics are covered, you can enjoy your money guilt-free.

Conversations That Matter

If you’re unsure whether a big purchase or experience fits into your plan, talk to a financial advisor. Not to get permission, but to get clarity.

Sometimes you need a second set of eyes to say, “Yes, you can absolutely afford this. Here’s how.” Or, “Let’s find a smarter way to do it.” Either way, it helps eliminate the stress of guessing.

A great advisor doesn’t just manage your investments. They help you live the life you want with the resources you have.

These conversations matter even more when there’s uncertainty, market volatility, a job change, or a sudden windfall. Knowing how to navigate big shifts can be the difference between peace of mind and financial anxiety.

Your Values Should Drive Your Strategy

At the core of all good financial decisions are values. What do you care about? What kind of legacy do you want to leave? What makes you feel most alive?
When you base your plan around what matters most, it becomes easier to:

  • Say no to things that don’t serve you
  • Spend confidently on what does
  • Adjust your goals when your life changes

Living for today means honoring those values now, not just someday.

Final Thoughts

Living for today doesn’t mean blowing your savings or ignoring the future. It means being intentional. It means knowing your priorities, staying within your lifestyle, and making room for experiences that bring you joy.

You worked hard for your money. It should work hard for you, not just someday, but today. Whether you’re planning your next trip, debating a big purchase, or just trying to feel less guilty about spending, remember this: You can’t take it with you. But you can make it count.

So spend wisely, plan boldly, and live fully.

Ready to build a plan that lets you live fully today and confidently into the future? Reach out to our team at Bonfire Financial. We’re here to help you find that sweet spot.

How to Maximize Your Social Security Benefits & Why It Still Matters, Even If You’re Wealthy

Posted on by Brian Colvert

When we think about Social Security, we often associate it with those who need financial help in retirement. But what if you’re financially independent? What if you’ve done everything right, built significant wealth, and no longer rely on a paycheck? Should Social Security still be part of your retirement plan?

The short answer: yes.

Even if you’re wealthy, Social Security benefits still matter, and today we’ll explore why you shouldn’t overlook them, how to think about them strategically, and most importantly, how to maximize your Social Security benefits to fit into your broader financial picture.

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The Common Misconception: “It Doesn’t Matter”

Every so often, I speak with individuals who’ve done exceptionally well for themselves. They’re financially independent, own multiple assets, and feel like they’ve already “won the game” when it comes to money. Naturally, they assume Social Security is irrelevant to their situation.

Their mindset tends to be:
“Why should I care? I don’t need it.”

And honestly, I get it. If you’ve saved well, built a solid investment portfolio, and have multiple income streams, Social Security may seem like small potatoes. But there are several reasons this thinking may be short-sighted.

Reason #1: You Paid Into It,  It’s Your Money

One of the most important things to remember is this: Social Security isn’t a handout.

You paid into the system for decades. Every paycheck you earned, every tax year you contributed, those funds weren’t just donations. You earned credits (40 of them, to be exact) that now qualify you for a benefit. Claiming Social Security is not about need, it’s about reclaiming what’s yours.

Even if the monthly check doesn’t make a big impact on your budget, ignoring your benefit is like leaving money on the table. Think about it: would you willingly skip collecting on a pension or a rental check just because your portfolio is doing well?

Reason #2: It Can Be Strategically Used (Or Reallocated)

Another common argument is: “Even if I take it, I don’t need the income.”

But that’s where a mindset shift is helpful. You don’t have to use the benefit to fund your lifestyle. You can redirect it toward:

  • Charitable giving

  • Helping your children or grandchildren

  • Funding a donor-advised fund

  • Investing in a cause or startup you believe in

  • Offsetting health care costs

  • Replacing portfolio withdrawals in down markets

The point is: just because you don’t need the income doesn’t mean it shouldn’t be put to good use.

Reason #3: It’s One of the Few Sources of Guaranteed Income

In a world of market volatility and rising costs, guaranteed income is incredibly valuable. Social Security is one of the only income streams that’s inflation-adjusted and backed by the U.S. government.

For wealthy retirees, having another layer of stable income allows more flexibility with your investments. Maybe you want to delay tapping into your IRA to let it grow. Maybe you want to cover basic expenses with guaranteed funds and let your risk assets ride. Social Security gives you options, and options are power.

But Isn’t the System Running Out of Money?

This is a concern many people have, and it’s valid to a degree. We’ve all heard the headlines: “Social Security will be insolvent by 2030.” But let’s look at the facts:

  • The trust fund reserves are expected to run low by the early 2030s.

  • This doesn’t mean benefits go away. It means incoming payroll taxes will only cover around 75–80% of scheduled benefits unless action is taken.

  • Congress has a long track record of addressing funding issues when needed. It’s politically unpopular to cut Social Security benefits for current retirees, and it’s unlikely to happen without major pushback.

So while the system may see adjustments, perhaps higher income thresholds, delayed full retirement ages, or increased taxes, it’s not disappearing.

And in the meantime, your benefit is still valid and accessible.

How to Maximize Your Social Security Benefits

Now that we’ve established why Social Security matters, let’s talk about how to maximize your Social Security benefits. There are a few key levers you can pull:

1. Delay Claiming (If Possible)

Your benefit increases the longer you wait to claim it. Here’s the breakdown:

  • Full Retirement Age (FRA): For most people, this is between 66 and 67.

  • Claiming Early (age 62): Results in a permanent reduction of up to 30%.

  • Delaying Until 70: Increases your benefit by roughly 8% per year past FRA.

If you’re in good health and don’t need the income, delaying until age 70 can provide the largest monthly benefit, up to 76% more than claiming at age 62.

For someone with wealth and longevity, this can be a smart play.

2. Coordinate Spousal Benefits

If you’re married, you may be eligible for spousal or survivor benefits, which can be up to 50% of your spouse’s benefit (or even 100% if they pass away).

This can be especially valuable if one spouse didn’t earn as much or took time out of the workforce. Strategizing when each spouse claims can help you maximize the total household payout over your lifetime.

3. Watch Your Taxes

Social Security benefits can be taxed, especially if you have other sources of income like pensions, dividends, or required minimum distributions (RMDs). Wealthy retirees should work with a Certified Financial Planner to structure withdrawals in a tax-efficient way. With smart planning, you can minimize how much of your Social Security gets taxed and keep more of your benefits.

4. Use Social Security as a Safety Net

Some people worry about the “what-ifs” in retirement. Market crashes. Health issues. Family emergencies.

Even if you’re wealthy now, having Social Security as a consistent income stream adds stability. You may not use it for years, but if something changes—your expenses increase, your portfolio dips, your family situation shifts, you’ll be glad to have it.

Think of it as a built-in buffer in your financial life.

5. Incorporate It Into Your Philanthropy or Legacy Plan

If you don’t need the money and don’t want to keep it, that’s fine. But take it anyway—and repurpose it.

Ideas include:

  • Direct donations to charity

  • Annual gifts to heirs

  • Contributions to 529 plans

  • Support for causes or communities you care about

The bottom line: you still control how it’s used.

What About the Ethics of Taking It If You Don’t Need It?

Some people hesitate to claim Social Security out of principle. They feel it should “go to someone who needs it more.”

That’s admirable, but not how the system works.

Social Security is not a needs-based program. It’s an earned benefit. If you’re eligible, you have every right to claim it.

If you want to use it for good, do that, but don’t decline it outright. Claim it, then donate it. Help your family. Fund change in the world. It’s still your money.

Final Thoughts: Don’t Leave Money on the Table

Social Security may not be flashy. It may not feel urgent when your net worth is high. But that doesn’t make it irrelevant.

In fact, maximizing your Social Security benefits is a smart move for anyone, regardless of wealth. Whether you reinvest it, give it away, or use it to supplement your lifestyle, it’s a piece of your financial puzzle that shouldn’t be ignored.

You’ve earned it. Don’t leave it behind.

Next Steps

At Bonfire Financial, we help clients of all income levels make informed, strategic decisions about when and how to claim Social Security. We also offer a FREE Social Security and Medicare Guide & Cheat Sheet that’s updated annually to help you assess your options.

Grab your copy now!

Social Secuirty & Medicare Cheat Sheet Post

Roth Conversion Strategies: Build Wealth for Your Family, Not the IRS

Posted on by Brian Colvert

When it comes to building wealth and leaving a financial legacy, most people focus on how much they can accumulate. But what many overlook is how much of that money will actually reach their family, and how much could end up going to the IRS instead.

One of the most powerful yet underutilized strategies in estate and tax planning is Roth conversion strategies. While often discussed in the context of retirement planning, Roth conversions can play a key role in reducing the future tax burden on your heirs and maximizing the impact of the wealth you leave behind.

Today we’ll break down exactly how Roth conversions work, why they’re valuable for estate planning, and how to decide whether this strategy is right for you.

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What Is a Roth Conversion?

A Roth conversion is the process of transferring money from a traditional retirement account (like a traditional IRA or 401k) into a Roth IRA. When you make the conversion, you pay ordinary income tax on the amount you transfer, but after that, the funds grow tax-free, and withdrawals are also tax-free, assuming the account has been open for at least five years and you’re over age 59½.

People often use Roth conversions when they expect to be in a higher tax bracket later or want to maximize tax-free income in retirement. But there’s another layer to this strategy: reducing the tax burden on your heirs.

Why Roth Conversions Matter for Estate Planning

Thanks to recent tax law changes under the SECURE Act and SECURE 2.0, inherited IRAs now come with a strict timeline. If a non-spouse (such as a child) inherits your IRA, they must withdraw all the funds within 10 years, and those withdrawals are taxed as ordinary income.

This is a big shift from the previous “stretch IRA” rule that allowed beneficiaries to spread withdrawals over their lifetime. The new 10-year rule compresses the tax liability into a much shorter period, often hitting heirs during their peak earning years.

For example, let’s say your child earns $120,000 annually and inherits a $500,000 IRA. Instead of spreading withdrawals out over decades, they have to withdraw all the funds within 10 years. That could push their income over $170,000 in a given year, bumping them into a much higher tax bracket and significantly reducing what they ultimately get to keep.

By converting portions of your IRA to a Roth IRA during your lifetime, you pay the taxes now, and your heirs inherit an account that grows tax-free and can be withdrawn tax-free. Even though they still have to empty the account within 10 years, the absence of taxes makes it far more beneficial.

Real-World Example: A Client’s Legacy in Action

We recently worked with a client who brought her adult son to a financial planning meeting. She was a single woman in her 70s, financially secure, and had no need to rely on her IRA for living expenses. Her son, a successful professional, was in a significantly higher tax bracket than she was.

If she left her IRA untouched and passed away, her son would inherit a sizable sum and an equally sizable tax bill. Not only would he need to withdraw hundreds of thousands of dollars within a decade, but each withdrawal would be taxed at his current income rate.

By contrast, if she slowly converted the IRA into a Roth over a period of several years, carefully keeping each conversion within her lower tax bracket, she could shoulder the tax bill at her lower rate, allowing her son to inherit a Roth IRA instead. He would still need to withdraw the funds within 10 years, but he wouldn’t owe a dime in taxes.

The approach of evaluating Roth conversion strategies not only preserved more of the money for her family, but it gave them more flexibility and peace of mind during an emotionally difficult time.

Understanding the Tax Bracket “Fill” Strategy

One of the most practical ways to approach Roth conversions is through “tax bracket filling.” The idea is to make use of your current marginal tax bracket without tipping into the next one.

Here’s how it works:

Let’s say you’re a single filer with $60,000 in taxable income. The 22% federal income tax bracket in 2025 goes up to about $95,375. That means you could convert up to $35,375 of IRA money and still stay within the 22% bracket.

By “filling the bracket” with Roth conversions, you can transfer funds without triggering a jump into a higher tax tier. This is especially effective if you’re in a low-tax phase of life, such as early retirement, before taking Social Security or required minimum distributions (RMDs).

This strategy is repeatable year after year and can gradually shift large portions of your traditional IRA into a Roth IRA while minimizing your total lifetime tax liability.

Why Timing Matters for Roth Conversions

The effectiveness of a Roth conversion strategy often comes down to timing. The most advantageous window tends to be:

  • After retirement but before you begin collecting Social Security

  • Before you are required to take RMDs at age 73 (or 75, depending on your birth year)

  • During years when your income is temporarily lower (job transition, business loss, early retirement, etc.)

In these windows, your marginal tax rate may be much lower than what it will be in future years, or what your heirs will face.

It’s also important to think about where tax policy is heading when considering Roth conversion strategies. Many financial professionals believe federal income taxes are likely to increase in the coming decades due to growing national debt and budget deficits. Paying taxes today, when rates are relatively low, could be a smart long-term decision.

A Closer Look at the 10-Year Inheritance Rule

The SECURE Act’s 10-year rule means that non-spouse beneficiaries must completely drain an inherited IRA within a decade. While there’s no rule that says the withdrawals must be taken evenly each year, they must be completed by the end of year 10.

The downside? If the heir waits too long and takes a large lump sum at the end of the 10 years, it could cause an enormous tax spike.

This rule does not apply to Roth IRAs in the same way. Beneficiaries still have to follow the 10-year withdrawal rule, but distributions are tax-free, as long as the Roth account has been open for at least 5 years.

That means your heirs can:

  • Let the money grow tax-free for up to a decade

  • Withdraw it at a time that suits their financial situation

  • Avoid adding taxable income during their highest-earning years

Who Should Consider Roth Conversions for Estate Planning?

Roth conversion strategies are especially effective for individuals who meet the following criteria:

1. Retired and in a lower tax bracket than their children
If your income has decreased but your children are in their peak earning years, it makes sense for you to pay the taxes now so they don’t get hit with a much larger tax bill later.

2. Financially secure and not dependent on IRA withdrawals
If you don’t need your traditional IRA for day-to-day expenses, you can afford to strategically convert and handle the tax costs over time.

3. Planning to leave a large IRA to heirs
The larger the IRA, the greater the potential tax burden on your beneficiaries. Roth conversions reduce this future liability.

4. Wanting to reduce estate size for tax purposes
While estate tax only affects a small percentage of families, converting to a Roth can reduce your estate’s taxable size while still preserving value for your heirs.

5. Believing tax rates will go up in the future
If you suspect federal income tax rates will increase over the next 10–20 years, locking in today’s lower rates could be a wise move.

When Roth Conversions Might Not Make Sense

Like all financial planning tools, Roth conversions aren’t right for everyone. Situations where it might not be ideal include:

You need the money now
If you rely on your IRA for income, the added tax burden of a conversion might not be worth it.

You’re currently in a high tax bracket
If your current tax rate is higher than what your heirs will face, paying the taxes now may not make sense.

You plan to donate the IRA to charity
Qualified charities don’t pay taxes on IRA distributions. Leaving your IRA to a nonprofit could be more efficient than converting it to a Roth.

You can’t afford the taxes from the conversion
Ideally, taxes on a conversion should be paid from cash savings, not from the IRA itself. If you have to dip into the converted funds to cover the tax bill, the strategy loses a lot of its effectiveness.

Debunking Common Roth Conversion Myths

Let’s address a few common misunderstandings:

Roth conversions are only for young investors
Reality: Roth conversions can be especially effective for retirees and those doing estate planning, especially if their tax bracket is lower than their heirs’.

You’ll lose money by paying taxes now
Reality: Paying taxes now at a lower rate can save money in the long run, especially if future tax rates are higher.

Roth IRAs don’t help with inheritance planning
Reality: Roth IRAs can be a powerful inheritance tool, especially under the 10-year rule — no required taxes means more flexibility and value for your heirs.

How to Execute a Roth Conversion Estate Strategy

If you’re considering this strategy, here are a few key steps to follow:

Step 1: Run Projections
Work with a CFP® or tax professional to analyze your current and future tax brackets, your heirs’ tax situations, and your long-term retirement needs.

Step 2: Start Small and Be Strategic
Don’t convert your entire IRA in one year. Spread conversions over several years to manage your tax bracket and avoid triggering unintended Medicare or Social Security impacts.

Step 3: Use Non-IRA Funds to Pay the Taxes
To get the full value of the conversion, pay the taxes using cash from savings. That keeps the entire converted amount growing tax-free.

Step 4: Communicate Your Plan  
Make sure your heirs understand what you’ve done and why. Update your beneficiaries and document your estate plan accordingly.

Final Thoughts: Taxes Are Inevitable, But Smart Planning Isn’t

At the end of the day, the choice often comes down to this: Would you rather your money go to your family, or to the IRS?

Roth conversion strategies allow you to take control of that decision. When used strategically, they can reduce the long-term tax burden, offer more flexibility to your heirs, and help ensure that the wealth you worked so hard to build actually benefits the people you care about most.

It’s not a one-size-fits-all solution, but it’s one of the most powerful planning tools available if used at the right time, in the right way.

Need personalized Roth conversion strategies?

At Bonfire Financial, we help clients turn complex tax rules into smart, actionable strategies. We welcome you to schedule a call to see how Roth conversions could fit into your estate plan.

What Is a Fiduciary Financial Advisor? And how a free lunch could cost you.

Posted on by Brian Colvert

If you’re looking for trustworthy financial advice, one term you need to understand is: fiduciary financial advisor. It might sound like industry jargon, but it’s one of the most important distinctions in the financial planning world. Put simply, a fiduciary financial advisor is someone who is legally and ethically required to act in your best interest. Not all advisors are held to this standard, and that difference could cost you.

Today we’ll break down what it really means to work with a fiduciary advisor, how to know if yours is one, and why this matters when it comes to your money, your goals, and your peace of mind.

Listen Now:  iTunes |  Spotify | iHeartRadio | Amazon Music

What Is a Fiduciary Financial Advisor?

A fiduciary financial advisor is a professional who has a legal obligation to act solely in your best interest when providing financial advice or managing your investments.  This means the recommendations they give you must benefit you, not their paycheck. They must avoid conflicts of interest and fully disclose anything that could influence their advice.

That might sound obvious, shouldn’t every financial advisor do that? You’d think so, but unfortunately, many don’t.

Fiduciary in Action: What It Really Looks Like

Imagine you’re working with a financial advisor, and they present you with two investment options:

  • Investment A pays the advisor a higher commission

  • Investment B is nearly identical but pays the advisor much less (or nothing)

Under the fiduciary standard, if Investment B is in your best interest, that’s the one the advisor must recommend, even if it means they earn less. It’s not just about ethics. It’s the law.

That’s a huge deal when you’re talking about life savings, retirement accounts, and generational wealth. But without the fiduciary obligation, nothing stops an advisor from choosing the option that’s more lucrative for them, even if it costs you more.

Why the Fiduciary Standard Exists

The financial services industry hasn’t always had a great reputation. From high-commission sales tactics to conflicts of interest that aren’t always disclosed, the history is… let’s say, complicated. The fiduciary standard was created to protect clients from these conflicts. It’s meant to ensure that when you work with a financial advisor, you’re not just being sold something. You’re being advised, and the advice is in your best interest.

And yet, not everyone is held to this standard.

Wait, Not All Advisors Are Fiduciaries?

Correct. There are three basic types of advisors when it comes to fiduciary duty:

  1. Non-fiduciary brokers – These operate under a “suitability” standard. The investment just has to be suitable, not necessarily the best or most cost effective.

  2. Hybrid advisors – These can switch hats. In some accounts, they act as fiduciaries. In others, they can accept commissions. That dual role can create confusion.

  3. Fee-only fiduciary advisors – These are always fiduciaries. Fee-only advisors typically don’t accept commissions or sales incentives, which helps reduce conflicts of interest.

At Bonfire Financial, we chose to be a fee-only fiduciary firm because we didn’t want to operate in gray areas. We didn’t want to have to switch hats depending on the product or compensation structure. We wanted to build a business grounded in trust, because that’s what our clients deserve.

A Quick (and Real) Story: The Power of a Free Lunch

Let me paint a picture of what it doesn’t look like to act in a client’s best interest.

When I was early in my career at a large wirehouse, there was an informal group I jokingly called “The Lunch Hour Club.” Wholesalers, salespeople for investment products like mutual funds or annuities, would come in and treat advisors to lunch. Think sushi, steak sandwiches, the works!

In exchange? They hoped we’d recommend their products to our clients.

And sometimes, it worked.

Some advisors would literally recommend a mutual fund just because the wholesaler bought them a good meal. They weren’t necessarily bad people. But without a fiduciary standard, there was nothing stopping that kind of behavior.

It drove me nuts.

That experience was a big part of why I left and started my own independent firm. I didn’t want to operate in a system where a sandwich could steer someone’s retirement plan.

Transparency Is Key

Another cornerstone of fiduciary duty is disclosure. If there’s ever a potential conflict of interest, a fiduciary has to tell you. If an advisor owns a stake in a product they’re recommending or will be compensated in any additional way, you have a right to know before making a decision.

That doesn’t mean all commission-based advisors are unethical. Many are great people trying to do the right thing. But even good intentions can be overshadowed by unclear incentives and a lack of transparency.

With a fiduciary, you don’t have to wonder if you’re getting the full story. You are.

Trust Is the Real Currency

At the end of the day, this business is all about trust. When someone comes to us for financial advice, they’re not just asking where to invest. They’re trusting us with their future. Their kids’ college fund. Their retirement. Their legacy.

If you’re going to work with a financial advisor, you need to feel absolutely sure that they’re putting your interests first. That they’ll tell you the truth, even when it’s not convenient. That they’ll say no to a product or strategy that benefits them but doesn’t benefit you.

That’s the kind of relationship that lasts. That’s the kind of advisor you want in your corner.

How to Know If Your Advisor Is a Fiduciary

Here are a few key questions to ask:

  • Are you a fiduciary 100% of the time?

  • How are you compensated?

  • Do you ever earn money from third parties?

  • Are you a CFP®?

  • Will you put that in writing?

If any of the answers feel vague or avoidant, that’s a sign to dig deeper. A true fiduciary will be transparent and direct.

Why We Believe It Shouldn’t Be Optional

The fact that fiduciary duty is optional in parts of the financial industry is baffling. It’s like going to a doctor and not knowing if they’re being paid extra to prescribe a certain medication. You’d want to know, right?

We believe every financial relationship should start with this simple premise: put the client first. Always.

And if that means we make a little less on one decision? So be it. We’re playing the long game. Doing right by our clients has a way of working out.

Bottom Line: Choose Trust Over Hype

There will always be advisors out there chasing commissions, recommending high-fee products, or overpromising results. And there will always be flashy marketing campaigns pushing financial “solutions” that are more sizzle than substance.

But you don’t have to fall for it.

When you choose to work with a fiduciary advisor, you’re choosing clarity. You’re choosing transparency. You’re choosing a partnership built on trust—where your goals, your success, and your future come first.

And that’s how financial advice should work.

Need a fiduciary advisor you can trust?

At Bonfire Financial, we’re 100% fiduciary, 100% of the time. No commissions. No product pushing. Just honest advice built around you. If you want to see what that looks like, we’d love to talk.

Schedule a conversation with us at BonfireFinancial.com

Asymmetric Risk: How to Invest Wisely, Even If You’re Wrong Most of the Time

Posted on by Brian Colvert

Most investors think they understand risk. You win some, you lose some. Right?

Not quite.

Asymmetric risk is a smarter, more nuanced approach to investing that separates sophisticated investors from the crowd. At its core, asymmetric risk means making investments where the potential upside far outweighs the possible downside. You’re risking a small amount of capital for the chance of significant gains, without betting the farm.

Think of it as risk with a safety net. Even if things go south, the damage is minimal. If they go north? You could be looking at life-changing gains.

In our latest podcast, Brian breaks down exactly how asymmetric risk works, how much to allocate, and why it can help you grow wealth even if you’re not always right.

Listen Now:  iTunes |  Spotify | iHeartRadio | Amazon Music

Why Asymmetric Risk Matters for Modern Investors

Most people don’t know this, but the wealthiest investors rarely risk large portions of their portfolios on uncertain outcomes. Instead, they carve out a small slice for asymmetric opportunities, places where a small bet could deliver an outsized return. This strategy allows them to participate in high-reward opportunities without jeopardizing their overall financial stability. Even if several of these bets don’t pay off, a single big winner can more than compensate for the losses, driving significant portfolio growth over time.

Here’s why it works:

  • Small, calculated risks can drive portfolio growth without threatening financial security.

  • Losses are capped, gains are theoretically unlimited.

  • It protects your long-term goals while still allowing for meaningful upside.

The average investor often flips this equation,  risking too much chasing quick wins or being too conservative and missing out entirely. They either over-leverage themselves in hopes of striking it rich overnight or let fear drive their decisions, parking money in low-return assets that can’t outpace inflation. Both approaches ignore the power of asymmetric risk.

Real-World Examples of Asymmetric Risk

Let’s put some real-world context behind the theory:

Investment Type Asymmetric Risk Potential
Crypto (Bitcoin, Ethereum)           Small buy-ins with potential for exponential returns.
Stock Options           Low-cost options can lead to large payoffs.
Private Equity / Startups          Modest stakes in early-stage companies with unicorn potential.
Real Estate Deals          Small investments in properties with big appreciation upside.
Individual Stocks          Early buys in disruptors like Nvidia or Tesla years before they became giants.

Of course, none of these are recommendations, just illustrations of how asymmetric risk plays out in real portfolios.

How Much Should You Allocate to Asymmetric Risk?

There’s no universal number. Your risk tolerance, goals, and time horizon all come into play.

Here’s a general framework Brian shares with clients:

    Investor Profile     Suggested Allocation
Very Conservative 1% to 5%
Balanced 5% to 10%
Aggressive 10% to 20%

Key rule: Never risk more than you’re willing to lose completely.

As your wealth grows, the dollar amounts grow, but the percentage should align with your risk comfort and life stage. What feels like a small, manageable risk at one point in your life might feel too aggressive at another, or vice versa. Younger investors often allocate a higher percentage to asymmetric opportunities, while those approaching or in retirement typically reduce their exposure to preserve capital and minimize volatility. The key is to regularly reassess both your financial situation and your comfort with risk as they evolve.

The 3 Factors That Should Guide Your Asymmetric Risk Strategy

1. Your Goals (The Science)

Know exactly what you’re aiming for. Retirement income? A legacy for your kids? Dream travel? Quantify it. This shapes how much risk you can afford to take.

2. Your Time Horizon (The Math)

The longer you have, the more room there is to weather volatility and let asymmetric bets play out.

3. Your Risk Tolerance (The Art)

This isn’t a number on a quiz. It’s how you actually feel when markets swing or when an investment turns south. Risk tolerance varies wildly even among people with identical finances. Two investors with the same portfolio size and income might react very differently to the same market event, one seeing it as a buying opportunity, the other feeling panic. Personal experiences, past losses or gains, and even personality traits all influence how much risk feels acceptable. That’s why understanding your true tolerance isn’t just about numbers; it’s about knowing your emotional response to uncertainty.

Why Most Risk Tolerance Quizzes Fail

Most online risk assessments fall short because they treat risk as a logical decision, not an emotional experience.

People say they’re fine with volatility until they see a $100,000 loss in black and white. Brian’s clients often express this clearly:

  • “When I gain, I think in percentages.”

  • “When I lose, I feel it in dollars.”

Your emotional reaction to loss is what defines your true risk tolerance, not what you check off in an online quiz.

Why does understanding your risk tolerance matter so much? Because it directly influences how much of your portfolio you can confidently allocate to asymmetric opportunities. As your financial situation evolves, so should your approach to risk.

Investors who grasp their true risk tolerance are better equipped to take advantage of asymmetric risk. They adjust their exposure as their wealth grows without stepping outside their comfort zone or compromising long-term goals.

How Asymmetric Risk Changes As You Grow Wealth

As your assets increase, you can scale up your asymmetric risk investments without increasing your portfolio percentage.

Example:

  • $1 million portfolio → $50,000 (5%) into asymmetric risk.

  • $2 million portfolio → $100,000 (5%) same percentage.

Even though the percentage stays the same, your opportunity to capture major gains grows. A 5% allocation in a larger portfolio means more capital is working for you in asymmetric opportunities, increasing the potential dollar amount of any upside.

This allows your wealth-building strategy to scale without requiring you to take on proportionally more risk. Over time, as winners emerge from these calculated bets. They can meaningfully boost your portfolio’s overall growth, even if only a few outperform while others fall short.

Why Asymmetric Risk Should Shrink (But Not Disappear) Near Retirement

In early and mid-career, it makes sense to allocate more to asymmetric opportunities. You have time to recover from losses and let winners compound.

As you near retirement:

  • Consider dialing back the percentage.

  • Rebalance your portfolio regularly.

  • Still keep a slice dedicated to growth to offset inflation.

However, even retirees shouldn’t avoid asymmetric risk entirely. It can provide a growth engine to help keep up with rising living costs and unexpected expenses. While the proportion allocated to asymmetric opportunities may decrease in retirement, maintaining some exposure allows your portfolio to continue growing beyond conservative income-generating assets like bonds or CDs.

This growth potential becomes especially important in protecting against inflation and ensuring your assets can support a long retirement.

That said, it’s crucial to adjust your asymmetric risk allocation thoughtfully as you approach and move through retirement. Even with the best intentions, investors often stumble when it comes to executing this strategy effectively.

Common Mistakes Investors Make With Asymmetric Risk

Successfully incorporating asymmetric risk into a portfolio requires discipline, patience, and an honest understanding of your personal risk tolerance. Unfortunately, even savvy investors can fall into these common traps:

  • Overconcentration
    Going all-in on one “big bet.” Early success can breed overconfidence, tempting investors to allocate too much capital to a single opportunity. While it’s natural to want to increase exposure to a winning strategy, overconcentration defeats the purpose of asymmetric risk, which is to limit downside exposure.
  • Chasing Past Winners
    It’s easy to fall into the habit of adding to investments that have already skyrocketed. But true asymmetric opportunities are usually found early, before widespread adoption or mainstream success. Chasing past winners often leads to buying in at elevated valuations, reducing the potential upside and increasing downside risk.
  • Ignoring Liquidity
    Many asymmetric plays, such as private equity, venture capital, or certain real estate deals, can tie up your funds for years. Failing to consider liquidity needs can create cash flow problems or force you to exit positions prematurely, often at a loss.
  • Neglecting Professional Guidance
    The allure of asymmetric risk can lead some investors to go it alone, especially with the rise of online investing platforms and market forums. However, without a deep understanding of the risks and how these investments fit into your overall financial strategy, DIY approaches can quickly backfire. A CERTIFIED FINANCIAL PLANNER™ can help vet opportunities, manage risk exposure, and ensure that asymmetric bets align with your long-term goals.

How to Identify a Smart Asymmetric Risk Opportunity

Avoiding these common mistakes is just the first step. To make the most of asymmetric risk, you also need to know how to spot the right opportunities and filter out the wrong ones.

Not every opportunity with big potential qualifies as a smart asymmetric risk. Before investing, ask yourself these critical questions:

What’s the maximum I could lose?
Always define the worst-case scenario upfront.

What’s the realistic upside?
Be honest. Is the potential return worth the risk, or are you being overly optimistic?

How does this fit into my overall portfolio?
Asymmetric bets should complement, not dominate, your portfolio.

Will losing this money derail my goals?
If the answer is yes, it’s not the right asymmetric play.

How liquid is the investment?
Can you easily exit if needed, or will your capital be locked up?

What’s the track record of similar investments?
While past performance doesn’t guarantee future results, it can offer valuable context.

Beyond the checklist:
Smart asymmetric investing also means understanding the timing and context of an opportunity. Markets are dynamic. What looked like a great bet six months ago might not hold the same potential today.

Asymmetric Risk vs. Asymmetric Opportunity: Know the Difference

It’s important to distinguish between asymmetric risk and asymmetric opportunity.

  • Asymmetric risk focuses on the structure of a specific investment,  the balance between potential loss and potential gain.

  • Asymmetric opportunity refers to the broader environment, favorable market timing, disruptive trends, regulatory changes, or macroeconomic shifts that can magnify the potential of an investment.

Successful investors look for asymmetric opportunities where asymmetric risk structures already exist. It’s not just about finding a great idea; it’s about finding the right idea at the right time, with the right risk-to-reward balance.

Asymmetric Risk and Behavioral Finance: The Hidden Challenge

Understanding asymmetric risk intellectually is easy. Applying it emotionally is hard.

Why?

Because humans are naturally wired to avoid loss. In fact, studies in behavioral finance have shown that losses feel about twice as painful as equivalent gains feel rewarding, a phenomenon known as loss aversion.

This emotional response can lead even the most rational investors to make poor decisions. When faced with real dollar losses, it becomes difficult to stay objective. Investors might:

  • Pull out of investments too early at the first sign of trouble.

  • Double down on losing positions out of a desire to “get even.”

  • Avoid taking new opportunities entirely after experiencing a loss.

This is where asymmetric risk presents a unique challenge. While the strategy is built to absorb small losses in pursuit of larger wins, emotionally accepting those losses, even when they’re expected and planned for, can be uncomfortable.

That’s why working with a trusted advisor can be a game-changer.

A good advisor (like us *wink*) does more than just recommend investments. They help:

  • Keep your emotions in check during both market highs and lows.

  • Align asymmetric bets with your broader financial plan, so no single setback derails your progress.

  • Provide access to vetted asymmetric opportunities that fit your goals and risk tolerance.

  • Reassess and rebalance as your financial situation evolves.

Ultimately, while asymmetric risk offers a powerful way to pursue growth, the ability to stick with the strategy often determines success more than the strategy itself.

Why Asymmetric Risk Isn’t Just for the Wealthy

While high-net-worth individuals use this strategy often, any investor can apply it at the right scale.

It’s not about chasing moonshots or gambling. It’s about creating a portfolio that can:

  • Absorb small losses.
    By allocating only a small percentage to higher-risk opportunities, even multiple losses won’t significantly impact your overall wealth.

  • Capitalize on big wins.
    When an asymmetric bet pays off, the gains can be substantial enough to offset many smaller losses — and then some.

  • Build wealth responsibly over time.
    This approach lets you participate in growth without putting your financial security at risk.

Asymmetric risk levels the playing field. Whether you’re investing $5,000 or $500,000, the principle remains the same: focus on opportunities where the reward dramatically outweighs the risk. And as Brian often reminds clients, success in investing isn’t about being right all the time,  it’s about structuring your portfolio so that when you are right, it counts in a big way.

Key Takeaways

  • Asymmetric risk means risking a small, affordable amount for the chance at a large gain.

  • It’s a powerful tool for portfolio growth without jeopardizing financial stability.

  • Your allocation should reflect your goals, time horizon, and personal risk tolerance.

  • Mistakes happen when investors overcommit or fail to rebalance.

  • Professional advice helps navigate the emotional and strategic challenges of asymmetric investing.

Next Steps

If your advisor isn’t talking to you about asymmetric risk, they should be.

At Bonfire Financial, we specialize in helping clients use asymmetric risk intelligently,  not as a get-rich-quick scheme, but as a thoughtful, disciplined growth strategy.

Ready to explore asymmetric risk opportunities tailored to your goals? Schedule a call with us!

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