Archive for Author Kristi Sullivan

Going Back-to-School: Should I Get That Graduate Degree?

graduate degree

Back-to-school is in the air, so let’s stay with last week’s theme of education.  Many people struggle mid-career with the question of whether to further their education.  They may be asking, “Am I being held back for my lack of a Masters’ degree?” or, “Would having a PhD under my belt make me more in-demand?”


Perhaps it’s not a question of whether you will earn more, but one of having more knowledge or the experience of being in academia again.


My thoughts?

Oh, let’s face it, as a financial adviser, I think you should know what the return on investment is before committing time and money to an advanced degree.  After all, going back to school when you have a job and mortgage and kids is not going to be nearly as fun as your kegger-fueled days at Daddy-Paid-For-It State University.


Here are some statistics from the US Census Bureau (okay, it’s a little old, but you get the idea) on how much extra earnings you might get in different careers for a graduate degree:


How to use this data?

Consider the average Master’s degree costs about $30,000/year in tuition at a public university and takes 2 years to complete.  How many years of extra earnings will it take to cover that $60,000 tuition bill?


At a 101% earnings premium over $50,000 median wage in Biology, you’ll earn an extra $50,000/year in earnings.  It won’t take long to see the benefit of that $60,000 tuition bill.  However, a Master’s in art will give you an average annual boost of $10,000/year, or 6 years to recoup the cost of tuition.


Of course, it’s not all about money – even I realize that!  Kind of.  However, being realistic about costs and benefits has never hurt a decision process.

Myths and Facts about 529 College Savings Accounts

529 college savings

Clearly, once I have a theme, I can’t let go.  It’s back-to-school month and that could make some of us feel guilty about the lack of savings we’ve done for our kids’ college.  What’s holding you back?  Maybe by clearing up a few misunderstandings about college savings, it will motivate you to start a 529 college savings account for your little darling.


Myth #1:

My kid will have to go to an in-state school to use the money.


Fact:  529 college savings accounts, although state-sponsored, do not require the money be spent for in-state schools only.  The state-sponsored part only designates whether the person adding to the account will get a state income tax deduction for the contributions.


Myth #2:

My kid has to go to a 4-year university to use 529 account money


Fact:  Savings can be used nationwide at any eligible public or private college, university, vocational or trade school.


Myth #3:

I need a lot of money to start at 529 account.


Fact:  529s can be started with as little as $15 (Vanguard Colorado 529 Direct Portfolio, for example).  So, even if you only have a few bucks, you can start a fund that can at least help out with buying text books.

Myth #4:

A 529 account will ruin my child’s chance at financial aid


Fact:  529 money is counted as the parent’s asset when calculating the Expected Family Contribution.  Only 5% of parents’ non-retirement accounts are factored in to the formula.  You are much more likely to not get financial aid based on your annual income than a balance in a 529 account.


Myth #5:

My kid will get a football scholarship and not need the money I’ve saved.


Fact:  Not likely.  BUT, if your child does get scholarship money of any kind, 529 money can be taken out in a matching amount without IRS penalty.  You will pay income tax on the earnings of the money withdrawn but not the contributions you made.


Don’t let fear stop you from preparing for the future.  Even a little monthly contribution will be appreciated when Junior starts college.

Thinking about retiring, but not sure if it’s time?


If you’re thinking about retiring, but not sure if it’s the right time, you’re not alone. In this article from Investopedia, 6 Signs You Are OK to Retire, I offered this advice:


From Investopedia


This may seem like a no-brainer, but many soon-to-be retirees simply forget to crunch the numbers. Before you ditch your career, it’s important to figure out if you can live comfortably on your post-retirement income.

Start by adding up your must-have monthly costs, including your mortgage or rent, groceries, electricity and other utilities. Then start adding in your “wants,” such as travel, entertainment, shopping and dining out. Once you’ve calculated your estimated monthly expenses, it’s time to figure out if you’ll have enough retirement savings to cover them. Add up all your Social Security payments, pension, retirement account distributions and any other sources of income. “Your retirement budget (if you retire in your mid 60s) should not exceed 4% of your investments plus Social Security and pension payments,” says Kristi Sullivan, CFP®, Sullivan Financial Planning, LLC, Denver, Colo.

Looking for a Career Change? The U.S. needs Financial Planners

Financial Planners

Last week, I talked about the fear that financial planners have of being shoved out of our careers by robo-advisers.  This is kind of funny because the other gloom and doom projection for my industry is that we are woefully short of financial planners.

So, which is it?

Let’s take a look.

According to an article by Dan Butcher on January 4, 2016 on, “U.S. advisers’ average age was close to 60 as of last year, with 43% more than 55-years-old and a mere 11% younger than 35, according to research firm Cerulli Associates. Meanwhile, consulting firm Moss Adams estimated that by 2022 the U.S. wealth management industry is likely to face a shortfall of at least 200,000 advisers.”


Sounds like a great place for young people to start career building.  But what kind of person makes a good financial adviser?

It’s not just number-crunching nerds like you may think.  Here are some characteristics that go a long way to making a good financial planner:

  • You like to work with people, not just stare at spreadsheets.
  • You are a good listener.
  • You are self-motivated – it takes work to find clients, after all.
  • You can use numbers (yes there is that element) to interpret trends and help clients make data- supported decisions.
  • You are good at verbal and written communication.


Financial planning is also a great second career.

I’ve seen people make the jump from teachers, counselors, and law firms.  You can go to to find out more about getting a Certified Financial Planner designation and careers in financial advising.


More 4-year universities are incorporating the CFP program into their curriculum. When students graduate, they have passed the tests and are ready to get the 2-years’ experience required to use the CFP ® trademark.  Purdue, Louisiana State University (geaux Tigers!), Texas Tech, Kansas State, and Colorado State University are just a few of the schools offering CFP ® education along with business degrees.

Bottom line?

Jump on in the financial planning pool!  The water’s fine!

CNN Money asks Kristi how to Save (and Dress) like a Grown-Up

CNN Money

It’s my passion.


I know I should be excited to be quoted in this piece from CNN Money – and I am. But what I’m REALLY excited about is that they’re asking a question that relates to one of my favorite pastimes.

Consignment clothes shopping.

Yes, whether it’s in a meeting or walking down the street, if you see me wearing clothes (and I hope you do), chances are I got them at one of my favorite second-hand stores.

It’s not just about saving money…it’s fun, too!



Here’s more….


Robo-Advisers: Should a Robot Be Planning My Future?


A hot topic among my financial planner friends these days is whether we will all be unemployed by the advent of robo-advisers.  Will machines take over financial planning where humans were once needed?

Is all technology an advancement?


Like all technology disruptions (Uber to taxis, Amazon to physical stores, Microsoft Word to steno pools), financial services can be made more efficient and cost-effective using technology.  However, we still need people (Uber drivers, Amazon customer support and package fulfillment, Executive Assistants instead of dictation-takers) to help us across the finish line.

What is a robo-adviser?


Here is a handy definition from Wikipedia:


Robo-advisors are a class of financial adviser that provide financial advice or portfolio management online with minimal human intervention. They provide digital financial advice based on mathematical rules or algorithms.


Where does this fit into your financial planning?  Well, if you like using technology, but hate making investment decisions, the use of a robo-advisor may be right up your alley.  Also, some platforms come with financial planning features that help you track spending and arrive at savings goals.

There might just be a solution.


I’ve found, though, that when it comes to making important decisions – especially about money – people still prefer an experienced person to help them talk through the variables they are considering.  The great news is there is room for both.  You can use a robo-adviser for investment help and a human financial planner for life/money problem solving.  They don’t have to be mutually exclusive.


So, just like I don’t have to choose between buying a Lick-em Cat Scratcher on Amazon OR going to Target to mindlessly spend $100, you don’t have to have only a robo-adviser or only a human helping out with your finances.  You can use both!

Find yourself with a little extra income? Here’s my suggestion.

extra income

From Investopedia


I’m a 26-year-old professional with a 401(k), a Roth IRA, and a non- retirement account. I contribute enough to my 401(k) to get my employer’s match, and I try to max out my Roth IRA every year. But of those three accounts, where should my extra income be going? I’m not sure what’s best to focus on at this point in my career. Additionally, I work for a non-profit, so I only have an extra $5,000-$10,000 to play with.

My response


Great job so far with your savings! If only everyone started out like you have. At 26 years old, if you are saving 10% of your own money (not counting employer match) in retirement accounts, I’d say that’s good enough for now. Think about your medium term financial goals (buy a house, car, puppy, vacation, engagement ring, start a business) and start saving and investing towards those in a taxable account. That way, you have investments you can access at any time, not just retirement.

What?? Back-to-School Time Already??


Where did the time go?


Yep, it’s the end of July, and the back-to-school sales are ramping up.  If you’re like me, you hate this kind of shopping. So I was delighted when, about 5 years ago, my son’s school offered Edu-Kits – everything required by the school in a box delivered to the classroom.


Sure, it was expensive. But I knew I was paying for convenience and not having to run around to 3 stores to get everything on the school supply list.


Do you get what you pay for?


Reporter Patricia Lopez with ABC13 news in Houston did a comparison shop in 2014.  For $20.93, she was able to recreate the pre-packaged school supply kid that was selling at a local store for $67.99.  Yikes!  That’s a big upcharge for convenience.


In addition, in the last couple of years, I realized that I was buying the same stuff over and over again, when many supplies could just be reused from last year.  For example, every year, the school asks for a pencil bag (reusable), a huge number of spiral notebooks (barely used – tear out the written-on sheets), protractors, compasses, calculators, etc.


Just by going through my son’s backpack on the last day of school, I had half of the supplies needed for next year.


So, with very little effort, I’ve managed to scale back back-to-school spending.  Maybe I’ll sock that extra money into his 529 account!

NBR asks Kristi Sullivan about the Dangers of a Large Home Loan


When shopping for a home, it can be exciting to hear how much a bank is willing to lend you. But homeowners, especially first-time homebuyers, need to be cautious about maxing out that loan. NBR asked several financial planners their opinions and advice on how to wisely go into purchasing a home.

From NBR


Lenders have recently introduced programs that will make it easier for creditworthy borrowers to buy a home with very little down even as they juggle other demands, like student loan repayment or starting a family.

Banks have partnered with Fannie Mae and Freddie Mac, two entities that provide financing to lenders, to make mortgages available to first-time buyers with a down payment that’s as low as 3 percent. For instance, Wells Fargo launched “yourFirstMortgage” in late May. Similar programs are available at SunTrust and Bank of America. Quicken Loans offers a mortgage with a down payment option of just 1 percent.


“People need to look ahead and not commit to big housing costs,” said Kristin C. Sullivan, a certified financial planner with Sullivan Financial Planning in Denver….


…click here for more.

Do you REALLY know the difference between tax-free and tax-deferred?


What’s the difference?


Often people need help deciding whether to save for retirement in a Traditional or Roth-type of account; another way to put that is do you want tax-free or tax-deferred?  This question can come up when you are signing up for your retirement plan at work or when you are deciding to open your own Individual IRA.

The brick wall is that most people don’t understand the difference, so how can they make an informed decision?  I am here to help!

Taxes and Savings

Cast your memory back to when your savings account at the bank earned something called “interest.”  Yes, I know it was long ago. But, do you remember that at the end of the year, you would get a 1099 for interest earned? You would add that dollar amount to your income for the year and pay taxes on it.

The same process happens in your non-retirement and non-college investment accounts.  Every year you get a 1099 from your investment company reporting dividends, interest, and capital gains earned in the account.  That income is taxable to you in that year.  These are called “taxable” accounts.

Retirement accounts give us a break from those pesky annual 1099s and tax payments.  This is to encourage us to save for our old age by giving us tax incentives.



In a tax-deferred account (Traditional IRAs, Traditional 401(k)s), you get to shelter your annual contribution from income taxes and not pay yearly taxes on interest/dividends/capital gains.  When you take the money out for retirement spending, you will owe income taxes on the withdrawals you make each year from the accounts.


In a tax-free account (Roth IRAs, Roth 401(k)s), you do NOT get a tax deduction for the amounts you add to the account each year.  The account grows without annual taxes like the Traditional accounts above.  The big difference here is on the withdrawals.  When you take money out of Roth accounts in retirement, you will owe NO income taxes.

The difference.

So, the difference in a nutshell is do you want a tax break now (Traditional) or tax break in retirement (Roth)?  There is no right or wrong answer since we don’t know if your taxes are higher now or later.  Sometimes the best solution is to diversify – use a little of both.

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