FAQs

FAQs about our services and fees

How do you charge for your services?

Our fees may be based on a percentage of assets under management, a flat rate, commission based on products/services, or hourly billing—depending on your needs. We’ll discuss the fees associated with your goals prior to any business being written.

Do I need a minimum amount of assets to work with you?

We do not have a minimum, we’re happy to speak with anyone committed to improving their financial future.

Where are my assets held?

Our Broker dealer is LPL Financial (www.lplfinancial.com). However, some investments may be held at a different company, depending on the product and service.

Do you offer a free initial consultation?

Yes! We offer a complimentary consultation to discuss your goals and determine if we’re a good fit.

What can I expect at our first meeting?

We’ll review your financial goals, current situation, and explain our services and fee structure. You’re encouraged to bring any relevant documents or questions.

How often will we meet?

Typically, we meet quarterly, semi-annually or annually depending on your needs and goals. We’re also available for additional meetings as needed.

How do you make referrals to other professionals?

We refer clients to trusted professionals like CPAs or estate attorneys when needed. We do not receive compensation for referrals, ensuring customized recommendations.

How do I track my financial progress?

You’ll have access to a secure client portal, regular performance reports, and annual reviews. We also send newsletters and updates to keep you informed.

What is a fiduciary financial advisor?

A fiduciary advisor is legally obligated to act in your best interest in an advisory relationship.  We adhere to this standard in all our client relationships.

Can you help with retirement planning, tax strategies, or estate planning?

Absolutely. We offer comprehensive financial planning that includes retirement, tax planning, estate planning, and more.

Do I have to be a customer at Community First Bank to work with the Advisors at The Investment Center at Community First Bank?

You do not need to have an account with Community First Bank to work with our advisors.

Where are your locations?

The Investment Center at Community First Bank have 10 offices located in Southwest Wisconsin where we provide financial planning- Baraboo, Boscobel, Fennimore, Lancaster, Livingston, Muscoda, Reedsburg, Richland Center, Platteville, Prairie du Chien

Investing FAQs

What is tax-loss harvesting?

Tax-loss harvesting involves selling investments at a loss to offset capital gains taxes. It’s a strategy used to reduce your tax liability while maintaining your investment strategy.

Are my investments insured?

Investment accounts are not FDIC-insured but carry SIPC coverage through LPL Financial. The LPL Financial SIPC Membership provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be claims for cash. An explanatory brochure is available atwww.sipc.org. Additionally, through London Insurers, LPL Financial accounts have additional securities protection to cover the net equity of customer accounts up to an overall aggregate firm limit of $1,000,000,000 subject to conditions and limitations. The account protection applies when an SIPC member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against losses from the rise and fall in the market value of investments.

What is a stock?

A stock represents a share in the ownership of a company.

Ownership: Buying a stock means you own a piece of the company.
Shares: Companies divide their ownership into units called shares. If you buy one share, you own one unit of that company.
Public Companies: Stocks are typically issued by publicly traded companies and bought/sold on stock exchanges like the NYSE or NASDAQ.
Types of Stocks:

Common Stock: Most common type; gives voting rights and potential dividends.
Preferred Stock: Usually no voting rights, but higher claim on assets and earnings (like dividends).
 

What is a bond?

A bond is a type of investment that represents a loan made by an investor to a borrower, typically a corporation or government. A bond breakdown:

Loan Agreement: When you buy a bond, you're lending money to the issuer (like a company or government).
Fixed Income: In return, the issuer agrees to pay you interest (called the coupon) at regular intervals and repay the principal (the original amount you invested) at a set maturity date.

Types of bonds:
Government Bonds: Issued by national governments (e.g., U.S. Treasury bonds).
Municipal Bonds: Issued by states, cities, or counties.
Corporate Bonds: Issued by companies.

What is an IRA?

An IRA (Individual Retirement Account) is a retirement account to help you save for retirement with tax advantages. There are four different types of IRAs- Traditional, ROTH, SIMPLE and SEP. You can save for IRAs utilizing different investment options including, but not limited to stocks, bonds, mutual funds, Exchange Traded Funds, CDs, art, bank accounts, and annuities.

What is a Traditional IRA?

A Traditional IRA is a retirement account owned by one person. The Traditional IRA has the following characteristics:

• Tax-deductible contributions (depending on income and other factors)
• Taxes are paid later when you withdraw in retirement
• Required Minimum Distributions (RMDs) start at a certain age 

What is a ROTH IRA?

A Roth IRA is a retirement account owned by one person. The ROTH IRA has the following characteristics:

• Contributions are made with after-tax money
• Withdrawals in retirement are tax-free
• No RMDs during your lifetime 

 What is the difference between a Traditional IRA and a ROTH IRA?

The key difference lies in how and when your contributions are taxed:

Traditional IRA: Contributions may be tax-deductible, but withdrawals in retirement are taxed as ordinary income.
Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.

Is a ROTH or Traditional IRA better?

It is wise to work with your financial advisor and tax preparer to figure out which is best for you and your situation. They both have their advantages and disadvantages.

When can I contribute to a Traditional IRA or a ROTH IRA?

You can start contributing to both Traditional and ROTH IRAs when you have earned income. There are no minimum nor maximum income age limits for contributions as of 2020. There are income limits for IRAs to be tax deductible, and income limits for ROTH IRA contributions. If you are married, and have no earned income, you may still qualify for IRA contributions.

Can I contribute to both a ROTH IRA and Traditional IRA?

Yes, you can contribute to both every year. However, there is a maximum annual contribution limit that is across both IRAs (Traditional and ROTH).

What are my options with my retirement plan from my previous employer (401k, pension, 403(b), SIMPLE IRA, etc)?

You have basically four options. They all have their pros and cons, please discuss it with your financial advisor to determine which may be in your best interest, and if it is an option with your previous employer’s plan.

1.      Rollover to an IRA

2.      Roll over to your New Employer’s plan

3.      Leave it with your previous employer’s plan

4.      Cash it in

Can I have a 401(k) and an IRA?

Yes, you can have both a 401(k) and an IRA — and many people do! In fact, combining the two can be a smart way to boost your retirement savings. Having both you are able to diversify more with tax strategies and investment options. Be careful with your income limits for ROTH IRA contributions and deductibility of Traditional IRA contributions. Your financial advisor can help you determine what is in your best interest.

What does it mean to diversify my investments?

Diversifying your investments is simply spreading your investment money across different types of assets to reduce risk and improve the potential for returns. So that if one investment does poorly, the others may perform better to help balance things out.

Financial Planning FAQs

What is financial planning?

Financial planning is a comprehensive process that helps you set goals, assess your resources, and create a roadmap to achieve financial security through budgeting, investing, insurance, and estate planning.

Why should I hire a financial planner?

A financial planner helps you connect all aspects of your finances—investments, taxes, insurance, and estate planning—into a cohesive strategy tailored to your goals.

What should a financial plan include?

A complete plan includes your goals, net worth, cash flow, investment strategy, insurance coverage, tax planning, and estate considerations.

How often should I meet with my financial planner?

At least once a year, or more frequently during major life events like marriage, retirement, or inheritance.

 When should I start financial planning?

You should start planning when you begin to think about your future goals. We believe it is never too early. Many start to plan during key life events such as:

-Starting your first job or switching jobs

-Getting married

-Saving for or buying a house

-Starting a Family

-Extra funds from a windfall

-Wanting to achieve financial goals

How much do I need for retirement?

It depends. It depends on your lifestyle and retirement goals. The old rule of thumb is that you want to be able to live off of 4% of your retirement savings. However, we also need to take into account other dynamics, such as other income sources, investment returns, potential windfalls and expenses, health, age you wish to retire, and other factors. It is best to sit with your financial advisor and conduct a retirement analysis.

How do I determine if I have enough money to retire?

Most retirees need 70-80% of their pre-retirement income to maintain their lifestyle, and the old rule of thumb is to not withdraw more than 4% of your retirement assets each year to live off. However, everyone has different goals, income and wants and needs in retirement. It is best to sit with a financial advisor to determine if you have enough saved for retirement.

Wealth Management FAQs

What is wealth management?

Wealth management is a holistic service that combines financial planning, investment management, tax strategies, and estate planning to seek to grow and preserve your wealth.

Do I need a wealth management strategy?

If you have significant assets or complex financial needs, a wealth management strategy can help you save time, reduce taxes, and plan for the future with confidence.

When should I consider wealth management services?

When your financial situation becomes complex—due to inheritance, business sale, or retirement—it’s time to consider wealth management to provide preservation for your assets and pursue your goals.

College Planning FAQs

What are my different options for college savings?

There are several great ways to save for college, each with unique tax benefits, flexibility, and impact on financial aid. Here’s a breakdown of the most common options:

• 529 College Savings Plan
  Tax Benefits: Any earnings grow tax-free; withdrawals are tax-free when used for qualified education expenses.
  Flexibility: Can be used for college tuition, fees, books, room & board, and up to $10,000/year for K–12 tuition.
  Ownership: Controlled by the account owner (usually a parent or grandparent), not the student.
  Financial Aid Impact: Considered a parental asset, which has a relatively low impact on aid eligibility.
• Coverdell Education Savings Account (ESA)
  Tax Benefits: Tax-free growth on any earnings and withdrawals for qualified education expenses.
  Contribution Limit: Up to $2,000 per year per beneficiary.
  Flexibility: Can be used for both K–12 and college expenses.
  Income Limits: Contributions are phased out at higher income levels.
• UTMA/UGMA Custodial Accounts
  Ownership: Assets are held in the child’s name and become theirs at the age of majority.
  Use of Funds: Can be used for any purpose that benefits the child—not limited to education.
  Taxation: Subject to kiddie tax rules.
  Financial Aid Impact: Considered a student asset, which can significantly reduce aid eligibility.
• Roth IRA (Used for Education)
  Tax Benefits: Any growth on contributions are tax-free; withdrawals for qualified education expenses avoid the 10% early withdrawal penalty.
  Flexibility: If not used for education, funds can still be used for retirement.
  Limitations: Annual contribution limits apply; income restrictions may limit eligibility.
• Traditional Savings or Investment Accounts
  Pros: No restrictions on how the money is used.
  Cons: No tax advantages; assets may negatively impact financial aid more than other options.

What is a 529 plan?

A 529 is a tax-advantaged way for families to save for education. Traditionally invested in Mutual Funds, one may have federal and state tax-deferral on any growth. With no federal tax on qualified withdrawals. States can handle the taxation of withdrawals differently, please check with your state of residence. Wisconsin has no income tax on qualified withdrawals. In Wisconsin contributions for beneficiaries that are your child, grandchild, great-grandchild, niece, nephew or yourself, up to a maximum, are state tax deductible. 

How much should we save for college?

The amount you should save for college depends on several factors, including the type of school, years until enrollment, inflation, and your savings strategy. 

What is a UTMA/UGMA account?

A UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) account are types of custodial accounts that allow adults to transfer assets to a minor without setting up a formal trust. The account is managed by the custodian until the minor reaches the age of majority, the child then gains full control. The assets can be used for any purpose that benefits the child, not just education. The account is under the child’s social security number and therefore is counted as their asset for purposes of taxes and financial aid eligibility.

Life Insurance FAQs

How much life insurance do I need?

How much life insurance you need depends on your income, debts, dependents, and financial goals. It is best to sit down with a financial advisor to figure out how much life insurance is needed to protect your family. We also have calculators on our Tools page.

What are the different types of life insurance?

There are basically two types of life insurance, term and permanent life insurance. Term provides coverage for a certain period of time; whole permanent life insurance is to provide coverage for life and includes a cash value component that may grow over time. There are pros and cons to both, and it is wise to sit down with a financial professional to see what coverage is best for your family.

Is my employer’s life insurance enough?

Most of the time no, the coverage is not enough as it most employer plans only cover 1-2 times your annual salary. If you have family that relies on your income to maintain their lifestyle, you will want to sit down with a profession to determine your needs. Not only may it not be enough but generally group life insurance is not portable. This would leave your family without coverage if you were to leave your employer. One must obtain life insurance while they are healthy and insurable.

Do you sell life insurance?

Yes, we do! We have access to many different insurance companies to help you obtain the proper amount and kind of life insurance.

What type of life insurance do I need?

The type of life insurance you need depends on your goals, financial situation and stage of life. Typically, term insurance is less costly and helps cover the years where you have debt, kids in the home and your spouse would significantly be impacted by your death financially. Permanent Insurance is more expensive and is used also to cover loss of income- especially for a spouse who would lose pension or social security, cover final expenses, leave a tax-free inheritance, and cover estate taxes or for charitable giving.

Do I still need life insurance in retirement?

Yes—life insurance can still play a valuable role during retirement. When one spouse passes away, there’s often a reduction in household income, which can impact the surviving spouse’s financial stability. Additionally, life insurance can be a strategic tool for estate planning and charitable giving, helping you leave a meaningful legacy

What is key person life insurance?

Key person life insurance is a policy that a business takes out on a vital employee- someone whose death would have a significant financial impact on the company. It is designed to help the business recover from the loss and maintain operations.

What is buy-sell life insurance?

This is a type of life insurance used by business partners to fund a buy-sell agreement. It protects the surviving partner(s) should one partner die, so that the surviving partner(s) are able to buy out the deceased partner’s share of the business from their estate or heirs.

Long-Term Care Insurance (LTCI) FAQS

What is long-term care insurance (LTCI)?

Long-term care insurance pays for assistance with daily activities like bathing and dressing, or nursing home care, due to chronic illness or disability. It helps cover costs that Medicare and Medicaid often do not, protecting your assets and preventing reliance on family. Premiums vary based on age, health, coverage amount, and policy type, such as traditional or hybrid life-and-LTC policies. You become eligible for benefits when you cannot perform a certain number of "Activities of Daily Living" (ADLs).  

Who should buy long-term care insurance (LTCI)?

Long-term care insurance (LTCI) can be a smart financial decision for many, but it’s not right for everyone. It’s especially beneficial for middle-income individuals who want to protect their assets and preserve a legacy—such as retirement savings, or family land or a farm. Those with lower incomes may qualify for Medicaid, which can cover long-term care costs without the need for private insurance. Meanwhile, individuals with substantial wealth may choose to self-insure and pay for care out-of-pocket.

When should I buy long-term care insurance (LTCI)?

If you wish to avoid depleting your assets to pay for long-term care and have the income or assets to pay for long-term care insurance. The ideal age to purchase long-term care insurance is typically mid-50s to mid-60s. The older you are the more expensive the insurance becomes, and you take the risk of not being healthy enough to purchase the insurance.

What are the different types of long-term care insurance (LTCI) policies?

Traditional policies: Provide benefits for specific long-term care services.
Hybrid policies: Combine permanent life insurance with a long-term care benefit, offering a death benefit to beneficiaries if LTC isn't used.

What is covered in a long-term care policy (LTCI)?

LTCI typically covers services that assist with daily living activities such as bathing, dressing, eating, and mobility. Coverage may include:

• In-home care
• Assisted living facilities
• Nursing homes
• Adult day care
• Memory care 

What happens if I never use my long-term care insurance?

Traditional LTCI is “use it or lose it,” meaning if you never need care, you won’t receive benefits. However, hybrid policies may offer a death benefit or return of premium if care isn’t used.

Does Medicare cover long-term care?

No, Medicare does not cover most long-term care services. It may cover short-term skilled nursing or rehab after a hospital stay, but it does not pay for custodial care like help with daily activities over an extended period.

Disability Insurance FAQs

What is disability insurance?

Disability insurance provides income replacement if you're unable to work due to illness or injury. It helps cover essential expenses like mortgage payments, utilities, groceries, and other living costs while you're recovering.

I have disability insurance at work, do I need additional insurance?

You may need additional disability insurance because group policies from employers often cover only a portion of your income (40-60%), are taxable, and may not be portable. A supplemental policy can fill these income gaps, provide tax-free benefits (if you pay the premiums), offer portability, and provide more comprehensive coverage, especially for variable income or longer benefit periods. 

Is disability insurance expensive?

Premiums vary based on age, occupation, health, and coverage amount. Policies for younger, healthier individuals in lower-risk jobs tend to be more affordable. You can also adjust the benefit period and waiting period to manage costs.

What’s the difference between short-term and long-term disability insurance?

Short-term disability insurance typically covers you for a few weeks to months (often up to 6 months).
Long-term disability insurance kicks in after short-term benefits end and can last for several years or until retirement age, depending on the policy.

Can I get disability insurance if I’m self-employed?

Yes! In fact, self-employed individuals often have the greatest need for disability coverage since they don’t have employer-provided benefits. Policies can be tailored to your income and business structure.

How much coverage do I need?

A good rule of thumb is to replace 60–70% of your gross income. The exact amount depends on your monthly expenses, savings, and whether you have other sources of income or support.

Annuities FAQs

What is an annuity?

An annuity is a financial product through an insurance company with whom you establish a contract. You may fund this contract with a lump-sum payment or a series of payments and in return the company promises to provide a stream of guaranteed income that can begin immediately or at some point in the future.

What are the different types of annuities?

• Fixed Annuities: Provide guaranteed interest and predictable income.
• Variable Annuities: Allow investment in subaccounts, with income based on market performance.  Variable annuities are long term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. They are sold only by prospectus. Guarantees are based on the claims paying ability of the issuer. 
• Indexed Annuities: Any returns are tied to a market index (e.g., S&P 500), with downside protection.  Fixed Indexed Annuities (FIA) are not suitable for all investors. FIAs permit investors to participate in only a stated percentage of an increase in an index (participation rate) and may impose a maximum annual account value percentage increase. FIAs typically do not allow for participation in dividends accumulated on the securities represented by the index.
• Immediate Annuities: Start paying income right away.
• Deferred Annuities: Begin payments at a future date. 

Who should consider an annuity?

Annuities may be a good fit for:

• Individuals seeking guaranteed income in retirement
• Those who have maxed out other retirement accounts (like IRAs or 401(k)s)
• People who want to protect against outliving their savings
• Investors looking for tax-deferred growth potential

What is a rider?

A rider is an optional feature you can add to an annuity contract, such as:

• Guaranteed Lifetime Withdrawal Benefit (GLWB)- this provides a life-time income stream. This may be set up based on one lifetime, or joint lifetime with a spouse.
• Long-Term Care rider- adds protection for long-term care needs
• Death benefit rider pays out to your beneficiaries based on the contract terms. This may be a great addition if one is not healthy enough for life insurance.

These can enhance flexibility or protection but may come with additional costs. Riders are additional guarantee options that are available to an annuity or life insurance contract holder.  While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing.  Guarantees are based on the claims paying ability of the issuing insurance company.

What are the advantages of annuities?

Annuities can guarantee income, have tax-deferred growth potential, protect against market loss (in some types) and they are customizable with riders. There are many different types of annuities that one can benefit from depending on the individual’s goals and risk tolerance.

What are the disadvantages of annuities?

There is limited liquidity with annuities, often they need to be in the contract for so many years before full access is allowed without surrender fees. However, income and partial liquidity may be an option with certain contracts. The taxable portion of the annuity is taxed as ordinary income. There are potential fees and surrender charges, and some contracts can be complex, be sure your advisor goes over these with you prior to purchase.  

Are annuities safe?

Fixed and indexed annuities offer principal protection, while variable annuities carry market risk. All annuities are backed by the issuing insurance company, so it’s important to choose a financially strong provider.

How are annuities taxed?

Contributions that are made with after-tax dollars receive tax-deferral on any growth.  The taxable portion of your withdrawals are taxed as ordinary income.  If you withdraw before age 59½, you may face a 10% IRS penalty in addition to regular income tax.

Can I access my money in an annuity if I need it?

Most annuities have surrender periods, during which early withdrawals may incur fees. Some contracts allow penalty-free withdrawals up to a certain percentage annually. Riders may also offer enhanced liquidity options.