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Frequently Asked Questions

Retirement Planning

  • How much money do I need to retire ?


    • Most people need about 70%–80% of their pre-retirement income annually to maintain their lifestyle after retiring. Factors like where you live, how long you live, and your desired lifestyle will affect the total. A personalized retirement income plan helps identify your exact number. 


  • What’s the best age to start taking Social Security?*


    • You can claim Social Security as early as age 62, but your benefit increases the longer you wait—peaking at age 70. The best time to start depends on your health, life expectancy, and need for income.


  • How can I make my retirement savings last?


    • To make your retirement savings last, you need a sustainable withdrawal strategy, a balanced investment plan, and smart tax planning. A common guideline is the 4% rule, but every situation is different. Working with a financial advisor can help you align your spending, investments, and healthcare planning to fit your lifestyle and make your savings go the distance.


  • What’s the difference between a Roth IRA and a traditional IRA?


    • A Roth IRA  is a post tax investment. You pay taxes on the money now and then in the future when you take money out it will be tax free. 


  • Is it too late to start saving for retirement at 50 or 60?


    • It’s never too late. People in their 50s and 60s often have higher income and fewer expenses, allowing them to catch up using tools like IRA catch-up contributions and delayed retirement credits.


*BMS Financial Advisors and LPL  Financial are not associated with the Social Security Administration or any other government agency 

Insurance & Risk Management


  • Do I still need life insurance after I retire?


    • Maybe. Life insurance in retirement depends on your financial goals. If you still have debts, want to provide for a spouse, or plan to leave an inheritance, life insurance can be valuable. On the other hand, if your financial obligations are covered and your estate is in order, you might not need it anymore. A personalized review can help you decide.


    • Seniors often benefit from guaranteed universal life (for fixed costs) or final expense insurance (for covering burial and debt). The right policy depends on your health, financial goals, and estate plan.


  • What’s the best type of life insurance for seniors?


    • The best type of life insurance for seniors depends on your goals and health. If you want lifelong coverage and to leave money to loved ones or cover final expenses, whole life or guaranteed universal life insurance may be a good fit. If you're healthy and need coverage for a specific period, term insurance could work. Some seniors also consider final expense policies, which are smaller, affordable whole life plans designed to cover funeral costs.


    • The right choice depends on your budget, health, and what you want the insurance to accomplish. A licensed advisor can help you compare options and find the best value for your situation.


  • How does long-term care insurance work?


    • Long-term care insurance helps cover the cost of nursing homes, in-home care, or assisted living. Policies typically reimburse you for services once you can no longer perform a set number of daily activities, like bathing or dressing.


  • What happens to my policy if I stop paying premiums?


    • It depends on your policy type. With term life insurance, the policy usually lapses, and coverage ends. With whole or universal life, there may be cash value to cover premiums for a while, but eventually, it could lapse too. If you're unsure, it's best to review your policy or speak with a licensed advisor before missing a payment.


  • Is term or whole life insurance better for estate planning?


    • For estate planning, whole life or universal life insurance is often a better fit because it lasts your entire life and can build cash value. These policies can help provide tax-free inheritance, pay estate taxes, or equalize assets between heirs. Term insurance is usually temporary and not designed for long-term legacy planning.

Investments

  • How should I invest in my 50s or 60s?

     
    • Investments in your 50s or 60s should focus on balancing growth with preservation. That often means shifting toward a diversified mix of stocks, bonds, and income-producing assets—designed to reduce risk as retirement nears.


  • What’s the difference between stocks, bonds, and mutual funds?

     
    • Stocks represent ownership in a company. When you buy a stock, you own a small piece of that business and your money grows (or shrinks) based on the company’s performance and stock market changes. Stock investing includes risks, including fluctuating prices and loss of principal.
    • Bonds are loans you give to a company or government. In return, you get regular interest payments and your money back at a set time. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
    • Mutual funds are a mix of investments—like stocks, bonds, or both—bundled together. When you invest in a mutual fund, you're pooling money with other investors and a professional manager chooses the investments. It’s a simple way to diversify without picking individual stocks or bonds yourself. Investing in mutual funds involves risk, including possible loss of principal. Fund value will fluctuate with market conditions and it may not achieve its investment objective.


  • Is it risky to invest during a recession or election year?

    • Markets are always uncertain, but long-term investment strategies can ride out short-term volatility. The key is to stick to a diversified plan based on your goals—not headlines.


  • Should I use a financial advisor or manage my own investments?

    • If you feel confident in financial strategy, taxes, and market behavior, DIY may work. But many people benefit from an advisor’s objective planning, tax strategies, and experience—especially as life gets more complex.


  • How do I know if my portfolio is too aggressive or too conservative?

    • If your portfolio keeps you up at night or doesn’t seem to grow with your goals, it might be misaligned. An aggressive portfolio may take on too much risk, while a conservative one might miss growth opportunities. The right balance depends on your age, income needs, and comfort with risk—something we can help you evaluate and adjust.


*Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Financial Planning & Taxes


  • Do I need a financial advisor or a CPA—or both?


    • It depends on your needs. A financial advisor helps with long-term planning, investments, insurance, and retirement strategy. A CPA (Certified Public Accountant) focuses on taxes and compliance. Many people benefit from having both, especially in retirement or if they own a business. We often coordinate with CPAs to create a complete financial picture for our clients.


  • How can I lower my taxes in retirement?


    • Strategies include Roth conversions, tax-efficient withdrawals, qualified charitable distributions (QCDs), and capital gains planning. A good financial plan aligns your income sources with smart tax moves.


  • What is a fiduciary financial advisor?


    • A fiduciary advisor is legally required to act in your best interest, not their own. This differs from some brokers or agents who only have to recommend "suitable" products. Fiduciaries put your needs first.


  • What should be in a financial plan?


    • A solid financial plan includes:


      • Retirement income planning
      • Investment strategy
      • Tax planning
      • Insurance/risk management
      • Estate/legacy planning
        It’s your roadmap to lifelong financial clarity and security.


  • How often should I review my financial plan?


    • You should review your financial plan at least once a year. You should also review if you had any major life changes:


      • Divorce
      • Marriage
      • Children
      • Death 


* BMS Financial Advisors and LPL Financial do not provide legal or tax advice. Please consult with your tax or legal advisor regarding your personal situation.

Estate & Legacy Planning


  • What’s the difference between a will and trust?


    • A will distributes your assets after death and goes through probate. A trust allows assets to pass outside of probate, often faster and more privately, and can offer greater control over timing and distribution.


  • How do I avoid probate?


    • You can avoid probate by setting up:


      • Living trusts
      • Payable-on-death (POD) accounts
      • Joint ownership
      • Beneficiary designations
        • These allow assets to pass directly without going through court.


  • How can I make sure my children inherit fairly?


    • Start with clear communication and a solid estate plan. Use tools like wills, trusts, and beneficiary designations to spell out your wishes. Life insurance can also be used to “even out” inheritances when assets like property or a family business aren’t easily divided. A financial advisor can help guide you through a fair and thoughtful plan.


  • Do I need an estate plan if I’m not wealthy?

      
    • Yes. Estate planning isn’t just for the wealthy. It helps ensure your wishes are honored, your loved ones are protected, and your healthcare and finances are managed if you're unable to do so yourself.


*LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial. They also provide access to Trust & Will, a program that enables clients to create self- guided legal documents.

Trust & Will is not affiliated with or endorsed by LPL Financial. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

BMS Financial Advisors Information


  • Where is BMS Financial Advisors located?


    • BMS Financial Advisors is located at 1508 Mountain View Rd, Rapid City South Dakota 57702


  • What services does BMS Financial offer?


    • BMS Financial Advisors offer tax management, income management, cash management, wealth management, risk management, estate planning, and philanthropy planning. 


  • What are your hours at BMS Financial?


    • We are open Monday through Thursday 8:00am to 5:00pm and on Fridays 8:00am to 3:00pm during the summer. Winter hours are Monday through Thursday 8:00am to 5:00pm and Friday is 8:00am to 4:00pm.


  • What are BMS Financial Advisors phone number and email?


    • Our phone number is 605-341-1555 and our email is bms@bmsadvisors.com