Unmarried couples—same sex or straight—need to have a plan for their financial life without the several financial advantages that marriage provides. For a financially healthy present and a secure future, both parties need to understand where they are, where they’re going, what it will take to get there and also prepare for unexpected life events. For example unmarried/ same sex couples have to grapple with issues such as not getting Social Security spousal or survivor benefits, they have to deal with estate planning taxation challenges, wealth transfer issues, and income taxation disadvantages such as not being able to file “married filing jointly”.

Despite the horror stories, few unmarried couples of any age bother with financial planning. In fact, most couples—married or not—rarely get around to formal planning until they’re overwhelmed by a money crisis or left holding an empty bag after a nasty ending to a relationship. Financial and legal nuances need to be addressed that couples encounter as well as the basics. Sometimes the latter represents the greater risk to unmarried couples because, all too often, the basics are simply overlooked with devastating results.

When developing plans to secure their financial futures, unmarried couples need to have answers in place to a whole host of questions, including:

• The pros and cons of merging finances
• Determining ways unmarried partners should own property
• Strategies to ensure that your wishes will be carried out under all circumstances
• The importance of partnership arrangements and other legal documents for unmarried couples
• How to effectively employ life insurance strategies for protection of loved ones
• How to properly use estate planning and trusts for tax-optimization
• How to unify planning with the couple’s various retirement arrangements and Social Security
  and much, much more…

Contact us and let’s discuss your special situation. A free, no-obligation complimentary consultation is offered to all potential clients. – See more at: http://fmastery.com/financial-planning.htm

Please consider subscribing to my YouTube channel: http://www.youtube.com/user/FinancialMastery

Where could that money go besides a bank account?

Should your refund be saved? According to a TD Ameritrade poll, 47% of U.S. taxpayers expect a refund this year. What do they plan to do with the money?¹

The answers may surprise you. While 15% of the survey respondents indicated they would spend their refunds on discretionary purchases, 47% said they would save the money and 44% indicated they would use some or all of it to whittle away some debt. Just 15% said they would invest it, and only 6% said they would direct it to a charity.¹

Besides deposit accounts, consider other destinations. Putting your refund into your savings or checking account is sensible enough – but with the interest rates most bank accounts earn today, you may be wondering about alternatives. Here are some other options.

Your refund could let you put more money into your workplace retirement plan. Does your employer offer to match your retirement plan contributions? If so, you might want to think about contacting your plan administrator or human resources officer and increasing your elective salary deferrals into the retirement plan this year by the same amount as the refund. If you deposit those refund dollars in a checking or savings account, you can offset the increase in the amount of salary you defer by distributing the refund dollars from the bank account to yourself. Hopefully, that checking or savings account generates at least some interest on those deposited funds as well.²

It could help you increase your 2012 (or 2013) IRA contribution. If you didn’t make the maximum allowable IRA contribution for 2012 – $5,000 across all of your traditional and Roth IRAs, $6,000 for those 50 or older – you could boost that contribution as a byproduct of your refund.²

Assuming you haven’t sent your 2012 federal return to the IRS yet, you can redo your taxes to show your 2012 IRA contribution(s) raised by the amount of the refund you will be getting. As the deadline for 2012 contributions is April 15, 2013, you could either make your additional 2012 IRA contribution using your refund (if you file early and get your refund back nice and early) or with equivalent cash from your savings or checking account, knowing that you will then use the refund to reimburse yourself. Whatever way you choose, please make sure that you earmark your additional contribution for the year 2012; otherwise, the IRA custodian will interpret it as a contribution for this year. (If you’ve already sent your 2012 taxes to the IRS, you could still pull this off with the help of a 1040X form to amend your return).²

Another option: use the refund you get from your 2012 taxes to increase your 2013 IRA contribution.

 You could tell the IRS to put the money in bonds. Starting in 2011, the IRS gave taxpayers who received refunds a third option: in addition to a direct deposit or a check in the mail, their refunds could be redirected into U.S. Series I Savings Bonds. Up to $5,000 of refund dollars can be invested this way (in multiples of $50).³

You could use the dollars for home improvement. If you want to go green (or even greener) and you have the time, initiative and patience to tackle an energy-efficient home improvement project, here is another option. You could get as much as a $500 tax credit for your effort.²

You could make an additional mortgage payment or pay property tax. Assuming your home isn’t underwater, you may want to use the refund dollars to reduce mortgage principal. Also, mortgage companies often keep a few thousand bucks in escrow to pay various tax and insurance expenses linked to your home, and some of them will actually let a borrower’s savings account stand in for their escrow account. If they permit, you could make such payments out of an account of your own while it earns a (tiny) bit of interest.²

Lastly, think about avoiding a refund in 2013. In figurative terms, your federal tax refund amounts to an interest-free loan to Uncle Sam. If you don’t particularly want to make that “loan” again, see if your W-4 can be tweaked to decrease that possibility this year.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – files.shareholder.com/downloads/AMTD/2319508826x0x633008/9024d25b-97d6-410e-bc67-f7e1bcf7f17c/Tax_Refund_Release_Final_2013.pdf [2/6/13]

2 – http://www.cnbc.com/id/100457342 [2/13/13]

3 – http://www.irs.gov/uac/Ten-Things-to-Know-About-Tax-Refunds [4/11/13]

11:00 AM Wednesday May 27, 2009

I was late for my meeting with the CEO of a technology company and I was emailing him from my iPhone as I walked onto the elevator in his company’s office building. I stayed focused on the screen as I rode to the sixth floor.

I was still typing with my thumbs when the elevator doors opened and I walked out without looking up. Then I heard a voice behind me, “Wrong floor.” I looked back at the man who was holding the door open for me to get back in; it was the CEO, a big smile on his face. He had been in the elevator with me the whole time. “Busted,” he said.

The world is moving fast and it’s only getting faster. So much technology. So much information. So much to understand, to think about, to react to. A friend of mine recently took a new job as the head of learning and development at a mid-sized investment bank. When she came to work her first day on the job she turned on her computer, logged in with the password they had given her, and found 385 messages already waiting for her.

So we try to speed up to match the pace of the action around us. We stay up until 3 am trying to answer all our emails. We twitter, we facebook, and we link-in. We scan news websites wanting to make sure we stay up to date on the latest updates. And we salivate each time we hear the beep or vibration of a new text message.

But that’s a mistake. The speed with which information hurtles towards us is unavoidable (and it’s getting worse). But trying to catch it all is counterproductive. The faster the waves come, the more deliberately we need to navigate.

Otherwise we’ll get tossed around like so many particles of sand, scattered to oblivion. Never before has it been so important to be grounded and intentional and to know what’s important.

Never before has it been so important to say “No.” No, I’m not going to read that article. No, I’m not going to read that email. No, I’m not going to take that phone call. No, I’m not going to sit through that meeting.

It’s hard to do because maybe, just maybe, that next piece of information will be the key to our success. But our success actually hinges on the opposite: on our willingness to risk missing some information. Because trying to focus on it all is a risk in itself. We’ll exhaust ourselves. We’ll get confused, nervous, and irritable. And we’ll miss the CEO standing next to us in the elevator.

A study of car accidents by the Virginia Tech Transportation Institute put cameras in cars to see what happens right before an accident. They found that in 80% of crashes the driver was distracted during the three seconds preceding the incident. In other words, they lost focus — dialed their cell phones, changed the station on the radio, took a bite of a sandwich, maybe checked a text — and didn’t notice that something changed in the world around them. Then they crashed.

The world is changing fast and if we don’t stay focused on the road ahead, resisting the distractions that, while tempting, are, well, distracting, then we increase the chances of a crash.

Now is a good time to pause, prioritize, and focus. Make two lists:

List 1: Your Focus List (the road ahead)
What are you trying to achieve? What makes you happy? What’s important to you? Design your time around those things. Because time is your one limited resource and no matter how hard you try you can’t work 25/8.

List 2: Your Ignore List (the distractions)
To succeed in using your time wisely, you have to ask the equally important but often avoided complementary questions: what are you willing not to achieve? What doesn’t make you happy? What’s not important to you? What gets in the way?

Some people already have the first list. Very few have the second. But given how easily we get distracted and how many distractions we have these days, the second is more important than ever. The leaders who will continue to thrive in the future know the answers to these questions and each time there’s a demand on their attention they ask whether it will further their focus or dilute it.

Which means you shouldn’t create these lists once and then put them in a drawer. These two lists are your map for each day. Review them each morning, along with your calendar, and ask: what’s the plan for today? Where will I spend my time? How will it further my focus? How might I get distracted? Then find the courage to follow through, make choices, and maybe disappoint a few people.

After the CEO busted me in the elevator, he told me about the meeting he had just come from. It was a gathering of all the finalists, of which he was one, for the title of Entrepreneur of the Year. This was an important meeting for him — as it was for everyone who aspired to the title (the judges were all in attendance) — and before he entered he had made two explicit decisions: 1. To focus on the meeting itself and 2. Not to check his BlackBerry.

What amazed him was that he was the only one not glued to a mobile device. Were all the other CEOs not interested in the title? Were their businesses so dependent on them that they couldn’t be away for one hour? Is either of those a smart thing to communicate to the judges?

There was only one thing that was most important in that hour and there was only one CEO whose behavior reflected that importance, who knew where to focus and what to ignore. Whether or not he eventually wins the title, he’s already winning the game.

According to the National Association of Realtors, existing home sales rose 0.8% in February. The sales pace hit 4.98 million units, a 39-month high. The inventory of homes for sale increased 9.6% last month, recovering from a six-and-a-half-year low reached the month before. In related news, housing starts were also up 0.8% in February, with the Census Bureau putting the 12-month increase at 27.7%. As for projects in the pipeline, building permits rose 4.6% last month, part of a 33.8% year-over-year climb. The latest Federal Housing Finance Agency index showed a 6.5% yearly advance in house prices.^1,2,3

ANOTHER GAIN FOR THE CONFERENCE BOARD LEI

Seemingly reflective of the economy’s momentum, the Conference Board’s Leading Economic Index advanced for a third straight month. Its 0.5% February gain comes on the heels of an 0.5% rise in January and an 0.4% improvement in December.⁴

FED WILL KEEP EASING FOR THE NEAR FUTURE

Last week, Federal Reserve Chairman Ben Bernanke said that the central bank would keep up its monthly bond-buying effort until the economy showed more than “temporary improvement,” while noting that it might soon vary the size of those purchases in response to the pace of job growth. Bernanke reaffirmed that interest rates will stay at historic lows unless the jobless rate dips below 6.5%.⁵

RALLY WANES AS CYPRUS CRISIS BUILDS

On March 19, the Cypriot government turned down a European Central Bank offer to rescue its banking system. (The plan would have taxed depositors.) So the Dow lost 0.01% last week, the S&P 500 0.24% and the NASDAQ 0.13%. Friday, the Dow closed at 14,512.03, the S&P at 1,556.89 and the NASDAQ at 3,245.00. On the NYMEX, gold wrapped up the week at $1,607.10 and oil at $93.91.^6,7

THIS WEEK: Cyprus must arrange or agree to a bailout deal by Monday or face suspended ECB aid; Dollar General reports Q4 results, and Ben Bernanke speaks in London. Tuesday, NAR posts February new home sales figures, data arrives on February hard goods orders, and a new Conference Board consumer confidence poll and January’s Case-Shiller Home Price Index appear. Wednesday, NAR reports February pending home sales; Red Hat and Paychex announce earnings. Blackberry, Accenture, Mosaic and GameStop report earnings Thursday, and the BEA makes its final estimate of Q4 GDP. March 29 is Good Friday, with U.S. financial markets closed (and banks open); March’s final University of Michigan consumer sentiment survey and the Commerce Department’s February consumer spending report arrive.

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/22/13^6,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – http://www.marketwatch.com/story/home-sales-reach-highest-rate-since-2009-2013-03-21 [3/21/13]

2 – http://www.census.gov/construction/nrc/pdf/newresconst.pdf [3/22/13]

3 – http://www.foxbusiness.com/news/2013/03/21/us-home-prices-rise-06-in-january/ [3/21/13]

4 – http://www.conference-board.org/data/bcicountry.cfm?cid=1 [3/21/13]

5 – http://www.sfgate.com/news/article/Bernanke-Stimulus-hinges-on-sustained-improvement-4370751.php [3/20/13]

6 – http://www.cnbc.com/id/100582032 [3/22/13]

7 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

9 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/22/13]

10 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/22/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Erik Larsen, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, ING Retirement, AT&T, Qwest, Chevron, Merck, Pfizer, Verizon, Bank of America, netbenefits.fidelity.com, hewitt.com, Hughes, Northrop Grumman, Glaxosmithkline, resources.hewitt.com, access.att.com, Raytheon, ExxonMobil, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Erik Larsen is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Making allowances

Giving children allowances is a good way to begin teaching them how to save money and budget for the things they want. How much you give them depends in part on what you expect them to buy with it and how much you want them to save.

Some parents expect children to earn their allowance by doing household chores, while others attach no strings to the purse and expect children to pitch in simply because they live in the household. A compromise might be to give children small allowances coupled with opportunities to earn extra money by doing chores that fall outside their normal household responsibilities.

When it comes to giving children allowances:

While children might want to spend all their allowance now, encourage them (especially older children) to divide it up, allowing them to spend some immediately, while insisting they save some toward things they really want but can’t afford right away. Writing down each goal and the amount that must be saved each week toward it will help children learn the difference between short-term and long-term goals. As an incentive, you might want to offer to match whatever children save toward their long-term goals.

Shopping sense

Television commercials and peer pressure constantly tempt children to spend money. But children need guidance when it comes to making good buying decisions. Teach children how to compare items by price and quality. When you’re at the grocery store, for example, explain why you might buy a generic cereal instead of a name brand.

By explaining that you won’t buy them something every time you go to a store, you can lead children into thinking carefully about the purchases they do want to make. Then, consider setting aside one day a month when you will take children shopping for themselves. This encourages them to save for something they really want rather than buying on impulse. For “big-ticket” items, suggest that they might put the items on a birthday or holiday list.

Don’t be afraid to let children make mistakes. If a toy breaks soon after it’s purchased, or doesn’t turn out to be as much fun as seen on TV, eventually children will learn to make good choices even when you’re not there to give them advice.

Earning and handling income

Older children (especially teenagers) may earn income from part-time jobs after school or on weekends. Particularly if this money supplements any allowance you give them, wages enable children to get a greater taste of financial independence.

Earned income from part-time jobs might be subject to withholdings for FICA and federal and/or state income taxes. Show your children how this takes a bite out their paychecks and reduces the amount they have left over for their own use.

Creating a balanced budget

With greater financial independence should come greater fiscal responsibility. Older children may have more expenses, and their extra income can be used to cover at least some of those expenses. To ensure that they’ll have enough to make ends meet, help them prepare a budget.

To develop a balanced budget, children should first list all their income. Next, they should list routine expenses, such as pizza with friends, money for movies, and (for older children) gas for the car. (Don’t include things you will pay for.) Finally, subtract the expenses from the income. If they’ll be in the black, you can encourage further saving or contributions to their favorite charity. If the results show that your children will be in the red, however, you’ll need to come up with a plan to address the shortfall.

To help children learn about budgeting:

The future is now
Teenagers should be ready to focus on saving for larger goals (e.g., a new computer or a car) and longer-term goals (e.g., college, an apartment). And while bank accounts may still be the primary savings vehicles for them, you might also want to consider introducing your teenagers to the principles of investing.

To do this, open investment accounts for them. (If they’re minors, these must be custodial accounts.) Look for accounts that can be opened with low initial contributions at institutions that supply educational materials about basic investment terms and concepts.

Helping older children learn about topics such as risk tolerance, time horizons, market volatility, and asset diversification may predispose them to take charge of their financial future.

Should you give your child credit?
If older children (especially those about to go off to college) are responsible, you may be thinking about getting them a credit card. However, credit card companies cannot issue cards to anyone under 21 unless they can show proof they can repay the debt themselves, or unless an adult cosigns the credit card agreement. If you decide to cosign, keep in mind that you’re taking on legal liability for the debt, and the debt will appear on your credit report.

Also:

If putting a credit card in your child’s hands is a scary thought, you may want to start off with a prepaid spending card. A prepaid spending card looks like a credit card, but functions more like a prepaid phone card. The card can be loaded with a predetermined amount that you specify, and generally may be used anywhere credit cards are accepted. Purchases are deducted from the card’s balance, and you can transfer more money to the card’s balance whenever necessary. Although there may be some fees associated with the card, no debt or interest charges accrue; children can only spend what’s loaded onto the card.

One thing you might especially like about prepaid spending cards is that they allow children to gradually get the hang of using credit responsibly. Because you can access the account information online or over the phone, you can monitor the spending habits of your children. If need be, you can then sit down with them and discuss their spending behavior and money management skills.

FTSE 100                              6392.76     -1.49%    on the week

FTSE All Share                     3372.79      -1.44%    on the week

Brent Crude $ per barrel      107.66       -1.97%     on the week

Gold $ per troy ounce         1607.75        0.77%     on the week

Silver $ per troy ounce         29.06          0.52%     on the week

Copper US$ per tonne       7655.00       -2.00%     on the week   (LME 3 months)

Wheat Futures CBOT          729.75        0.93%     on the week   (US$ per bushel – Contract 5000 bushels/136 tonnes)

Palm Oil US$ per tonne      865.00        1.76%   on the week   (eg CMEGlobex – trading unit 25 tonnes – mirror and settle to Malaysian ringgit benchmark)

MPC Base Rate  %               0.50  (Bank of England Base/Repo Rate) since 05/03/2009

Euro Repo Rate %                0.75  since 05/07/2012

US Libor %                            0.15700   last week : 0.15300

Euro Libor %                         0.02071   last week : 0.01857

GBP Libor %                         0.48250  last week : 0.48500

Euro Euribor 3 mnths %     0.22   last week : 0.20

Sterling CDs 3 mnths %       0.57  last week : 0.48

RONIA  %                            0.4392  l wk : 0.4672 (Repurchase Overnight Index Ave Rate)

SONIA   %                            0.4356  l wk : 0.4371 (Sterling Overnight Index Ave Rate)

HFRX                                    1185.87          0.15%  on the week  (Global Hedge Fund Index)

10 Year Government Bond (Gilt) Price £98.98 Yield 1.87%

One Pound will buy 1.5239 US Dollars

One Pound will buy 1.1725 Euros

CPI Inflation stands at 2.8% as at Jan 2013     Currently the old Gov’t measure of inflation

CPIH Inflation stands at 2.6% as at Feb 2013   Currently the new Gov’t inflation measure

Retail Prices Index:         3.3% as at Jan 2013     No longer a Gov’t measure of inflation

Retail Price Inflation RPIJ – Jevon’s formula – NEW:  2.6% as at February 2013 

Inflation Target expected to stay in place: 2.0%  based on the Consumer Prices Index (CPI)

The Chancellor confirmed in his Budget Speech Wednesday 20th March 2013 that the 2% Inflation target for the Bank of England would stay in place.

The Government’s Inflation Target is announced each year by the Chancellor of the Exchequer in the annual Budget statement. The Bank of England Monetary Policy Committee has the aim to set interest rates so that over- or under- inflation can be brought back to Inflation Target over a reasonable time period without creating undue instability in the economy. Inflation Target is not a permanently fixed level and may vary depending on prevailing economic and fiscal conditions.

KEY to Important Indeces:

RONIA – Repurchase Overnight Index Average Rate – Launched June 2011

Changes to Method of Calculating Inflation Measurement Index – March 2013

Metal and Precious Metal Pricing used in Market Numbers 

Photo Credit: SBG PhotoStock

Please note that our SUMMARY is no more than an initial understanding of the Budget Speech and may contain errors and or omissions, despite our best endeavours, and cannot be relied upon as a basis for taking or refraining from taking any decision for action transaction or inaction. You should always seek and take professional independent relevant and timely advice prior to making decisions.

DOWNLOAD YOUR SewellBrydenGunn BUDGET SUMMARY March 2013 here.

SewellBrydenGunn provides Independent Financial Planning and Investment Advice which sets us apart from other financial advisers. We have developed our own client centred approach to produce the unique blend of lifestyle goal setting and incisive financial observation. We are driven by the professionalism and ethical best practice, found only in the combination of rigorous qualifications of Chartered Financial Planner and Masters in Business Administration (MBA) together with specialist expertise in Long Term Care Advice, Equity Release (Lifetime Mortgages) and Specialist Pension and Pension Transfer and Opt Out Advice. A knowledgeable insight into Investment Portfolio Management matters as well as a keen eye on tax, IHT and estate planning issues enables us to provide a well-rounded comprehensive advice and planning service for our clients.  

It means you can be confident that you are dealing with one of the UK’s best qualified firms that is wholly committed to providing you with the best possible advice, service and support.

We provide comment on market developments and key financial planning issues, to enable our clients and professional connections alike to understand the implications of whatever is unfolding next. We welcome conversations with individuals, business owners and professional advisers on any of the issues raised in this update.

SuperRich or not so rich – “wealth is what you make it” – health and wellbeing in body and spirit are equally important. In our view, to “Maximise Your Life™” requires making the most of your opportunities, resources and relationships. Enjoy an engaging conversation with a financial and wealth professional whose priority is to understand you and your family, your financial situation and to help you plan for the things you want to accomplish and the future life you want to enjoy: 01276 471083 or cedar@s-cm.com

CEO™ is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

The CEO™ device is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

Design and PhotoCredit: SBG PhotoStock

This article is directed toward those who are dealing with elderly parents, some of whom are not as mentally alert or as strong as they once were. Time has a way of getting away from us and for those of you in middle age, this part of your future has a lot of challenges.

So I encourage you to approach your time with your parents, aunts and uncles, with the following circumstances in mind. You’ll be doing yourself a favor, not to mention minimizing stress for those afflicted.

By Kevin Sypniewski | March 20, 2013

When we hear something once, we might pay attention but when we hear the same thing from totally unrelated people, we begin to suspect there is a trend.

Some of the most enlightening and interesting professional conversations I’ve had recently have been with long-term care (LTC) claim departments. Okay, perhaps I should get out more!

Two different claim departments from two different leading LTC carriers tell me that they regularly get LTC claims submitted 12 or even 24 months after the claim event.

Why on earth would someone wait that long to receive the money for which they are entitled? Because the family just found the LTC policy!

The insured was ADL dependent but not communicative, and the family just “happened” to find the policy in a shoebox or file cabinet in the basement.

Have you ever been into the basement of the house that someone has lived in for 30 years and tried to find a specific file? It is wonderful that this policy got found and even more wonderful that the carriers are paying “late” claims, some of which they are no longer contractually obligated to pay.

What about the other LTC policies on other insureds that never get found?

If some get found, others surely do not get found!

We’ve had employees in our caregiving education and LTC sessions tell us about finding policies and others tell us about “knowing” mom bought one, but they never could find it once mom needed it.

We were hoping these were somewhat isolated incidences; however, after talking with leading LTC carriers, we know these are not isolated. If someone lapses their policy and takes the carrier “off the hook,” I’m okay with that.

That is their decision and certainly the carriers don’t mind. But knowing that families are paying premiums for the duration and the carrier gets a bye on the payment…That just stinks!

You as an insurance professional did your job selling the policy. The claimant did a smart thing buying the policy, but in the end the family loses a lifetime of assets and now the family home has a lien and the insured is on Medicaid in a Medicaid facility.

That is just not right! Sure, the policies that get found eventually get paid, but by then the assets might be gone, mom is in a Medicaid facility, and now the family gets the $200,000 check.

Better than nothing, but not for Mom.

I can hear the family discussion now. “I sure wish Mom had bought long-term care insurance because she really wants to remain at home in her house of 30 years.” She did buy the policy but just never told anyone, which is exactly like not buying a policy… just more expensive.

The carriers and regulators require we designate a third-party in case we don’t pay our premium. What about a third party to make sure we file our claim?

I think we have an obligation to communicate this story to each and every person we help with LTC insurance.

Perhaps we create our own third party notification memo that at the time of purchase the new policyholder is able to designate several people who get notified about the policy purchase.
Sure, those people may or may not be around 25 years later at claim time, but I certainly like the odds of that effort versus the strategy of hope.

Source: http://www.lifehealthpro.com/2013/03/20/lost?eNL=514a2b29150ba0161b0002ff&utm_source=LifeHealthProDaily&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=1044219161

Pre-Retirement

The first thing to note is that, in the main, there was nothing new announced that we weren’t already aware of.  The constant “tinkering” with pensions by successive Governments is one of the key reasons why I believe people lose confidence in this important area of financial planning.  Not having anything “new” is therefore very much a positive thing.

We were already aware that the annual allowance (the maximum amount you are allowed to pay into a pension each year and still receive tax relief) would reduce from £50,000 to £40,000 from next year.  This, together with a reduction in the Lifetime Allowance (the total amount that can be held within a pension whilst still qualifying for full tax benefits) were announced in the Chancellor’s Autumn Statement.

For those whose planning involves significant contributions, either through personal or company schemes, there are four main issues to be aware of.

1. If you are one of those lucky enough to be a member of a final salary pension, pay close attention to the total level of contributions being made.As the employer has to ensure that enough money is paid in to guarantee your benefits, this can represent a significant contribution, particularly for those on higher incomes.  (Your scheme administrators should be able to confirm the total level of contributions if you are unsure).
2.  Find out when your “PIP” starts.The new £40,000 limit applies not to the Tax Year but to your Personal Input Period (PIP).  In some cases, particularly with personal pensions, this may be the same as the Tax Year, however in many cases the dates will differ.  For anyone who’s PIP commences after 6^th April 2013 you will fall under the new limits almost immediately.  Your adviser, pension provider or scheme administrator can confirm what the date is, what contribution limits will apply and when.
3. The Lifetime Allowance calculations are not always as straightforward as you may think, especially if you are a member of a final salary scheme.For those with a personal or money purchase company scheme, the position regarding the total amount held in your pension is easier to work out.  If you are due to retire in the next few years, however, be careful to take into account future contributions and growth as well, and look at what you your fund may be worth in the future.

   Be careful as well if you receive an increase in your income during the year (for example, due to a promotion), as this could potentially increase your benefits beyond the limit.

   The Government has announced that certain levels of protection will be available to help people who, due to the reduction in the limits, will now exceed the allowance.  Full details have not yet been announced, and are to be included in the next Pensions Act.

Post-Retirement

There are two main announcements that could affect either those already utilising certain pension contracts to generate an income, or those who may do so in the near future.

This principally affects those with Capped or Flexible Drawdown contracts (more commonly called Income Drawdown).  If you’ve got one you will already know what they are, but in simple terms it is a way of leaving a pension invested rather than buying an annuity, and then drawing an income from the fund.

Until April 2011 the level of income that could be taken under a drawdown contract is based on the rates determined by the Government Actuaries Department (GAD). These GAD rates were designed to mirror the amount an individual could receive if they had purchased an annuity.

Over recent years these GAD rates have shown less resemblance to standard annuity rates, which led to a call for the system to be reviewed and revised.  This review has now been announced, which we hope will lead to increased rates for policy holders.

An additional benefit which comes into effect next week is the increase in the maximum percentage of the GAD rate that can be taken.

Until April 2011, a drawdown policy holder could take up to 120% of the prevailing GAD rate as an income.  This was reduced to 100% from that date which, combined with other factors such as falling annuity rates and erratic investment returns, led to some pensioners seeing a significant reduction in their incomes.  It has been confirmed that the maximum rate will return to 120% for all policies where the review date is 26^th March 2013 or later.  Where a review date falls before 26^th March the new limits will take effect at the next annual review.

Summary

Whether you are planning ahead for retirement or you have already reached that point, the announcements yesterday need to be considered carefully as the potential implications are significant.

As with any financial planning, if you are at all unsure take professional advice.  If you don’t already have an adviser, or would simply like a second opinion, please contact me and I will be happy to explain how we can help.

Gareth Tregidon.

Gareth Tregidon is manager of Bevan & Buckland’s Financial Planning Department, which operates from the firm’s Swansea, Pembroke and Haverfordwest offices. The department provides fee-based advice to personal and business clients, both from within the firm and elsewhere.

As well as having over 25 years’ experience in the provision of financial advice, Gareth is a Certified Financial Planner^CM and an accredited Later Life Adviser with the Society of Later Life Advisers (SOLLA).  He is former Chairman of the Institute of Financial Planning in South Wales, and an assessor for the internationally recognised Certified Financial Planner^CM licence. 

http://www.bevanbuckland.co.uk/services/financial-planning

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

This summary covers the issues which we feel are most poignant. Look out for our fuller Budget Summary which we will be making available from our website shortly. As with every Budget, as more details and planning opportunities come to light, we will add additional comment on specific planning topics to our website at 3sbg.net . SmartLifestyle™ Financial Planning means SewellBrydenGunn.

For a more in-depth insight into how things may impact on your own financial planning priorities, please do get in touch. Enjoy a financial conversation as part of your regular financial planning review at SewellBrydenGunn.

 In Brief:  The income tax personal allowance is now set to rise to £10,000 in 2014, a year earlier than previously planned. Other measures brought forward by one year include the introduction of a flat-rate State Pension at £144 per week and the lifetime cap on the cost of social care.

Other items in the Budget are as follows (comments in royal blue):

1. The Bank of England retains their CPI inflation target of 2%, with their remit set to change in the future to focus on growth as well as managing price inflation – THAT is a BIG ask! Might we be overstretching ourselves a little??
2. As summarised above, the income tax personal allowance is being increased to £10,000 from April 2014, a year earlier than was originally planned. The personal allowance is currently £8,105 (up from £7,475 for Tax year 2011/12) and will rise again to £9,440 on 6th April 2013 (Tax Year 2013/14).
3. A 20% income tax relief on the cost of childcare up to £6,000 per child per year will be introduced in 2015.
4. Most government departments will experience budget cuts of 1% in each of the next two years, with spending on schools and the NHS ringfenced. The culling of this indirect injection of cash into the economy, partially recouped anyway through income and other transaction based taxes, could be seen as nothing more than political posturing…
5. The 1% cap on public sector pay increases is extended to 2015/16, with additional restrictions placed on “progression” pay rises.
6. The introduction of a flat-rate state pension at £144 per week was brought forward by one year, to be introduced in April 2016. Broadly welcome news.
7. The pension annual allowance is currently £50,000 and will be reduced to £40,000 from 6th April 2014. At least the warning gives everyone affected a chance to plan forward any extra contributions in the short term before the next tax year.
8. Stamp duty will no longer be paid when buying shares on the Alternative Investment Market (AIM).
9. Capitals gain tax relief for Seed Enterprise Investment Scheme (SEIS) will be extended by two years to 2014/15. For the majority of “middle of the road” investors, items 8 and 9 make little difference…
10. The main rate of corporation tax is being cut to 20% in 2015. This was eluded to last year and its inclusion now makes the UK one of the most competitive tax systems for businesses in the developed world. However it is unlikely to bring any major benefit changes for smaller businesses many of whom are currently subject to lower tax.
11. A new ‘employment allowance’ is being introduced which will result in businesses paying no employer National Insurance up to the first £2,000 in 2014. This new measure will mean about 450,000 small businesses will not pay employer National Insurance contributions next year. Broadly welcome news.
12. Capital gains tax relief on the sale of a controlling interest in a business to an employee ownership structure will be introduced in April 2014, making up to £50,000 worth of shares exempt from CGT on shares received from 1st September 2013. This is certainly a positive step which will help many small business owners wishing to retire or move away from their business.
13. A lifetime cap on the amount paid for social care will be brought forward a year to 2016, now to be set at £72,000 rather than the previously suggested £75,000. The asset threshold for means tested benefits will be raised to £118,000. These measures follow at least in spirit the proposals in the Dilnot report previously published and which was of course the subject of much debate fairly recently. Welcome news indeed for many who would otherwise be caught by the “Long Term Care Trap”. This will almost certainly pave the way for the introduction of better more effective Care Funding Products – let us look forward to some proactivity from providers.
14. The shared equity scheme is being extended - interest free loans of up to 20% of the value for new-build properties. This is seen by us as good news for the housing market.

SewellBrydenGunn provides Independent Financial Planning and Investment Advice which sets us apart from other financial advisers. We have developed our own client centred approach to produce the unique blend of lifestyle goal setting and incisive financial observation. We are driven by the professionalism and ethical best practice, found only in the combination of rigorous qualifications of Chartered Financial Planner and Masters in Business Administration (MBA) together with specialist expertise in Long Term Care Advice, Equity Release (Lifetime Mortgages) and Specialist Pension and Pension Transfer and Opt Out Advice. A knowledgeable insight into Investment Portfolio Management matters as well as a keen eye on tax, IHT and estate planning issues enables us to provide a well rounded comprehensive advice and planning service for our clients.  

It means you can be confident that you are dealing with one of the UK’s best qualified firms that is wholly committed to providing you with the best possible advice, service and support.

We provide comment on market developments and key financial planning issues, to enable our clients and professional connections alike to understand the implications of whatever is unfolding next. We welcome conversations with individuals, business owners and professional advisers on any of the issues raised in this update.

SuperRich or not so rich – “wealth is what you make it” – health and wellbeing in body and spirit are equally important. In our view, to “Maximise Your Life™” requires making the most of your opportunities, resources and relationships. Enjoy an engaging conversation with a financial and wealth professional whose priority is to understand you and your family, your financial situation and to help you plan for the things you want to accomplish and the future life you want to enjoy: 01276 471083 or cedar@s-cm.com

CEO™ is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

The CEO™ device is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

Design and PhotoCredit: SBG PhotoStock&Design

This summary covers the issues which we feel are most poignant. Look out for our fuller Budget Summary which we will be making available from our website shortly. As with every Budget, as more details and planning opportunities come to light, we will add additional comment on specific planning topics to our website at 3sbg.net . SmartLifestyle™ Financial Planning means SewellBrydenGunn.

For a more in-depth insight into how things may impact on your own financial planning priorities, please do get in touch. Enjoy a financial conversation as part of your regular financial planning review at SewellBrydenGunn.

 In Brief:  The income tax personal allowance is now set to rise to £10,000 in 2014, a year earlier than previously planned. Other measures brought forward by one year include the introduction of a flat-rate State Pension at £144 per week and the lifetime cap on the cost of social care.

Other items in the Budget are as follows (comments in royal blue):

1. The Bank of England retains their CPI inflation target of 2%, with their remit set to change in the future to focus on growth as well as managing price inflation – THAT is a BIG ask! Might we be overstretching ourselves a little??
2. As summarised above, the income tax personal allowance is being increased to £10,000 from April 2014, a year earlier than was originally planned. The personal allowance is currently £8,105 (up from £7,475 for Tax year 2011/12) and will rise again to £9,440 on 6th April 2013 (Tax Year 2013/14).
3. A 20% income tax relief on the cost of childcare up to £6,000 per child per year will be introduced in 2015.
4. Most government departments will experience budget cuts of 1% in each of the next two years, with spending on schools and the NHS ringfenced. The culling of this indirect injection of cash into the economy, partially recouped anyway through income and other transaction based taxes, could be seen as nothing more than political posturing…
5. The 1% cap on public sector pay increases is extended to 2015/16, with additional restrictions placed on “progression” pay rises.
6. The introduction of a flat-rate state pension at £144 per week was brought forward by one year, to be introduced in April 2016. Broadly welcome news.
7. The pension annual allowance is currently £50,000 and will be reduced to £40,000 from 6th April 2014. At least the warning gives everyone affected a chance to plan forward any extra contributions in the short term before the next tax year.
8. Stamp duty will no longer be paid when buying shares on the Alternative Investment Market (AIM).
9. Capitals gain tax relief for Seed Enterprise Investment Scheme (SEIS) will be extended by two years to 2014/15. For the majority of “middle of the road” investors, items 8 and 9 make little difference…
10. The main rate of corporation tax is being cut to 20% in 2015. This was eluded to last year and its inclusion now makes the UK one of the most competitive tax systems for businesses in the developed world. However it is unlikely to bring any major benefit changes for smaller businesses many of whom are currently subject to lower tax.
11. A new ‘employment allowance’ is being introduced which will result in businesses paying no employer National Insurance up to the first £2,000 in 2014. This new measure will mean about 450,000 small businesses will not pay employer National Insurance contributions next year. Broadly welcome news.
12. Capital gains tax relief on the sale of a controlling interest in a business to an employee ownership structure will be introduced in April 2014, making up to £50,000 worth of shares exempt from CGT on shares received from 1st September 2013. This is certainly a positive step which will help many small business owners wishing to retire or move away from their business.
13. A lifetime cap on the amount paid for social care will be brought forward a year to 2016, now to be set at £72,000 rather than the previously suggested £75,000. The asset threshold for means tested benefits will be raised to £118,000. These measures follow at least in spirit the proposals in the Dilnot report previously published and which was of course the subject of much debate fairly recently. Welcome news indeed for many who would otherwise be caught by the “Long Term Care Trap”. This will almost certainly pave the way for the introduction of better more effective Care Funding Products – let us look forward to some proactivity from providers.
14. The shared equity scheme is being extended - interest free loans of up to 20% of the value for new-build properties. This is seen by us as good news for the housing market.

SewellBrydenGunn provides Independent Financial Planning and Investment Advice which sets us apart from other financial advisers. We have developed our own client centred approach to produce the unique blend of lifestyle goal setting and incisive financial observation. We are driven by the professionalism and ethical best practice, found only in the combination of rigorous qualifications of Chartered Financial Planner and Masters in Business Administration (MBA) together with specialist expertise in Long Term Care Advice, Equity Release (Lifetime Mortgages) and Specialist Pension and Pension Transfer and Opt Out Advice. A knowledgeable insight into Investment Portfolio Management matters as well as a keen eye on tax, IHT and estate planning issues enables us to provide a well rounded comprehensive advice and planning service for our clients.  

It means you can be confident that you are dealing with one of the UK’s best qualified firms that is wholly committed to providing you with the best possible advice, service and support.

We provide comment on market developments and key financial planning issues, to enable our clients and professional connections alike to understand the implications of whatever is unfolding next. We welcome conversations with individuals, business owners and professional advisers on any of the issues raised in this update.

SuperRich or not so rich – “wealth is what you make it” – health and wellbeing in body and spirit are equally important. In our view, to “Maximise Your Life™” requires making the most of your opportunities, resources and relationships. Enjoy an engaging conversation with a financial and wealth professional whose priority is to understand you and your family, your financial situation and to help you plan for the things you want to accomplish and the future life you want to enjoy: 01276 471083 or cedar@s-cm.com

CEO™ is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

The CEO™ device is a Trademark of SewellBrydenGunn, a business name of SCM Finance and is used for various purposes including “Capital Eyes on the Market” bulletin updates.

Design and PhotoCredit: SBG PhotoStock&Design

An example of one strategy is waiting as long as possible to start claiming your Social Security benefits.  The earliest age that a retiree can start claiming these benefits is 62 years old.  However, did you know that once you reach your full retirement age (between 65 -67), your social security benefits increase by 8% each year plus inflation adjustments? Wow, the money claimed increase considerably just by waiting a little longer.

Are there claiming strategies that can optimize your Social Security benefits even if you need to start collecting at an earlier age?  The answer is “Yes”.  Advantageous strategies can be applied to this situation as well when you know how to maneuver through the claiming process… you just need the proper expertise to guide you through the rules.  Once you know these rules and know how to navigate confidently through the claiming process, you can apply a strategy that works in your favor, and maximizes this money.

Some of these claiming strategies involve the idea of spousal benefits.  Here, spousal benefits can be applied to a “Restricted Spousal” strategy as well as a “File and Suspend” strategy.  According to Jim Blankenship, CFP, EA of Forbes Advisor Network, “File and Suspend allows for the lower wage earner to increase his or her benefits by adding the Spousal Benefit, while the higher wage earner continues to delay his or her benefit, adding the delay credits.” On the other hand, the Restricted Application for Spousal Benefits “provides one spouse or the other with the option of collecting a Spousal Benefit, while at the same time delaying his or her own retirement benefit.” All and all, any couple must carefully consider the particular rules pertaining to these strategies in order to determine the appropriate strategy that applies to their specific situation.

Overall, these claiming strategies can cushion your retirement years with thousands of dollars.  If you are thinking about navigating through your Social Security claiming process alone, it might be very unrealistic because the rules behind these strategies can be complex and meticulous.   Even the employees at the national and local Social Security offices cannot give any advice; therefore, it’s best to seek the help of a financial advisor who has an in-depth knowledge of the best Social Security strategies for retirees.  The world today is very different… life expectancy has increased, pensions have dwindled, medical costs have increased, and the economy remains uncertain.  Especially now, maximizing your Social Security benefits is necessary because these are unfavorable conditions.  So, make certain that you fully learn and understand the rules of each strategy before you chose.  You can add thousands of dollars to your retirement funds just by applying the right Social Security claiming strategy for you.

Investment Advisory services provided by Gregory Ricks & Associates

Blankenship, Jim. “Are You Leaving Social Security Money on the Table.” Forbes. 26 November 2012. <http://www.forbes.com/sites/advisor/2012/11/26/are-you-leaving-social-security-money-on-the-table-you-might-be-if-you-dont-understand-and-use-this-one-rule/>

Roberts, Damon. “The Retirement Planning Edge: Maximizing Social Security.” Fox Business. 27 November 2012. <http://www.foxbusiness.com/industries/2012/11/27/retirement-planning-edge-maximizing-social-security/>

Image courtesy of: http://www.bankrate.com/finance/retirement/5-little-known-facts-about-social-security-1.aspx

HIRING HAS REALLY PICKED UP

During June-August 2012, non-farm payrolls grew by an average of 135,000 jobs a month. Across September-November, that average improved to 181,000 per month. From December-February, the economy added an average of 191,000 jobs a month. The icing on the cake: the latest monthly report from the Labor Department showed 236,000 new jobs generated in February, including the biggest monthly surge of hiring in the construction industry in six years. Unemployment fell to a four-year low of 7.7% in February, but the percentage of Americans either working or looking for work hit a 30-year low – 130,000 people dropped out of the job hunt.¹

KEY INDEX SHOWS HEALTHY SERVICE SECTOR

The Institute for Supply Management’s non-manufacturing PMI came in at 56.0 for February – the best reading in 12 months, up from 55.2 in January. ISM noted a 3.8% increase in new orders, a 5.5% rise in backlogs of orders and a 3.7% gain in prices last month.²

BEIGE BOOK ENCOURAGES, BUT FACTORY ORDERS DIP

The Federal Reserve’s latest “Beige Book” survey of economic conditions noted modest growth in most of its 12 districts since January, with increased hiring a major factor. Last week, the Commerce Department reported a 1.2% rise in wholesale inventories and a 2.0% drop in factory orders for January.^3,4

MORE HISTORY IS MADE

A 2.18% weekly gain brought the DJIA to a new record close of 14,397.07 Friday. The S&P 500 (+2.17% to 1,551.18), NASDAQ (+2.35% to 3,244.37) and Russell 2000 (+3.04% to 942.50) also had terrific weeks. As for the CBOE VIX, it dropped 17.84% in five days to finish last week at 12.62. Gold ended the week at $1,577.7o per ounce on the COMEX, oil at $91.88 a barrel on the NYMEX.^4,5

THIS WEEK: On Monday, earnings reports arrive from Urban Outfitters and Dick’s Sporting Goods. Costco reports earnings on Tuesday. Wednesday, the Census Bureau gives us retail sales figures for February, the Commerce Department notes January business inventories, and Express, Inc. announces quarterly results. February’s PPI arrives Thursday, plus Q4 results from Aeropostale. Friday is a quadruple witching day that also sees the release of the February CPI, data on February industrial output, and the preliminary March consumer sentiment survey from the University of Michigan.

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/8/13^4,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Erik Larsen, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, Merck, Pfizer, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Verizon, Bank of America, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Erik Larsen is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Citations.

1 – http://www.mercurynews.com/business/ci_22746707/us-adds-236k-jobs-unemployment-falls-7-7 [3/8/13]

2 – http://www.ism.ws/ISMReport/NonMfgROB.cfm [3/5/13]

3 – online.wsj.com/article/SB10001424127887324178904578343432769615600.html [3/6/13]

4 – http://www.cnbc.com/id/100537377 [3/8/13]

5 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]

7 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/8/13]

8 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/8/13]

Many of us have little love lost for the IRS but understand, they are the ones charged with collecting the money that Congress, over the years, has authorized be collected so the government has the necessary funds to pay its bills. You can argue that it’s being wasted, but that’s a secondary consideration.

You can also argue that the national debt is way too high and steps must be taken to get it under control. No real argument from me. But I’d rather see steps taken to increase wealth in the long run than give the bad guys more room to rip me off.

By Marlene Y. Satter, AdvisorOne | March 7, 2013

Now that it’s tax season again, not only taxpayers and tax preparers are gearing up to besiege the IRS with tons of returns; fraudsters and phishers are, too. The tighter money gets, it seems, the more determined the bad guys are to part you from yours so that they can party while you wait by the mailbox for that refund they’ve already spent.

As a result, the IRS has once again issued warnings to taxpayers to safeguard their information, take quick action if they suspect their identity has been stolen and guard against phishers looking to hook the Big One. And well they might; according to the National Taxpayer Advocate’s 2012 annual report to Congress, ID theft is mushrooming into a far bigger problem in the tax arena than many taxpayers may suspect.

While the IRS warns taxpayers, it suggests these strategies: guarding personal information, watching out for IRS impersonators (those phishermen, active via email and social media) and protecting tax information on your computer or on your tax preparer’s computer. It also suggests ways you might discover that your refund is already being spent in the Bahamas while you’re still suffering through a cold winter. These include IRS notifications that a) you have filed more than one tax return (what, one wasn’t enough?), or that someone has already filed for you (and not out of the goodness of their hearts); b) you owe taxes for a year when you weren’t legally required to file a return and did not in fact file a return; or c) an employer you never heard of claims to have paid you for work you know you didn’t do.

If any of these nasty little missives come your way, beware. According to the Taxpayer Advocate, the IRS is getting worse, not better, at handling ID theft issues. As the problem balloons, the IRS is responding with more, not fewer, departments through whose hoops you may have to jump as you seek to prove that you’re really you and you really, really need that tax refund.

According to the report, rather than creating a centralized response center for taxpayers to turn to in cases of ID theft, “the IRS has now established 21 different units to address identity theft cases, many with their own rules and procedures …” Resolution of the soaring case load (for FY 2012, almost 450,000 cases, a 78% increase over FY 2011) is slow, taking months, not weeks, with much of the IRS’s focus on revenue protection rather than taxpayer claim resolution. The Taxpayer Advocate Service (TAS) has seen an increase of more than 650% in ID theft complaints since 2008.

So take those data protection suggestions seriously. Otherwise, that refund could be a long time in coming.

The edition covers two topics:  Successful Women and Financial Journeys.  The first covers building a successful career and not dwelling on past mistakes.  Financial Journeys adds some thoughts on the fiscal cliff as well as provides some great ideas on your tax refund and building a better nest egg.  
 

Thanks Jodi! 

Jodi J. Johnston, WMS
Financial Advisor
Wealth Management Specialist
Raymond James & Associates, Inc.
880 Carillon Parkway-32E
St. Petersburg, FL 33716
727-567-2668 (direct line)
727-567-8349 (fax)
jodi.johnston@RaymondJames.com
www.raymondjames.com/JodiJohnston

Deciding when to retire may not be one decision but a series of decisions and calculations. For example, you’ll need to estimate not only your anticipated expenses, but also what sources of retirement income you’ll have and how long you’ll need your retirement savings to last. You’ll need to take into account your life expectancy and health as well as when you want to start receiving Social Security or pension benefits, and when you’ll start to tap your retirement savings. Each of these factors may affect the others as part of an overall retirement income plan.

Thinking about early retirement?

Retiring early means fewer earning years and less accumulated savings. Also, the earlier you retire, the more years you’ll need your retirement savings to produce income. And your retirement could last quite a while. According to a National Vital Statistics Report, people today can expect to live more than 30 years longer than they did a century ago. Not only will you need your retirement savings to last longer, but inflation will have more time to eat away at your purchasing power. If inflation is 3% a year–its historical average since 1914–it will cut the purchasing power of a fixed annual income in half in roughly 23 years. Factoring inflation into the retirement equation, you’ll probably need your retirement income to increase each year just to cover the same expenses. Be sure to take this into account when considering how long you expect (or can afford) to be in retirement.

Source: National Vital Statistics Report, Vol. 59, No. 4, March 2011

There are other considerations as well. For example, if you expect to receive pension payments, early retirement may adversely affect them. Why? Because the greatest accrual of benefits generally occurs during your final years of employment, when your earning power is presumably highest. Early retirement could reduce your monthly benefits. It will affect your Social Security benefits too. Also, don’t forget that if you hope to retire before you turn 59½ and plan to start using your 401(k) or IRA savings right away, you’ll generally pay a 10% early withdrawal penalty plus any regular income tax due (with some exceptions, including disability payments and distributions from employer plans such as 401(k)s after you reach age 55 and terminate employment). Finally, you’re not eligible for Medicare until you turn 65. Unless you’ll be eligible for retiree health benefits through your employer or take a job that offers health insurance, you’ll need to calculate the cost of paying for insurance or health care out-of-pocket, at least until you can receive Medicare coverage.

Delaying retirement

Postponing retirement lets you continue to add to your retirement savings. That’s especially advantageous if you’re saving in tax-deferred accounts, and if you’re receiving employer contributions. For example, if you retire at age 65 instead of age 55, and manage to save an additional $20,000 per year at an 8% rate of return during that time, you can add an extra $312,909 to your retirement fund. (This is a hypothetical example and is not intended to reflect the actual performance of any specific investment.) Even if you’re no longer adding to your retirement savings, delaying retirement postpones the date that you’ll need to start withdrawing from them. That could enhance your nest egg’s ability to last throughout your lifetime. Postponing full retirement also gives you more transition time. If you hope to trade a full-time job for running your own small business or launching a new career after you “retire,” you might be able to lay the groundwork for a new life by taking classes at night or trying out your new role part-time. Testing your plans while you’re still employed can help you anticipate the challenges of your post-retirement role. Doing a reality check before relying on a new endeavor for retirement income can help you see how much income you can realistically expect from it. Also, you’ll learn whether it’s something you really want to do before you spend what might be a significant portion of your retirement savings on it.

Phased retirement: the best of both worlds

Some employers have begun to offer phased retirement programs, which allow you to receive all or part of your pension benefit once you’ve reached retirement age, while you continue to work part-time for the same employer. Phased retirement programs are getting more attention as the baby boomer generation ages. In the past, pension law for private sector employers encouraged workers to retire early. Traditional pension plans generally weren’t allowed to pay benefits until an employee either stopped working completely or reached the plan’s normal retirement age (typically age 65). This frequently encouraged employees who wanted a reduced workload but hadn’t yet reached normal retirement age to take early retirement and go to work elsewhere (often for a competitor), allowing them to collect both a pension from the prior employer and a salary from the new employer. However, pension plans now are allowed to pay benefits when an employee reaches age 62, even if the employee is still working and hasn’t yet reached the plan’s normal retirement age. Phased retirement can benefit both prospective retirees, who can enjoy a more flexible work schedule and a smoother transition into full retirement; and employers, who are able to retain an experienced worker. Employers aren’t required to offer a phased retirement program, but if yours does, it’s worth at least a review to see how it might affect your plans.

*Age 55 for distributions from employer plans upon termination of employment

Check your assumptions

The sooner you start to plan the timing of your retirement, the more time you’ll have to make adjustments that can help ensure those years are everything you hope for. If you’ve already made some tentative assumptions or choices, you may need to revisit them, especially if you’re considering taking retirement in stages. And as you move into retirement, you’ll want to monitor your retirement income plan to ensure that your initial assumptions are still valid, that new laws and regulations haven’t affected your situation, and that your savings and investments are performing as you need them to.  

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of Erik Larsen, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, Northrop Grumman, ING Retirement, Chevron, AT&T, Hughes, Glaxosmithkline, Merck, Raytheon, ExxonMobil, resources.hewitt.com, Verizon, Qwest, Bank of America, Pfizer, access.att.com, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Erik Larsen is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

First you have to assemble a pile of cash for the down payment and closing costs. Then you must convince a bank to lend you an even more staggering sum – generally 80% or more of the purchase price.

So your first step, even before you start the actual hunt for a property, should be to get your financial house in order.

Credit reports are kept by the three major credit agencies, Experian, Equifax, and TransUnion. Among other things, they show whether you are habitually late with payments and whether you have run into serious credit problems in the past.

A credit score is a number calculated from a formula created by Fair Isaac based on the information in your credit report. You have three different credit scores, one for each of your credit reports.

A low credit score may hurt your chances for getting the best interest rate, or getting financing at all. So get a copy of your reports and know your credit scores. Try Fair Isaac’s MyFICO.com for reports and scores from Equifax and TransUnion. Experian scores and reports can be accessed from experian.com.

Errors are not uncommon. If you find any, you must contact the agencies directly to correct them, which can take two or three months to resolve. If the report is accurate but shows past problems, be prepared to explain them to a loan officer.

Next, you need to determine how much house you can afford. You can start with one of the Web’s many calculators. For a more accurate figure, ask to be pre-approved by a lender, who will look at your income, debt and credit to determine the kind of loan that’s in your league.

The rule of thumb here is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.

Another rule of thumb: All your monthly home payments should not exceed 36% of your gross monthly income.

The size of your down payment will also determine how much you can afford.

If you haven’t already, you’ll need to come up with cash for your down payment and closing costs. Lenders like to see 20% of the home’s price as a down payment. If you can put down more than that, the lender may be willing to approve a larger loan. If you have less, you’ll need to find loans that can accommodate you.

A warning: With a down payment under 20%, you will probably wind up having to pay for private mortgage insurance, a safety net protecting the bank in case you fail to make payments. PMI adds about 0.5% of the total loan amount to your mortgage payments for the year. So if you finance $200,000, your PMI will cost $1,000 annually.

Closing Costs                                                                                                   Once you’ve considered the down payment, make sure you’ve got enough to cover fees and closing costs. These may include the appraisal fee, loan fees, attorney’s fees, inspection fees, and the cost of a title search. They can add up to $5,000 to $10,000.

(First-time homebuyers can withdraw up to $25,000 without penalty from your RRSP account).

Happy Savings!

For any additional information on mortgages and investments, contact me at 1.426.527.2785 Please email me your question to: info@andreypetrov.ca

FTSE 100                              6483.58      1.65%    on the week

FTSE All Share                     3415.55       1.71%    on the week

Brent Crude $ per barrel      110.85        0.41%     on the week

Gold $ per troy ounce         1581.75      -0.03%     on the week

Silver $ per troy ounce         28.78          2.75%     on the week

Copper US$ per tonne       7744.50        1.05%     on the week   (LME 3 months)

Wheat Futures CBOT          690.00       -3.26%     on the week   (US$ per bushel – Contract 5000 bushels/136 tonnes)

Palm Oil US$ per tonne      857.50         2.08%   on the week   (eg CMEGlobex – trading unit 25 tonnes – mirror and settle to Malaysian ringgit benchmark)

MPC Base Rate  %               0.50  (Bank of England Base/Repo Rate) since 05/03/2009

Euro Repo Rate %                0.75  since 05/07/2012

US Libor %                            0.15500   last week : 0.15400

Euro Libor %                         0.01857   last week : 0.01857

GBP Libor %                         0.48125  last week : 0.48125

Euro Euribor 3 mnths %     0.20   last week : 0.21

Sterling CDs 3 mnths %       0.48  last week : 0.48

RONIA  %                            0.4779  l wk : 0.4526 (Repurchase Overnight Index Ave Rate)

SONIA   %                            0.4313  l wk : 0.4305 (Sterling Overnight Index Ave Rate)

HFRX                                    1181.28      0.50%  on the week  (Global Hedge Fund Index)

10 Year Government Bond (Gilt) Price £97.25 Yield 2.07%

One Pound will buy 1.4928 US Dollars

One Pound will buy 1.1500 Euros

CPI Inflation stands at 2.7% as at Jan 2013     Currently the Gov’t measure of inflation

Retail Prices Index :     3.3% as at Jan 2013     Previously the Gov’t measure of inflation

Inflation Target for the time being:   2.0%    based on the Consumer Prices Index (CPI)

However this is now currently under discussion and review.

The Government’s Inflation Target is announced each year by the Chancellor of the Exchequer in the annual Budget statement. The Bank of England Monetary Policy Committee has the aim to set interest rates so that over- or under- inflation can be brought back to Inflation Target over a reasonable time period without creating undue instability in the economy. Inflation Target is not a permanently fixed level and may vary depending on prevailing economic and fiscal conditions.

KEY to Important Indeces:

RONIA – Repurchase Overnight Index Average Rate – Launched June 2011

Changes to Method of Calculating Inflation Measurement Index – March 2013

Metal and Precious Metal Pricing used in Market Numbers 

Photo Credit: SBG PhotoStock

Let’s look at some measures of risk. You may have heard the term: “Beta.” You can think of beta as the tendency of a stock, fund or ETF’s, etc. returns to respond to swings in the market. Beta can generally be defined as the systematic risk exposures of the portfolio (usually achieved through Asset Allocation which I will discuss in a future blog).

For example, a beta of 1 indicates that the stock, fund or ETF’s, etc. price will move with the market to the same degree. A beta of less than 1 means that it will be less volatile than the market. For example, many utilities stocks have a beta of less than 1. Conversely, most high-tech, Nasdaq-based stocks have a beta of greater than 1, offering the possibility of a higher rate of return, but also posing more risk. So, it’s a measure of volatility, i.e. “risk.”

“Standard Deviation” is another statistical measure of risk, which is used in trying to assess one’s risk tolerance—in other words a sensitivity to volatility. It is applied to the mean rate of return of an investment to measure its volatility. Think of a wave around a long stick. The long stick is the average rate of return trending upward, the wave around it is the volatility or standard deviation. Almost any investment can have “Standard Deviation”. Stocks, Funds, ETFs, etc. Standard Deviation for Funds and ETFs can be looked at on Morningstar under “Ratings & Risk,” and then scrolling to “Volatility Measures” on that page. The standard deviations of one year returns of various investment categories range from 34% for small stocks to 3% for Treasury bills (Ibbotson Associates, 1996). In other words the higher the number the more volatility.

So, how much volatility can one take on, how much risk can one tolerate? Only factors related to short-term goals should be important in not being willing to take some risk to obtain higher return on financial investments. Those who might have specific short-term goals, such as saving for a down-payment on a home, might not be in a position to invest in risky assets. I would assume that for those with long investment time horizons, being unwilling to take some chances to obtain a higher return on investments indicates a lack of information, as it is not rational to be unwilling to take some risk—and in this context I mean volatility—for long-term goals.

How do you work with your risk-tolerance? All investments contain some risk; the key to success is to identify an appropriate risk tolerance and then manage the portfolio to that tolerance. I would suggest that investors do a couple of things. First, ascertain your investing time horizon, it plays an important role, because generally it would be a determinant of how much risk you can afford to take on. This may be several financial goals, such as saving for college, saving for a down payment on a home, or saving for retirement. Is this time-line 5, 10, 20 or 30 years? The longer the time horizon, the more risk you may be able to take on; more volatility. The shorter the time horizon, the more cautious an individual should be in their investment approach. Then, as a step two, try to ask yourself a few questions, for example: if my investment dropped 20 to 30% how would I feel? What would I do? Am I going to be able to stay with it? How much volatility can I withstand? Again, these are emotional, psychological decisions and one needs to take some time to ponder them. Really try to imagine your reaction and subsequent potential actions to adverse market conditions and try to put yourself into that future self to see what would happen. What would you do? Are you going to be “steady Eddie” or “jumpy Jones”?

At times one needs to be a little more risk tolerant in order to meet certain financial goals, especially when dealing with long-term time horizons. What does that mean? Anything beyond 5 years. There is a concept called the “Efficient Frontier” which is part of modern portfolio theory that basically deals with putting an optimal portfolio on the efficiency curve at a certain position, at the cross section of one’s willingness to take on a certain degree of risk and obtaining a specific return based on historical data. I will talk about this concept in another blog.

A great online resource is investopedia.com where one can learn a lot about various investing concepts via short, simple videos and a treasure trove of well written articles.

One of the most positive, effective actions you can take is to talk to a fee-only professional investment advisor for a few hours to assess your risk-tolerance taking into account a variety of factors, and coming up with a portfolio makeover that will be aligned in accordance with that risk-tolerance and your financial situation. This can only be revealed through proper risk-tolerance assessment and via deep conversation, which is achieved by employing a highly sophisticated, well-tested questionnaire and a personal interview.

This blog will be available as a video on my YouTube channel: http://www.youtube.com/user/FinancialMastery

Reaching Retirement

You’ve worked hard your whole life anticipating the day you could finally retire. Well, that day has arrived! But with it comes the realization that you’ll need to carefully manage your assets so that your retirement savings will last.

Review your portfolio regularly

Traditional wisdom holds that retirees should value the safety of their principal above all else. For this reason, some people shift their investment portfolio to fixed-income investments, such as bonds and money market accounts, as they approach retirement. The problem with this approach is that you’ll effectively lose purchasing power if the return on your investments doesn’t keep up with inflation.

While generally it makes sense for your portfolio to become progressively more conservative as you grow older, it may be wise to consider maintaining at least a portion of your portfolio in growth investments.

Spend wisely

Don’t assume that you’ll be able to live on the earnings generated by your investment portfolio and retirement accounts for the rest of your life. At some point, you’ll probably have to start drawing on the principal. But you’ll want to be careful not to spend too much too soon. This can be a great temptation, particularly early in retirement.

A good guideline is to make sure your annual withdrawal rate isn’t greater than 4% to 6% of your portfolio. (The appropriate percentage for you will depend on a number of factors, including the length of your payout period and your portfolio’s asset allocation.) Remember that if you whittle away your principal too quickly, you may not be able to earn enough on the remaining principal to carry you through the later years.

Understand your retirement plan distribution options

Most pension plans pay benefits in the form of an annuity. If you’re married you generally must choose between a higher retirement benefit paid over your lifetime, or a smaller benefit that continues to your spouse after your death. A financial professional can help you with this difficult, but important, decision.

Other employer retirement plans like 401(k)s typically don’t pay benefits as annuities; the distribution (and investment) options available to you may be limited. This may be important because if you’re trying to stretch your savings, you’ll want to withdraw money from your retirement accounts as slowly as possible. Doing so will conserve the principal balance, and will also give those funds the chance to continue growing tax deferred during your retirement years.

Consider whether it makes sense to roll your employer retirement account into a traditional IRA. IRAs usually offer greater withdrawal flexibility than employer plans. A rollover to an IRA also allows you to consolidate your retirement assets.

Plan for required distributions

Keep in mind that you must generally begin taking minimum distributions from employer retirement plans and traditional IRAs when you reach age 70½, whether you need them or not. Plan to spend these dollars first in retirement.

If you own a Roth IRA, you aren’t required to take any distributions during your lifetime. Your funds can continue to grow tax deferred, and qualified distributions will be tax free. Because of these unique tax benefits, it generally makes sense to withdraw funds from a Roth IRA last.

Know your Social Security options

You’ll need to decide when to start receiving your Social Security retirement benefits. At normal retirement age (which varies from 65 to 67, depending on the year you were born), you can receive your full Social Security retirement benefit. You can elect to receive your Social Security retirement benefit as early as age 62, but if you begin receiving your benefit before your normal retirement age, your benefit will be reduced. Conversely, if you delay retirement, you can increase your Social Security retirement benefit.

Consider phasing

For many workers, the sudden change from employee to retiree can be a difficult one. Some employers, especially those in the public sector, have begun offering “phased retirement” plans to address this problem. Phased retirement generally allows you to continue working on a part-time basis–you benefit by having a smoother transition from full-time employment to retirement, and your employer benefits by retaining the services of a talented employee. Some phased retirement plans even allow you to access all or part of your pension benefit while you work part time.

Of course, to the extent you are able to support yourself with a salary, the less you’ll need to dip into your retirement savings. Another advantage of delaying full retirement is that you can continue to build tax-deferred funds in your IRA or employer-sponsored retirement plan. Keep in mind, though, that you may be required to start taking minimum distributions from your qualified retirement plan or traditional IRA once you reach age 70½, if you want to avoid harsh penalties.

If you do continue to work, make sure you understand the consequences. Some pension plans base your retirement benefit on your final average pay. If you work part time, your pension benefit may be reduced because your pay has gone down. Remember, too, that income from a job may affect the amount of Social Security retirement benefit you receive if you are under normal retirement age. But once you reach normal retirement age, you can earn as much as you want without affecting your Social Security retirement benefit.

Facing a shortfall

What if you’re nearing retirement and you determine that your retirement income may not be adequate to meet your retirement expenses? If retirement is just around the corner, you may need to drastically change your spending and saving habits. Saving even a little money can really add up if you do it consistently and earn a reasonable rate of return. And by making permanent changes to your spending habits, you’ll find that your savings will last even longer. Start by preparing a budget to see where your money is going. Here are some suggested ways to stretch your retirement dollars:

• Refinance your home mortgage if interest rates have dropped since you obtained your loan, or reduce your housing expenses by moving to a less expensive home or apartment.
• Access the equity in your home. Use the proceeds from a second mortgage or home equity line of credit to pay off higher-interest-rate debts, or consider a reverse mortgage.
• Sell one of your cars if you have two. When your remaining car needs to be replaced, consider buying a used one.
• Transfer credit card balances from higher-interest cards to a low- or no-interest card, and then cancel the old accounts.
• Ask about insurance discounts and review your insurance needs (e.g., your need for life insurance may have lessened).
• Reduce discretionary expenses such as lunches and dinners out.

By planning carefully, investing wisely, and spending thoughtfully, you can increase the likelihood that your retirement will be a financially secure one.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of Erik Larsen, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, Qwest, Chevron, Raytheon, Merck,, ExxonMobil, Glaxosmithkline, Pfizer, Verizon, Northrop Grumman, Hughes, Bank of America  ING Retirement, AT&T, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Erik Larsen is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Securities offered through FSC Securities Corporation, member FINRA/SIPC. Investment advisory services offered through The Retirement Group, LLC. a registered investment advisor not affiliated with FSC Securities Corporation.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013.

With the cost of care also set to increase from the current average of £26,000 per year to a predicted £33,000, the burden on the UK economy – and hence on a decreasing proportion of taxpayers – is set to be prohibitive. How can the country afford it?

And yet… Is it fair that someone who has worked and paid taxes all their life should then have to sell their home to fund the cost of long term care?

This problem – and the apparent difficulty of squaring the circle – has clearly been known about for some time, and in 2010 the Government commissioned economist Andrew Dilnot to look into the whole issue of long term care. Essentially Dilnot was asked to find a way of protecting people’s assets against the cost of long term care – whilst at the same time ensuring that the country didn’t face an impossible bill.

Dilnot recently made his recommendations, which were accepted by Health Secretary Jeremy Hunt, ‘with some slight tweaks.’ So what are the recommendations? And what implications do they have for your long term financial planning?

The three main recommendations:

Dilnot’s first recommendation was a cap on overall care costs, so there is a limit on the total amount that anyone can pay in his or her lifetime. Dilnot had recommended that the cap be between £30,000 and £50,000: in fact the Government decided that the figure should be higher, with the cost of care capped at £75,000 during an individual’s lifetime.

The cap does not include the cost of accommodation – it is the cost of care only. So if, for example, someone was paying £700 per week for long term care, made up of £400 per week residential costs and £300 per week care costs, only the £300 would count towards the cap.

The second change is an increase in the means-tested threshold. At the moment anyone with assets in excess of £23,250 must pay towards the cost of their care. Dilnot had proposed increasing this to £100,000 but the Government have moved it still further, to £123,000. However, if your assets exceed this figure then you are not eligible for any state help until you have passed the ‘cap’ of £75,000.

It is important to note that for those people needing care at home – a substantial number – the threshold will stay at £23,250.

Finally, no-one will now need to sell their home to pay for the cost of care. This has always been an unpopular piece of legislation, and Dilnot has proposed a scheme to allow fee payment to be deferred in a person’s lifetime. This ‘universal deferred payment’ will be introduced in 2015, and will allow people to borrow against the value of their home with the estate then paying back the loan (plus as yet undecided interest) on death.

When will the changes be introduced?

In the main these changes will be introduced in 2017, apart from the universal deferred payment as described above. Until then the current rules will apply to anyone going into care.

What do they mean for your financial planning?

By and large, the changes are to be welcomed. But do they remove the need for financial planning where the costs of long term care are concerned? Far from it. The cap on costs was essential: we have long felt that it is wrong for a person to face an open-ended bill at the end of their life. Likewise the rise in the threshold – but £123,000 is only equal to the cost of a very small home, so we suspect that this move may not make a lot of practical difference.

We have some reservations about the ‘universal deferred payment,’ particularly the as yet unannounced interest rate. If it is linked to inflation (as the rate of interest on student loans is) then it could see substantial amounts of interest being paid.

We would still urge anyone who feels that they may need long term care – or who has elderly relatives who may need long term care – to talk to us about financial planning. The Dilnot proposals are welcome, but for many people – particularly high net worth clients – they may make little practical difference.

If you want to choose the quality of your long term care, and want to be certain that you will pass on as much of your estate as possible to your beneficiaries, then proper financial planning remains an absolute essential. These proposals, welcome as they are, have done nothing to change that.

Contact us on 01737 225665 or advice@conceptfp.com

Ano nga ba ang “the best investment”? Eto ang tanong ng karamihan na gusting palaguin ang kanilang pera.
Ang sagot sa mahiwagang tanong na ito ay DEPENDE. Depende kung sino ang kausap mo =). Napansin nyo ba?

Kung kausap mo ay isang real estate broker, Properties/House and lot/ Condo ang the best.
Kung ang kausap mo ay stock broker, siyempre stocks/equities.
Kung ang kausap mo ay taga Banko,bank deposit para safe.
Kung Mutual Fund distributor, Mutual fund. Mas malaki ang potential returns, at mas diversified.
Kapag Insurance agent naman, Life insurance at VUL. Pumanaw man ng maaga ang bread winner, may aasahan pa din ang pamilya nya na income replacement.
Kung entrepreneur naman, business ang the best.

Sa pagpili ng tamang investment, tatlong bagay ang mahalaga na ating isaalang-alang.
RISK – LIQUIDITY- RETURNS
Mas mataas ang Returns at mas mabilis mas mainam. Mas mababa ang Risk, mas mainam. Mas Liquid o madaling i-convert sa cash, mas mainam.
Sa madaling salita, ang best investment ay may  LOW RISK,  HIGH LIQUIDITYand HIGH RETURNS. Unfortunately, walang investment that can provide all 3 factors at its peak. Kung meron tayong marinig nag aalok ng ganito, malamang illegitimate ito (at VERY HIGH RISK pa din). Ang investment ay palaging nababalanse sa tatlong bagay na ito. Generally sa investments,” the higher the risk the higher the potential return”, “the more liquid the investment, the lower the returns”.
Ang bawat investments ay may kanya kanyang pros and cons. Walang perpektong investment, ngunit ang bawat investments may kanya kanyang gamit at ito din ay aayon sa need, risk apetite at panahon.
Ilan lang sa mga dapat mong itanong sa iyong sarili once you have decided to invest ay ang mga sumusunod.
1. May sapat ka bang emergency fund na madali mong madudukot in case of emergency? (3-6 months worth of your monthly expenses ideally). Kung gagalawin mo din kaagad ang investment mo, malamang na matalo ka pa.
2. Kung may mga dependents ka, may sapat ka na bang Life insurance as risk management. Hindi forever ang buhay ng isang tao at lahat tayo ay vulnerable sa accident, sickness, disability and death. Pag nawala ang bread winner at walang Life Insurance, ang maiiwan lang sa mga dependents ay ang kasalukuyang value ng kanyang investment na malamang ay ndi pa tumutubo ng malaki kung kinuha ng maaga.
3. Ano credilbility ng paglalagyan mo na kumpanya o institution. Hindi dahil investor dun ang kamag-anak mo, friend mo o ang kakilala mo na maimpluwensiyang tao ay safe at legitimate na ito.
4. Saan mo planong gamitin ang investment na ito?
5. Kelan mo gagamitin ang kita at ang principal ng iinvest mo? Kung gagamitin mo din ito kaagad, ndi mo dapat ito ilagay sa mahirap iliquidate na investment.
6. Know your risk appetite. Mahimbing ka pa din bang makakatulog sa gabi na ndi nag aalala na mawawala ang hard earned money mo?

Ngayon, balikan natin ang mahiwagang tanong, ano nga ba ang best investment? Hindi tayo eksperto, pero kung makikinig tayo sa mga eksperto, magbabasa, magreresearch, magtatanong malalaman natin that the “best investment is knowledge”.

Happy Investing!

Sa bawat sulok ng mundo, nagpapakita ng paghanga ang mga komentarista. Ayon sa Bloomberg Business Week, “Keep an eye on the Philippines.” Ang Foreign Policy Magazine, pati isa sa mga pinuno ng ASEAN 100, nagsabing maaari daw tayong maging “Asia’s Next Tiger.” Sabi ni Ruchir Sharma, pinuno ng Emerging Market Equities and Global Macro ng Morgan Stanley,

“The Philippines is no longer a joke.” At mukha naman pong hindi siya nambobola, dahil tinatayang isang bilyong dolyar ang ipinasok ng kanyang kumpanya sa ating bansa. Sana nga po, ang kaliwa’t kanang paghanga ng taga-ibang bansa, masundan na ng lokal na tagapagbalita.”

Ang mga naunang talata ay ilan sa mga balita hango sa SONA ni PNOY nuong 2012. Ang reaksyon ng karamihan sa mga Filipino, “eh ano ngayon?, Hindi nga namin ramdam ang sinasabi nya na pag unlad eh!”. Habang pinanunuod ko ang isang programa sa telebisyon kaninang umaga, isa sa guest analyst nila ang nagsalita tungkol stock market. Sang ayon sya sa mga balita ni PNOY, ngunit hindi raw ito ramdam ng mamayang Filipino, isang kadahilanan ay dahil iisang porsyento (1%) lamang daw ng mga Filipino ang nagpaparticipate sa stock market at ang mga ito ay ang mga tinuturing na elite of the elite. May katotohan marahil ang komentong ito. Sa karamihan ito ay kumplikado, kailangan ng medyo malaking kapital at natatakot na mawala ang investments dahil sa volatily and riskiness nito.

Ang hindi alam ng karamihan, ay may alternatibong paraan upang pumasok sa ganitong uri ng investments,ang MUTUAL FUND. Tulad ng stock market, ang puhunan ng investors sa Mutual fund ay nacoconvert sa shares. Ang value ng shares ay nagbabago araw araw depende sa takbo ng individual na negosyo, merkado, ekonomiya, atbp. Ang kinaganda nito kumpara sa individual na stocks ng mga kumpanya ay pinagsasasama sama nito ang mga puhunan ng bawat individual na investors upang makabili ng mas maraming stocks ng iba’t ibang kumpanya. Sa ganitong paraan ang risk ay na naikakalat sa iba’t ibang investors at investments. Kung bumaba ang isang kumpanya pwede masagip ng iba pang kumpanya na maganda ang takbo, “DIVERSIFIED INVESTMENTS” ika nga. Dahil pinagsasama sama din nito ang puhunan ng iba’t ibang investors, madali ang mkapasok dito sa maliit na capital lamang (Php 5,000 ang minimum starting investments). Hindi mo din kailangan na tutukan ang takbo ng merkado araw araw dahil mayroon itong mga sariling FUND MANAGERS na tututok araw araw na ang hangarin ay ang palaguin ang pera ng mga namumuhunan. Sa ganitong paraan hindi mo na kailangan ang lumiban sa kasalukuyan mong ginagawa upang kumita, “ do what you currently do best to sustain your income and the fund managers will do the rest for your investments”. At hindi tulad ng mga ari-arian na tulad ng mga bahay at lupa, mas madali itong ibenta pabalik upang maging cash (LIQUID) sa biglaang pangangailangan.

Ang lahat ng investments ay may kaakibat na RISK, ang mahalaga ay kung pano natin ito pangangasiwaan. Sa mas mahabang panahon na pag iinvest mas tiyak ang panalo kesa talo.

Paano magsisimula? Unahin muna punan ang emergency fund mo na ilalagak mo sa iyong savings. Ang sobra ay dapat naka invest upang mas malaki ang potential nitong kumita. Kumausap ng mapagkakatiwalaan na financial advisor upang mas masuri ang kasalukuyan mong kalagayan at pangangailangan at makapagbigay ng rekomendasyon.

Ngayon alam mo na! Ano ang gagawin mo sa informasyon na ito?

“Our success is determined by our actions not just by our learnings