07Jul
Financial Planning for Divorced Women
Women / Widows

The steps toward a post-divorce action plan…

A divorce is one of the most stressful circumstances a woman can experience. It can leave you feeling as if some things are beyond your control. Do not let that feeling interfere with your effort to maintain control over your financial life.

Financial planning after a divorce is not radically different than financial planning before a divorce. The basic principles are the same. The big difference comes down to how you start – or rather, how you start over.

Complete Article

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05Jul
Tax Changes in 2016
Taxes

2016 ushered in some interesting tax changes.

I will summarize some of the key changes in this blog.

Social Security: There is no hike in the 2016 Social Security wage base.  It remains at $119,500.

The earnings test also did not change.  If, at any time in 2016, you are 66 or older, you may earn $41,880 and not have to repay any Social Security benefit.  (There is no earnings cap once a beneficiary turns 66.)

Any one ages 62-65 can earn up to $15,720 and keep their full Social Security benefits.

Medicare: Most people will pay $104.90 for Medicare Part B.

For those in the upper income brackets, the combined Part B and D premiums plus surcharges can be as high as $340.90 a month.

Health Savings Accounts: The annual cap on deductible contributions to HSA’s increases to $6750 in 2016.

The limits for deducting long term care premiums per person are:

Under age 40: $390
41 to 50: $730
51 to 60: $1460
61 to 70: $3900
70 and older: $4870

The estate and gift tax exemption for 2016 increases to $5,450,000 and the top tax rate remains at 40%.

There is significant new legislation that applies to executors of taxable estates.  Executors are now required to report to the IRS and heirs the basis of inherited assets within 30 days of filing the IRS estate tax form 706.

Please know that Resonate can definitely assist providing cost basis information and works cooperatively with your other advisors toward creating best results for you and your loved ones.

The source for this information is the April 2016 Kiplinger Tax Letter.

Please be sure to meet with your tax advisor to see how this information applies to you.  The let’s coordinate his or her advice with that of your Resonate team to be sure you are using all tax laws to your benefit.

This is especially important for anyone interested in legacy planning.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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01Jul
Will Our Money Last as Long as We Live?
uncategorized

When tragedies such as shootings in the South Carolina church or the Orlando bar happen, people often question how long they might live.

While no one knows for sure, of course, here are some interesting facts from the October 9, 2014 USA Today article by Larry Copeland.

Life expectancy in the USA rose in 2012 to 78.74 years.

Life expectancy for a woman is 81.2 years and for men it’s 76.4 years.  That difference of 4.6 years has not changed from the 2011 figures.

Since we also know that 800,000 women become widowed each year in the U.S., this gives special reasons for women to be sure that their finances will be adequate to support them throughout life expectancy.

We work with all clients to answer the questions:

“Will our money last as long as we do?”

“What lifestyle can we afford?”

“Can we gift to our children and grandchildren?”

“Can we help our grandchildren with college expenses without hurting ourselves?”

These questions are especially important when one member of the couple has passed on.

The Resonate team is ready to listen to your questions and concerns and to partner with you to create solid, supportive answers.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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28Jun
Brexit – Observations from Leeb
Economy

To our Resonate family, your families and friends,

It is during times like these that your Resonate team chooses to stay especially close to you.  We filter through much of the “noise” and attempt to distill out the “news.”   I thought these observations from Stephen Leeb were of interest and hope you do as well.

Global markets are scrambling after the Brits voted to leave the European Union by a 52-to-48 margin.  Interestingly, more than 3.7 million British citizens and U.K. residents have signed a petition calling for a second EU referendum.  Clearly, many people did not understand the ramifications of Brexit.

Whether the U.K. now regrets Brexit or not, it seems the votes will count, and global investors must now deal with the fallout.  Not surprisingly, as we noted last week, in the event of a Brexit stocks would likely dive for a few days.  Indeed, the S&P 500 logged its worst day of the year on Friday; it fell 3.6 percent.  Those hardest hit, of course are the companies who do the most business in Europe.

On June 27, the S&P was again firmly in the red, and shed another 1.8 percent.  The drop in the U.K. market has been small, about in line with that in the U.S., but it’s partially masked by the fall of the British pound to a 31-year low against the dollar.

The U.K. must now negotiate with the EU for terms of breakup, though the “leave” campaign leaders state they will wait until summer vacations have ended despite the insistence of some within the EU that negotiations begin immediately.  It’s possible the U.K. could enter a recession within a year as the uncertainty of the situation, among other ramifications, reduces business investments, tightens financial conditions, and levies possible negative impacts on trade.

Leeb urges investors not to read too much into the initial market reaction, but to pay close attention to how political leaders manage the fallout, which will have far more long-lasting ramifications.  An orderly exit and dedication of EU leaders to keep the union and euro zone intact would help to minimize disruptions; if the European leaders allow the situation to get out of hand, however, which could lead to the breakup union, all bets are off.

Although the stock market volatility since the Brexit vote may appear reminiscent of the dark days of the Financial Crisis of 2008, this time there are no financial bubbles waiting to pop on the scale of that U.S. housing bubble.  A full-blown financial crisis is unlikely, but due to the unprecedented exit and the uncertainty over what comes next, it is not surprising that the referendum has thrown global markets into turmoil.

Fortunately for U.S. investors, Brexit’s direct impact on the American economy should be, tangible, but small, perhaps shaving off a quarter of a percentage point from 2016 GDP growth.  But again, the full scope of the Brexit fallout won’t be known for years, and the actions of the political leaders in the months ahead should provide telling clues.  At this time, investors should not panic, but remain vigilant.

Easy as it may be to let Brexit and the associated drama distract us, it’s important that investors remember that the current drama will not materially affect the issues.  Over the long term, the world must address many problems: specifically, resource scarcity, cyber security, and the transfer of power from the West to the East.

Not to mention a presidential election…

Until next time, live with purpose and remember who and what is most important in your life.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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28Jun
Women Retirement Challenges
uncategorized

A new study has raised eyebrows about the retirement prospects of women.  Download the article attached.

Do Women Face Greater Retirement Challenges Than Men?

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24Jun
Brexit Commentary
Economy

As you probably know by now, history was made as England voted to leave the European Union (euro) and re-establish the pound as its currency.

We are pleased to share with you an insightful commentary from the Chief Investment Officer at ValMark.  TOPS – BREXIT Message – June 2016

We will continue to write frequently as more information becomes available.  We urge you to stay calm and positive.

Until next time, stay focused on your purpose!

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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23Jun
Observing Secondary Stocks
Economy

To our Resonate family, your families and friends,

Recently, I have been receiving emails from clients worried about the U.S. and global stock markets.

I thought that Stephen Leeb’s comments in the June 13, 2016 Complete Investor Hotline were interesting.

Leeb writes:

“One number we continue to watch:  the relative performance of so-called secondary stocks, stocks too small to qualify as making an individual difference in the big-cap averages such as the S&P 500, as compared to the S&P, itself.  We have reported on this number before because it is a simple way to note the vulnerability of the market.  In no case for more than 40 years has a major market setback occurred when this indicator averaged above 1.”

“For example, during the 20 percent decline in 2011 the average of the indicator was about .19.  On the other hand, from May through December 2008—the heart of the last bear market—the indicator’s average fell deep into negative territory.”

“Over the past three months our trusty measure of underlying market strength has averaged about 4, a number wholly consistent with a bull market, one that suggests the market will likely make a new high in the not-too-distant future.  In a worst case, under these conditions, we would be surprised at anything more than a 7 percent correction.”

If anyone reading this is not currently a Resonate client, we offer a complimentary second opinion on your existing portfolio.  We’d love to hear from you!

Until next time, live your purpose every day!

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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14Jun
Sudden Tragedy
Blogs / Articles

On Saturday June 11, 2016, there was a senseless, horrific attack on members of the GLBT community.

While the politicians rush to affirm “this was an attack on all Americans,” the GLBT population has been attacked and discriminated against for centuries in ways that only those who live the life can understand.

Because the discrimination too often emanates from the family of origin, on hearing the news, I asked myself: “What happens to the survivors of those killed?

“What happens if the decedents had not taken care of their estate and legacy planning to assure that their physical and financial assets were transferred to whomever the GLBT person wanted?”

What we know is that, if we do not take control of our planning and estate documents, then the state in which we reside has a distribution plan for us. This is called dying intestate (without a will in place).

Often times, dying intestate only intensifies the tragedy of sudden loss. For example, if someone who was murdered Saturday night was also partnered, but died intestate, here is the chart that shows how assets pass by intestate succession in Florida:

If you die with: here’s what happens:
·   children but no spouse ·   children inherit everything
·   spouse but no descendants ·   spouse inherits everything
·   spouse and descendants from you and that spouse, and the spouse has no other descendants ·   spouse inherits everything
·   spouse and descendants from you and that spouse, and the spouse has descendants from another relationship ·   spouse inherits 1/2 of your intestate property

· your descendants inherit 1/2 of your intestate property

·   spouse and descendants from you and someone other than that spouse ·   spouse inherits 1/2 of your intestate property

· your descendants inherit 1/2 of your intestate property

·   parents but no spouse or descendants ·   parents inherit everything
·   siblings but no spouse, descendants, or parents ·   siblings inherit everything

(Source: NOLO “Intestate Succession in Florida”)

It is easy to see how these unexpected deaths can results in someone not only losing the most important person in his or her life, they may also lose financial well-being.

The Resonate team partners with attorneys to assure that your financial and legal plans and documents are coordinated and will work together.

In the midst of our sorrow, may we also find the resolve to be certain that our plans are current and state exactly what we want to have happen… “just in case.”

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07Jun
Time Value of Money
Blogs / Articles

Compound Interest: The 8th Wonder of the World!

One of the first things I learned in finance class was time value of money calculations. For those not familiar with what the calculation entails, it involves entering inputs into a financial calculator such as number of years, interest rate, and other assumptions to determine a future amount. I was always amazed how much money I would have in the future if I was disciplined enough to save, generate a decent rate of return, and not take or limit withdrawals.

Business Insider recently published a study conducted by JP Morgan asset management that illustrates the very topic of time value of money. In the study, JP Morgan looked at 4 individuals that invested $10,000/year at over various time periods and varying return assumptions. Let’s examine the strategies employed by each of the four individuals that were featured in the study. Chloe invested $10,000/year from ages 25-65. Lyla started 10 years after Chloe, investing $10,000/year from ages 35-65. Quincy saved $10,000 from age 25-35 and then stopped. Finally, Noah invested $10,000 from ages 25-65; however, Noah used a lower return assumption of 2.25%, lower than the 6.5% assumed for Chloe, Lyla, and Quincy. So which portfolio did the best?

Not surprisingly, Chloe’s portfolio outperformed. Over her 40 years, her contribution of $400,000 turned into $1,870,480. Quincy was able to turn a contribution of $100,000 into $950,588 despite only contributing for 10 years and not saving a dime for the next 30. While Lyla contributed 3x what Quincy put in ($300,000), she actually ended up with a lower account balance. At age 65, Lyla’s account totaled $919,892 compared to Quincy’s balanced of $950,588.

It’s no wonder that compound has been described as the8th wonder of the world!  To truly harness its power, a financial advisor can customize a savings plan that is unique to each person.

We offer a complimentary consultation to help design yours!  Please contact us to help secure your future…. Or that of a child or grandchild!

JPM TVM

Story Link: http://www.businessinsider.com/compound-interest-chart-march-2016-2016-3

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01Jun
Longevity and Planning
Blogs / Articles

A common goal inherent in planning is to be able to sustain a desired lifestyle for as long as needed.

One key question and concern is: “On what age(s) is your planning based?”

I contend that many plans have not considered the following:

The Methuselah Foundation says, “By advancing tissue engineering and regenerative medicine, we want to create a world where 90-year olds can be as healthy as 50-year olds.”

Are you tempted to answer “Maybe ….but not in my lifetime?

Well the goal for 90 to be new 50 is actually 2030!

(Source: Financial Advisor Magazine The 7 Disruptions by Bill Bachrach April 2016.)

If this goal is reached, here are some of the questions planners should be considering with  clients now:

  1. What assumptions shall we use for life expectancy?
  2. How do we invest wisely to match those assumptions?
  3. If baby boomers and Gen Xers are going to live much longer than originally thought, what impact does this have on wealth transfer?
  4. How should millennials and younger Gen Xers be preparing for their future?

Here are some action steps to consider:

  1. Look at your own planning assumptions and see if they need to be revised. If they do, discuss with your planner soon, in order to allow as much time as possible to implement more suitable ideas.
  2. Boomer parents and grandparents may want to give their children and grandchildren the gift of completing their own planning by offering to pay for the planning fee.

 

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