Investment Commentary: Second Quarter 2019

Center for Financial Planning, Inc.® Investment Commentary 2019

Mid-Year update

As summer feels like it is finally underway after a soggy start, the markets have had anything but a soggy start to the year. The first half of 2019 ended on a strong note, as the U.S. and China seemed to resume negotiations with a constructive air. This is the best first half of the year the S&P 500 has experienced since 1997, as it posted a 18.54% gain.

Interest rates

Bonds have also enjoyed strong results this year, with the Barclays US Aggregate Bond Index up 6.11%. The Federal Reserve left rates unchanged again in June, but has made a complete about-face over the first half of the year, from projecting multiple interest rate increases to a majority of officials now thinking rates will be lower by year-end.  This comes on the heels of steady interest rate increases since 2015. The dispute over trade policy between the U.S. and China and imposition of tariffs is the main stimulus behind this thinking. This change by the Federal Reserve of wanting to reduce rates rather than raise rates (also referred to as a more dovish stance) has given a strong boost to domestic bonds as well as emerging market debt. The market has already priced in two interest rate cuts by year-end and two more in 2020. While this aggressive rate cut schedule may not fully play out (just as the three rate increases forecast for 2019 at the end of 2018 did not happen), the Federal Reserve has clearly signaled a softening economy.

Economic Snapshot

If you look at the economy and set aside the risks from the trade war, you see a pretty strong current picture; however, some of the positive signs are getting less and less positive. The expansion we have been in for so long could continue a while longer, but it seems to have less wind in its sails than it did just a year ago.

Retail Sales have come in very strong for the first half of the year, on the heels of some of the strongest readings on consumer confidence since the mid-2000s.

The Unemployment Rate, 3.6%, is at the lowest level since December 1969. The labor market remains very tight, and wages are increasing at a pace higher than inflation. This supports the high consumer confidence number and consumer spending, which is such a large part of our economy.

Inflation remains subdued with both headline and core CPI coming in at 2% or less, despite the pickup in wage inflation. Tariffs could start to increase pressure here, but we haven’t seen this flow through to the data yet.

Housing prices have been on the decline over the past year; however, the Federal Reserve’s recent change in stance on interest rates could give another slight temporary boon to this market.

Risks that could increase market volatility

Another breakdown in U.S. China trade negotiations, which could cause an abrupt pullback in markets. The tariffs in place now would start to have longer-term impact on inputs for producing goods. Businesses impacted by the tariffs would have to either cut costs elsewhere – think layoffs and discontinuing of capital expenditures – or pass the price increase along to the end consumer. Either way, this alone could start to push the economy into recession. This wildcard could have far-reaching impacts on our economy and we are closely watching developments..

The Federal Reserve not following through on cutting interest rates, as the markets are currently anticipating. The futures markets have priced in nearly four rate increases over the next 18 months. If the Fed doesn’t cut rates, we may see market rates back on the rise, meaning a short-term potential slowdown in bond returns and some headwinds for emerging market debt.

An escalation in tensions between the U.S. and Iran, which has started to affect oil prices in a negative way, although prices are still lower than they were a year ago. A sharp increase in oil prices affects consumer confidence and spending, while also putting pressure on inflation to the upside. Oil rising very quickly to high levels is often an early signal of recession

Our investment committee meets monthly and informally talks every day, if needed, regarding developments in headline risks and the economy. Sometimes, these discussions result in action, and sometimes, we take a wait-and-see approach, with an eye toward certain indicators. Right now, we continue to monitor the inversion of the yield curve, as well as the weekly initial claims for unemployment insurance from the Federal Reserve Bank of St. Louis. Both data points can be leading economic indicators that may give us some early warning signs. While we think the year should finish in positive territory, we remain cautious with our outlook for 2020.

We continue to hear great feedback on our new Client portal! We have a new instructional video to help you learn how to navigate if you are already using the portal, but also to let you know what information you could see by signing up. If you are interested, please reach out to us so we can send you the link to activate it!

On behalf of everyone here at The Center, we hope you enjoy the rest of your summer!

Angela Palacios CFP®, AIF®
Partner
Director of Investments

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.


Any opinions are those of financial advisor and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Qualified Charitable Distributions: Giving Money While Saving Money

Josh Bitel Contributed by: Josh Bitel, CFP®

Qualified Charitable Distributions

The Qualified Charitable Distribution (QCD) can be a powerful and tax-efficient way to achieve one’s philanthropic goals. This strategy has become much more popular under the new tax laws.

QCD Refresher

The QCD, which applies only if you’re at least 70 ½ years old, essentially allows you to directly donate your entire Required Minimum Distribution (RMD) to a charity. Normally, any distribution from an IRA is considered ordinary income from a tax perspective; however, when the dollars go directly to a charity or 501(c)3 organization, the distribution from the IRA is considered not taxable.

Let’s Look at an Example

Sandy turned 70 ½ in June 2019, and this is the first year she has to take a Required Minimum Distribution (RMD) from her IRA, which happens to be $25,000. A charitably inclined person, Sandy gifts, on average, nearly $30,000 each year to her church. Because she does not really need the proceeds from her RMD, she can have the $25,000 directly transferred to her church, either by check or electronic deposit. She would then avoid paying tax on the distribution. Since Sandy is in the 24% tax bracket, she saves approximately $6,000 in federal taxes!

Rules to Consider

The QCD and similar strategies have rules and nuances you should keep in mind to ensure proper execution:

  • Only distributions from IRAs are permitted for the QCD. Simple and SEP IRAs must be “inactive.”

    • Employer plans such as a 401k, 403b, 457 do not allow for the QCD.

    • The QCD is permitted within a Roth IRA but would not make sense from a tax perspective, because Roth IRA withdrawals are tax-free by age 70 ½.*

  • You must be 70 ½ at the time the QCD is processed.

  • Funds from the QCD must go directly to the charity and cannot go to you first and then out to the charity.

  • You can give, at most, $100,000 to charity through the QCD in any year, even if this figure exceeds the actual amount of your RMD.

The amount of money saved from being intentional with how you gift funds to charity can potentially keep more money in your pocket, which ultimately means there’s more to give to the organizations you passionately support.

Josh Bitel, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

Monitor Your Savings Bonds Through Treasury Direct

Jeanette LoPiccolo Contributed by: Jeanette LoPiccolo, CRPC®

Monitor your savings bonds through Treasury Direct

Throughout the years, savings bonds have been popular gifts. Before college savings accounts became so popular, grandparents sometimes gave bonds for birthdays, encouraging their grandchildren to save for the future. Could you have any savings bonds lying around in files or locked up in a safety deposit box?

If you have bonds that you have not looked at in years, now may be the right time to bring them into the digital age with Treasury Direct.

Recently, the U.S. Treasury stopped issuing paper bonds to save costs. Instead, you can create an online account and monitor your bonds as you would an investment account. If you use Raymond James Client Access, you can create an external link to your savings bonds account. Then, you and your financial planner can track your bonds.

In addition to preventing your bonds from being forgotten (or tossed away in a Marie Kondo cleaning frenzy), here are a few good reasons to try the online account:

  • You can cash your electronic bonds, in full or in part, at any time – 24 hours a day, seven days a week – and move the funds to a savings or checking account that you specify. You don’t need to go to a financial institution, and there are no restrictions on the number of bonds or the value that can be cashed, once minimum requirements are met.

  • Online holdings and their current values can be viewed at any time.

  • When electronic bonds reach final maturity and are no longer earning interest, they will be automatically paid to a non-interest bearing account.

The process is fairly simple. Step 1 is to locate your savings bonds. Then visit https://www.treasurydirect.gov/indiv/research/indepth/smartexchangeinfo.htm and scroll down to “How Do You Use SmartExchange?”. Follow the prompts and get started!

Jeanette LoPiccolo, CFP®, CRPC®, is an Associate Financial Planner at Center for Financial Planning, Inc.® She is a 2018 Raymond James Outstanding Branch Professional, one of three recognized nationwide.


Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Separate vs. Marital Property in Divorce

Jacki Roessler Contributed by: Jacki Roessler, CDFA®

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It’s Complicated!

Here in Michigan, divorce cases occur in what’s referred to as an “Equitable Division” environment. This distinction separates us from “Community Property” states like California, where the presumption is that all property acquired during a marriage is subject to equal division. In an equitable division property state, there’s a presumption that a property settlement should be equitable or FAIR…not necessarily equal. Marital property, including any asset (or debt) that accumulates during the marriage, no matter in whose name, is subject to equitable division between the parties.

But what about assets that don’t fall neatly into the proverbial marital pie? How, if at all, are they divided?

In general, assets considered the “separate” property of one spouse include those that were:

  • Brought into the marriage and left in the party’s name

  • Gifted during the marriage and left in the party’s name

  • Inherited during the marriage and left in the party’s name

Simple, right? Wrong.

In fact, although I’ve been a practicing divorce financial planner for nearly 25 years, lately I’ve noticed the distinction between separate and marital assets has gotten more complicated and difficult to navigate.

As an example, suppose John and Jane have filed for divorce after 20 years of marriage. Five years ago, Jane inherited $100,000 from an aunt in the form of an Inheritance IRA, from which the IRS requires her to take minimum annual distributions. She has been using the distributions to fund family vacations, and she and John have paid taxes on their joint return for all distributions.

For purposes of the divorce, is her $100,000 separate or marital property? In other words, is John entitled to an equitable share of any part or does it go to Jane, free and clear?

The answer: It depends. It depends on the length of marriage. It depends on whether Jane’s inheritance was co-mingled in any way. Let’s suppose the funds distributed were put into an account only in Jane’s name and weren’t used for family vacations. That might make a difference, depending on other circumstances.

Let’s take the example above and consider the parties’ marital home. John made the down-payment with proceeds from the sale of his pre-marital home, but both names are on the new home’s title. This is generally considered John’s gift to the marital estate. Because his separate property has been co-mingled, the house becomes part of the marital pie and up for equitable division between the parties.

Looking at a more complicated example, let’s also suppose that John had $200,000 in his 401k when he and Jane got married. He never moved the money into an account in both names, took a distribution or loan during the marriage. With the account now grown to $1,000,000, Jane concedes that the original $200,000 isn’t in the marital pie, but believes the entire $800,000 increase should be. John’s attorney says no, only the contributions made during the marriage, and earnings on those funds, should be part of the marital pie. The rest is separate.

Who is correct? Once again, it depends on several factors and on the specifics of the case. It’s important to understand, though, that no cut-and-dried answer can be applied to every case. These complex legal questions must be addressed by a qualified family law attorney. Keeping in mind that only a lawyer can help a client determine what is separate and what is marital property, there’s also the question of proof. That’s where a financial expert comes into play. Working within the framework of the legal strategy, the financial expert’s job is to reasonably quantify what is separate and what is marital.

The take-away for clients? When facing an issue of separate or marital property, bring it to the attention of an attorney and ask a lot of questions. Next, are there financial records to prove the case? This is key to determining whether it makes sense to pursue a claim in favor of or against separate property. Last, it may be possible to invade separate property based on need or other relevant factors.

As always, clients need to work closely with their attorneys and financial experts to explore all the options available to them – and the costs.

Jacki Roessler, CDFA®, is a Divorce Planner at Center for Financial Planning, Inc.® and Branch Associate, Raymond James Financial Services. With more than 25 years of experience in the field, she is a recognized leader in the area of Divorce Financial Planning.


Any opinions are those of Jaclyn Roessler and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. The case studies included herein are for illustrative purposes only. Individual cases will vary. Prior to making any investment decision, you should consult with your financial advisor about your individual situation. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Raymond James and its advisors do not provide tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Health Care Costs: The Retirement Planning Wildcard

Kali Hassinger Contributed by: Kali Hassinger, CFP®

Health Care Costs: The Retirement Planning Wildcard

When planning ahead for retirement income needs, we typically think about how much it will cost us to live day-to-day (food, clothing, shelter), and to do those things we want to do, like travel and helping grandkids pay for college. The costs we don’t often think about, those that could potentially wreak havoc on retirement income planning, are health care costs.

According to a recent article from the Employee Benefits Research Institute, the average 65-year-old couple will need $400,000 to have a 90% chance of covering health care expenses over their remaining lifetimes (excluding long-term care).

Longevity is a critical factor driving health care costs. According to the Social Security Administration’s 2020 study, a couple, both 66 years of age, has a 1-in-2 chance that one will live to age 90 and a 1-in-4 chance that one will live to age 95. And considering that Medicare premiums are means-tested, the more income you generate in retirement, the higher your Medicare premiums.

So, what can you do to plan for this potential large cost?

  1. If your goal is to retire early, plan on self-insuring costs from retirement to age 65. Some employers may offer retiree healthcare, or you can purchase insurance on the Health Insurance Exchange through the Affordable Care Act (still out-of-pocket dollars in retirement).

  2. Consider taking advantage of Roth 401(k)s, Roth IRAs (if you qualify), or converting IRA dollars to ROTH IRAs in years that make sense from an income tax perspective. You can use these tax-free dollars for potential retirement health care expenses that won’t increase your income for determining Medicare premiums.

  3. Work with your financial planner to determine whether a non-qualified deferred annuity or similar vehicle might make sense for a portion of your investment portfolio. Again, these dollars can be tax-advantaged when determining Medicare premiums.

  4. Most importantly, work with your financial planner to simulate retirement income needs for health care expenses and include this in your retirement plan. Although you will never know your exact need, flexible planning to accommodate these expenses may help provide confidence for your future.

Contact your financial planner to discuss how you can plan to pay for your retirement health care needs.

Kali Hassinger, CFP®, CDFA®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She has more than a decade of financial planning and insurance industry experience.


UPDATED from original post on March 11, 2014 by Sandy Adams.

Any opinions are those of Kali Hassinger and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

The Gambler

sell buy hold stocks

While I’m not a big country music fan, one of the few country songs I can sing along to is “The Gambler” by Kenny Rogers. While Kenny certainly knew how to make money, he also had a pretty good idea of how to keep it: “You gotta know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.” There’s a valuable lesson for investors in those lyrics. 

Most investors (and professionals, too) spend a lot of time deciding which investments to buy and little time understanding when to sell. It’s crucial to have a security selection process in place, and to understand what you own and why you own it, even if it is just an index mimicking strategy.

Part of your process, even before buying a security, should be to outline reasons you would hold the investment even through downturn periods. This can help you resist the temptation to sell in the wrong moments, for the wrong reasons. It is also important to establish factors that could cause you to sell.

At The Center, some of our reasons to potentially change strategies within a portfolio are: 

Security specific

  • Key personnel departure

  • Attainment of your price target

  • Increased correlation to other investments

  • Deviation from intended outcomes

  • Expenses

Goal specific

  • Change in circumstances (ie. entering retirement)

  • Change in risk tolerance

  • Change in the outcome needed to achieve long-term financial planning goals

Having these points in mind will make thinking about selling a position or changing your overall investment strategy (strategic allocation) easier and much less emotional. 

While it is usually best to buy and hold over longer periods of time, knowing when to hold ‘em and fold ‘em doesn’t come easily. But with some thought, you can make prudent decisions when you buy and when you sell, because you never want to have to walk away … or worse yet … have to run!

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.


Any opinions are those of Angela Palacios and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Can you roll your 401k to an IRA without leaving your job?

Nick Defenthaler Contributed by: Nick Defenthaler, CFP®

Can you roll your 401k to an IRA without leaving your job?

Typically, when you hear “rollover,” you think retirement or changing jobs. For the vast majority of clients, these two situations will be the only time they complete a 401k rollover. However, another option for moving funds from your company retirement plan to your IRA — the “in-service” rollover — is an often overlooked planning opportunity. 

Rollover Refresher

A rollover is simply the process of moving your employer retirement account (401k, 403b, 457, etc.) to an IRA over which you have complete control, separate from your ex-employer. If completed properly, rolling over funds from your company retirement plan to your IRA is a tax- and penalty-free transaction, because the tax characteristics of a 401k and an IRA generally are the same.  

What is an “in-service” rollover?

Unlike the “traditional” rollover, an “in-service” rollover is probably something unfamiliar to you, and for good reason. First, not all company retirement plans allow for it, and second, even when it’s available, the details may confuse employees. The bottom line: An in-service rollover allows an employee (often at a specified age, such as 59 ½) to roll a 401k to an IRA while employed with the company. The employee may still contribute to the plan, even after the completed rollover. Most plans allow this type of rollover once per year, but depending on the plan, you potentially could complete the rollover more often for different contribution types at an earlier age (sometimes as early as 55).

Why complete an “in-service” rollover?

While unusual, this rollover option offers some benefits:

More investment options: Any company retirement plan limits your investment options. You can invest IRA funds in almost any mutual fund, ETF, stock, bond, etc. Having options and investing in a way that aligns with your objectives and risk tolerance may improve investment performance, reduce volatility, and make your overall portfolio allocation more efficient.

Coordination with your other assets: Your financial planner can coordinate an IRA with your overall plan with much greater efficiency. How many times has your planner recommended changes in your 401k that simply don’t get completed? When your planner makes those adjustments, they won’t fall off your personal “to do” list.

Additional flexibility: IRAs allow penalty-free withdrawals for certain medical expenses, higher education expenses, first time homebuyer allowance, etc. that aren’t available with a 401k or other company retirement plan. Although this should be a last resort, it’s nice to have the flexibility.

Exploring “in-service” rollovers

So what now? First, always keep your financial planner in the loop when you retire or switch jobs to see whether a rollover makes sense for your situation. Second, let’s work together to see whether your current company retirement plan allows for an in-service rollover. That typically involves a 5-10 minute phone call with us and your company’s Human Resources department.

With your busy life, an in-service rollover may fall close to the bottom of your priority list. That’s why you have us on your financial team. We bring these opportunities to your attention and work with you to see whether they’ll improve your financial position! 

Nick Defenthaler, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He contributed to a PBS documentary on the importance of saving for retirement and has been a trusted source for national media outlets, including CNBC, MSN Money, Financial Planning Magazine, and OnWallStreet.com.


Rolling over your retirement assets to an IRA can be an excellent solution. It is a non-taxable event when done properly - and gives you access to a wide range of investments and the convenience of having consolidated your savings in a single location. In addition, flexible beneficiary designations may allow for the continued tax-deferred investing of inherited IRA assets. In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your options. For additional information and what is suitable for your particular situation, please consult us. 1. Leave money in your former employer's plan, if permitted Pro: May like the investments offered in the plan and may not have a fee for leaving it in the plan. Not a taxable event. 2. Roll over the assets to your new employer's plan, if one is available and it is permitted. Pro: Keeping it all together and larger sum of money working for you, not a taxable event Con: Not all employer plans accept rollovers. 3. Rollover to an IRA Pro: Likely more investment options, not a taxable event, consolidating accounts and locations Con: usually fee involved, potential termination fees 4. Cash out the account Con: A taxable event, loss of investing potential. Costly for young individuals under 59 ½; there is a penalty of 10% in addition to income taxes. Be sure to consider all of your available options and the applicable fees and features of each option before moving your retirement assets. Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to re tax or legal matters with the appropriate professional. 401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Roth 401(k) plans are long-term retirement savings vehicles. Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 70.5.

How to Deal with Financial Decisions When a Major Life Event Has You Feeling Stuck

Sandy Adams Contributed by: Sandra Adams, CFP®

How to Deal with Financial Decisions When a Major Life Event Has You Feeling Stuck

We’ve all had at least one. A major life event — some might even describe it as a trauma — that leaves us feeling like we’ve been run over by a freight train. For some of us, it may have been a divorce; for others, the loss of a spouse or other close loved one. It could be the sudden loss of a job, a terminal illness diagnosis or accident. Even unexpected “good news” events, like an inheritance or job promotion that comes with a move, can feel stressful when other aspects of your life are unsettled.

Times like these might leave a person unable to envision future goals or make ANY short or long term decisions. It’s common to feel stressed, numb, uncomfortable, anxious, confused — any of these, all of these — or just plain STUCK!

If “stuck” sounds like a place where you (or someone you know) might be, what can you do?

  • First, work with your financial decision partner (your financial advisor) to make sure that you are immediately okay and that any immediate cash flow needs are being met. Those are the only decisions that REALLY need to be made now.

  • Next, take an intentional “time out” (we call this the “DECISION FREE ZONE”) from making any major financial decisions or plans. This gives you time to deal with the life event that has happened or is happening to you.  Take time to take care of you — physically, psychologically, and emotionally — and get back to the business of future planning and decision making when your head is in a more clear place.

  • When you are ready to start thinking about planning again, take a step away from your current situation. “Getting on the balcony” can give you a more clear perspective. With the help of your financial decision partner, you can see your situation from a new point of view and begin the process of setting new goals for your new normal.

Getting “un-stuck” is not easy. And it cannot be done without patience, time, and the help of a good decision partner. 

What has you stuck?  What life event or life events have you feeling numb, stressed, and unable to make decisions?  Understand that this is likely to happen to all of us at some point in our lives, so do not feel alone.  And do not feel pressured to make decisions and or to move forward until you have taken care of yourself and feel comfortable moving ahead. 

We at The Center are trained to help clients with these types of difficult transitions. Please reach out if we can assist you or anyone you know and love.  Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP®, CeFT™, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.


Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Webinar in Review: Bridging the Gender Gap

Jacki Roessler Contributed by: Jacki Roessler, CDFA®

Women are gaining numbers in the workforce and are the primary breadwinner in over 40% of American households yet they still lag behind their male counterparts in financial preparedness for retirement.* Learn about the unique obstacles women face and discover tools to overcome them in this eye-opening webinar designed to help bridge the financial gender gap.

If you missed the webinar, here’s a recording:

Check out the time stamps below to listen to the topics you’re most interested in:

  • Women’s Strengths and Obstacles: 2:00

  • Setting the Foundation: 5:30

    • Build a Budget: 6:15

    • Emergency Reserves: 9:50

    • Pay Down Debt: 12:50

    • Monitor Credit: 16:00

  • Planning for your Future: 18:30

    • Retirement Savings: 20:30

    • Investment Strategy: 25:30

    • Estate Planning: 34:15

    • Anticipate the Unexpected: 36:30

  • Protect yourself: 39:00

Jacki Roessler, CDFA®, is a Divorce Planner at Center for Financial Planning, Inc.® and Branch Associate, Raymond James Financial Services. With more than 25 years of experience in the field, she is a recognized leader in the area of Divorce Financial Planning.

*Cited from 2012 US Consensus

5 Financial Tips for Recent College Graduates

Robert Ingram Contributed by: Robert Ingram

financial tips for recent college graduates

Congratulations Class of 2019! This is an exciting time for recent college graduates as they begin the next phase in their lives. Some may take their first job or start along their career path, while others may continue their education. Taking this leap into the “real world” also means handling personal finances, a skill not taught often enough in school. Fortunately, by developing good financial habits early and avoiding costly mistakes, new graduates can make time an ally as they set up a solid financial future.

Here are five financial strategies to help get your post-college life on the right path:

1. Have a Spending Plan

The idea of budgeting may not sound like a lot of fun, but it doesn’t have to be a chore that keeps you from enjoying your hard-earned paycheck. Planning a monthly budget helps you control the money coming in and going out. It allows you to prioritize how you spend and save for goals like buying a home, setting up a future college fund for children, and funding your retirement.

Everyone’s budget may be a little different, but two spending categories often consume a large portion of income (especially for younger people early in their careers): housing costs and car expenses. For someone who owns a home, housing costs would include not only a mortgage payment, but also expenses like property taxes and insurance. Someone renting would have the rental cost and any rental insurance.

Consider these general guidelines:

  • A common rule of thumb is that your housing costs should not exceed about 30% of your gross income. In reality, this percentage could be a bit high if you have student loans, or if you want more discretionary income to save and for other spending. Housing costs closer to 20% is ideal.

  • A car payment and other consumer debt, like a credit card payment, can quickly eat into a monthly budget. While you may have unique spending and saving goals, a good guideline is to keep your total housing costs and consumer debt payments all within about 35% of your gross income.

2. Stash Some Cash for Emergencies

We all know that unexpected events may add unplanned expenses or changes to your budget. For example, an expensive car or home repair, a medical bill, or even a temporary loss of income can cause major financial setbacks.

Start setting aside a regular cash reserve or “rainy day” fund for emergencies or even future opportunities. Consider building up to six months’ worth of your most essential expenses. This may seem daunting at first, but make a plan to save this over time (even a few years). Set goals and milestones along the way, such as saving the first $1,000, then one months’ expenses, three months’ expenses, and so on, until you reach your ultimate goal.

3. Build Your Credit and Control Debt

Establishing a good credit history helps you qualify for mortgages and car loans at the favorable interest rates and gets you lower rates on insurance premiums, utilities, or small business loans. Paying your bills on time and limiting the amount of your outstanding debt will go a long way toward building your credit rating. What goes into your credit score? Click here.

  • If you have student loans, plan to pay them down right away. Automated reminders and systematic payments can help keep you organized. To learn how student loans affect your credit score, click here.

  • Use your credit card like a debit card, spending only what you could pay for in cash. Then each month, pay off the accumulated balance.

  • Some credit cards do have great rewards programs, but don’t be tempted to open too many accounts and start filling up those balances. You can easily get overextended and damage your credit.

4. Save Early for the Long Term

Saving for goals like retirement might not seem like a top priority, especially when that could be 30 or 40 years away. Maybe you think you’ll invest for retirement once you pay off your loans, save some cash, or deal with other, more immediate needs. Well, reconsider waiting to start.

In fact, time is your BIG advantage. As an example, let’s say you could put $200 per month in a retirement account, like an employer 401(k), starting at age 25. Assuming a 7% annual return, by age 60 (35 years of saving), you would have just over $360,000. Now, say you waited until age 35 to begin saving. To reach that same $360,000 with 25 years of saving, you would need to more than double your monthly contribution to $445. Starting with even a small amount of savings while tackling other goals can really pay off.

Does your employer offer a company match on your retirement plan? Even better! A typical matching program may offer something like 50 cents for each $1 that you contribute, up to a maximum percentage of your salary (e.g. 6%). So if you contribute up to that 6%, your employer would add an extra 3% of your salary to the plan. This is like getting an immediate 50% return on your contribution. The earlier you can contribute, the more time these matching funds have to compound. 

5. Get a Little More Educated (about money and finances)

Ok, don’t worry. Forming good financial habits doesn’t require an advanced degree or expertise in all money matters. To build your overall knowledge and confidence, spend a little time each week, even just an hour, on an area of your finances and learn about a different topic.

Start with a book or two on general personal finance topics. You can find reference books on specific topics, from mortgages and debt to investments and estate planning. Information offered through news media or internet searches also can provide resources. And you can even find a blog not too far away (Money Centered Blog).

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.