Welcome to the Year 2020

 Where will the Center be 8 years from now?   Center team members have spent the past few months creating that view of the future, called the “Center Vision 2020.”

Partner Tim Wyman reflects on his experience:

“For the last 6 months we have been working on The Center’s Vision 2020.  This “all hands on deck” process has allowed all team members to participate in shaping the firm for the next 8 years.  The process has been engaging, exciting, thought provoking, enlightening, challenging and fun (I think that captures it) and will result in enhancing the service that The Center provides.

On a personal level, I am quite proud of the sense of servant leadership and genuine commitment to serving others that our team exudes. Each of us recognizes that our work and lives are enriched by the service we give to clients, each other, our families, business partners, and our communities.”

What does this vision of the year 2020 look like? 

It includes an increased dedication to clients and communities, more technology-enhanced experiences, and greater emphasis on developing the internal talent of Center team members.

Our collective 2020 vision inspires, rallies, and guides our decisions. Day in, day out, The Center lives by Mission, Firm Values and Firm Service Values.  This will not change in 2020!

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Women Face Unique Challenges in Retirement Planning

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 Women today have never been in a better position to achieve financial stability for themselves and their families.  More women than ever are successful professionals, business owners, entrepreneurs and knowledgeable investors.  Growing economic clout and greater financial responsibility highlight the importance of making smart financial decisions along the way. 

And here is the but . . . . they still have a long way to go before closing the male/female retirement savings gap.  In the financial world, women often find themselves in very different circumstances than their male counterparts.  A recent research report from the Insured Retirement Institute says that income disparities over the past 30 years have translated into a 25% to 30% retirement savings shortfall for women baby boomers when compared to men with similar savings and investing patterns.

Income disparities are not solely to blame according to the IRI study.   Besides earning less, women have longer life expectancies than men creating the need to stretch retirement income for a longer period of time.  Another prevailing headwind when it comes to retirement planning is that traditionally women have been more likely to take career breaks for caregiving of family members.  Career breaks can lead to fewer promotions, less savings, potentially lower Social Security income and reduced employer provided retirement benefits.

The solution?   It is critical that women know how to save, invest, and plan for the future.  Here are foundational first steps to help you catch a tailwind and close the retirement savings gap:

1. Chart your financial course every step of the way

Create a budget, manage debt and credit wisely, set priorities

2. Learn basic investing concepts

Asset classes, risk tolerance, time horizon, inflation

3. Understand the role of retirement savings opportunities

401 (k)s, IRAs, and 403 (b)s

4. Before retiring research your Social Security benefit amount

Analyze the options because age, work history, and income earned affect the amount

5. Seek professional help when needed

Increase awareness, implement plans, strategize options

Creating a financial plan and sticking to it isn’t always easy or convenient; however understanding options and implementing a plan helps resolve the tension between what is needed and wanted today and what is needed and wanted for the future.  Closing the retirement savings gap will no doubt push up against the retirement income glass ceiling.   

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. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Laurie Renchik and not necessarily those of RJFS or Raymond James.

Sandy Adams Speaks to CPAs on Eldercare

 Sandy Adams recently spoke to over 150 members of the Michigan Association of CPAs (MACPA) at their annual Management Information and Business Show on June 27th and 28th at the Rock Financial Showplace in Novi.  The presentation, titled “ElderCare 101” addressed the eldercare client, CPAs responsibilities for serving clients in this demographic, as well as opportunities for the CPA practice. Sandy is the Center’s point person for eldercare planning issues.

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Pre-Paid Funeral Plans

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 Historically, end-of-life issues, especially death and funerals, were the last topics people wanted to discuss.  With more information and resources available, it seems that Americans are more at ease having these conversations.  And they are willing to plan for these events in advance!

Recently, I had a client ask me about pre-paid funeral/cremation plans and whether these were something she should consider.  In doing some research on the topic, I found that there can be pros and cons to these types of plans:

Pros:

  • Prepaying for your funeral can ease the burden on already grieving family members when the time comes, and you are able to choose the options you want.
  • Using a prepaid plan can provide peace of mind.  If you choose the right method and plan, you can feel confident that there are funds available to pay your final expenses. 
  • A prepaid funeral plan is a non-countable asset if you need government assistance for long-term care expenses down the line (Medicaid or VA Aid & Attendance Benefits).

Cons:

  • Purchasing a pre-paid funeral plan directly with a funeral home can be risky.  If the funeral home goes out of business or misappropriates the funds, you could be out the money invested.
  • You must carefully read any contract to ensure that there will not be added costs later on (i.e. the casket that was chosen is no longer available and the replacement model is much more costly).
  • If you purchase a plan with a specific funeral home, you may not have the flexibility you want/need later on if you need to relocate and wish to change funeral plans.

There are pre-paid funeral insurance plans sold by insurance companies that provide the flexibility of using any funeral home in any state.  The policies ensure that the premium you pay will cover the costs you plan for when the time comes.  Again, it is important to read the fine print and consider the costs for any type of pre-paid funeral plan.  Additional information and FAQs can be found in the Federal Trade Commission’s publication “Funerals:  A Consumer Guide”.

There are many ways outside of the pre-paid funeral plans to ensure that your plans are in place and that the funds are available.  Discuss these and other important issues with your financial planner.

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.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does don constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

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Betsey Schrock Elected President of Stagecrafters in Royal Oak

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 The Center is pleased to announce that Betsey Schrock, Office Manager/Bookkeeper, has recently been elected president of Stagecrafters, a large community theatre organization located at the Baldwin theatre in Royal Oak.  Stagecrafters recently celebrated 50 years of providing quality performances to children and adults in the southeast Michigan region.  Each year, Stagecrafters presents five productions on its 372-seat Main Stage and three contemporary productions on its more intimate 100-seat 2nd Stage.  Stagecrafters is unique among community theatre groups because it owns the building where it performs and where, later this year, the Baldwin is expected to be awarded Michigan Historic Building status.

Betsey joined Stagecrafters in 1996 after being involved as the wife of an actor and the mother of two budding theatre aficionados.  She began her involvement as producer for several Stagecrafters Youththeatre productions (SYT). From there, Betsey also experienced producing on the Main Stage and more recently the 2nd Stage.  Other experiences include manning the box office, ushering, house managing, and working on such committees as human resource, membership, production, and budget.

Betsey is most proud of the SYT which presents two productions per year.  SYT is theatre for youth and by youth.  Children ages 8 – 18 can join SYT for a small fee and can be involved in a production, from acting, to set building, to painting, ushering, and even producing or directing, all of which are supervised by caring and experienced adult members of Stagecrafters.  Some of our youth have gone on to professional acting, including the popular Kristen Bell!  More importantly, the youth have the opportunity to work with adults and feel comfortable around adults who are valuable role models.  Whether on-stage or backstage, one can see how involvement at Stagecrafters helps youth develop their interests and their confidence, which are useful later on in life.

Betsey’s term as president is two years.  During these two years, she plans to help Stagecrafters celebrate SYT’s 40th year and to seeing to fruition a multi-year campaign to fund and renovate the theatre’s restrooms.

 "There’s always something we can do to make Stagecrafters even better." Betsey 

Around the Water Cooler at The Center

 We find ourselves in the middle of summer again and more than half way through the year.  Here at The Center, this is the time of year when we are digging into the most intense research and doing some very “deep thinking”. A heavy dose of conferences and speakers in the spring gave us much food for thought, and now we find ourselves at a time in the year where the schedule seems a bit lighter, no doubt due to our clients out enjoying their well-deserved summer vacations. So, while you may be thinking about relaxing, here’s what we’re thinking about at The Center:

  • Around the world, government intervention has caused interest rates to fall due to slowing growth in China and Euro Crisis. Can they go even lower?

  • A surprising slowdown in overall US debt growth has been occurring under our noses. No, the US federal debt load keeps growing, but there has been measurable deleveraging on the state and household levels.

  • The Affordable Care Act was largely upheld by the Supreme Court last month having implications for Americans and their investment and tax strategy in all walks of life.

  • Scandalous headlines are resurfacing at big banks, most recently JP Morgan and Barclays

This is more than water cooler talk for us, we are busy working these landmark changes into our strategies for the future. To find out more about what’s catching our attention, check out our Quarterly Investment Commentary.

Need help making good financial decisions?

 You are not alone. There are few people who should even attempt charting their financial course without consulting someone else. Even experts ask others for advice! So, I offer 7 key components to helping you find the right person to help you make the best decisions possible for you:

  1. Experience: Reflecting back on my career, I am always amazed at how green we are in the first 10 years of our careers.  I would recommend that you seek an advisor with a minimum of 10 years of on-the-job work experience before handing over the keys to your largest financial decisions. Make sure that the work experience is hands-on and specific to your needs. Ask them about their experimental practice history.   What was their greatest mistake or great new awareness surrounding the people they help?
  2. Qualifications: Make sure the financial professional is a CFP® practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC).
  3. Services: Ideally, the first meeting is free so you can see if the relationship is a good fit.  At the first meeting, spend time trying to understand if your values are aligned and if the financial planning professional really cares about you and your goals.  Ask for a list of services the financial planner offers or the scope of the engagement options. This should define the scope of work and the costs.  Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.
  4. How their firm works: The financial planner may work with you or have others in the office assist. You may want to meet everyone who will be working with you. If the planner works with professionals outside his/her own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on them all out.
  5. Compensation: As part of your financial planning agreement, the financial planner should clearly tell you in writing how he/she will be paid for the services to be provided. Planners can be paid in several ways (i.e. Commissions, fees, or a combination).
  6. Other costs: While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs should include the planner’s hourly rates or fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.
  7. Complaint history: Ask what organizations the planner is regulated by and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies. Or, if they are associated with a company that is registered as an investment adviser, they must be able to provide you with a disclosure form called Form ADV Part II or the state equivalent of that form.

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.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

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