The Center's Celebrated for Being "A Cool Place to Work"

 Melissa Joy, CFP® shares her insights about The Center’s approach to creating a culture and workplace environment that is energizing and rewarding for all team members.   Below is an excerpt from the article titled  A Cool Place to Work by Ellen Uzelac.

Creating a Culture

With $685 million in assets under management and 20 firm “members,” as they are called, Center for Financial Planning in Southfield, Mich. considers itself a “one-firm firm” that treats employees like they are employees of a business and not employees of an individual advisor.

There is a flex-time policy, financial support for the pursuit of new credentials and learning opportunities, an incentive compensation formula and structured career paths for all positions.

“We want to service our employees the same way we want to service our clients. After all, they have as much or more contact with clients as we do,” says Melissa Joy, a partner and director of investments for the 27-year-old firm. “I really think if you are going to be a modern firm, it’s critical to put yourselves in the shoes of an employee.”

It’s a culture that is anything but static. This past April, for example, every employee was involved in a half-day retreat involving the firm’s vision for 2020. “What better way to have buy-in than to get it from the get-go?” observes Joy.

Center for Financial Planning also launched an employee satisfaction survey that resulted last year in enhancements to its benefits package. Among them: formalized bereavement time; time off for community involvement; the opportunity to take a sabbatical after seven years of service; and increased time off for life balance concerns and professional growth.

“One of the ways that we like to think about it is we like employees that have intellectual curiosity. We’re in an entrepreneurial business. Intellectual curiosity isn’t something that starts when you are a principal,” Joy says. “We want to encourage and reward innovation. We want to grow our leaders from within.”   Joy is an example of that. She started out as a client service assistant 13 years ago. Today, she’s an owner.

“We have a lot of friends in the business and lot of people talk about their successes as an employer but they’re always bemoaning their high turnover,” she adds. “We don’t experience that and we think there is a reason for it.”

Our culture is driven strongly by our company values.  More than words; they serve as guides in our actions. Everything we do is about our clients and our team with our values leading the way.

We invite you to take a closer look (click here) at our 8 guiding values we believe make The Center a COOL PLACE TO WORK!

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"Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC." Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James

VA Aid & Attendance Benefits: Beware of Bad Advice

 Imagine this scenario:  You attend a presentation with your father at his assisted living facility.  The organization presenting is very official looking, with materials covered in flags and red, white and blue.  Although they are not the Veteran’s Services Organization or VA, they claim to be able to help all veteran’s get a monthly pension benefit from the VA, no matter what their financial situation.  They claim clients they work with have never been denied benefits.  Could this be true, or might there be a catch?

The U.S. government provides several benefits to military veterans as a way to honor them for their service.  One of the benefits that might be available to many veterans and their spouses in older age is the VA Aid & Attendance Benefit. 

• Not all veterans are eligible for this benefit, as it is dependent on time of service and medical and financial need.
•  This benefit provides a monthly pension to veterans and/or their spouses in older age when they begin to need assistance with activities of daily living. 
• The Aid & Attendance Benefit is also based on financial need – income versus ongoing medical related expenses and value of assets.  In general, anyone with asset in excess of $80,000 is not eligible (note that this asset number can be adjusted based on age and life expectancy).   *Source:  U.S. Department of Veterans Affairs

If a veteran qualifies within the income and assets requirements, applications can be filed with the Veteran’s Services Organization at no cost.  For veterans who might not be eligible for benefits without additional planning, organizations like those described above will offer to assist by re-registering and/or gifting assets and repositioning assets into insurance based products that generate high commissions to the “advisors” selling them and are not necessary to qualify for benefits. 

If you or someone you know is a veteran or spouse of a veteran who thinks they might benefit from the Aid & Attendance Pension Benefit, here are a few things to remember:

• If the veteran has limited income and assets, go directly to the Veteran’s Services Organization to apply for benefits.
• If you think you may need additional planning to qualify for benefits, seek out a Certified Elder Law Attorney who has been certified by the VA to counsel veterans.  A qualified Elder Law Attorney will counsel you based on the client’s needs now and in the future (i.e. future need for Medicaid benefits), and may recommend that the VA Aid & Attendance Benefit is not appropriate for all clients.
• Be aware of advisers who insist that the only way to qualify for benefits is to shift assets to an Irrevocable Trust and fund the trust with insurance based products (be especially aware if the recommendation is to buy multiple, smaller insurance products – as this may not be a suitable option and the advisors may only be trying to maximize their commissions).  The real truth is that if the trust is appropriate, it may not be necessary for it to be funded with insurance products that might have high commissions and might have surrender charges not appropriate for an older adult.

I don’t know about you, but whenever I think about U.S. military veterans, I think of respect, service and gratitude.  The best way to honor our military veterans is to provide them with the most suitable advice for their situation. Not bad advice that will cost them money. If you are a veteran or know one who might be eligible for the Aid & Attendance Benefit, make certain that the appropriate professionals are consulted. 

Watch for my upcoming post on additional Elder Financial Fraud scams.  Contact me at Sandy.Adams@CenterFinPlan.com if you have additional questions about any elder care related topics.

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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 not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss.  You should discuss tax or legal matters with the appropriate professional.

Great Investment Performance is Not Enough

 "The economy is suffering" and "Job loss" and "Euro crisis" ... you've likely been reading a lot of bad news about the economy lately. Especially in this election season, the worst often gets pushed center stage in campaign ads and speeches. But instead of focusing on the buzz, take a look at the facts. Below is a chart of returns over the past year from 8/20/2011 to 8/21/2012.  The S&P 500 returned over 28% including dividends!!!

Source: Morningstar Direct

This has happened during a time when:

• United States Treasuries lost their coveted AAA rating from S&P debt rating agency
• National Unemployment remains high
• The Euro Zone continues to be engulfed by concerns over debt

And that is just to name a few of the scary headlines we’ve witnessed over the past year. Regardless, though, the market continues to march on.

Unfortunately, the average investor has been divesting in the U.S. markets consistently since 2008 rather than investing. The chart below shows that the average retail investor (that is you and me), represented by the blue and orange areas, has been consistently pulling money out of US stocks while institutions, represented by the green area, have been consistently investing.

Source: Morningstar Direct

You might ask where has the money been going.

• A large amount has been flowing into U.S. Bonds (despite the downgrade and historically low interest rates)
• Some has left the market to pay down consumer debt
• Many are moving over to exchange traded instruments to find their U.S. Stock exposure

It is hard to say if the average investor is permanently scared away from buying U.S. Stocks, but do not count on the media to make it feel any easier!

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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 information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James. The S&P 500 is an unmanaged index or the 500 widely held stocks that are generally considered representative of the U.S. stock market.  Inclusion of these indexes is for illustrative purposes only.  Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual performance.  Individual investor’s results will vary.  Past performance does not guarantee future results.  Dividends are not guaranteed and must be authorized by the company’s board of directors.

Where in the World is Dan Boyce?

 When I’m not spending my week each month in Michigan or travelling to see the “kids” and grandchildren, you can usually find me at our home in Prescott, AZ (pronounced by the locals as “Press’kit” rather than “Press-caht”).  People think of Arizona as unbearably hot in the summer months; but our locale in the Central Highlands of the state (at 5,800’) actually boasts more comfortable summers than Southeast Michigan.

My weeks in Michigan consist of multiple client appointments each day—many of them in tandem with another Center planner.  It results in long days.  Other than keeping fit, I don’t have much time for a life outside work there.  In Prescott, I typically spend 2-3 hours per day keeping up with the financial planning field, talking with the office, reading about industry trends, doing research, etc.  Otherwise, I’m working on several other projects that have unfolded:

• Working (volunteering) as Coordinator for the Institute for Sustainable Social Change (the “Institute”—see below), which is affiliated with Prescott College
• Making music—I just finished a year as choir director of the Granite Peak Unitarian Universalist Congregation;  in addition, Sue and I rehearse weekly with a high-quality vocal a cappella octet
• Working on behalf of Prescott College as a Trustee—I can unequivocally state that being Past Chair of the Board is a much cushier position than being the current Chair!
• Acting as a school board member for a charter school here in Prescott
• Chairing a task force for the Unitarian Universalist Association which is laying the groundwork for a curriculum focused on creating healthy relationships and attitudes towards our money, using it to and intentionally reflect our values and empower our lives

So I’m keeping myself well occupied.   Many clients ask me about the Institute.   In brief, I am involved in both behind-the-scenes work—the “business” end of running the organization—as well as working on a project to create a culture of civic engagement, community involvement and volunteer service throughout the Prescott College community.  This is a joint venture of the Institute and the Office of Student Life at the college; we just brought on a full-time VISTA member to work on this initiative during the coming year.  Watch for a separate blog coming soon which will describe my work at the Institute in more detail.

When is it Time to Downsize?

 If I give away some of my stuff, am I giving away a part of me?  Does it make “me” less? 

That was the question posed by Dr. Cathy Lysack, PhD, an occupational therapist and the Deputy Director of the Institute of Gerontology at Wayne State. She asked the audience at The Center’s recent educational workshop about downsizing and mobility for thoughts about giving away “stuff”.  This topic can be troublesome, not only for seniors, but their adult children as well.  What’s unique about late life downsizing versus any other move?  According to Dr. Lysack, it’s when downsizing occurs in a compressed time period and is often initiated by health issues.

So when is the right time to move?

The answer to that is not the same for everyone but there are important clues.  The most common is that your body says it’s time.  It becomes obvious when your current living situation, environment, or health simply become too much to handle. Depending on your stage in life, you may also desire to be closer to family or to live in a more fulfilling community.

When the final decision to downsize has been made, there are many emotional decisions that remain.   What should you keep? What must go?   Dr. Lysack said, “We tend to keep things that give us pleasure, have monetary value, or are things we have attached a special memory to.”  Throughout the process we wonder if, by giving these items away, we are going to be giving away a part of ourselves.

Here are three key questions to consider when faced with these tough choices:

• Does it fit in the space I am moving to?
• Does it mean something to me?
• Do I really need it?

Dr. Lysack concluded the presentation with the following thoughts, “There are many different ways to downsize and that the process is more than packing boxes and moving.  Older adults dislike change (like the rest of us), but they are experienced with life, resilient and adaptable. Many show considerable creativity in making decisions about what to keep, sell, donate or gift.

The Center for Financial Planning recognizes first-hand the challenges many aging clients and their families experience moving into later stages in life.   We remain committed to providing well-informed and compassionate advice to those faced with these very emotional decisions.   Please do not hesitate to contact our office if you would like additional information.   

Wile E. Coyote and the Fiscal Cliff

 Have you ever had one of those dreams where you were just about ready to fall off a cliff … and thankfully you woke up just before looking like Wile E. Coyote?  Known as “The Coyote” to many who grew up watching “The Road Runner” and “Looney Tunes”, Wile E. Coyote fell off more than his share of cliffs in many an episode. 

Hopefully U.S. taxpayers will not end up like The Coyote as our nation faces a “fiscal cliff”.   While Chuck Jones created Wile E. Coyote, we have Ben Bernanke, Federal Reserve Chairman, credited with introducing the fiscal cliff metaphor.

The fiscal cliff essentially stands for the possible economic challenges coming should Congress fail to act on some important measures, most notably: 

• The expiration of the Bush Tax Cuts
• The expiration of the 2% reduction in payroll taxes
• Scheduled (forced) federal government spending cuts   

Add ‘em up and in the profound words of The Road Runner … beep beep.  Congress must act or the above measures are set to become law. If Congress doesn’t address the fiscal cliff successfully, economic growth as measured by gross domestic product in 2013 will be muted at best and contracted at worst.  

Without taking a political position or laying blame, Congress has unfortunately shown an inability to ACT in the past. Consider this your warning sign: Fiscal cliff ahead! You can keep running like The Coyote, or you can stop and pay attention to the sign. Proper advanced planning is critical in achieving your most important financial and life goals.  If you would like more information, email me and request a copy of our “Financial Planning in an Uncertain Tax Landscape” white paper from our partner Raymond James.  If you would like to schedule a time to discuss your specific planning needs, feel free to call or email to schedule a meeting. 

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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 opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

Lump Sum Buyout: A Case Study

 Tim Wyman & Melissa Joy from the Center for Financial Planning were recently featured in Dow Jones NewsWires on this subject.

In an article titled Pensioners Decline Lump-Sum Buyout by Niki Reading, Tim and Melissa collectively walk through an individual client’s decision process as they choose between taking a lump sum payment offer or continuing their annuity payments.  As the excerpt reveals, it is not always a number game.  Real life issues sometimes demand real life solutions.

The client is 70 years old and his wife is in her late 60s. In addition to the pension, they have about $1 million socked away, both receive Social Security and are also employed part-time. They use an annuity and Social Security to cover monthly living expenses.

Tim Wyman, CFP® ran the numbers and determined that the buyout looked appealing: The breakeven point was at about 12 years, he says, and Mr. Wyman and his team navigated the tricky life-expectancy conversation to determine that the clients, too, felt it made good sense.

While many long-time company employees feel a sense of loyalty to their employer--and believe that nothing will interrupt their monthly pension checks--there are others who are more inclined to take the money and run. In this case, the clients were happy to cash out.

But despite the initial allure of the lump-sum payout, Mr. Wyman and Ms. Melissa Joy, CFP® had one big concern about the clients' plan. Because the firm had managed the couple's money for years, they knew that the couple had for many years offered financial support to their two adult children.

"If you have $500,000 sitting in an account, when you give kids $20,000 it doesn't seem like it'll have a huge effect," Mr. Wyman says, but over time the tab had added up for the couple. And, with a little help from Tim and Melissa, the clients recognized that a $250,000 buyout check might lead them down the same path.

The experience reinforced to Mr. Wyman that smart financial decisions don't always revolve around whether the numbers add up. Indeed, in this case the key was looking beyond the dollars and cents to see the solution was right for the clients. The answer turned out to be no.

As the Ford pension buy-out season continues, many important decisions remain for Ford retirees. Please feel free to email Melissa or Tim with additional questions or comments.

Melissa.Joy@CenterFinPlan.com   Timothy.Wyman@CenterFinPlan.com

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This case study is for illustrative purposes only. Individual cases will vary. 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. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

Back to School Event for Birmingham & Bloomfield Residents

 It’s almost time for the school buses to start rolling into another school year.  Backpacks, lunch boxes and shiny new shoes are ready to go.  To help everyone get off to a great start the Birmingham Bloomfield Chamber presents Back to School – Community Conversations with Superintendents. The event will be held Wednesday, August 29^th, 8 to 9:30 AM at the Birmingham Conference Center.

Connect with community leaders and hear the latest developments from our local school districts. Join Birmingham Bloomfield Chamber members, community officials and residents as we flip to the next chapter.

Click Here for Additional Information or to Register

Planning for Elder Care? I’ve Found a Great Resource

 I am in school again.  This time not because I have to or need to, but because I want to.  In my quest to have greater knowledge about the aging process and elder care issues, I recently did a class project to find recources for caregivers and families. My search uncovered a great resource that was new to me – Joy Loverde’s “The Complete Eldercare Planner”. 

Our population is approaching the biggest shift in U.S. history.  By 2030, those Americans 65+ will make up over 20% of the U.S. population.  Even more surprising, in less than 50 years, there will be as many Americans aged 80 and older as there are now people over 65.(Source: Fidelity Research) 

This population shift is putting more and more Americans in the position of caring for aging parents at the same time they are raising their own children.  Without the proper resources, the task of caring for parents can be overwhelming, putting the health and sanity of caregivers and their families at risk.

In her book, “The Complete Eldercare Planner,” Joy Loverde, a well-known consultant in the senior industry for over thirty years, provides valuable insight for caregivers who need to plan and manage eldercare issues.  Particularly helpful are the low-cost and no-cost resources and checklists provided to guide caregivers through the following areas: 

• Effective Overall Planning
• Creating a Care Team
• Care for the Caregiver
• Communication
• Emergency Preparedness
• Money Matters
• Legal Matters
• Insurance
• Housing
• Safety Issues
• Transportation and Mobility
• Managing Medical Care
• Quality of Life
• Death and Dying
• Financial Organization/Document Location

I fell in love with the book when I read the author’s opening message, “Caregiving may be the hardest family responsibility you’ll ever take on. It unquestionably affects our every waking moment – at home, in the workplace, where and how we live, and how we cope.  If eldercare has chosen you, I will be with you every step of the way. Every page, every sentence, and every word in this book contain my personal messages to you, and I have the utmost respect for your decision to accept this role as caregiver.”

”The Complete Eldercare Planner” is easy-to-use. The checklists and resource lists are simple and are likely to be used over and over during the process of caring for an elder family member. 

For additional resources and/or answers to questions regarding Elder Care financial planning, contact me at sandy.adams@centerfinplan.com.

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This 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.  Joy Loverde is not affiliated with Raymond James.

Euro 101: Who’s In the Euro Zone and Why Was It Established?

 When you think of Europe, your mind might immediately start plotting your “bucket list” of vacation destinations. That happens whenever I see a map like the one below, but this picture actually brings us to the next lesson on Europe.  Could you imagine changing currencies every time you drove up to the Upper Peninsula or over to Chicago?  While we are somewhat used to that when we go over the bridge to Canada, most of the United States is not.  However, that is what living in Europe was like until 1999, when the Euro Zone was established.

Lesson #2

What is the Euro Zone?

In contrast to the European Union’s large membership of 27 countries, the Euro Zone consists of only 17 of those 27 countries.  This is an Economic and Monetary union of these countries.  They have all accepted the Euro as their sole legal currency.  The Euro Zone currently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

According to the European Commission, the benefits of the euro are diverse and are felt on different scales, from individuals and businesses to whole economies. They include:

• More choice and stable prices for consumers and citizens
• Greater security and more opportunities for businesses and markets
• Improved economic stability and growth (Okay, maybe this one is up for debate)
• More integrated financial markets
• A stronger presence for the EU in the global economy
• A tangible sign of a European identity

The European Central Bank (ECB) was established to administer the Euro Zone.  The ECB controls monetary policy similar to our Federal Reserve Bank in the U.S.  Their main goal is to keep inflation under control by setting interest rates.  Lately they have had to become a buyer of member countries bonds in order to help bring their rates (borrowing costs) down for countries like Spain and Italy. 

I was fortunate enough to spend three years living in Germany after the Euro Zone was created.  We found ourselves traveling from Germany to other Eurozone countries for long weekends as easily as driving to Chicago for a visit.  If I felt this way as an individual, you can imagine the impact this has had for business.

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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.