Plan to Save in 2013? Basics to Get Started

 It’s the start of a new year and we all have the best intentions. But it can be easy to let those intentions slip away by the end of January if you don’t have a plan.  

In my previous post, I addressed strategies for developing an action plan to keep your financial savings resolutions.  For even more ideas, Susan Tompor of the Detroit Free Press offers more than a dozen basic savings ideas in her recent article “13 Resolutions to Save in ’13.” All the ideas are helpful, but here is my Cliff Notes version of the top three simple strategies you can put to work:

1. Use What You’ve Got – How many of us run out and buy something new rather than take the time to look for and use what we might already have?  We tend to stash items in the pantry or in the back of the closet and then forget about it.  So, before you run out to the store to get something like a new tube of toothpaste, why not make sure you’ve used up the small tubes you’ve collected from your dental visits over the past year first?
2. Think “Just In Time” --  Our society is obsessed with stores like Costco and Sam’s Club that allow us to get tremendous “deals” by buying in bulk.  Unfortunately, this leads to overspending and overstocking our pantries with items that we then forget we have (see #1).
3. Go to Your Kids and Ask Them How to Save Money – Get the entire family involved in saving.  It’s never too early to get children involved in being fiscally responsible, and you might be surprised at the creative ideas that they come up with.

Making progress towards your larger financial goals starts with just a few small steps.  Start your steppin’ today.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Financial Resolutions

 It’s that time of year again and you’ve likely made one or more New Year’s Resolutions.  If you’re like a majority of Americans, you made a resolution to achieve at least one of the following goals in 2013:

• Lose weight
• Get in better physical condition (exercise more)
• Get organized
• Get in better financial shape

A recent survey by Fidelity Investments, found that of those who made financial resolutions, over 50% set a goal of saving more money. 

Whether saving is for a short-term goal (like buying a new car) or a long-term goal (like saving for retirement), how do you avoid being one of the over 35% of Americans who have broken their resolution by the end of January?*

Try these ideas:

1. Write down the savings goals you’d like to accomplish by 12/31/2013.
2. Break your bigger goals into actionable and specific quarterly goals; assess your progress every 90 days.
3. Be accountable to a third party.  Your financial planner is the perfect person to work with to establish your annual goals and develop actionable steps to achieve those goals.  Schedule a quarterly check-in to report your progress.

Like any goal (or resolution) you make in life, putting it in writing and keeping yourself accountable is the best way to achieve success.  Make 2013 the year you keep your financial resolutions!  See my next blog for ideas on specific actionable goals for the year.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

*New York Times, January 2012

Yep, There's An App For That

 Raymond James Launches Investor Access for Mobile Phones

This winter, Raymond James has made Investor Access, their client account access system available on mobile devices. You can see your account summaries and portfolio values via a secure and convenient application available through the Apple, Google, or the Windows Marketplace.

To get your app, search for Raymond James Investor Access in your App Store, or visit the Raymond James Mobile Access web page.

Visioning Your Future Retirement: How to Write Your Own Story

 A recent Wall Street Journal headline caught my eye and got the wheels turning in my head.  It read, “The Let’s Sell Our House and See the World Retirement.”  This article outlines an interesting variation to the more traditional retirement theme of choosing a static location to call home for retirement.  It’s an unconventional take on retirement that required some careful planning and some carefree exploration. As the globe-trotting couple says in the article, “When all else fails, walking and gawking are free everywhere.”

The retirees featured in the piece sold their permanent residence and live in furnished apartments and houses around the world.  They call themselves senior gypsies that put down roots – at least for a month or two.  The simplified version of their story is that they are both happier in life while “on the road.”  Health is good and the desire to see the world in bigger bites than 2-3 weeks at a time is their primary motivation. 

The message I find compelling is that traditional financial planning principals provided the fundamental backdrop for the decision-making but the individual creativity of the retirees provided the unique detail.  This means that a myriad of possibilities exist for all retirees contemplating future retirement. We can start with financial planning as a home base and then craft a unique retirement that provides value and worth regardless of individual preferences. 

Here are three tried and true tips to consider when visioning your future retirement picture:

1. Engage in honest conversations about what is important in retirement.  This simple exercise has a way of opening doors to future possibilities. 
2. Own the reality check.  Crunching the numbers provides context and insight to what can be possible in retirement.  In the article, selling the home was a key to realizing the desired lifestyle in retirement.
3. Develop a solid spending strategy.  This step is instrumental in keeping any budget in line.  Adjustments are an ongoing part of any budget and lend to the health of the overall plan. 

Technological advances connect the world in amazing ways and the reality is that times are changing. Many baby boomers and younger cohorts are writing their own retirement story, even if it means creating a new set of rules about how to spend retirement.

In the spirit of a new adventure, I started to make a mental list of the pros and cons to this hybrid approach and wondered how an idea like this might float with my husband! 

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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.

Excellence is Not Perfection

 Passion for Excellence: a Center Value that guides us in our daily actions. 

No one is perfect, but we can all strive for excellence. Setting the bar high and striving for continual improvement is a function of excellence.

Perfection is to have no flaw. Excellence is to recognize our mistakes and learn from them. Furthermore, excellence is to implement systems to automate repetitive tasks and eliminate waste.

Perfection is to do no harm. Excellence is to be compassionate when mistakes inevitably happen. When mistakes happen it’s best to listen. Let clients realize we are truly hearing them - be sympathetic about the error. Acknowledge that we understand how this affected them and that we are striving to build ways so this will not happen again.

Perfection is pure and rigid. Excellence can have a core set of "rules" but also be unique and flexible.

NO! – can be a threatening word; try to be careful when using “no." Consider this, “Let me see what our options are."

Perfection can be intolerant and exact. Excellence was best said by Gandhi: “Intolerance is usually all that I can not tolerate, so I guess I still have some work to do.”  Be open to differences; some clients are older and slower than others

Perfection is static and closed. Excellence is open to possibilities but accountable to detail. We generally find comfort in our similarities but growth in our differences.

Perfection is rude. Excellence is about attitude, a strong discipline to continual improvement, a focus on goals with open communication.  I will ask you to consider embracing work discussion with a level of constructive criticism when necessary this next year. Especially when developing systems and processes for the entire organization to use. Tighter specifications to details are necessary when building synergies for an organization like ours.

Our work for clients is hardly ever completed. Perfection is completion, while excellence is usually found in the pursuit.

I'm proud that our firm has always pursued excellence.

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Checkout our current blog posts HERE. See you there!

Fiscal Cliff Limbo

It’s December 21st as I write this which is the artificial deadline we circled for a fiscal cliff resolution in 2012. By the time that you read this we may have a resolution, but as of this writing we do not. Last night the House of Representatives abruptly adjourned without voting on Speaker of the House John Boehner’s “Plan B”.

No insider expected Plan B to be the ultimate resolution of the fiscal cliff debate. It was a bargaining chip for Speaker Boehner to show united resolve from House GOP during negotiations with President Obama. With that resolve now shattered, eyes turn toward an increased role of Senate Leaders: Republican Mitch McConnell and Democrat Harry Reid.

Without action between now and year-end, a bundle of tax increases and spending cuts will become effective January 1. It is important to keep in mind that this bundle of changes accumulates over a full calendar year to equal the billions of dollars that have been estimated to reduce the economy. While it looks like a compromise will be difficult in the next few days, any action in 2013 could be retroactive to the end of 2012, especially on the income tax front.

Greg Valliere, Chief Political Strategist at Potomac Research, has noted this week that we are now in a worst case scenario. This doesn’t mean the full “cliff” will necessarily be realized, but Washington may look to the markets for a “crisis” prior to acting. As of yesterday’s close, the US stock market as measured by the S&P 500 is trading above Election Day values. A pullback is not out of the question but recognize the fickle nature of political negotiations which make it very difficult to time peaks and valleys.

During this time, as always, we manage your portfolios with a steady hand recognizing that there are ebbs and flows in investing. You have stated goals for your investments related to your life needs. Our enduring purpose is to help you to achieve those goals through our investment and financial planning decisions. If you have any questions as we continue to navigate these choppy fiscal waters, please feel free to contact us.

On behalf of everyone at The Center,

Melissa Joy, CFP®

Partner, Director of Investments

Required Disclosure: 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, are not a complete summary or statement of all available data necessary for making an investment decision, and do not constitute a recommendation. 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 Melissa Joy and not necessarily those of RJFS or Raymond James. The S&P 500is an unmanaged index of 500 widely held stocks that’s generally considered representative of the U.S. stock market.

Matt Chope Shares Values at Youth Diversity Symposium

 On November 9, 2012 Matt offered his thoughts on what it means to leave a Legacy of Value.  Through discussion and a hands-on exercise students explored their true life values.   Matt helped them look inside themselves to determine who they are and where they stand today.  A value Matt takes to heart and practices throughout both his personal and professional lives.

This year’s symposium, "Millennials Creating a Legacy", focused on global issues that the millennial generation face and the legacy that they hope to leave behind for future generations.

The Youth Diversity Symposium is an annual event developed by the Southfield Community Foundation and is being helped in partnership with the Council of Michigan Foundation in 2012.  The event offers a diverse base of youth from the metro Detroit area an opportunity to interact with each other and engage in learning activities centered on social issues and philanthropy. 

Marilynn Levin Shares a Proud Grandparent Story

 “I just had to share this story of my grandson Malcolm…… (Marilynn Levin)  This happened the weekend of No. 24^th in Philadelphia.  Lots to be learned from this kid - And I know this too:  I'm just in awe of the kid and terribly, terribly proud of him.”  The following story is told by my son David.

Reference Notes:  Malcolm turned 10 in August,  PS139 is his elementary school in Brooklyn, NY 

Malcolm is officially the highest-rated player in P.S. 139 history.

If you want the short form of this story, know this. This was a big goal of Malcolm's and we all feel really great about it.  If you want the, long (and possibly insufferable) version, keep reading.  Either way is truly ok.  You've been warned.

When Malcolm set this goal, it seemed impossible. Coming into the fall it started to seem inevitable.  But then, Malcolm's rating actually started to sink, and his confidence was shaken.

At the low point, Malcolm decided he only wanted to play much higher rated competition. Part of this was tactical, if you lose to a higher rated player then your rating doesn't fall much.  But part of Malcolm's decision was that he felt he would perform better if he took on a bigger challenge.  Having a hard time with a big goal?  Take on a tougher challenge.  Ok.  His call. And one backed up by Mr. West his chess coach. But I had my doubts.

So Malcolm entered the Under 1800 section at the National Chess Congress this weekend.  His official ranking for the purposes of the tournament was 1400.  He was far and away the lowest rated person in the section.  (He would have been in the middle of the pack at best in the Under 1600 section.)

Malcolm lost his first two games and took the losses hard. I felt bad for him, gave him lots of hugs, and worried that we were in for a very long weekend. In the very next match, Malcolm went out and took down the number 2 seed! He gave away a knight in exchange for two pawns and then exploited the absence of those two pawns to methodically grind out a win over the course of the next sixty to ninety minutes.  People kept coming around the board to watch. A small crowd of admirers gathered. Malcolm's opponent hunched over the board, breathing heavily, grunting occasionally and gamely maneuvered, trying to save the position. The pressure mounted.  He and Malcolm were locked in a tight, tight grip like two sumo wrestlers.  Each move countered by the other. Then it was Malcolm's turn and he did...nothing.Well not exactly nothing. But instead of attacking his opponent, he stepped back. And all of a sudden, Malcolm's opponent had nothing to hold on to. I was stunned with how calm Malcolm was and how flexible the maneuver was.

The game lasted a couple more moves, but it was all but over. And then it was all over. The lowest rated player in the section (who had no business in the section) had beaten a player (rated 1789) who fell just under the top ceiling for the section. Malcolm went on to another draw and in his final match he stunned a much higher rated player with a move that looked like it gave away a piece but actually won the game. I happened to visit Malcolm's board at the decisive moment.  He made the move and his opponent stared down at the pieces: 1 minute, 2 minutes, 3 minutes passed.  Then he hung his head, turned off the clock and said, "you win." Then he looked at me and said: "He is very, very good."

Malcolm and I sat down and analyzed the game. It's up there with the most spectacular things I've ever seen on a chess board.  In some tournaments, they have a prize for what's called a "Chess Brilliancy." I have no doubt this would qualify. Well, I know this: It is a strange feeling to be so surpassed at something by your ten year old. And I know this too: I'm just in awe of the kid and terribly, terribly proud of him.

Love,
David

File & Suspend: The Best Kept Social Security Secret?

 The other day, one of our associates was on the phone with the Social Security Administration (SSA). When asked about the “File & Suspend” strategy, the SSA staffer said he hadn’t heard about it “yet”. Not exactly encouraging since “File & Suspend” has been around since about 2000. More than a decade later, this highly effective social security retirement benefit strategy is still considered new and obviously causing confusion.

To recap, this strategy is designed to help a married couple maximize their combined social security retirement benefits.  One of the spouses, the higher earner, will “file & suspend” at full retirement age which allows the lower earner (or one with no earnings record) to begin receiving spousal benefits.  Additionally, the higher wage earner will receive delayed retirement credits from full retirement age until the age of 70, which can have a significant impact in maximizing the couple’s combined benefits. (See Julie Hall’s October 31, 2012 blog post One Social Security Strategy Too Many Married Couples Miss).

Once a couple decides to implement this strategy

It's time to deal with the Social Security Administration. 

We have not had a client file and suspend using the SSA’s online process.  While this may be possible, because of the importance on getting this correct and the apparent confusion involved, we suggest visiting the SSA in person if possible.  Obviously this requires more of a time commitment on your behalf, but may ensure that the application gets processed correctly. Additionally, both couples can attend together to take care of both their applications. A client recently shared their experience and stated that they were glad that they went in person. The visit took an hour and a half with their cooperative SSA staffer (even though this was the staffers first time completing a “file & suspend” request). 

What needs to be communicated to the Social Security Administration at your meeting? 

It is important to note that there is nothing on the application that asks if you want to suspend your benefits to earn delayed retirement credits, thus the general confusion even for SSA staffers. It is important to put a statement in the “remarks” section of the application stating, "I want to voluntary suspend all benefits in order to earn delayed retirement credits”. This is critical because voluntary suspension can only be requested if benefits have not yet been paid for the month. 

What might the conversation actually sound like?  Let’s use Bob and Mary Smith as an example: 

Bob: “I have reached full retirement age.  I would like to file for social security and suspend my benefits immediately so that I do not receive any payments and earn delayed retirement credits.”

Mary: “Once my husband Bob files and suspends his benefits, I would like to file for my spousal benefits, please,” (while using “please” may or may not help, I trust you agree that is a good thing). 

Last, but certainly not least, ask to get a photocopy of the application for your own records. 

Please use us a resource for all of your social security retirement needs.  Social security retirement benefits can play an important role in your overall retirement success and we’d enjoy helping you maximize your benefits.

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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, is not a complete summary or statement of all available data necessary for making an investment decision, and does not constitute a recommendation.  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.  The strategy mentioned may not be suitable for all investors.  Please consult the appropriate professional regarding your individual situation.