Office and Markets Will Be Closed January 21st

 In observance of Martin Luther King Day, both The Center and U.S. Markets will be closed on Monday, January 21. We’ll reopen for our regular hours on Tuesday, January 22. 

Fact or Fiction?

It is easy to create a federal holiday in the United States.

False. It took 86 years after his death to honor George Washington by designating his birthday as a federal holiday. Although its creation was controversial at the time, it took just 15 years to honor Dr. Martin Luther King Jr. by designating the third Monday in January as a federal holiday to honor the civil rights leader.

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Investment Performance - 4th Quarter 2012

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invcom_performance_2013q1.jpg

Source: Morningstar

Bonds represented by Barclay's Aggregate Bond Index a market-weighted index of US bonds. US Large Companies per S&P 500 Index a market-cap weighted index of large company stocks. Barclay’s Global Bond index is a market-cap weighted index of global bonds. US Small Companies per Russell 2000 Index a market-cap weighted index of smaller company stocks. International stocks measured by MSCI EAFE is a stock market index designed to measure the equity market performance of developed markets outside of the US and Canada. Commodities per Morgan Stanley Commodity Index a broadly diversified index designed to track commodity futures contracts on physical commodities. Barclays Capital US Corporate High Yield Index is an unmanaged index that covers the universe of fixed-rate, noninvestment-grade debt. Barclays Capital US Corporate High Yield Index is an unmanaged indexthat covers the universe of fixed-rate, noninvestment-grade debt.

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 investment performance. Individual investor’s results will vary. Past performance does not guarantee future results.

What You Can Look For in 2013

 On behalf of our 20 team members, Happy New Year! We enter into our 28th year and will continue to serve with passion and the very best of our professional ability. In 2012 we experienced the rhetoric of a contentious presidential election and addressed difficult economic issues in Europe and beyond. While the Presidential election has passed, it's clear that much of the political turmoil remains. Like past years, we will help you navigate these issues as it relates to accomplishing your financial and life goals.

Economic Climate

At the time of this writing, the Fiscal Cliff deal known as the American Taxpayer Relief Act of 2012 is newly minted. No doubt you have questions. Fortunately, the Fiscal Cliff and resulting income and estate tax changes have been on our minds and in our plans for much longer than the headlines. We continue to digest and analyze the new law and share our early analysis in the following blog 'How Will the Fiscal Cliff Deal Impact You?'

Education and Awareness

We will continue to provide a variety of educational sessions for 2013. In response to your feedback, you can expect to see our content delivered in a more innovative manner. We look to incorporate recorded webinars or conference calls that may be accessed at your convenience. Expect to see topics that address: Applying for Social Security, Medicare strategies, and a fall Investment Forum. 

Blogs:  Timely & Relevant Topics

The Oakland Press continues to endorse our Money Centered blog which provides actionable advice surrounding many of today’s financial planning and investment opportunities. It's a great way to share our collective wisdom and continues to stretch our leadership in the financial planning community. Money Centered speaks to our clients, professional relationships, and general public.

In addition to Money Centered, don’t forget to check out our other blog platforms. Center Connections help to keep our clients apprised of news, events, and announcements concerning your Center team. Our quarterly Investment Commentary shares our insights and thinking as it relates to both big picture and market-focused investment topics. As always, please feel free to forward our blog posts to those that you care about.

Wishing you a healthy and prosperous 2013!   

How Will the Fiscal Cliff Deal Impact You?

 At the last second of the so-called eleventh hour, the Fiscal Cliff deal known as the American Taxpayer Relief Act of 2012 was forged. Because it is still relatively fresh you, no doubt, have questions and are wondering just how the provisions might impact your bottom line. Here’s a basic breakdown of the changes for taxpayers:

  • Did taxes go up or down?  Well, it depends upon your measuring stick and perhaps political persuasion.  Bear with me – here is the timeline. At midnight on 12/31/12 the Bush era tax cuts expired, meaning in theory income taxes for most Americans increased.  On 1/1/13 Congress enacted new law and reduced income taxes for most Americans.   According to the Tax Policy Center, a nonpartisan research group in Washington, about 0.7 percent of households (those making over $500k) will be subject to an income tax increase in 2013.
  • Payroll Tax Impact? However, if your measuring stick compares what you expect to pay in 2013 versus what you paid in 2012…..most will experience higher taxes (about 77% of households).  This is due to the fact that payroll taxes are being restored.  For example, a family earning $100,000 will pay roughly $2,000 (2%) more in payroll taxes in 2013 over 2012.
  • What’s your number?  There are different income (taxable income) thresholds for various income tax provisions that will be important in 2013.  Here are some that you and your planner will want to review:
    • $200,000 single/$250,000 married filing jointly:
      • New Medicare surtax of 3.8% on net investment income
      • New 0.9% additional tax on wages above the thresholds
    • $250,000 single/$300,000 married filing jointly:
      • Limitations on personal exemptions and Itemized deductions restored in 2013.
      • The net effect is approximately a 2% increase in marginal rates for those above the thresholds.
    • $400,000 single/$450,000 married filing jointly:
      • New top marginal bracket of 39.6%
      • Capital gains and qualifying dividends taxed at 20% up from 15%. Because of the Medicare surtax, this means that effectively capital gains and qualified dividends are taxed at 23.8%.
  • Estate & Gift Tax:   The new law makes permanent the exemption equivalent at $5.12M and top rate up to 40% from 35%.  Also, "portability" between spouses is now permanent. 
  • Annual gift exclusion: $14,000 up from $13,000
  • Charitable IRA:  Those over 70.5 may again choose to make tax free gifts up to $100,000 from their IRA to qualified charities.
  • Remaining issues to be resolved:  Based on what the new law doesn't change, we are sure to witness further confrontation over spending cuts and the debt ceiling. 

For more information pertaining to your individual situation, feel free to contact me at timothy.wyman@CenterFinPlan.com.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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

Happy Centerversary!

 The Center celebrates its 28th year! Founded in 1985, our success and longevity would not be possible without the support from our team members. Let's take a moment to recognize our individuals celebrating a Centerversary in the month of January. 

Top: Marilyn Gunther, Daniel Boyce; Middle: Marilynn Levin, Betsey Schrock, Laurie Renchik; Bottom: Troy Wyman, Julie Hall.

We would like to share a special thanks and Happy Centerversary to Marilyn Gunther and Dan Boyce, two of our founding partners. Thank you for building such a strong foundation that will serve us toward our Vision 2020 and beyond!

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.

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.

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! 

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.

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