State of The Center - A Year in Review

 Before we turn the page and welcome a new year, we want to share our look back at 2013 inside The Center.  From our Client Survey, we heard that you wanted to hear how The Center is doing from time to time.  Well, thanks to our long term and loyal clients, a dedicated team, our new business development focus, and last but not least, favorable equity markets, The Center experienced an exceptional 2013.  

A Record-Setting Year

Providing world-class service to our EXISTING clients is always priority number one. We serve 785 individuals & families representing record assets under our management of $847M as of December 27, 2013 up from $733M at the start of the year.

A Year of Goodbyes

We have been fortunate to earn the loyalty of team members as well as clients.  We take tremendous pride in providing a great workplace – and the longevity of team members shows it.  That said, 2013 might just be known as the “year of the retirement”.  We said goodbye (as team member but not as friend or client) to Marilynn Levin, Betsey Schrock, and Brenda Spencer. 

And A Year of Hellos

In 2013 we made the decision to increase the depth of our financial planning staff and feel very fortunate to have attracted Nick Defenthaler and Matt Trujillo to the firm in July. We also took the opportunity to add to our client service team with the addition of Kali Hassinger.

More Milestones

  • Our Center family continued to grow as Melissa and Jeff Joy welcomed Josie to their now family of 4 and Jennie and Kelly Bauder welcomed Emma.
  • The Center held its First Annual Family Picnic emceed by Dan Boyce and his friendly bullhorn.
  • Part of our Vision 2020 includes boosting our community involvement. This year we teamed up with Gleaners Food Bank of Southeastern Michigan and the Community Housing Network. We rolled up our sleeves and volunteered at the Gleaners food distribution center and helped sponsor Gleaners’ Vine and Dine fundraiser. We held a pro bono group presentation and one-on-one meetings with the staff of Community Housing Network as part of our “Helping Those That Help Others” initiative.
  • To help educate clients, we held events on topics such as Medicare and Investments.
  • And to add to the overall ambiance at The Center, we upgraded our Client Conference room table, chairs, and TV for both comfort and use of technology in meetings. 

New Partners

As a privately held firm we value our independence, as it allows us to be stewards to our clients, colleagues, financial planning community, and the communities we touch. All Center members have both the opportunity and responsibility to help create the kind of organization we envision. Our firm partners provide additional leadership and mentoring; perform at a high level consistent with our Firm values and have a financial commitment to the firm. Current partners include: Dan Boyce, Matt Chope, Marilyn Gunther, Melissa Joy, and Tim Wyman.  As of January 2014 we proudly welcome Sandy Adams and Laurie Renchik as partners.

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This New Year Take Our Resolution Challenge

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 The beginning of a new year gives us a clean slate to get on the right track.  Then it happens … we all do it.  With the best intentions we make those dreaded New Year resolutions that very rarely get accomplished. Then we find ourselves in the same boat as we were the year before.  Have you ever noticed how busy the gym is in January and how it magically goes back to normal capacity within a few months?  I’m just as guilty as the next person with failed resolutions. However, this year I’m going to make a challenge to our fine clients at The Center.   Make a New Year resolution to sit down for just an hour in January and make a game plan for your finances in 2014.  It’s not a challenge to save “X” amount for retirement or to rollover that 401k plan to an IRA that has been with an ex-employer for a few years. These are individual goals that you can work into your plan.  My challenge is rather to open up the discussion, take a close look at your own personal financial scenario, and set some goals that you would like to achieve in 2014. 

Think of the approach in terms of the famous Fitzhugh Dodson quote: “Without goals, and plans to reach them, you are like a ship that has set sail with no destination.”  As your trusted advisors, we are here to help you identify these goals and work with you to navigate through them until they are accomplished.  We look forward to working with you in this New Year and wish our clients and their families and friends nothing but the best for 2014 and beyond!

Nick Defenthaler, CFP® is a Support Associate at Center for Financial Planning, Inc. Nick currently assists Center planners and clients, and is a contributor to Money Centered and Center Connections.

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.  C13-001740.

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How I Set My Own Financial New Year’s Resolutions

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 If you are like me, each year you make a list of New Year’s resolutions that don’t end up making it to spring time, much less the entire year… i.e. going to the gym, eating healthy, etc. Well, this year I plan to not only stick to my goals, but also add goals for my financial well-being to the list. Make improving your financial well-being part of your annual resolution procedure … and stick to it! In hopes of getting you going, here are mine:

I will make a budget, and use it to improve my spending habits

 This doesn’t have to be as gruesome as you think. Consider using a tool such as Mint.com that automates, aggregates, and updates for you. Track your progress monthly with their charts and see what areas you can cut back (like the Jimmy John’s sandwich that is oh so convenient to have delivered for lunch multiple times per week).  

I will spend less, and thus save more

  • Take advantage of coupons, Groupons, or any other deals out there. I’m not saying become an extreme couponer like you see on TV (unless you have the time and energy for that), but there are easy potential ways to save on your expected purchases. Try a quick Google search for sales or price comparisons before you head out to make that buy.
  • Don’t pay for pricey added features that you don’t use, just because you get a deal for bundling (i.e. cable, cell phones, internet). If you lead a busy life and don’t have the time to watch TV very often, consider a streaming option such as Netflix, Hulu, or Roku instead of paying for pricey cable.
  • If you get an end-of-year bonus, put it into savings (or at least majority of it) instead of going on a shopping spree and spending it all in one day. For your job well done, treat yourself to something satisfying yet small in expense (maybe that Biggby specialty coffee you hardly ever buy because it’s expensive), then transfer the rest to savings. 

I will plan for future retirement

Take advantage of employer matching 401(k)s. If you get a raise for the upcoming year, consider increasing your 401(k) contribution as well. Then your increased income goes directly into your retirement savings instead of into your checking account, where it will be tempting to spend.

I will create a long term vision and strive to make it my future reality

Start an emergency fund (the Center recommends 3-6 months of expenses). This may take some time, depending on if you have one started. Once your emergency fund is sufficient, consider compartmentalizing your incoming savings for your long-term visions (click here for recent post about compartmentalizing).

The little things add up before you realize it, so strive to break the constant bad spending habits (the daily Jimmy John’s or Biggby coffee); but have fun treating yourself sometimes as well. Finding enjoyment while staying within your means will help you stick to your resolutions long term and may improve your financial well-being.

Any opinions are those of Center for Financial Planning, Inc., and not necessarily of RJFS or Raymond James. C13-001741.

Curtain Call

 

The Center's Team enjoys sharing their knowledge with the press to help stories come to life, share facts and bring important topics to the forefront.  We are also honored when we are recognized by media and publications for our work and service to our profession. Here's what's new:

Investment Commentary

Timothy Wyman, CFP®, JD was quoted in InvestmentNews on December 4, 2013, in an article titled, “Advisers help clients prepare for sharp decline in pension benefits” by Darla Mercado.

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How to Make Net Unrealized Appreciation Work for You

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The financial planning profession is full of acronyms such as RMD, IRA, TSA and NUA.  One acronym making a comeback due to the increase in the US Equity market is “NUA”.  NUA stands for net unrealized appreciation and anyone with a 401k account containing stock might want to better understand it.  NUA comes into play when a person retires or otherwise leaves an employer sponsored 401k plan.  In many cases, 401k funds are rolled over to an IRA.  However, if you hold company stock in the 401k plan, you might be best served by rolling the company stock out separately. 

Before getting to an example, here are the gory details: The net unrealized appreciation in securities is the excess of the fair market value over the cost basis and may be excluded from the participant's income. Further, it is not subject to the 10% penalty tax even though the participant is under age 59-1/2, since, with limited exceptions; the 10% tax only applies to amounts included in income.  The cost basis is added to income and subject to the 10% penalty, if the participant is under 59.5 and the securities are not rolled over to an IRA.

Suppose Mary age 62 works for a large company that offers a 401k plan.  Over the years she has purchased $50,000 of XYZ company stock and it has appreciated over the years with a current value of $150,000.  Therefore, Mary has a basis of $50,000 and net unrealized appreciation of $100,000. 

If Mary rolls XYZ stock over to an IRA at retirement or termination, the full $150,000 will be taxed like the other funds at ordinary income tax rates when distributed.  However, if Mary rolls XYZ stock out separately the tax rules are different and potentially more favorable.  In the example above, if Mary rolls XYZ out she will pay ordinary income tax immediately on $50,000 but may obtain long term capital treatment on the $100,000 appreciation when the stock is sold; thus potentially saving several thousand dollars in income tax.

A NUA transaction is complex so care and professional guidance is encouraged.   

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 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.  You should discuss any tax or legal matters with the appropriate professional.

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Holiday Financial Conversations for the Generations: Older Adult Parents

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 The holidays provide us with rare opportunities to gather with family.  This is a time to check in with older adult parents to see how things are going and to see what might be changing.   Often, we will notice that time (and/or age) are beginning to make everyday life a little more challenging for our parents.  This is the perfect time to ask your parents about their plans for their future.

Things to discuss with your parents may include:

If having these conversations makes you feel uneasy, you are not alone.   However, giving your parents the opportunity to express their desires and helping them to put an actual plan in place to make their plans a reality is an invaluable gift.  And what better time than the holidays to give that gift?

Contact your financial planner for tips on holding these conversations or to schedule a family planning meeting.

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.

Happy Centerversary - The November/December Edition

 

In the hustle and bustle of the holiday season, some things get pushed aside. Sound familiar? Well, we may be a little belated on wishing Amanda Toia, Tim Wyman and Matthew Chope a Happy Centerversary, but it’s better late than never!

Client Service Manager Amanda Toia joined The Center team 3 years ago in November. With 3 years under her belt, Amanda says, “It has been a joy to come to the office each day surrounded by great people.  The Center is a wonderful place.  How lucky I have been these three years!” 

It was in December 17 years ago that now-Partner Matt Chope joined the Center.  When asked to reflect on his tenure, Matt offered his favorite quote by Yogi Berra: "In theory there in no difference between theory and practice but in practice there is.” Matt says it is humbling to work with so many financial advisors who get it and who are deeply dedicated to forging a good outcome for clients. 

Partner Tim Wyman is celebrating 14 years at The Center this month. When we pointed this out to him, he wondered where the time had gone. “Joining The Center 14 years ago was by far the best professional decision I have made and I feel very fortunate to be working alongside 19 other professionals committed to serving others.”

We’re feeling pretty fortunate for Amanda, Matt and Tim. Happy Centerversary to you all!


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Holiday Financial Conversations for the Generations: Teenagers

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The upcoming holiday break from school gives you the perfect opening to have conversations with your teenage children about their college plans.  Try talking to them about what they are currently interested in studying once they reach college, where they think they might apply, and also your family’s plan for college funding.  This includes what you plan to contribute, as well as your expectations about your child’s contribution. 

Here are several items that should be on your list:

How much is your child’s education likely to cost?  Go online and look up tuition rates for the schools your child might be considering. Then find one of the many online college tuition calculators to determine what your child’s costs might be.

How will you plan to pay for school?

  • Discuss what you have saved (529 College Savings Plans, UTMAs, and other savings).

  • Discuss opportunities for scholarships and grants.  Here are two sites to visit as early as your child’s freshman year in high school:

Discuss ways for your child to contribute, either now or in the future. This may include part-time work in high school, during summers, or during college.  This also includes strong academic performance and/or extra curricular activities now which can put them in a position for academic or other scholarships in the future.

The high cost of a college education makes these family conversations necessary.  By framing the discussions around the excitement of planning for your child’s future, you can make this an enjoyable and productive use of the holidays.

Talk to your financial planner about the many ways to save for your child’s college education.

In my next blog, I will talk about holiday financial discussions to have with your older adult parents.

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.

Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Center Honored as one of Michigan's Healthiest Employers

 

We’ve been eating our veggies and squeezing in our workouts and we have the abs … or rather the award to prove it.  The Center was recognized as one of Michigan’s Healthiest Employers for the second consecutive year.  Honorees were chosen from employers across Michigan whose policies and programs promote a healthy workforce.  The statewide program is sponsored by Priority Health, Crain’s Detroit Business and MiBiz with one simple goal: To showcase how companies are using wellness programs to make a positive impact on their employees’ lives – both at work and at home.

A focus on wellness is part of The Center culture and has been an ongoing initiative since 2007.  Planner Laurie Renchik says, “Everyone gets involved in one way or another, either taking ownership in planning activities, supporting ongoing programs or lending a helping hand and encouraging others to participate.”

Winners were chosen in two regions and five categories based on the number of employees.  The Center took honors in the Metro Detroit region in the 5 to 99 employee category.

The project was sponsored by Priority health, data was collected by Indianapolis based Healthiest Employer LLC.  Crain’s Detroit Business and MiBiz produced the promotional supplement as media sponsors of the project.  

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