Save Trees & Save Some Green!

 Go Paperless by April 30th and receive a one-time $50 fee waiver*

We invite you to stop receiving paper statements, trade confirmations and shareholder communications by mail and instead opt for electronic delivery via Investor Access, a free service exclusively for Raymond James clients.

Just imagine - no more rummaging through overstuffed filing cabinets, dusty shoeboxes, cluttered in-boxes or wherever you stow your statements. Online, they're always easier to find. And if you need them on paper, just print them on demand.

Here are some additional benefits to Investor Access:

  • Your portfolio is continuously updated throughout the day
  • View your accounts at any time
  • See cost basis information and recent transactions
  • See upcoming activity such as dividend payments
  • Read relevant news about your investments
  • Access Raymond James' award-winning equity research

Investor Access uses many different measures to protect your information, including password protection and encryption. Sound good? Here's how to think outside the envelope and go paperless. Sign up by visiting raymondjames.com/investoraccess and click on Enroll in Investor Access in the left-hand column. You'll need your account number to get started and will be prompted to select your document delivery preferences during the enrollment process.

If you already use Investor Access to access your accounts online, log in and go to Account Services > Client Tools > Account Name and Document Delivery Tab (first one that displays). Choose "I want to receive all of my documents online only to update your preferences.

Please contact your favorite Center Client Service associate with any questions you may have.

*Subject to offer terms and conditions: http://www.raymondjames.com/investoraccess/enhancements/terms_conditions.htm C14-005361

Answering Tough Questions on Social Security

 With a little humor and a lot of facts, our Tim Wyman answers questions about a topic that can easily confuse. There are so many facets of Social Security that is hard for anyone to stay on top of it all, but everyone wants to make the most of their retirement benefits.

This Q & A session holds answers to some of the questions we hear the most.

Tim you seem to have a particular interest in Social Security retirement benefits?

I am not sure if it’s the graying of America or graying myself (really balding in my case) but the issue is important to many of our clients and prospective clients, so I have spent considerable time learning the ins and outs of social security retirement benefits.

Are there general rules that people can use to determine how to maximize social security benefits? 

I wish there were.  Right now there are over 2500 rules in the Social Security Administration handbook.  The challenge, and opportunity, is to apply the rules to each situation.  For some, beginning to receive benefits as early as possible might be best.  For others, especially couples, having one spouse wait until age 70 in order to receive “Delayed Retirement Credits” might be best. I recently blogged about how couples can come up with the best strategy (click here).

Maybe we are getting ahead of ourselves – will Social Security be there for future generations?

Twenty years ago many clients wanted their plans to be reviewed assuming social security would not be available.  As people get closer to retirement this has changed. While there may well be changes to the social security system in its current form, my research suggests that benefits will remain intact for most.  For younger workers, perhaps under 50, it probably makes sense to assume some sort of reduction in benefits when planning for retirement.

Are social security retirement benefits meaningful? Why not just assume they won’t be there.

Social security benefits for many of our clients may be less important in their financial independence, but they are still significant.  It is not uncommon for social security benefits to have a present value of $800k-$1M for some of our clients – I would deem that very meaningful.

When should people start receiving benefits?

That is a very individualized answer.  For some, most Americans frankly, starting as soon as possible (age 62) is necessary to meet their living expenses.  When working with clients in determining a strategy I will try to balance factors such as their income needs, health status, life expectancy, whether they plan to work past age 62, income taxes, and their marital status.  I like to think of a large funnel – we put in all of the factors specific to our client and attempt to determine the best strategy for them. Unfortunately, general rules just don’t provide the best solution.

Many articles have been written on how to maximize benefits – what’s your take on them?

There have been many fine articles written for consumers, as well as research papers for professionals, trying to determine the “best” claiming strategy.  These articles are wonderful in increasing one’s knowledge on the topic.  However, what is right for one person or couple cannot be gleaned from an article.  Determining the ideal solution takes conversation and scenario planning with your particular factors in mind.  It is what we do for clients and has really seemed to provide some clarity in their retirement planning.

For more answers to your social security questions, contact Tim at the Center for Financial Planning.

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.

Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. C14-004615

Hundreds of Apples a Day: Center Team Spends Saturday Helping Gleaners

 Our team never winces at the suggestion of a little manual labor, in fact we embrace it when it means helping out a great local charity. On Saturday February 15th, our Center team members and their families volunteered to support the Gleaners Community Food Bank of Southeastern Michigan. We look forward to this rewarding opportunity to get together outside of the office and help out a charitable organization that directly supports our local communities.

After orientation, The Center team was assigned the task of packing 750 bags of apples to be distributed to families in need.  We made quick work of packing 150 large bags of apples into 5 huge crates for shipment – plenty of laughs and smiles along the way!

I wanted to give many thanks to The Center team members for the continued support of the now Bi-Annual Gleaners volunteering event.  It came as no surprise to me, but The Center team members also managed to accumulate a total of 323 pounds of non-perishable donations (Yes – I said 323 POUNDS).  A special thank you to Client Service Manager Jennie Bauder who collected monetary donations from the office and filled two shopping carts with donations – look out Extreme Couponing!” –Jen Hackmann

If you happen to get the volunteering itch, you can just show up at 9:00 a.m. on any Saturday at the Detroit Gleaners Distribution Center location: 2131 Beaufait Street in Detroit. Once there, look for the Gleaners Volunteer signs! You do not need to be part of a large group to donate your time, just arrive ready to work. Please check out the Gleaners website www.gcfb.org to see all of the remarkable things the Gleaners Organization does locally or to find out more about volunteering opportunities.

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Back Door Roth IRA Conversion

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A well-planned tax strategy has become increasingly important to investors, especially with overwhelming uncertainty of what tax rates could potentially increase to in the future. That’s why some investors look to Roth IRAs, a fairly new arrival to the investment world.  They were first released in 1997 and have become more and more popular.

A Quick Roth IRA Refresher

Contributions to a Roth IRA do not receive an immediate tax deduction like a 401(k) or deductible Traditional IRA.  However, earnings grow tax-deferred and if holding requirements are met, all withdrawals (including contributions and earnings) can be withdrawn 100% tax free.  Roth IRAs are an unbelievably attractive investment vehicle for those who believe they are currently in a lower tax bracket than they will be in retirement.  More specifically, young people, who are years away from their high earning years and wish to forego tax deductions (while most likely in the lowest tax bracket of their lifetime) now reap the benefits of tax-deferred growth and tax-free withdrawals upon retirement.  As a young person myself, I cannot stress enough how attractive the Roth IRA can be for investors if they fit the “Roth mold”.    

Who Is Right for a Roth?

There are income limitations on who can contribute to a Roth IRA.  For 2014, a married couple filing their taxes jointly must have an AGI less than $181,000 to be able to contribute the maximum to a Roth IRA. In 2014, individual contributions max out at $5,500, or $6,500 if you are over the age of 50.  The AGI limit for singles in 2014 is $114,000.  If you make over this income level, there is a tax “work around” in place that could still allow you to contribute to a Roth, depending on your personal situation.  Prior to 2010, there was an income limitation on who could convert Traditional IRA dollars to a Roth IRA.  Since 2010, theincome limitation has been completely lifted for conversions, meaning anyone, regardless of their income, can convert funds from a Traditional IRA to a Roth IRA.  This raised the eyebrows for number geeks like myself, who viewed this ruling as an excellent planning opportunity for clients. 

Lifting the Income Limit for Roth Conversions

The abolishment of the income limit on Roth conversions means that if you are over the income limit to contribute to a Roth IRA, you could open a Traditional IRA and immediately convert the funds to a Roth IRA.  There is, however, a catch to this “work around”.  The conversion would typically only make sense if the client did NOT have an existing Traditional IRA.  The tax calculation on the conversion gets very messy if the client does in fact already have a Traditional IRA and typically, it doesn’t make sense if they do.  One main point to also keep in mind is that employer sponsored plans such as a 401(k) or 403(b) are not taken into consideration like a Traditional IRA is when calculating tax due for completing the conversion.  

Back Door Roth Conversion Criteria

☑ If you are over the income limit to contribute to a Roth IRA ($181,00 for couples and $114,000 for singles)

☑ And you do not have an existing Traditional IRA because you are taking full advantage of employer retirement plans (401(k), 403(b), etc.)

☑ And you have additional funds to save

If you can check all three boxes above, the “back door” Roth IRA is something you may want to consider based on your individual situation and long-term goals. Since this is a fairly new planning opportunity, this type of conversion is something we are closely monitoring for our clients on an individual basis.  As with any financial decision, it won’t make sense for everyone.  But it is our job as your advisory team to walk you through your options and help you make a smart financial decision. 

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.

Unless certain criteria are met, Roth IRA owners must be 59 ½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. C14-004799

Investment Conference Highlights Exchange Traded Funds & Key Market Trends

 Recently I was lucky enough to escape an extremely cold Michigan and head to Hollywood Beach, Florida for Inside ETFs.  While fun in the sun was top of mind, it was last on the agenda.  The conference was well attended by more than 1,500 advisors and industry professionals and helped me expand my understanding of Exchange Traded Funds (ETFs) and where they best fit in portfolios.

ETF University

The first day was appropriately themed ETF University.  Experts started from the most basic level of understanding explaining what ETFs are and why investors utilize them.  They went on to explain how to trade these investments as their liquidity throughout the trading day is their most unique characteristic.  This is also, clearly, the most confusing and aspect of an exchange traded fund versus any other investment.  Much of my time during and after the conference has been spent furthering my understanding of this topic.

3 Key Market Trends and Research

Besides muddling through EFT University, I had the chance to attend sessions focused on current events in the economy and markets around the world. Here are some key trends:

Emerging Markets in Crisis: Negative sentiment, fear and pessimism in emerging markets is reaching a crescendo, presenting potentially excellent buying opportunities. 

Secular Bull Market in U.S. Equities: Well-known economists Liz Ann Sonders and Jeremy Siegel argued we are in the midst of a new secular bull market that began in 2009.  While they expect corrections over the coming years, overall they feel the long-term trend will continue to be positive.

The Bond Bear:  While the outlook for bonds are bleak, with the rising interest rate environment perceived to be just on the horizon, they are still one of the best hedges to an equity portfolio.  Bonds continue to be one of the only negatively correlated asset classes to stocks.  In other words, when stocks fall bonds rise and vice versa.  This is very important to reducing overall volatility of a portfolio and should not be abandoned, even now.

These key themes resonated with me as our investment committee at The Center has been discussing and actively incorporating changes to reflect these concerns in clients’ portfolios over the past few years.

While I am a fan of the old adage, “If it ain’t broke don’t fix it,” this should never apply to your investment portfolio.  It is very important to continually monitor the investment and financial planning landscape because it constantly changes.  Exchange Traded Funds are likely here to stay and their benefits to some investor’s portfolios are undeniable.

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

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Investment risk is real. Every day. Every year. In up and down markets.

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It is generally in good times – when, for example, US Equities are performing well  – that we all could use a friendly reminder like this:

The management of investment risk is constant in successful investing.     

Benjamin Graham, known as the “father of value investing”, dedicated much of his book, The Intelligent Investor, to risk.  One of his many timeless quotes states, “The essence of investment management is the management of risks, not the management of returns.”  This statement can be counterintuitive to many investors.  Risk does not have to be an alarm; rather a healthy dose of reality in all investment environments.

Our Take on Risk

How do we at The Center attempt to manage risk as stewards of approximately $850 million dollars? 

  •   Executing a defined investment process

  •   Individual investment policy statements

  •   Asset Allocation – both Strategic and Tactical

  •   Rebalancing guidelines

We have been managing client assets for over 28 years.  We fully understand and appreciate that investment returns are important. We also know that risk is an important element in constructing portfolios intended to fund some of life’s most important goals such as sending a child or grandchild to college, funding a long and successful retirement, having sufficient funds for long-term health needs, and passing a legacy to loved ones.  While no one can guarantee future investment returns, our experience suggests that those following our risk management tactics above may better stay on track with their financial plan. 

If you are a client, we welcome the opportunity to talk more about how your portfolio is constructed.  Not a client?  We’d enjoy the opportunity to share our experience and review your goals and risk.

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.

Investing involves risk and investors may incur a profit or a loss. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. C14-004278

Newest Team Member Already Calling Us Family

 There are a lot of things that wouldn’t get done around here without an Office Manager. That’s why we’re more than thrilled to welcome our newest staff member Nancy Sechrist to The Center team. Nancy joined us on February 3rd and after a few weeks, we’re happy to report that it looks like she’ll stick around for a while! In fact, when asked how it’s going so far, Nancy replied,

Everyone at The Center is great! It truly feels like an extended family.”  

Nancy comes with vast experience in human resources, finances and personnel management, making her a perfect fit for our team. Nancy and her husband reside in Macomb with their two daughters. So, the next time you stop by The Center, make sure to track her down and welcome her to the family.

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:

CNBC.com

Angela Palacios, CFP®: Angela was quoted on CNBC.com on January 30, 2014, in an article titled, “5 ETF myths that keep investors away” by Leslie Kramer.

Financial Advisor Magazine

Melissa Joy, CFP®: Melissa was quoted in Financial Advisor Magazine in October 2013, in an article titled, “Uncommon Talents” by Karen DeMasters.

Center Honored as an AHA 2014 Start! Fit-Friendly Platinum Status Company

For six consecutive years The Center has been recognized as an American Heart Association Start! Fit-Friendly Company. For the most recent two years the firm received Platinum status, the highest recognition level. To achieve this award the health and wellness program met the following criteria:

• Physical activity options in the workplace
• Healthy eating options at the worksite
• Promotion of a wellness culture
• Implement at least nine criteria outlined by the AHA in the areas of physical activity, nutritition and culture
• Demonstrate measurable outcomes related to workplace wellness

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Taking Charge: Why Every Woman Should Get Involved in Financial Planning

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You may have spent decades building a life with a significant other or spouse, perhaps even leaving the important questions about assets and investments up to them. In fact, it is not uncommon for couples to pick and choose household responsibilities and slide into a routine to divide and conquer.  All the ducks are in a row so what is missing?  Some things like picking up the laundry, getting your oil changed or planning that much-needed vacation can easily be delegated.  But a mistake I see women making is delegating away personal financial planning.  You can leverage your time by letting others take on this task, but there are some pitfalls that come with this strategy. 

Risks of Delegating Financial Decisions

  • If you are suddenly put in a position where there is no one but you to make the decisions, you may be unprepared.

  • Others may not fully understand the vision you have for your future. If you aren’t actively involved, you risk losing your say.

  • You may be delegating to save yourself time, but playing catch-up when the duties fall on you can be very time-consuming.

Making Yourself a Priority

If properly planning for the future of your design has been shuffled to the bottom of your inbox, it is time to reprioritize and here is why:

  1. Your vision is like a best friend.  It reminds you of what is most important in your life.

  2. Putting your vision in the context of a financial plan helps connect values and money.

  3. Financial planning doesn’t mean planning for the day your health begins to fail, it means asking, “Where do I want to be in 3 years?”

  4. For those who are more risk-averse, having a plan can change unknowns into quantifiable nuggets of information to reflect upon and serves as the basis for decision making.

  5. While it might seem ok now to let a spouse or someone you trust steer your financial plan, if you don’t have an active role or solid understanding of desired goals you may be disappointed at the end result.

Here’s my challenge to women of all ages and stages of life:  Let’s not kid ourselves – things get missed.  Think of yourself first and give your personal financial life the kind of attention it deserves!

Laurie Renchik, CFP®, MBA is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

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.

Any opinions of Center for Financial Planning, Inc. are not necessarily those of Raymond James C14-004276

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