Why Investors Get Serious at Age 40

Contributed by: Timothy Wyman, CFP®, JD

In my experience, folks tend to get “serious” about financial planning when they near age 40. The earlier you start the better, but when you near the age of 40, you may have a variety of financial issues (sometimes disguised as challenges) you are dealing with.   For the 40+ crowd retirement is no longer simply an event that is way out in the distance.  It’s time to put pencil to paper, take stock of where you are financially today, and make real plans for ultimate financial independence.

4 Steps to Getting Started at 40

During a recent consultation a new client simply needed some guidance on where to prioritize savings.  Fortunately, they had both the desire and cash flow to start feeding the retirement nest egg. Even with the ability to save, the options available can be somewhat overwhelming.  If you find yourself in a similar situation – here are 4 ideas that might help:

1. Make maximum contributions to employer sponsored retirement plans such as 401k or 403b plans.  Under current law, you are able to contribute up to $18,000 per year to said plans.  For those over the age of 50, an additional $6,000 may be contributed.  The idea is that most people are in a higher marginal tax bracket during their working years than in retirement and these plans can provide tax leverage in addition to tax deferred growth of any earnings.

2. Make use of ROTH IRAs if eligible.  Higher income earners (singles earning over $116,000 and married/filing jointly over $183,000) may not be able to make an annual contribution to a ROTH IRA. However, we have assisted some people in making “Back Door Roth IRA” contributions.  Not only is the name cool – it can add a real punch to tax free income. We’d enjoy discussing if this is a potential strategy for you.

3. Consider Taxable Brokerage Accounts. While the contributions or deposits are not tax favored, having after tax investments can provide great flexibility, especially if you are considering retirement before age 59.5.

4. Look at tax deferred annuities and life insurance.  For some higher earners using either of these tax-favored vehicles may provide additional savings opportunities.  Generally, the first three vehicles mentioned above should be utilized first.

We are here to help you prioritize and make the best use of each and every dollar. Give us a call today.

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

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors may incur a profit or a loss. Investments mentioned may not be suitable for all investors. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

New Investor Access Tool: Account Aggregation

Contributed by: Nicholas Boguth

Investor Access has just added a neat new feature to the platform that allows you to organize your accounts so that they are easier to keep track of on the website.  If you are a subscriber to Investor Access, you are now able to create groups of accounts and aggregate them to different categories.  If you are not signed up for Investor Access, now is a good time to try it. You can take advantage of this feature in many ways, but here are a few ideas and examples to help you organize your accounts:

• Cluster accounts by account owner and/or by account type
• Separate your cash accounts from investment accounts
• Separate your savings accounts from your checking accounts
• Group your retirement accounts together
• Group your individual or trading accounts together

However you choose to use this tool, it should make managing and maintaining your accounts a little easier with better organization.

CLICK HERE for more detailed instructions on how to take advantage of this new feature.

If you are not familiar with Investor Access, follow the “Investor Access” link at the top of our website to find out more.  And as always, please contact any of our Center Client Service Associates with any questions!

Nicholas Boguth is an Investment Research Associate at Center for Financial Planning, Inc.

Family and Finances: How to Help Aging Parents Stay in Control

Contributed by: Sandra Adams, CFP®

I recently attended my daughter’s college orientation.  During one of the presentations to parents, the speaker said something that struck a chord with me:

“As hard as it may be, it is time for you as parents to let go of the reigns and give your children control of their own lives. Let them take care of things for themselves and make their own decisions. This may mean that they make some mistakes, but this is the time for them to learn.” 

Wow!  Did that hit home!  How hard is it as a parent to let go and let your child start doing things for themselves when you have been doing things for them for the last 17 – 18 years?  But isn’t this what your child has been waiting for?  To be an adult and to have control over his or her own life?  Isn’t that what we all wait for?

Why Control Matters at Any Age

As I sat and thought about the issue of control a bit more, I began to think about the older adult clients that I work with and about how hard they fight to keep control over their lives as they age.  I thought about the adult children of those clients who often feel as if, at some point, they may have to take away that control if the older adult losses the capacity to maintain control for themselves.  It can be particularly stressful for adult children to be put in a situation of needing to take over “control” for their aging parents without having a clear idea of their parents’ desires for their lives as they age.  So, what can be done to avoid this potential situation?

• Have open and honest conversations about the older adult’s plans for their future aging life; this may include a family meeting (tips here on having your own) that is led by your financial planner to include conversations about financial assets and how longer term care planning and future housing options might be funded.

• Make sure that all of the proper estate planning documents are up-to-date and that they are accessible (consider keeping copies on file with your financial planner’s office, as well).  Particularly important are Durable Power of Attorney Documents for General/Financial and Health Care/Patient Advocate.

• Ensure that all wishes and plans for the future are documented in writing.  Also make sure to have your financial affairs organized and documented.  Our Personal Financial Record Keeping System & Letter of Last Instruction is one helpful tool you can use.

Control is something we all want to have over our own lives … and something we fight to keep.  As parents of young adults, we struggle to let go of the control for fear that our children might take a few falls.  At the same time, we might be struggling with the thought of having to take control from aging parents who might be struggling with capacity issues as they age.  But, if you’ve planned ahead and helped your parents communicate their wishes, you won’t have taken their control from them at all. Instead, you will be assisting them in carrying out their own well-designed future.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been 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.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. You should discuss any legal matters with the appropriate professional.

Making Sense of Market Volatility

Contributed by: Timothy Wyman, CFP®, JD

Dear Clients & Friends:

At the risk of stating the obvious, the equity markets experienced some wild swings toward the end of August.  When I was interviewed by Channel 4’s Rod Meloni on August 25th – the 2nd consecutive day of the stock slide – I talked about opportunities I see.  But Rod described it best when he said Cedar Point had nothing on the US Stock market – quite a rollercoaster. 

I’d like to walk you through where the equity markets stand as of September 1, 2015, share some insights as to some of the factors that may have led to such volatility, discuss what may occur in the near future, and importantly what you might do.

Where do equity markets stand on September 1, 2015?

The three major domestic indexes plunged and rallied in quick succession, but ended the month down more than 6%, with the broad-market Standard & Poor’s 500 marking its worst month in three years. International stocks, as measured by the MSCI EAFE index fared a bit worse than their US counterparts.

What combination of factors got us here?

It is natural to seek “causes” or an explanation when stocks go on a wild ride (which is more often than we think). Though there’s no easy answer, here are 4 contributors:

1. China: As my colleague Angela Palacios shared in our August 25th Investment Commentary, weak or at least slowing growth in China is the most widely cited cause of the stock market pullback. After decades of rapid economic growth, recent evidence has shown that China’s growth is slowing. The central bank of the world’s second-largest economy devalued its currency in an attempt to stimulate growth and thwart a stock-market bubble. After those efforts proved futile, Chinese stocks dropped and concerns about growth in China and across the globe sent stocks around the world plunging soon after. The primary Chinese stock exchange, the Shanghai Composite Index, has dropped roughly 40 percent since its June peak.

2. Falling oil, commodity prices: Oil prices are hitting lows not seen in years due to falling demand, oversupply and concerns over global economic growth. Other commodity prices have also declined due to economic growth fears.

3. Interest rate uncertainty: Short-term interest rates have hovered near zero since the 2008 financial crisis. The U.S. economy has recovered enough that the Federal Reserve has indicated it will raise interest rates and return to more normalized monetary policy in the months ahead. Uncertainty over the timing has weighed on investor sentiment, further muddying the timeline for a hike. Falling values in U.S. and world equities complicate the Fed’s decision.

4. Natural market cycles: Markets are cyclical in nature. Declines, though unsettling, are normal and necessary when asset prices climb too high. The S&P 500 index has steadily risen since March 2009, but hadn’t experienced a 10 percent correction since mid-2011. Analysis by Raymond James experts shows the S&P 500, on average, endures three 5-percent pullbacks and one 10-percent correction every year.

Certainly no one knows for sure – but we believe that the four forces above provide a significant part of the explanation or cause.

Will there be a retest of the recent market lows?

After seeing a nearly 10% drop in stocks, stocks rebounded rather quickly by what Jeffrey Saut, Chief Investment Strategist at Raymond James, would term a “throwback rally” – something that is rather normal from a historical standpoint.  Jeff also points out:

“The follow-up from a 2 – 7 session ‘throwback rally,’ from a massively oversold condition, typically leads to a downside retest.”

Moreover, it looks like that retest began Monday 8/31/15. According to Jeff Saut, a key factor will be whether a retest brings about new lows (below 1867); which could mean further losses.

Another market commentator and Wharton finance professor, Jeremy Siegel, opined recently:

“When there’s a sharp decline and then a rally, usually you’ll get another downward leg that will test that decline.”

According to Professor Siegel, the Dow Jones may ultimately drop 15% from recent highs before recovering to around 19,000 by year-end. He doesn’t see a recession in the US or a bear market.  Time will tell – Saut and Siegel are veterans with vast historical perspective.

While some of the more negative news is grabbing the headlines, as you would expect there are a variety of balancing factors at play.

Recent data reports continue to suggest moderately strong growth in the U.S. economy. Consumer spending improved in July, durable goods orders increased, the housing market is strengthening, and household income advanced. The estimate of second quarter GDP growth was revised to a 3.7% annualized rate (from 2.3% in the advance estimate).

Oil prices reached a six-year low in recent weeks, which should be good for the American consumer, but less so for energy companies. Still, as energy prices stabilize, inflation should move somewhat higher and Federal Reserve policymakers will begin to raise short-term interest rates ahead of that.

The Federal Reserve’s annual symposium in Jackson Hole, Wyoming saw central bankers discussing inflation, the global economy and the fallout from China’s economic woes, but officials provided no clear guidance as to the timing of the first increase in the federal funds target rate. The St. Louis and Cleveland Fed Bank presidents reiterated, ahead of the retreat, that U.S. fundamentals remain strong and a September rate hike is still a possibility.

“It shouldn’t really matter whether the Fed begins to raise rates in September, late October, or mid-December,” noted Raymond James Chief Economist Scott Brown on August 31st. “The important thing is the pace of tightening beyond that first move …The economy has made enough progress and is strong enough that it can easily withstand a small increase in rates.”

A retest is certainly possible, but recession is not imminent and many see higher stock prices by year-end.

What to Do?

During volatile times, dispensing the advice of “Do nothing because you’re a long term investor” almost seems pedestrian and stale.  As shared by Angela, a few things to consider include (1) Make sure your long-term allocation is still appropriate, (2) Double check that your time frame is correct for the investments in your portfolio, and(3) Review and consider your risk tolerance for those investments.  Additionally, while all of the news on bonds in general is negative due to expected interest rate increases – US Treasuries and high quality corporate bonds still provide some of the best diversification or negative correlation when stocks slump.  Additionally, this is a good reminder to review expected cash needs and set aside the appropriate amount.

I’m sharing all this with you to keep you informed about global economic movements and market events. I understand that seeing the short-term impact of volatility on your portfolio can be unsettling. During uncertain times, it can be assuring to stick to the investment strategy that we have developed together. For 30 years now, The Center’s focus has remained on disciplined investing and it has served generations of clients. In the meantime, we’ll continue to monitor market developments and update you accordingly.  Should you have any questions about the markets or your long-term financial plan, feel free to contact us. We are here to help.

Sincerely,

Timothy Wyman, CFP™, JD

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

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The opinions expressed in this update are those of Timothy Wyman and not necessarily those of RJFS or Raymond James, and is subject to change without notice.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results and there is no assurance the trends mentioned will continue or that any forecasted events will occur. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. The performance noted does not include fees or charges, which would reduce an investor's returns. The process of rebalancing may result in tax consequences.

Raymond James Financial Services does not accept orders and/or instructions regarding your account by e-mail, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. E-mail sent through the Internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all e-mail. Any information provided in this e-mail has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this e-mail. This e-mail is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.

Tim Wyman: Now is the Time to Rebalance Your Portfolio

Contributed by: Timothy Wyman, CFP®, JD

The end of August for investors might have felt like a ride at Cedar Point. The downs were jarring, the ups exhilarating. In the midst of consecutive days of corrections, Detroit News Financial Editor Brian J. O’Connor interviewed The Center’s managing partner Tim Wyman.

“We investors have been pretty spoiled the last few years with low volatility, and these corrections are certainly more common than people think,” Tim said. “This latest correct is certainly nerve-wracking, but it’s common. This time it’s not different and a prudent, long-term focus will  prevail.”

Shifting investors’ focus from immediate headlines about China, Europe, the Federal Reserve and oil to the long-term may be easier in a bull market. But Tim says concerns should stiffen your resolve.

How Should I React?

When it comes to your next move, Tim told Detroit News that history suggests now is the time to rebalance your portfolio. Taking a look at your mix of stocks, bonds and assets on a quarterly basis is always a good practice, but doing it now makes sense.

“Research suggests that if you rebalance when there are large swings you get the biggest bang,” Tim said. “So this is an ideal time to be rebalancing. Some of that will mean increasing your stock allocation at this time. It’s hard to do, but we know it’s the right thing to do.”

Is the six-and-a-half year historic bull market over? The indicators aren’t pointing to a recession. But during this seesaw of the market, it is time to focus on the long term and consider rebalancing. If you’re ready to take a look at your portfolio, we’re here to help.

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

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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 Tim Wyman and not necessarily those of Raymond James. Past performance may not be indicative of future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. You should discuss any tax or legal matters with the appropriate professional.

How to Increase Your Social Security Benefit by 8% per Year

Contributed by: Nick Defenthaler, CFP®

Most people have either received their Social Security statement in the mail or have reviewed it online but do you know what your “full retirement age” is and what it actually means?  Full retirement age (FRA) is defined as the age at which a worker is entitled to 100% of their Social Security benefit.  Below is a summary of the current full retirement age “schedule” according to year of birth:

Source:  ssa.gov

The earliest you can collect benefits on your own earnings record is 62, however, the benefit will be permanently reduced, and in most cases, is not something we recommend to clients.  Each year benefits are delayed, you are entitled to a permanent, 8% increase in benefit.  You can also continue to delay beyond your full retirement age until age 70 to fully maximize your benefit. 

Knowing your full retirement age, given your date of birth, is very important because it can impact when you ultimately decide to file and what your actual benefit will be.  As many of you have noticed, several years ago, the Social Security Administration stopped mailing annual Social Security statements out to most Americans as a cost savings measure.  However, creating an account and checking your Social Security statement online has become very easy and is something we recommend to all clients who are still working.  You should check the statement for accuracy as it relates to your wages for the year and to see if your benefits have changed in any way. For step-by-step instructions to quickly set up your own online Social Security account, click here.

Social Security is a critical part of most retirees’ financial game plan, so knowing things such as your full retirement age, is important to make sure you are making the most of the benefits that you’ve earned.  If you have questions about Social Security, we’ll find the answers.  We have a team of CERTIFIED FINANCIAL PLANNER™ professionals who can help guide you through one of the most important financial decisions you will make in your lifetime.  

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc. Nick is a member of The Center’s financial planning department and also works closely with Center clients. In addition, Nick is a frequent contributor to the firm’s blogs.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Nick Defenthaler, CFP® and not necessarily those of Raymond James. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

When the experts need financial perspective – who do they call? Center for Financial Planning of course

Contributed by: Center for Financial Planning, Inc.

Rod Meloni of Channel 4 visited with Tim Wyman, CFP®, JD on August 24, 2015 as he breaks down the market turmoil. 

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of speakers and Tim Wyman and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The NASDAQ Composite Index is an unmanaged index of securities traded on the NASDAQ system. 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. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Diversification and asset allocation do not ensure a profit or protect against a loss. Raymond James is not affiliated with and does not endorse the opinions of Rod Meloni. Investments mentioned may not be suitable for all investors. Prior to making an investment decision, please consult with your financial advisor about your individual situation. C15-034569

Rising College Costs Make Early Savings Crucial

Contributed by: Melissa Parkins

If you have school-aged kids, what will a college education cost by the time they get there? According to J.P. Morgan Asset Management, if the cost of college continues to increase 5% each year, the cost will be more than double what it is today by 2032.  Colleges are spending more to attract students, hiring more to reduce student-to-faculty ratios, and receiving less financial support from the states.  Add these factors up and costs go up too. And with the rapidly increasing costs, we hear people asking more and more, “Is a college education worth it anymore?” The short answer is: Yes! The value of a college education is growing faster than the cost to attend. A college diploma opens the door to career opportunities, increased earnings potential, and job security.

Graph Source: JPMorgan Asset Management College Planning Essentials

Where do you Start Saving for College Costs?

Wondering how to begin saving for this huge financial goal? Well, you have to start somewhere, and it’s never too early. By starting to save early, you can take advantage of not only potential investment returns, but the power of compounding. Choosing the right savings plan and investment mix can help you maximize growth potential and also help on taxes (and who doesn’t want to reduce taxes?!). You may not make the goal of saving enough to cover all the costs, but check out this chart to compare the investment in college savings vs. taking out loans:

Source: JPMorgan Asset Management College Planning Essentials. This is a hypothetical example for illustration purpose only and does not represent an actual investment. Actual investor results will vary.

What are my College Savings Plan Choices?

There are many ways to set aside money for college expenses. Some families use traditional savings accounts while others use tax-advantaged accounts, like 529 plans. These give you the opportunity to grow your contributions faster than using a taxable investment account earning the same exact returns. Not only can you withdraw money for qualified expenses tax free, but many 529 plans offer state tax deductions as well. This chart illustrates the impact of investing in a tax efficient way for college:

Source: JPMorgan Asset Management College Planning Essentials. This is a hypothetical example for illustration purpose only and does not represent an actual investment. Actual investor results will vary.

What about other Ways to Pay for College?

Perhaps you’re hoping to rely on financial aid, grants, or scholarships? Remember, not all aid is free and not everyone qualifies. According to www.finaid.com, only 0.3% of college students receive enough grants and scholarships to cover all costs. And loans? Well, it costs more to borrow and pay interest than to save and earn interest. Not to mention the burden it causes not only to the student, but their family as well.

Source: JPMorgan Asset Management College Planning Essentials

Need help getting started on saving for college costs? We can work with you to find a plan that fits your family. Also, look for details to come out soon for our September webinar on Ways to Raise Money Smart Kids.

Melissa Parkins is a Registered Client Service Associate at Center for Financial Planning, Inc.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors may incur a profit or a loss.

Investors should carefully consider the investment objectives, risks, charges and expenses associated with 529 plans before investing. This and other information about 529 plans is available in the issuer's official statement and should be read carefully before investing. Investors should consult a tax advisor about any state tax consequences of an investment in a 529 plan.

As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. 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.

Post-Transplant Report on Tim & Kacy Wyman

Contributed by: Center for Financial Planning, Inc.

You may have heard that Tim Wyman was out of the office earlier this summer. He underwent surgery to remove a kidney, which was then transplanted to his daughter Kacy. Tim’s wife Jen Wyman gave us this update on how the recovery is going:

Tim and Kacy have just passed the 12 weeks post-kidney transplant mark …. a milestone of sorts. After a rough surgery and recovery for Tim, he is back to an almost normal version of himself, less a kidney, but otherwise feeling like himself.  While it has not been easy on him, he would do it over again in a heartbeat.  All he has to do is look at Kacy to know that.    

Kacy, despite the fact that she has a 12-inch scar, looks and acts as if nothing ever happened. She has completed 12 weekly uneventful transplant clinics with very few medication tweaks.  Her labs are stable and her health has been excellent.   She now will go to clinics every other week, 11 different medications will reduce to 8, and 40 daily pills will now be 34.   Still big numbers, but as the weeks and months go by, so too will the medications reduce.  Each week is a baby step in the right direction with no signs of rejection and a happy and healthy Kacy.  She just restarted her competitive swim schedule and is ready for her 7th grade year with her dad’s kidney and a new lease on life.   I have a new respect for Tim and Kacy having watched them endure this journey together.  Tim gave her the ultimate gift of life and Kacy’s body welcomed it as her own.  

Stock Market Update

Contributed by: Angela Palacios, CFP®

In the past week the S&P 500 tumbled amid increased volatility, wiping out all gains year to date and sending the index into negative territory.  Activity like this can be unsettling so please find some of our thoughts and observations following. 

Why is this happening?

• Uncertainty around whether or not the FED will raise rates next month is concerning in general.  Markets don’t like this uncertainty as we move closer to September.

• Weak growth in China and Emerging markets are spilling over into commodities and the currency markets causing concern in general that there will be contagion to local markets.

What have we done to prepare?

• We expect volatility like this to happen from time to time.  The past several years have been an anomaly with little to no volatility.  Reacting is rarely a profitable move for an investor but acting ahead of time can be.  We have structured a portion of portfolios with active managers that have been building cash positions for just these moments.  When they see attractive opportunities they can put that cash to work.

• Bonds were never abandoned; in fact, we have increased our exposure here over the past year.  Even when faced with rising interest rates, we believe bonds are an important piece of diversification as they have held up very well in this short downturn giving positive performance.

• We utilize a bucket strategy when managing clients’ accounts to provide cash flow that is needed even when markets are at their most volatile.  The first bucket of defense is the cash that we hold to fund any current cash flow needs.  The next bucket is short term and high quality bonds which as mentioned above usually hold up well in a market rout.  Your personal situation dictates how much is appropriate to hold within these buckets.

What else can you do?

• Make sure your long-term allocation is still appropriate

• Double check thatyour time frame is correct for the investments in your portfolio

• Review and consider your risk tolerance for those investments

A correction doesn’t necessarily mean a recession is looming.  None of the indicators we are following point to a recession on the horizon so we feel this is just a temporary pullback.  This is the time when you lean on your financial planner to help you make the right decisions for your goals and needs and not act out of panic or fear.  Please feel free to reach out to us with any concerns or questions you may have, we are here for you!

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 as investment updates at The Center.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Angela Palacios, CFP® and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investments mentioned may not be suitable for all investors. Past performance is not a guarantee of future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Individuals cannot invest directly in any index. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Diversification and asset allocation do not ensure a profit or protect against a loss.