Tag Archives: Financial Planning

Local businesses strive to walk alongside clients, educate community about how to achieve financial wellness

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Financial advisor and money mindset coach Dinorah Caro Livingston welcomes participants to a local financial wellness workshop (Courtesy, Deborah Reed WKTV)

By Deborah Reed

WKTV Managing Editor

deborah@wktv.org

Attorney Rose Coonen engages community members in coversation (Courtesy, Deborah Reed WKTV)

Wyoming-Kentwood Chamber of Commerce businesses have partnered to help local community members navigate individual and family financial needs.

Dinorah Caro Livingston, Regional Vice-President of Primerica Advisors, recently hosted a financial wellness education workshop to help unravel the mystery surrounding financial wellness.

“It’s about providing education,” Livingston said. “The more that people know, the better they can make informed decisions for what they need.”

Education you won’t get in schools

With 20 years operating in the financial arena, Livingston is dedicated to helping people take control of their finances and their future.

“If you want something different in the future, you have to do something different today,” said Livingston.

Dinorah Caro Livingston talks about life moments that create our “WHYs” (Courtesy, Deborah Reed WKTV)

But Livingston also understands that taking the reins can seem overwhelming.

“Unfortunately, people get scared, and they are scared to ask for the information,” said Livingston. “[But] there are no dumb questions. People can take baby steps to become financially stable,” Livingston added.

Livingston urges people to begin taking those baby steps to avoid a situation where they run out of time or it is too late to put plans in place.

“If you drop them little seeds of education along the way, sometimes it spurs them on to stop dragging their feet,” said Livingston. “And depending on where they are in their lives, the message is heard differently.”

Livingston provides quarterly workshops to the public but also presents workshops for specific groups such as employers, schools and churches.

“We have multiple investment partners who will help us with these,” said Livingston, “We believe education should be free.”

When Livingston met personal family lawyer Rose Coonen of Coonen Law, PLLC, she found that Coonen also focused on educating her clients via relationships and informational workshops.

A partnership was born

With 20 years of estate planning experience, Coonen believes financial planning goes hand in hand with estate planning. Like Livingston, however, Coonen has found that most people are reluctant to take that first step.

Attorney Rose Coonen talks about gaining and maintaining control of your estate and assets (Courtesy, Deborah Reed WKTV)

“Especially from an estate planning standpoint, it’s important, but not urgent,” said Coonen. “And no one wants to think about it.”

The solution?

Coonen says that she encourages people to think about who they are setting plans in place for, and offers to come alongside them to help.

“We do education pieces to say why it’s important, here is what could happen, let us be of service to you and help you,” Coonen said.

Communication and empathy are key

Both Livingston and Coonen have noticed that the success ratio for businesses is higher when the focus is partnership with families rather than transactional.

Rose Coonen answers questions about estate planning from the audience (Courtesy, Deborah Reed WKTV)

“Every family is different,” said Coonen. “Every family has different family dynamics.”

Coonen’s law firm was recently nominated for West Michigan Woman Readers’ Choice Awards – for the third time.

She believes the community has chosen to nominate her firm because she is not the “typical” attorney.

“I do not consider myself a traditional estate planning attorney,” said Coonen. “We are more holistic. We tell clients right from the start that they are not a number, that we come alongside them, not just to get a plan set up, but we stay in contact with them. They hear from us regularly.”

Coonen said her goal is to give families peace of mind.

“We guide families,” said Coonen. “We spend a lot of [time] building those relationships with our clients.”

Coonen has spent hours during the day calling clients to check in and see how they are doing, if anything has changed, and how life is going.

“Estate planning is an on-going process,” said Coonen, adding that the law firm does reviews every two years to make sure a client’s established plan is still current to their needs.

Get rich – slowly 

Mark Everswick talks about the importance of long-term investments (Courtesy, Deborah Reed WKTV)

Franklin Templeton Investments Regional Director Mark Everswick has also joined forces with Livingston and Coonen to bring the component of long-term investments to the table.

With an ever-evolving economy, investing can be a puzzle. Everswick provides strategies to help people invest confidently at every age.

Everswick said that patience is key in long-term investing.

“This investing thing is [about] getting rich slowly,” said Everswick, adding that the benefits are seen over a period of time.

The goal, Everswick continued, is not to simply acquire financial stability and retire, but to pass that stability on to family, preserving it for the future.

“An apple a day keeps the doctor away.”

Consistency is key in financial planning (Courtesy, www.pxhere.com)

Livingston recited an old saying to help convey the value of consistency.

“That consistency is so important, whether on the legal side or the financial side,” said Livingston. “Sometimes you need a coach to stay on track. It’s never ‘if’ you’ll fall down on the financial mat, it’s a matter of ‘when.’ And when that happens, we are going to be with you.”

For more information about financial services and financial wellness workshops, visit Dinorah Caro Livingston, How Money Works.

To learn more about how to get started on estate planning, visit Coonen Law, PLLC.

Investment information can be found at Franklin Templeton Investments.

4 financial planning tips for post-retirement health expenses

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By Vista Springs Assisted Living

 

The topic of savings and expenses becomes heavily-discussed as more and more adults reach retirement age and no longer can rely on a steady income. There are many areas that seniors need to have plans in place for post-retirement, including living expenses, daily costs, gifts, vacations, and—most importantly—healthcare.

 

While Medicare will help out with covering some healthcare costs, there are still a lot of important healthcare expenses that come directly out-of-pocket. It’s important to seriously consider the care costs you will likely encounter as you age, and make plans for how you will pay for these needs. Here are four tips for how you can approach financial planning for post-retirement healthcare expenses.

1. Learn what Medicare doesn’t cover

Medicare, or federal health insurance for those 65 and over, is the main way that seniors plan to take care of medical expenses after retirement. Medicare covers many things including hospital visits, general medical insurance, and some prescription drugs, but it doesn’t cover everything. In fact, some major medical expenses that most—if not all—seniors need aren’t even partially covered under basic Medicare plans, which can lead to problems for seniors who don’t have another plan in place.

Dental

Having good dental health and receiving dental care is incredibly important to ensure that your retirement years aren’t spent in pain. However, Medicare doesn’t cover routine or complex dental procedures—causing many seniors to make the mistake of skipping out on dental care altogether.

Vision

While Medicare does cover the cost of eye disease and injury treatments, it doesn’t cover routine vision care like annual appointments and eyeglasses, all of which can lead to major out-of-pocket expenses.

Hearing

Common hearing treatments that seniors often need as they age, like hearing aids, are not covered through Medicare. A good pair of hearing aids can help you stay communicative and social as you age, as well as significantly reduce your chances of developing memory diseases, but paying for them yourself can be expensive.

Long-term care

Medicare will only pay for long-term care housing like a nursing home if it is directly related to the recovery of a specific medical procedure. It won’t cover activities of daily living or instrumental activities of daily living, which many seniors need as they age. Examples of necessary care services not covered under Medicare include:

  • Eating
  • Bathing and personal care
  • Toileting
  • Money and financial management
  • Medication distribution and management
  • House maintenance and cleaning
  • Moving to a wheelchair or in and out of bed

2. Know your family history

You can try and predict what medical expenses you might need to plan for by taking a close look at your family’s medical history. If you see patterns or know that certain diseases and medical problems have affected your family in the past, you can take the necessary steps to address paying for those concerns should you have them as well.

 

It’s also a good idea to examine your own life choices and see if there are any habits or behaviors—such as smoking—that might contribute to a significant medical care expense after you hit retirement age.

3. Explore Medicare Advantage plans

While Original Medicare, or Medicare Parts A & B, don’t cover any of the areas mentioned above, there is a chance that a Medicare Advantage Plan might pick up some of the slack for important vision, dental, and hearing medical expenses.

 

There are lots of different types of Medicare Advantage plans, such as:

  • Health Maintenance Organizations
  • Preferred Provider Organizations
  • Private Fee-for-Service Plans
  • Special Needs Plans
  • Medicare Medical Savings Account Plans

Each type of Advantage plan has different associated costs and coverages, so it’s important to explore the different options and find a plan that meets your care needs while being affordable within your healthcare budget.

4. Start planning & budgeting now

Every day that you wait to make a plan for unexpected healthcare costs is a day where you might might not have enough savings. It’s important to take action today to plan for your important medical expenses and start creating a budget and looking into different funding options for senior health expenses.

 

You can speak with a financial advisor or go through your finances yourself to see where your spending can be cut and put into a retirement fund or health savings account. If you are already retired, think about ways you can save money and reduce daily costs to plan for healthcare expenses in the future.

 

Finally, while it’s not fun to think about, the reality is that 70% of seniors will need long term care and those odds include you. Start exploring options like assisted living today so you can have a plan already in place when the time comes to make the move to a senior care community.

 

Reprinted with permission from Vista Springs Assisted Living.

 

 

The Importance of Guaranteed Retirement Income

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Courtesy Vista Springs Assisted Living

By Vista Springs Assisted Living

 

For most adults reaching retirement age, finances are looking pretty grim. By most studies, more than half of the Baby Boomer generation isn’t financially prepared for retirement, and as many as 30% have no retirement savings at all. Experts are worried about how new retirees will fare, or if retirement as we currently think of it will even still exist. So if savings can’t save the day, what can?

Why do you need it?

While many of the people who have been retired for a while have managed to maintain their nest egg while enjoying pre-retirement lifestyles and spending habits, younger retirees and adults approaching their full retirement age shouldn’t count on the same fortune. Americans nearing retirement have a median retirement savings of about $147,000, which is more than $500,000 shy of the amount that experts project is necessary for a comfortable, financially stable retirement.

 

Sources of retirement income are one way that current and future retirees are dealing with their finances. From estimated medical costs as high as $280,000 to cost of living to travel and entertainment, there’s so many aspects of retirement that require financial security. So what can you do?

What are your options?

Social Security

The in’s and out’s of Social Security can be difficult to navigate. If you’ve already claimed your benefits and have been receiving monthly payments for a year or more, the amount you can receive each month is more or less locked in aside from cost-of-living increases. If you haven’t claimed yet, or if you’ve been receiving benefits for less than a year, you have some choices to go over with your financial advisor.

 

First, the age at which you claim benefits has a huge effect on how much money you’ll receive each month. At the minimum age of eligibility, 62, your benefit could be reduced by as much as 25-30%, depending on your full retirement age (FRA). Then, at your FRA, you can receive your full benefit with no reductions. Or, for every year you wait to claim after your FRA and up to age 70, you can earn an 8% bonus to your benefit. Everyone’s situation is different, so one age is not necessarily always better than another, but many financial planning experts advise waiting and betting bonuses if your health and financial situation will allow.

 

Employer Pensions

Today, employer pensions are becoming rare, but they do still exist. Public service workers, such as the police force, firefighters, judges, and public teachers have always had pension plans, and other government positions also offer pensions. Because pensions are part of an employee’s compensation package, the amount of retirement income they provide varies based on industry, position, and even from person to person.

Retirement Accounts

While you can open your own retirement accounts, they are generally associated with employer-provided benefits. These benefits, such as 401(k)s, 403(b)s, deferred comp plans, SIMPLE or SEP IRAs, and more, may not be income like pensions are, but function in much the same way after retirement. You are required to withdraw a minimum amount per year after age 70½, though earlier withdrawals may help reduce your lifetime tax bill. Transfers can be done in a lump sum (though we don’t recommend it), quarterly, monthly, or on a different schedule as long as the minimum is met annually.

Savings Accounts

Your personal savings aren’t actually guaranteed income, but barring emergency expenses, you should treat money you withdraw about the same as you treat Social Security payments or retirement account withdrawals. Budget your spending and pay yourself a monthly paycheck from your savings account, and don’t go over that budget. The main difference is that you can withdraw more money if you need to, in case of an emergency medical expense for example, whereas other sources of retirement income generally pay out a regular amount that you have little to no control over.

Annuities

Annuities are somewhat unique in this list, as they can be obtained after you’ve already retired, and some, like fixed indexed annuities, have the option to be truly guaranteed retirement income, meaning that you will always receive income from them regardless of your financial situation, the markets, and other variable factors. There are different types of annuities that may be better or worse for your needs, which you should discuss with a financial advisor.

Part-time Work

And of course, one way to earn retirement income is simply by earning income from a job. There are many part-time work opportunities that allow retirees to supplement their savings while still maintaining a retirement lifestyle, and more retirees are becoming entrepreneurs for enjoyment and income. Continuing to work isn’t part of the traditional picture of retirement, but it’s quickly becoming more common.

 

While retirement savings across the board aren’t where they should be, a financially stable retirement is possible with enough planning. Take stock of your options for retirement income, and speak with a financial advisor to get the clearest picture of your finances.

 

Reprinted with permission from Vista Springs Assisted Living.

 

Charitable giving under new tax laws: Understanding the Donor-advised Fund (DAF)

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By Ellen A. Winter, Grand Wealth Management

 

No matter how the 2017 Tax Cuts and Jobs Act (TCJA) may alter your tax planning, we’d like to believe one thing will remain the same: With or without a tax write-off, many Americans will still want to give generously to the charities of their choice. After all, financial incentives aren’t usually your main motivation for giving. We give to support the causes we cherish. We give because we’re grateful for the good fortune we’ve enjoyed. We give because it elevates us too. Good giving feels great – for donor and recipient alike.

 

That said, a tax break can feel good too, and it may help you give more than you otherwise could. Enter the donor-advised fund (DAF) as a potential tool for continuing to give meaningfully and tax-efficiently under the new tax law.

 

What’s Changed About Charitable Giving?

To be clear, the TCJA has not eliminated the charitable deduction. You can still take it when you itemize your deductions. But the law has limited or eliminated several other itemized deductions, and it’s roughly doubled the standard deduction (now $12,000 for single and $24,000 for joint filers). With these changes, there will be far fewer times it will make sense to itemize your deductions instead of just taking the now-higher standard allowance.

 

This introduces a new incentive to consider batching up your deductible expenses, so they can periodically “count” toward reducing your taxes due – at least in the years you’ve got enough itemized deductions to exceed your standard deduction.

 

For example, if you usually donate $2,500 annually to charity, you could instead donate $25,000 once each decade. Combined with other deductibles, you might then be able to take a nice tax write-off that year, which may generate (or be generated by) other tax-planning possibilities.

 

What Can a DAF Do for You?

DAFs are not new; they’ve been around since the 1930s. But they’ve been garnering more attention as a potentially appropriate tax-planning tool under the TCJA. Here’s how they work:

  1. Make a sizeable donation to a DAF. Donating to a DAF, which acts like a “charitable bank,” is one way to batch up your deductions for tax-wise giving. But remember: DAF contributions are irrevocable. You cannot change your mind and later reclaim the funds.
  2. Deduct the full amount in the year you fund the DAF. DAFs are established by nonprofit sponsoring organizations, so your entire contribution is available for the maximum allowable deduction in the year you make it. Plus, once you’ve funded a DAF, the sponsor typically invests the assets, and any returns they earn are tax-free. This can give your initial donation more giving-power over time.
  3. Participate in granting DAF assets to your charities of choice. Over time, and as the name “donor-advised fund” suggests, you get to advise the DAF’s sponsoring organization on when to grant assets, and where those grants will go.

Thus, donating through a DAF may be preferred if you want to make a relatively sizeable donation for tax-planning or other purposes; you’d like to retain a say over what happens next to those assets; and you’re not yet ready to allocate all the money to your favorite causes.

 

Another common reason people turn to a DAF is to donate appreciated stocks in kind (without selling them first), when your intended recipients can only accept cash/liquid donations. The American Endowment Foundation offers this 2015 “Donor Advised Fund Summary for Donors,” with additional reasons a DAF may appeal — with or without its newest potential tax benefits.

 

Beyond DAFs

A DAF isn’t for everyone. Along the spectrum of charitable giving choices, they’re relatively easy and affordable to establish, while still offering some of the benefits of a planned giving vehicle. As such, they fall somewhere between simply writing a check, versus taking on the time, costs and complexities of a charitable remainder trust, charitable lead trust, or private foundation.

 

That said, planned giving vehicles offer several important features that go beyond what a DAF can do for a family who is interested in establishing a lasting legacy. They also go beyond the scope of this paper, but we are happy to discuss them with you directly at any time.

 

How Do You Differentiate DAFs?

If you decide a DAF would be useful to your cause, the next step is to select an organization to sponsor your contribution. Sponsors typically fall into three types:

  1. Public charities established by financial providers, like Fidelity, Schwab and Vanguard
  2. Independent national organizations, like the American Endowment Foundation and National Philanthropic Trust
  3. “Single issue” entities, like religious, educational or emergency aid organizations

Within and among these categories, DAFs are not entirely interchangeable. Whether you’re being guided by a professional advisor or you’re managing the selection process on your own, it’s worth doing some due diligence before you fund a DAF. Here are some key considerations:

 

Minimums — Different DAFs have different minimums for opening an account. For example, one sponsor may require $5,000 to get started, while another may have a higher threshold.

 

Fees — As with any investment account, expect administration fees. Just make sure they’re fair and transparent, so they don’t eat up all the benefits of having a DAF to begin with.

 

Acceptable Assets — Most DAFs will let you donate cash as well as stocks. Some may also accept other types of assets, such as real estate, private equity or insurance.

 

Grant-Giving Policies — Some grant-giving policies are more flexible than others. For example, single-entity organizations may require that a percentage of your grants go to their cause, or only to local or certain kinds of causes. Some may be more specific than others on the minimum size and/or maximum frequency of your grant requests. Some have simplified the grant-making process through online automation; others have not.

 

Investment Policies — As touched on above, your DAF assets are typically invested in the market, so they can grow tax-free over time. But some investments are far more advisable than others for building long-term giving power! How much say will you have on investment selections? If you’re already working with a wealth advisor, it can make good sense to choose a DAF that lets your advisor manage these account assets in a prudent, fiduciary manner, according to an evidence-based investment strategy. (Note: Higher minimums may apply.)

 

Transfer and Liquidation Policies — What happens to your DAF account when you die? Some sponsors allow you to name successors if you’d like to continue the account in perpetuity. Some allow you to name charitable organizations as beneficiaries. Some have a formula for distributing assets to past grant recipients. Some will roll the assets into their own endowment. (Most will at least do this as a last resort if there are no successors or past grant recipients.) Also, what if you decide you’d like to transfer your DAF to a different sponsoring organization during your lifetime? Find out if the organization you have in mind permits it.

 

Deciding on Your Definitive DAF

Selecting an ideal DAF sponsor for your tax planning and charitable intent usually involves a process of elimination. To narrow the field, decide which DAF features matter the most to you, and which ones may be deal breakers.

 

If you’re working with a wealth advisor such as Grand Wealth Management, we hope you’ll lean on us to help you make a final selection, and meld it into your greater personal and financial goals. As Wharton Professor and “Give and Take” author Adam Grant has observed, “The most meaningful way to succeed is to help others succeed.” That’s one reason we’re here: to help you successfully incorporate the things that last into your lasting, charitably minded lifestyle.