THE COLUMBUS DISPATCH | SPECIAL ADVERTISING SECTION | SUNDAY, OCTOBER 4, 2009 OCTOBER 5 TO OCTOBER 11, 2009 FINANCIAL PLANNING WEEK Sponsored by The Financial Planning Association of Central Ohio Why hire a Certified Financial Planner ™ ? A CFP ® professional is an indi- vidual who has a demonstrated level of financial planning techni- cal knowledge, experience in the field and holds to a client-centered code of ethics. CFP ® professionals are dedi- cated to using the financial plan- ning process to serve the financial needs of individuals, families and businesses. To earn the prestigious CFP ® certification and remain certified as a CFP ® professional, individuals must meet four main requirements. FOUR E’S TO BECOMING A CERTIFIED FINANCIAL PLANNER™ Education CFP ® practitioners develop theoretical and practical financial planning knowledge by complet- ing a comprehensive course of study at a college or university offering a financial planning cur- riculum registered with the Certi- fied Financial Planner Board of Standards. Examination CFP ® practitioners must pass a comprehensive two-day, 10-hour CFP ® Certification Examina- tion that tests their ability to apply their financial planning knowledge in an integrated for- mat. Based on regularly updated research of what planners do, the CFP ® Board’s exam covers the gen- eral principles of financial plan- ning, insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning and estate planning. Experience CFP ® practitioners must have a minimum of three years’ expe- rience working in the financial planning process prior to earning the CFP ® mark. As a result, CFP ® practitioners have demonstrated a working knowledge of counseling skills in addition to their financial planning knowledge. Ethics As a final step to certification, CFP ® practitioners must pass an ethics review and agree to abide by the CFP ® Board’s Financial Planning Practice Standards and a strict code of professional con- duct, known as the CFP ® Board’s Code of Ethics and Professional Responsibility. The Code of Ethics states that CFP ® practitioners are to act with integrity, offering pro- fessional services that are objec- tive and based on client needs. RE-CERTIFICATION It is also necessary for every CFP ® certificant, once certified, to complete a re-certification every two years. Those seeking to main- tain their certification must attain a minimum of 30 hours of con- tinuing education in order to stay current with developments in the financial planning profession and to better serve their clients. Two of these hours must be spent study- ing the CFP ® Board’s Code of Eth- ics and Professional Responsibility or Financial Planning Practice Standards. FIND A PLANNER FPA’s PlannerSearch™ can connect you with CERTIFIED FINANCIAL PLANNER™ professionals in your area. To find a planner, visit: www.fpaforfinancialplanning.org/ FindaPlanner/ CFP ® , CERTIFIED FINANCIAL PLANNER TM and federally registered CFP ® (with flame logo) are certification marks owned by Certified Financial Planner Board of Standards. These marks are awarded to individuals who success- fully complete CFP Board’s initial and ongoing certification requirements. What is the FPA? The Financial Planning Association ® (FPA ® ) is the stron- gest collective voice for the financial planning profession. The FPA has over 28,500 members consisting of finan- cial planners, allied professionals, and organizations that champion the financial planning process. Members of the FPA receive numerous benefits such as networking oppor- tunities with some of the best financial minds in the world, government advocacy, outstanding continuing education programs, practice management tools, career development assistance, and much more. The core values of the FPA are Competence, Integrity, Relationships, and Stewardship. Each member of the FPA agrees to adhere to a Code of Ethics that reflects their commitment to help clients achieve their life goals. The Financial Planning Association of Central Ohio has over 275 members. Our mission is to serve and inspire those who deliver, support, and need financial planning. We are having another successful year as all of our committees continue to find ways to improve our chapter. We con- tinue to develop our pro bono efforts, which over time will allow us to provide financial planning to individuals and families who cannot typically afford such services. We are working with the financial planning students at The Ohio State University and Franklin University to help them with their career development through our “Student Spotlight” program, internships, networking and job opportunities. We are also supporting the OSU Student FPA in their on-going peer counseling service for students at the Wellness Center called Scarlet & Gray Financial. For two years now, members of the FPA of Central Ohio have been involved with Junior Achievement. Our partnership enables members of our orga- nization to teach middle and high school students finance concepts throughout the central Ohio area. We have also developed a relationship with The Ohio State University and their CFP™ certification education program. This enables us to give our members another outlet when pursuing the CERTIFIED FINANCIAL PLANNER™ certification. Please visit our Web site at www.FPACentralOhio.org for more information regarding the FPA of Central Ohio. Pamela S. Birkenholz, CRPC President, FPA of Central Ohio
Financial Planning Week 2009
Mar 03, 2016
Financial Planning Week, October 5-11 2009
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THE COLUMBUS DISPATCH | SPECIAL ADVERTISING SECTION | SUNDAY, OCTOBER 4, 2009
OCTOBER 5 TO OCTOBER 11, 2009
FINANCIALPLANNING WEEK
Sponsored by The Financial Planning Association of Central Ohio
Why hire a Certified Financial Planner™? A CFP® professional is an indi-vidual who has a demonstratedlevel of financial planning techni-cal knowledge, experience in the field and holds to a client-centeredcode of ethics. CFP® professionals are dedi-cated to using the financial plan-ning process to serve the financial needs of individuals, families andbusinesses. To earn the prestigious CFP® certification and remaincertified as a CFP® professional, individuals must meet four mainrequirements.
FOUR E’S TO BECOMING ACERTIFIED FINANCIALPLANNER™Education CFP® practitioners develop theoretical and practical financial planning knowledge by complet-ing a comprehensive course of study at a college or universityoffering a financial planning cur-riculum registered with the Certi-fied Financial Planner Board of Standards.
Examination CFP® practitioners must pass a comprehensive two-day, 10-hour CFP® Certification Examina-tion that tests their ability toapply their financial planningknowledge in an integrated for-mat. Based on regularly updated research of what planners do, the
CFP® Board’s exam covers the gen-eral principles of financial plan-ning, insurance planning and riskmanagement, employee benefitsplanning, investment planning,income tax planning, retirementplanning and estate planning.
Experience CFP® practitioners must havea minimum of three years’ expe-rience working in the financial planning process prior to earningthe CFP® mark. As a result, CFP®
practitioners have demonstrated aworking knowledge of counseling skills in addition to their financial planning knowledge.
Ethics As a final step to certification,
CFP® practitioners must pass anethics review and agree to abide by the CFP® Board’s Financial Planning Practice Standards and
a strict code of professional con-duct, known as the CFP® Board’s Code of Ethics and ProfessionalResponsibility. The Code of Ethicsstates that CFP® practitioners are to act with integrity, offering pro-fessional services that are objec-tive and based on client needs.
RE-CERTIFICATIONIt is also necessary for every
CFP® certificant, once certified, tocomplete a re-certification everytwo years. Those seeking to main-tain their certification must attaina minimum of 30 hours of con-tinuing education in order to staycurrent with developments in the financial planning profession and to better serve their clients. Two of these hours must be spent study-ing the CFP® Board’s Code of Eth-ics and Professional Responsibilityor Financial Planning Practice Standards.
FIND A PLANNERFPA’s PlannerSearch™ can connect you with CERTIFIED FINANCIALPLANNER™ professionals in yourarea.
To find a planner, visit:www.fpaforfinancialplanning.org/FindaPlanner/CFP®, CERTIFIED FINANCIAL PLANNERTM
and federally registered CFP® (with flame logo) are certification marks owned by Certified Financial Planner Board of Standards. Thesemarks are awarded to individuals who success-fully complete CFP Board’s initial and ongoing certification requirements.
What is the FPA?The Financial Planning Association® (FPA®) is the stron-
gest collective voice for the financial planning profession. The FPA has over 28,500 members consisting of fi nan-cial planners, allied professionals, and organizations that champion the financial planning process. Members of the FPA receive numerous benefits such as networking oppor-tunities with some of the best financial minds in the world, government advocacy, outstanding continuing education programs, practice management tools, career development assistance, and much more. The core values of the FPA are Competence, Integrity, Relationships, and Stewardship. Each member of the FPA agrees to adhere to a Code of Ethics that reflects their commitment to help clients achieve their life goals.
The Financial Planning Association of Central Ohio has over 275 members. Our mission is to serve and inspire those who deliver, support, and need financial planning. We are having another successful year as all of our committees continue to find ways to improve our chapter. We con-tinue to develop our pro bono efforts, which over time will allow us to provide financial planning to individuals and families who cannot typically afford such services. We are working with the financial planning students at The Ohio State University and Franklin University to help them with their career development through our “Student Spotlight” program, internships, networking and job opportunities. Weare also supporting the OSU Student FPA in their on-going peer counseling service for students at the Wellness Center called Scarlet & Gray Financial. For two years now, members of the FPA of Central Ohio have been involved with Junior Achievement. Our partnership enables members of our orga-nization to teach middle and high school students fi nance concepts throughout the central Ohio area. We have also developed a relationship with The Ohio State University and their CFP™ certification education program. This enables us to give our members another outlet when pursuing the CERTIFIED FINANCIAL PLANNER™ certifi cation.
Please visit our Web site at www.FPACentralOhio.org for more information regarding the FPA of Central Ohio.
Pamela S. Birkenholz, CRPCPresident, FPA of Central Ohio
| THE COLUMBUS DISPATCH | SPECIAL ADVERTISING SECTION | SUNDAY, OCTOBER 4, 2009 ∑ 2
During the past several months many families have struggled to their pay bills and make ends meet. By the time the bills are paid there is little left to fund goals such as your chil-dren’s education, saving for your retirement, maintain-ing an emergency fund,purchasing a home, buying a car, or even taking a vaca-tion. You may ask yourself, “Where does the money go?” It is easy to become overwhelmed when setting up a spending plan for your monthly income. However, with proper planning you are more likely to reach your goals. There are fi ve key steps to help you reach your goals:
1. Start by listing your goals 2. Prioritize your goals 3. Decide on a timeline to meet each goal 4. Project funds needed to achieve each goal 5. Calculate how much you need to set aside each pay check. For example:Saving for RetirementBeginning at Age 65
Amount needed: 80percent of current income
Amount to save: $100per pay period
Maintain an Emergency Fund in Two Years
Amount needed: Threemonths worth of expenses
Amount to save: $125per pay period
Yearly VacationAmount needed: $2,000Amount to save: $88
per pay period
New or Used Car inThree Years
Amount needed: $10,000Amount to save: $128
per pay period Professional fi nancial planners can help you ana-lyze projections and the in-vestment needed to achieve each of your goals. Savings from each paycheck can be a great way to “pay your-self fi rst” and save for your goals before the money sifts through your fi ngers like sand through an hourglass.
Pamela S. Birkenholz, CRPCWaddell & Reed, Inc.(614) 799-0373 x110pbirkenholz48370@ wradvisors.com
like Sand through an Hourglass
With unemployment hitting multidecade highs, more people are leaving their employers and retire-ment plans now than ever. A 401(k) rollover refers to the transfer of funds from an employer-sponsored program to an IRA or other qualifi ed plan. A detailed analysis of your situation with respect to your 401(k) is warranted before taking action. Here are a few things to con-sider:
INVESTMENT SELECTION,CONTROL & EXPENSE 401(k) plans are typi-cally set up with a limited menu of investments. Al-though there are typi-cally adequate choices for diversifi cation, you may have preferences that are not satisfi ed within the plan. Rolling it over to an IRA account may give you the additional fl exibility you desire. In addition, you’ll fi nd internal fund expenses are a wildcard — sometimes they are higher in 401(k) plans, and sometimes they’re not. While it’s diffi cult to de-termine expenses for your 401(k), your plan admin-istrator must give you the summary plan document upon request, which is a good starting point.
LIQUIDITY NEEDS It’s rarely a good idea to withdraw from your retirement account for emergency cash. How-ever, it’s nice to know you have options, should you need them. 401(k)s do not afford you the option to withdraw funds prior to age 59½ without incurring
a 10 percent excise tax. IRA plans generally have the same restrictions but there is an out. You can utilize Rule 72t which allows you to take regular and on-go-ing distributions. There are complexities to this, so speak to a professional prior to instituting.
ESTATE PLANNING 401(k) company-spon-sored plans tend to be more restrictive with re-spect to benefi ciary desig-nations. An IRA will allow you to set up multiple ben-efi ciary designations for various investment strate-gies. In addition, as noted above, IRA’s allow you to
use “stretch” distributions whereas most 401(k) plans require a lump-sum to be taken soon after death of the plan participant. This can potentially have ad-verse tax consequences for the spouse or benefi ciary.
SIMPLICITY Often overlooked, hav-ing one IRA rather than multiple 401(k)’s can assist a professional in making investment decisions.
Mark FisselBeacon Hill Investment [email protected]
401(k)
When it makessense to rollover
∑ SUNDAY, OCTOBER 4, 2009 | SPECIAL ADVERTISING SECTION | THE COLUMBUS DISPATCH | 3
Feeling helpless as you watch the market gyrations take a toll on your account balances? Consider these four ways to help recover some ground.
Get to know your tax bracket and use it to your advantage. Tax rates are at historically low levels but that’s certain to change. It might make sense to pay off the IRS now. Making after-tax contributions to Roth accounts will pro-vide you with tax-free income during retirement while every dollar of your
Traditional IRA and 401(k) withdrawals will be taxed as ordinary income.
Pay careful atten-tion to investment fees. Expenses reduce your effective rate of return, can have a dramatic impact on portfolio value and de-crease standard of living in retirement. A mutual fund class A share will cost an up-front fee, or “load,” of about 5.75 percent. There are ongoing fees which might run an additional 1 percent per year. Compara-tively, an exchange-traded index fund might cost you
0.25 percent per year with
no loads.Develop an asset allo-
cation policy and STICK TO IT. Asset allocation, very simply, is the mix of equities and bonds that make up your portfolio. A carefully designed asset allocation can help you increase portfolio return while reducing portfolio volatility. No matter your level of risk tolerance, consider investing 10-15 percent of your portfolio in the stock market in an effort to outpace infl ation.
Rebalance regularly.Even a “buy and hold” passive investment strat-egy needs some tweaking from time to time. Exam-ine your portfolio at least quarterly to ensure that dollars are aligned with your target asset allocation. A disciplined investor will sell off equities when they rally enough to be “over-weighted.” Profi ts should be reinvested in an asset class that is not in favor. Being disciplined in your approach to asset alloca-tion and rebalancing has been proven to add return to your portfolio in the long-run.
Lori L. Embry, CFP®
Fairfi eld Investments & Wealth Management, LLC(614) 481-8440lori@fairfi eldwealth.com
4Does your retirement
feel out of reach?You need a plan.®
Financial planning services and investments available through Ameriprise Financial Services, Inc.,Member FINRA and SIPC.1 The Financial Planning Association® (FPA®) and Ameriprise Value of Financial Planning study,was conducted by Harris Interactive in June/July, 2008 among 3.022 adults. While marketvolatility was significant during the study period, subsequent financial developments, whichmay have affected attitudes and behaviors, had not yet occurred. No estimates of theoreticalsampling error can be calculated; a full methodology is available.2 Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5,available at adviserinfo.sec.gov as of Dec. 31, 2008.© 2009 Ameriprise Financial, Inc. All rights reserved.
Montgomery and AssociatesA financial advisory practice ofAmeriprise Financial Services, Inc.
450 W. Wilson Bridge RoadSuite 150Worthington, OH 43085(614) [email protected]
To find out why more people come to Ameriprise forfinancial planning than any other company,
2
call (614) 310-0501 today.
If you’re like many people, today’s uncertain economic times mayhave you feeling that your retirement goals are harder to reach.But did you know having a financial plan could help improve youroutlook on retirement?
At Ameriprise Financial, we’ve seen how true financial planningmakes a difference in the lives of our clients. Now a national study1
confirms that people with a comprehensive plan feel more confidentand on track with their retirement goals — even in today’svolatile market.
People with a comprehensive financial plan are more likely tosay they:
> Have a clear financial direction> Feel well prepared for retirement> Have rebalanced their portfolio> Are on track with saving goals
Super-Sizeyour retirement savings
easy ways to
THE COLUMBUS DISPATCH | SPECIAL ADVERTISING SECTION | SUNDAY, OCTOBER 4, 20094 5∑ ∑
FINANCIAL PLANNING WEEK
The FinancialPlanning Association
of Central Ohio serves and inspires those
who deliver, support and need financial
planning.Board member not pictured: Joseph Jankowski, CFP®, Co-Director, Programs
William A. Leuby JD,CPA,CFP®Hamilton Capital Managment, Inc
(614) [email protected]
Jessica A. LeeBudros, Ruhlin & Roe, Inc.
(614) [email protected]
Charlene C. Kott CFP®Asset Management/Raymond
James Financial(614) 895-2990
Gregory A. KoehlerRaymond James Financial Services
(614) [email protected]
Michael Kline CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Katherine E. Kincaid CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Scott Kidwell CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Charles A. Kerwood, III CFP®,ChFCWaller Financial Planning Group, Inc.
(614) [email protected]
Lisa M. Jolley J.D.The Columbus Foundation
(614) 251-4000 [email protected]
Rita M. ItsellPDS Planning, Inc.
(614) [email protected]
Adam T. Hill CFP®Maxwell Financial
Management(614) 431-4345
Michael A. Henn CFP®Swisher Financial Concepts, Inc
(614) [email protected]
Robert Hamilton CFP®PDS Planning, Inc.
(614) [email protected]
James M. HamiltonPDS Planning, Inc.
(614) 481-8449 [email protected]
Debbie Price J.D., CPA, CFP®Price Planning, LLC
(614) [email protected]
Christina PovenmireCFP®, MBA
Vawter Financial, Ltd. (614) 487-1244
Debbie J. Pottebaum CFP®Chornyak & Associates, Ltd.
(614) [email protected]
Martina Peng Ph.D.Franklin University
(614) [email protected]
Christopher O. Olsgard CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Timothy K. Montgomery CFP®Ameriprise Financial
(614) [email protected]
Timothy M. Montague CPA, CFP®, MT
Hamilton Capital Management(614) 273-1000
Andrew L. Michel CLU, ChFCAndrew Michel & Associates/
Lincoln Financial Advisors(614) 885-2853
John McHugh CPA, CFP®Budros, Ruhlin & Roe, Inc.
(614) 481-6900 [email protected]
Richard W. Maxwell CFP®Maxwell Financial
Management(614) 431-4345
Robert A. Mauk CFP®Chornyak & Associates, Ltd.
(614) [email protected]
Whitney T. Logan CFP®, CLU, ChFCRaymond James Financial Services
(614) [email protected]
Jeffrey R. Loehnis CPA, CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Richard A. Ray MBA, CFP®Hamilton Capital
Management, Inc.(614) 273-1000
R. Matthew Hamilton CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Paul A. Gydosh Jr. CFP®Kensington Wealth
Partners Ltd.(614) 431-4336
Gwen Gloeckner CDFAGloeckner Financial Group
(614) [email protected]
Peter S. Geldis CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Andrew E. Fugazzi CFP®Ameriprise Financial
(614) [email protected]
Mark A. FisselBeacon Hill Investment
Advisory888-614-4625
Douglas Feller CFP®Investment Partners LTD
(614) [email protected]
Jason E. Farris CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Michael P. Faieta CFP®Hamilton Capital
Management, Inc.(614) 545-4011
Robert J. Eyen CFP®, CLU®Ameriprise Financial
(614) [email protected]
Lori L. Embrey CFP®Fairfield Investments & Wealth
Management, LLC(614) 481-8440
Andrea Ellis CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Clint Edgington CFABeacon Hill Investment Advisory
Daniel Due CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Diane E. Armstrong CFP®, CPAWealthStone
(614) [email protected]
Kevin M. Doll MS,CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Connie E. Demers CFP®Demers Financial Planning
(614) [email protected]
Mark S. Coffey JD, CFP®John E. Sestina and Company
(614) 326-3077 ext. [email protected]
Robert A. Cochran CFP®PDS Planning, Inc.
(614) [email protected]
Joseph A. Chornyak, Sr. CFP®Chornyak & Associates, Ltd.
(614) [email protected]
Joseph A. Chornyak, Jr.Chornyak & Associates, Ltd.
(614) [email protected]
Linda Campbell CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Carl C. BucknerJohn Sestina and Company
(614) [email protected]
Geoffrey R. Biehn CPA, CFP®Trinity Financial Advisors LLC
(614) [email protected]
Brian W. Becker CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Shawn R. Ballinger CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Teri R. Alexander CFP®Alexander Financial
Planning, Inc.(614) [email protected]
Sonya R. AlberyRaymond James Financial Services
(614) [email protected]
Aaron Armstrong CFP®Budros, Ruhlin & Roe, Inc
(614) [email protected]
Ellen Dorle CFP®Dorle Financial
Daniel M. Lindelow CFP®, CPA ACT
Financial Partners, LLC(614) 638-9913
Scott E. Rendle CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Pamela S. Birkenholz CRPCWaddell & Reed, Inc.(614) 799-0373 x110
Jason A. Eliason CFP®, ChFCWaller Financial Planning Group, Inc.
(614) [email protected]
Co-Director, Partnerships
Erin Gaeta CFP®Cephas Capital Management, LLC
(614) [email protected]
Director, Pro Bono & Junior Achievement
Jeffrey C. Gilbert CFP®PDS Planning Inc.(614) 481-8449
[email protected], Membership
Jamie P. Menges CFP®Investment Partners, LTD
(614) [email protected]
President-Elect & Director, Career Development
Michelle M. Merkel CFP®Merkel Financial Services, Inc.
(614) [email protected]
Co-Director, Membership
David Stone CFP®Personal Financial Advisors, Inc.
(614) [email protected]
Co-Director, Partnerships
Larry R. Zapp CFP®Larry R. Zapp & Associates, Inc.
(614) 478-0500Treasurer
Carol A. Friedhoff CFP®, MSSavvy Outcomes Inc.
(614) [email protected]
Director, Public Relations
Tammi GourleyDiamond Hill Investments
(614) [email protected]
Co-Director, Programs
Matthew J. Stewart CFP®Key Private Bank(614) 460-3453
Amy Weldele CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Lisa S. Walls CFP®Hamilton Capital
Management, Inc.(614) 273-1000
Larry Waller CLU, ChFC, CFP®Waller Financial Planning
Group, Inc.(614) 457-7026
Brian R. TitusAmeriprise Financial
(614) [email protected]
Kristen J. Sydney CLU,ChFC,JD,CFP®
Sagemark Consulting Private Wealth Services(614) 854-6680
Jeffrey Suchy CFP®Budros, Ruhlin & Roe, Inc.
(614) [email protected]
Beth K. Sparks CFP®Raymond James & Associates
(614) [email protected]
Douglas C. SmithDouglas C. Smith Company, LLC
(614) [email protected]
John E. Sestina CFP®, ChFCJohn E. Sestina and Company
(614) [email protected]
John Roessler CFP® Budros & Ruhlin & Roe, Inc.
(614) [email protected]
John M. Reymann CFP®Ameriprise Financial
(614) 310-0501 [email protected]
Rebecca L. White CFP®Key Financial Services
John Timothy Young JD, CFP®Hamilton CapitalManagment, Inc(614) 273-1000
Financial PlanningAssociation ofCentral Ohio
Join Financial Planners ofCentral Ohio in Celebrating
BO
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| THE COLUMBUS DISPATCH | SPECIAL ADVERTISING SECTION | SUNDAY, OCTOBER 4, 2009 ∑ 6
“It will never happen to me.” In reality, however, disabilities can and do happen — to anyone — at any time. In fact, you’re three and a half times more likely to become disabled than you are to die prema-turely1. What constitutes a dis-ability? When you become too sick or hurt to work, you are disabled. Many disabilities are short-lived — a pulled muscle or a sprained ankle. These disabilities typically don’t interfere with your ability to continue working and providing for your family. But what if you suffered a heart attack? Or had a serious car accident and had to spend an extended period of time in a hospital (or worse yet, never fully recovered)? The fi nancial implica-
tions of a disability can be disastrous. How would you make your house and car payments if you couldn’t work? Even if your employer offers a group plan, the benefi t provided is often not enough. After taxes, most group plans only cover approximately 45 percent of your income. An individual disability policy can fi ll the gap. What to know when comparing individual dis-ability income insurance policies: • Defi nition of disability. It’s in your best interest to avoid disability policies that have an “any occupa-tion” defi nition. These types of policies pay only if you are unable to perform any occupation that rea-sonably fi ts. Instead, look for a policy that considers
you disabled if you cannot perform the duties of your regular occupation. • How long your dis-ability benefi ts should last. This depends on your age, income and level of sav-ings. Many people pur-chase coverage that lasts until age 65. • How long you can wait to receive benefi ts. If your income stopped today, how long could you con-tinue to pay your bills on your own? The longer the elimination period, the less expensive your policy will be.
1Health Industry Associa-tion of America, 2000
Michelle M. Merkel, CFP®
Merkel Financial Services, Inc.(614) 481-4455merkelfi nancial@ merkelfi nancial.com
‘It will never happen to me...’Disability income insurance can protect your fi nancial future
I’ll bet you could easily break a wooden pencil in two. However, it would be more diffi cult to break a bundle of pencils. Imag-ine that lone pencil is the technology stock category. If you were invested entirely in technology stocks, the market snapped that lone pencil a while ago. But what if you added a government bond pencil, a money market pencil, a precious metal pencil, a value investment pencil, a municipal bond pencil, and a few consumer stock pencils? Your tech stock pencil might bend, or still even break, but the band of pencils as a whole would remain strong and unbroken. Safety (and strength) in numbers is the power of diversifi cation. Diversifi cation is the spreading of in-vestment risk by putting assets in several investment categories — stocks, bonds, money market instruments, precious met-als, and the spectrum of mutual funds. The 17,000 Enron employees who invested their 401(k)s heavily in company stock watched helplessly as their savings evapo-rated and the company collapsed into bankruptcy. They believed in their compa-
ny, in themselves, and in their company’s stock. Diversifi cation protects you by spread-ing your risk among several categories of investments. Historically, when one group goes down, not all of them go down; some may even go up. You protect your savings; you protect yourself. If those Enron em-ployees had diversifi ed their 401(k)s more broadly, they might have lost only a por-tion of their retirement portfolio—instead of the whole thing. They could have main-tained a foundation to continue building from. With recent economic conditions, diversifi cation within your portfolio is very important. Historical trends are not neces-sarily repeating themselves. Work with an experienced fi nancial professional to help you design your investment strategy to your needs and risk tolerance. Better safe than sorry.
Gwen Gloeckner, CDFAGloeckner Financial Group(614) 310-2400gwen@gloecknerfi nancial.com
Protect investments through diversifi cation
During the last 12 months of volatile mar-kets, how did you react?Did you boldly face the economic times or did you quit opening your invest-ment statements? How can you stay rational in uncertain times? How can you take control of your fi nancial future?
KNOW YOUR VITALS The makeup of your fi -nancial situation is unique to you. Don’t fall victim to the fear and panic of the masses. Take control by checking each aspect of your affairs carefully. Ask your advisors to pull together an analysis of your current fi nancial circumstances: asset/liabili-ties, cash fl ow, investment performance, real estate holdings, business values, insurance coverage, etc. Reassess your plans and expectations. Are your intentions the same today and if not, what changes can or should be made?If you had planned to sell your business, should you proceed or wait a few more years? Should you adhere to your existing gifting schedule? Should investment allocations be changed in light of the volatility we’ve experi-enced? If you answer the questions above without knowing exactly where you stand and where you are headed, you’re not answering in context of your unique vantage point, vision and opportunities.
CONTROL WHAT YOU CAN CONTROL Focus on the forest, not the trees. Instead of looking narrowly at your investments, pull back and make sure you have a
sound thorough fi nancial plan. As simplistic as this sounds, most people focus on the parts and not how they work together. Your plan should drive any investment changes, not your emotions. Decisions made with limited consid-eration can have unexpect-ed consequences in other areas.
ENSURE YOURSTRATEGIC ADVISORS KNOW YOUR VISION To advise you well — both in the best of times and through rough waters — your key advisors need to know your long range vision. Now, more than ever, this vision should dic-tate your decision making. In short, this is a crucial time to become fully engaged in your fi nancial situation. I’m not suggest-ing that you watch the markets daily. I am sug-gesting that you open the proverbial envelopes, be informed, and make edu-cated decisions. It is true that in the middle of every challenge is opportunity. However, to see these opportunities, one must choose to notice.
Diane E. Armstrong, CFP®, CPAWealthStone(614) 267-2600darmstrong@ wealthstone.net
To see opportunities, one must choose to notice
Generally, contributions to traditional IRAs are tax deductible. However, once you withdraw from a traditional IRA, it is taken as taxable income. Roth IRA contribu-tions, on the other hand are not deduct-ible. In other words, when you contribute to a Roth, you pay taxes on that money immediately. The benefi t, however, is that money can grow indefi nitely and when withdrawn, you won’t pay taxes.
Roth IRAs are more benefi cial as: • Your future tax rate increases • Your length of time until you with-draw increases
Regular IRAs are more benefi cial as: • Your current tax rate decreases • Your expectation of “game changing” events is lower. In addition, Roth IRAs do not have the required minimum distribu-tions that Traditional IRAs do and enjoy more liberal withdrawal rules.
WHY 2010? Conversions from Traditional IRAs to Roth IRAs has been limited if your modi-fi ed adjusted gross income has been above
$100,000 for couples fi ling jointly. In 2010 only, this restriction will be lifted In addi-tion, taxes due on the amounts converted can be spread over 2011 and 2012 — effec-tively reducing your tax rate. While limita-tions on conversions are lifted for 2010, the limitation on contributions to IRAs has not been waived.
RULES OF THUMB • If you believe your tax rates will drop during the withdrawal period, it likely doesnot make sense. • If you believe your tax rate will in-crease, it likely does make sense. • If you do not have cash to comfortably pay the taxes due, it likely does not make sense. • If you do not have a long time horizon (5 to 10 years) for the tax-free compound-ing to occur, it likely does not make sense.
Clint Edgington, CFABeacon Hill Investment [email protected]
Roth vs. Traditional IRAs:You need to decide in 2010
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As a fi nancial planner who helps business owners plan for their retirement, the topic of how and when to sell the business usually comes up early in the con-versation — especially since most business owners have a good majority of their net worth tied up in their busi-nesses. An owner selling a C-corporation that she has owned for more than fi ve years (some exclusion ap-ply) may be able to exclude a signifi cant percentage of capital gains from taxation by taking advantage of IRC Section 1202 — Qualifi ed Small Business Stock. Section 1202 basicallystates that if a C-corpora-tion is a “qualifi ed small business” (as defi ned within the code), then the owner may exclude from gross in-come 50 percent of any gain from the sale or exchange of
the qualifi ed small business stock (up to $10,000,000 of gain). This deal is sweetened for those selling their business in the years 2009 and 2010 due to the American Recov-ery and Reinvestment Act of 2009, which allows the tax-payer to exclude 75 percent of the gain. (Consult with a CPA for the many details of this part of the tax code!) Due to this preferential tax treatment, it may be-hoove those nearing retire-ment to sell their businesses before the end of the year 2010. However, there surely are many other factors (other than taxes) that one needs to take into consid-eration when a decision of this magnitude is being weighed. Having a team of profes-sional, trusted advisors is critical when it comes to
this, and other, decisions that face business owners on a regular basis. Members of such a team might in-clude an attorney, a CPA, a banker, a business valuation analyst, a business broker, and a CERTIFIED FINAN-CIAL PLANNERTM profes-sional that specializes inworking with business own-ers. In addition to providing advice on topics such as estate and retirement plan-ning, a CFP® practitioner can act as the “quarterback” and coordinate the efforts of the entire team. This could save you time and money — things that you’ll hopefully have a lot of once you’ve retired.
Matthew J. Stewart, CFP®
Key Private Bank(614) 460-3453matthew_j_ [email protected]
Selling your C-corporation businessWhen is the right time?
While the title of this article implies that good investing strategies may have changed as a result of the recent extreme market turbulence; in fact, the key steps of investing remain unchanged.
STEP 1: HAVE A PLANYou wouldn’t build a
house without a blueprint, so be sure to have a “blue-print” for what may be your largest asset. Investment advisors refer to this as the asset allocation. Research has shown that the biggest predictor of investment returns is your choice of asset classes and categories — NOT the individual secu-rities you choose.
Your asset allocation doesn’t need to be com-plex to be effective. The
most important decision is your ratio of cash/bonds to stocks. First, think about your time horizon and risk tolerance. Typically, the shorter your time horizon,
the more conservative your investments should be. The three categories of invest-ments are, in order of risk:cash, bonds, and stocks. If your time horizon is fi ve
years or less, your portfolio should be heavily skewed toward cash-like securities and, perhaps, bonds. Stocks shouldn’t be added until your time horizon is longer,
10 to 15 years, then applied liberally if you are risk-tol-erant. Be sure to assign a specifi c percentage to each asset class and then to each category. This will help rebalance in step 3 below.
STEP 2: SELECT YOURINVESTMENTS Because most academic research shows that few, if any, money managers can outperform the market, you should look for low-cost, well diversifi ed mutual funds, exchange-traded funds (ETFs) or index funds.
STEP 3: REBALANCEPERIODICALLY Every 12 to 18 months you should revisit your original asset allocation. Some categories will have grown larger than what you
originally allocated, while others will be less. If bonds now make up 30 percentof your portfolio while the original allocation was 20 percent and stocks are down to 70 percent from 80 percent, then you should sell 10 percent of the bonds and invest those funds back into stocks. Rebalancing helps to reduce risk and to force investors to sell high and buy low; the ultimate goal of every investor. Need more information?Morningstar.com is a great educational resource.
Christina Povenmire, CFP®, MBAVawter Financial, Ltd.(614) 487-1244cpovenmire1@ columbus.rr.com
Investing for 2009 and beyond
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