Newsletter June - 2016 NEW FORMAT€¦ · Next you need to assemble your “team.” These are the family members who are willing to participate in a caregiving plan. Someone should

Registered Representative offering securities through First Allied Securities, Inc. A Registered Broker/Dealer, MemberFINRA/SIPC. Investment Advisor Representative offering services through First Allied Advisory Services, Inc.

Annuities as Pension Plans

According to a recent NorthwesternMutual survey, many Americans aren’tprepared to be caregivers for their par-ents. Sixty percent of respondents saidcaring for two aging adults is more de-manding than caring for two childrenages 3 to 5. Sixty-six percent said theextra costs of caregiving would have alarge financial impact on them and that38% had not planned for those costs. Where would the money come from?Forty-eight percent said they would cuttheir own discretionary living expense,27% said they would take it from theirretirement savings, and 20% said theywould get another job. Have the conversation. Outside ofthe financial questions, there are a hostof other questions to investigate andanswer honestly before taking on acaregiving role. First, what does Momor Dad want? According to the AARP’splanning guide titled “Prepare to Care,”it is crucial to have the “conversation” ina way that allows everyone to feel re-spected and heard. Ask neutral ques-tions and leave preconceived notions at

the door. A few examples from theAARP guide: 1. “Dad, I just wanted to have a talkabout what you want. Let’s just startwith what is important to you.” 2. “Mom, have you thought about whatyou want to do if you needed morehelp?” 3. “I know this isn’t fun to think or talkabout, but I really want to know what’simportant to you. I’m going to do thesame thing for myself.” Assemble your team. Next youneed to assemble your “team.” Theseare the family members who are willingto participate in a caregiving plan.Someone should serve as the leader orpoint person because it is easy forthings to fall through the cracks in apurely committee style. At this point you should be consider-ing your own role. If you are luckyenough to have enough family membersto approach caregiving as a team, youstill need to honestly assess your owncapabilities and needs. And if you aren’t

Are You Prepared to be a Caregiver for Your Parents?

We all know defined benefit pensionplans are nearing extinction, at least inthe private sector. Private industry em-ployees with defined benefit plans havedecreased from 35% in 1990 to 18% in2011 and experts expect that number tocontinue to decline. In an effort to reduce expenses, com-panies have increasingly replaced de-fined benefit plans with definedcontribution plans like 401(k) plans.This has shifted the burden of saving forretirement from the employer to theemployee, who could in turn make morepersonalized decisions about fundinglevels and investment choices. Forthose disciplined enough to fully fund a

defined contribution plan and carefullyselect investment models, this changehas likely been beneficial. While there are pros and cons to bothtypes of plans, one of the most attractivefeatures of defined benefit plans was thelifetime of income that a worker couldplan and count on. Many of us stilldesire that feature, but how can we cre-ate such an income stream ourselveswithout a defined benefit plan? Enter the annuity. People are afraid ofoutliving their money and annuitieshelp conquer that fear by providing out-come they can’t outlive. There areannuities for virtually every scenario –

Announcements

Our FFA family recently experi-enced a few changes:

Ann Swain decided to retire!After 21 years in a prominent role,Ann wanted to spend more timewith her extended family andfriends. She plans on a relaxingsummer at the lake and more trav-eling with her husband. Her lastwork day was May 26 and weenjoyed a dinner celebration onJune 1. Please call Rachael Als-dorf at x207 to schedule futureappointments with Jeff or Justin.

Lynda Hickey, whom you mayknow from our Money Manage-ment program, found her dreamjob in a school setting. She spent20 years with us and we wish herwell! Devin Buckley, also a long-term FFA employee, has steppedinto that role and can be reachedat x216.

We hired Tricia Colleran as ourreceptionist/office assistant in ear-ly May. She’s busy learning aboutour office and looks forward tomeeting you at your next appoint-ment. Tricia has many years offinancial services experience andis making a smooth transition.

Alzheimer’s DiagnosisJeff’s Market WatchMedicare Advantage PlansTransfer of AssetsNewlywed ChecklistSummer SectionTax ReportPool OwnershipJustin’s Corner

Information for your financial life

PerspectivesFirst Financial Associates Quarterly Newsletter - Summer 2016

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Inside this issue:


Summer 2016Perspectives - Page 2

Alzheimer’s Diagnosis and Financial Planning

According to the Alzheimer’s Associa-tion, every 67 seconds someone in theUnited States develops Alzheimer’s dis-ease. In 2015, the cost was $226 billionto treat dementia; by 2050, it is estimat-ed that the cost will top $1.1 trillion. A diagnosis of Alzheimer’s or otherprogressive dementia disorder canchange your life plans in an instant.Most of us are ill-prepared for this orany sudden tragedy. If your loved onehas been diagnosed, your first thoughtis to explore all manner of treatmentoptions, including how to pay for theneed for increasing care. But beforetheir judgement becomes too impaired,address your loved one’s individual fi-nances as soon as possible since finan-cial acumen is often one of the firstskills to go. Although these tips were written fordealing with the onset of Alzheimer’s,many are also excellent suggestions forevery family faced with aging lovedones:

First and foremost, make sureyou have all documents in order tomake legal decisions for the patientbefore their cognitive functions slip.These documents include Powers of At-torney, guardian arrangements, and ad-vance directives. Most forms ofdementia are progressive, so as timepasses this person will have difficultywith judgement and logic. They willalso eventually be unable to create orchange legal documents such as willsand trusts. Make sure these documentsare in good order now to carry out theirfinal wishes later. As soon as possible, make a com-plete list of all financial accounts,bank accounts, household bills,insurance and other medical poli-cies, pension and Social Securityaccounts so that you have a clear pic-ture of who is responsible for what andthe sources of income. There is a handyLegal and Financial Worksheet on theAlzheimer’s website (www.alz.org) tohelp you get organized. If your lovedone is solely responsible for any bankaccounts or on-line bill payments, dis-cuss becoming a joint owner or assumethe accounts yourself.

Check the ownership and benefi-ciary listings on all accounts,plans and policies. Identify any po-tential issues that should be correctedbefore your family member’s awarenessbecomes limited.

Determine the individual’s pass-words and PINs for computers, on-line accounts, phones, etc., so that youcan continue access to important infor-mation. Oftentimes, one person in ahousehold is responsible for the onlineaccounts and passwords so this area willbe difficult to navigate without someadvanced preparation.

Make contact with care provid-ers – medical, professional and finan-cial. The Alzheimer’s Association’swebsite is an excellent source for help:www.communityresourcefinder.org.Get educated on how the Medicare andMedicaid rules will affect your choicesfor care. Contact your financial profes-sional to ensure that your assets arestructured for the least disruption. Thismay help alleviate unexpected tax con-sequences or income stream issues asassets are utilized. Those with compli-cated estates may also consider contact-ing an elder law attorney who can workwith your financial planner to help nav-igate the options to pay for extendedcare. A little hard work now can reap greatrewards if and when you or a loved oneis diagnosed with a debilitating disease.Make a promise to start organizing yourassets, accounts, and critical informa-tion on the next rainy day.

Finally, for caretakers it’s impor-tant to have a coping strategy foryourself. No one should provide carealone and not everyone is prepared toprovide care at the required levels (seeAre You Prepared to be a Caregiv-er for Your Parents on page 1). Seekhelp through your family, church,neighbors, doctors, and friends to en-sure that you don’t become over-whelmed. Although this time can be extremelyunsettling, preparation can help yourloved one fully live each day and shareevery possible moment with you.

Keeping SocialSecurity in the Loop

While you can get a lot of informa-tion from Social Security throughtheir website or publications, keep inmind that in many cases the SocialSecurity Administration may be in thedark about your situation. This couldcause you to leave money on thetable. A recent FinancialPlanning articledescribed a situation where a wom-an, age 68, hadn’t filed for spousalbenefits even though she has beeneligible to do so since reaching fullretirement at age 66. She had beenunder the impression that if she start-ed collecting that spousal benefit itwould have affected her ability togrow her own benefit until age 70.But instead she could have filed a“restricted application” at 66, collect-ed spousal benefits until 70, and thenstart her own benefit that had grownwhile she waited. As we mentioned in our last news-letter, Congress recently changedthe rules for different claiming strate-gies. Filing a restricted spousal ben-efit application is still allowed foranyone who reached their 62nd birth-day by December 31, 2015. In that woman’s situation she wasable to apply for up to six months ofmissed benefits, which she receivedas a lump sum in addition to her newspousal benefit payments. Missing potential spousal benefitsare just one example of how SocialSecurity could be unaware of what isbest for you. If you are divorced andhad been married for more than tenyears, have not remarried, and bothyou and your ex-spouse are at leastage 62, you could be collecting aspousal benefit. In some cases thatbenefit could be higher than yourown. Informing Social Security of yoursituation can make a big difference inyour benefits, so don’t wait and hopethat you are getting what you de-serve, but rather contact Social Se-curity and fill in the blanks.


Summer 2016Perspectives - Page 3

Jeff’s Market Watch: A Cautious Near-Term Outlook

2016 is flying byand the year is al-ready half over.As I look ahead tothe rest of 2016,and in particularthe next fewmonths, I have afew concerns:

1. BREXIT- OnJune 23rd citizens of the U.K. will voteon whether or not to remain part of theEuropean Union. This is basically anon-event if they elect to remain, but ifthe British public votes to leave it willhave far-reaching implications. Onlinebetting markets give the chances of aBrexit about 1 in 3 by 2017, so it appearsthat the "stay in the EU" vote is going tonarrowly win. This is the result wewant, as the markets do not like uncer-tainty, and a "leave the EU" vote wouldcreate a good deal of just that.

2. U.S. Presidential Election- Ac-cording to the same online betting mar-ket - predictit.org - Hillary is about 7:1likely to become the Democratic nomi-nee and Democrats are about 3:2 to winthe White House this fall. Key statesappear to be the usual suspects: Florida,Ohio, and Pennsylvania, but of specialnote is normally partisan states like Ar-izona, Utah, and New Jersey appear (al-beit based on limited polling) to beup-for-grabs as well. National pollingresults between Clinton and Trumphave recently tightened, and for as longas the race remains in doubt, that willlikely not help our stock market ad-vance.

3. Stock Market- I feel better aboutthe stock market this fall than its pros-pects between now and August. We areat about 2,100 on the S & P 500 as Iwrite this update - the all-time high forthe S & P 500 is 2,134. A fairly well-defined channel between approximately1,810 and 2,100 has developed over thepast two years, during which time, onnet, there has been very little move-ment. I feel like stocks will either shakeout strongly to the upside - another leg

of strength, as it were - or else we willebb back off of 2,100 down below 2,000or even 1,900 in the coming months.Due to the time of year and all the vari-ous uncertainties in the air - not to men-tion positive but mediocre earnings forUS companies broadly - I think a 5% to10% downtick followed thereafter by aresumption to the upside is likely. Depending on the model or invest-ment objectives, I am either endeavor-ing to sidestep this giveback or in othercases we will just ride the rollercoasterand hope for the best heading into 2017.I do not think the stock market is "bro-ken," nor do I feel we are on the preci-pice of a lasting downdraft. I vastlyprefer value stocks over growth stocks,incidentally, and that preference is re-flected across our holdings where possi-ble.

4. Federal Reserve- The recent jobsreport was abysmal - the fewest jobswere added in a month domesticallysince May 2010. While this number iscertainly subject to a future upward re-vision, it gives further credence to mycontinuing expectation that the Fed willnot raise rates at their June 14-15thmeeting. I believe it is more likely that the Fedraises rates a quarter of a point at theirlate July meeting, which will also conve-niently occur after the BREXIT vote(mentioned above), as opposed to theJune meeting just a week before thatvote. The next two meetings after Julyare September 20-21 and then Novem-ber 1-2, and those dates on the calendarare too close to our Presidential electionto likely see a rate increase (unless theeconomy is really heating up, which isunlikely). December 13-14 or the firstmeeting of 2017 would then be on thetable for rate hike #3 in the cycle, in myopinion.

5. Bond Market- What the Fed doesor does not do is irrelevant in a vacuum- all that really matters is how bondsreact. The US yield curve has been flat-tening dramatically over the past fewquarters. What that means is thatshort-term interest rates have increased

somewhat while long-term interestrates have stayed steady or even de-clined. We do NOT want to see an envi-ronment where short-term rates meetor exceed long-term rates- that basicallyalways results in a recession. I continue to expect 10-year ratesaround the world to converge. Pleasenote that the following countries areamong a group of nations with rateshigher than ours domestically: Greece,Portugal, Brazil, Mexico, Australia, NewZealand, India, Singapore. Nationswith rates well-below ours: Japan,France, Germany, UK, Canada, Italy,Spain, Netherlands. Within which ofthese two lists do we find more of oureconomic peers and friends?

6. Gold- At least weekly this topiccomes up with clients: "Should I be buy-ing gold? Is gold a good investment?"It is true that the gold price in dollarsand especially gold and mining-relatedstocks have done very well thus far in2016. But gold has a very long priceseries that's readily available online, solet's look back a bit. Since June 1916gold has made an average of 1.05% peryear. Since June 1966, it has made3.15% on average. Since the month ofmy birth (September 1978) it has madeabout 1.27% per year. No matter whatlong-term time series you pick, overtime, here is the descending order ofasset classes, with inflation thrown inthe mix: Stocks, bonds, inflation, cash,gold. Over the coming decades I wouldprobably rate them stocks, inflation,bonds, gold, cash, but that's just be-cause of our current very low-interestrate environment. Gold is not a long-term investment.

I will continue to monitor each of thesesituations as well as any other factorsthat affect investments and the markets.In the meantime, if you would like me toreview your accounts, discuss 401k in-vestment or allocation options, or meetwith a friend or family member in areferral situation, please contact me atyour convenience to set up an appoint-ment. I hope each one of you has aterrific summer!

Jeffrey B. Snyder, CFP®President

Perspectives - Page 4


Summer 2016

Let the Summer Rivalries Begin!

Despite reductions in payments toinsurance companies under the Afford-able Care Act, Medicare Advantageplans are more popular than ever andcomprise 31% of all Medicare enrollees. Medicare Advantage plans (otherwiseknown as Medicare Part C) are requiredby law to provide at a minimum thesame benefits of original Medicare, butare instead administered by privatehealth insurance companies. When youenroll in a Medicare Advantage plan,the government agrees to pay that in-surance company a set subsidy and aslong as the plan offers at least the samebenefits as original Medicare. However,the company is free to offer other bene-

fits at different monthly premiums. When the Affordable Care Act passedin 2010 it included a cut to those subsi-dy payments to insurance companies.Many experts believed these planswould become less economically feasi-ble for insurance companies to providecoverage and therefore would decreasein popularity. Instead, according to theKaiser Foundation, enrollment has in-creased from 11.1 million individuals in2010 to 17.6 million in 2016. Withinthose 17.6 million plans, 64% wereHMO plans, 23% were local PPO plans,and 7% were regional PPO plans (PPOplans offer more flexibility to see doc-tors outside of a company’s network).

Medicare Advantage Plan Enrollment Increases

Who couldn’t use a few tricks tomake summer a little easier? Hereare some of our favorites from thestaff and websites such as twisted-sifter, boredpanda and Pinterest:

• Hang all your tank tops on onehanger by clipping plastic showercurtain rings to your hanger first,then hang tops on each ring.

• Freeze leftover coffee into cubes soyour next iced coffee doesn’t getwatered down.

• Mix aloe vera and a little water andplace in ice cube tray to freeze –instant sunburn relief!

• Push a straw from the bottom of astrawberry to the top to quickly re-move the stem.

• Push a small bathroom cup or cup-cake liner over the bottom of an icecream stick for no-drip eating.

• Roll chip bag inside itself from thebottom up to push the chips to thetop for an easy stand-up grazingbowl.

• When camping, place toilet paperroll in coffee can to keep supply dry.

• Freeze grapes and then add toglasses to keep wine chilled.

• Need a quick cold beer? Wrap wetpaper towel around the bottle andput in freezer for 15 minutes.

• Put ice pops in a tall cup beforefreezing so cutting off the top later isno-mess!

• Grilling every night? Put condi-ments on a Lazy Susan or in smallcontainer with low sides and leave inyour fridge for one-step service andcleanup.

• Use Orajel to take the sting out ofinsect bites.

• Bring zipper style sandwich bags tothe beach to keep sand off yourphones.

Summer Life Hacks

A fight is looming on Capitol Hill be-tween Congress and the Social SecurityAdministration (SSA) over issues with-in its disability benefits program andhow appeals are processed. The Senate Homeland Security andGovernmental Affairs Subcommittee onRegulatory Affairs and Federal Man-agement recently held a hearing to dis-cuss why despite increased funds fromCongress, the SSA has failed to hire suf-ficient numbers of administrative lawjudges. In fact, in their effort to reducewait times for appeals, the SSA is in-stead proposing to divert more cases

away from administrative law judgesand towards attorney examiners, whoare regular employees of the SSA, aswell as federal administrative appealsjudges. Why does this matter? Administrativelaw judges are independent and are animportant part of the due process af-forded to people appealing decisions bySSA. Critics fear that individuals will bedeprived of their right to a decision byan independent judge free of agencyinfluence as mandated by the Adminis-trative Procedure Act.

Social Security Appeals Process Controversy



Summer 2016

Missed a Bill Payment? Don’t Panic and Follow These Steps

Even the most responsible among uscan miss a bill payment. Maybe it wasburied in a pile of papers or you justplain forgot, but here are a few things tokeep in mind before you freak out: While you may be subject to a late feeor an increase in an interest rate, youcannot be reported to the credit bu-reaus until your payment is 30 dayspast due (180 days for a medical debt). At this point you can just accept yourfate, but if you have a good history ofpaying your bills on time with thisparticular creditor it doesn’t hurt togive a call and simply ask for forgive-ness. But you need to address theissue before it is 30 days past due, orelse your credit report will be dingedregardless (and it will stay on there forseven year from the date the accountwent into default). Sometimes a cred-itor will be willing to work out an in-stallment plan but you will only find outif you inquire, so don’t be shy. If your bill is REALLY far past due,then you will likely be contacted by adebt collector. Debt collectors either

charge a large commission to the credi-tor on any money they collect, or theybuy the debts outright from the creditorand keep everything they collect. Eitherway, they are required to provide writ-ten notice to you and you have 30 daysfrom the time you receive the notice to

dispute the debt. Debt collectors arenot allowed to contact you before 8 A.M.or past 9 P.M., use obscene language, orthreaten you with violence under TheFair Debt Collection Practices Act.

If your debt has gone to a debt collec-tor you should always make a settle-ment offer rather than pay in full(remember, either they bought the debtat a steep discount or they are earning acommission, either way they might bewilling to work out a deal).

Any settlements or payments to debtcollectors will be reflected on yourcredit record and will hurt your creditscore, so the best strategy is always topay your debt in full before the origi-nal 30 days past due expires. Finally, while there are sometimesstatutes of limitations that restricthow long a creditor can use the courtsto force you to pay an unpaid debt (sixyears in CT), there is no statute oflimitations on debt itself. That meanswith old debts, even if a creditor can’tsue you for the amount owed, they canstill call you, write letters, and do any-

thing within their power to try to getyou to pay. So while we all make mis-takes and sometimes miss paying a bill,the quicker you address it, the better offyou and your credit will be.

When you set up an IRA account youare required to specify a beneficiary,therefore easing the transfer of assetsin the event of your death. Your assetswill bypass probate which speeds upthe transfer process and lowers ex-penses. If your assets are held withinan annuity you already named benefi-ciaries as well (but don’t forget tochange beneficiaries as your lifechanges – new children, new spouses,etc.). But what about your non-quali-fied assets in brokerage accounts? Unless you take preventative steps,your non-qualified assets may end upin probate even if you thought younamed beneficiaries. Make thingseasier for your beneficiaries by choos-ing one of the following options foraccount ownership: Trust accounts: A trust generallyallows assets to avoid probate withinthe terms of the trust. Make sure wehave a copy of the trust agreement.

Joint Tenancy With Rights of Sur-vivorship (JTWROS): Each party hasequal rights to the account’s assets.For assets held by a husband andwife, this is the account type we typi-cally use. When either the husband orwife dies, the assets pass on to thespouse without probate. Transfer On Death (TOD) plans:Transfer on death plans are gainingpopularity and should be consideredby anyone who has non-qualified as-sets in a non-trust or non-JTWROSaccount (such as an individual ac-count). A TOD allows you to name abeneficiary just like an IRA and avoidprobate. We would be more than hap-py to help you set up a TOD on any ofyour non-qualified brokerage accountswith us. Be careful, whether you are desig-nating a beneficiary on an IRA or aTOD, these designations supersedeyour will. So if your will says to split

brokerage assets evenly amongstthree children, if only one of them islisted on the TOD that child will receivethe assets and will not be legally re-quired to share them. It is worth re-examining all of yourbeneficiary designations and estateplanning documents every few yearsto make sure they are up-to-date andtruly reflect your wishes. Keep copiesof your statements and beneficiary pa-perwork in a convenient location foryour beneficiaries to help reduce con-fusion. If you are a beneficiary, always notifythe financial institution in a timely man-ner of an account holder’s death andtake care to provide requested docu-mentation in the format and mannerrequested (otherwise the process cantake a lot longer). Consult a financialadvisor to assess your assets and op-tions.

Avoiding Probate: Transfer on Death Plans



Summer 2016

As companies like Airbnb and Uberhave become household names manyretirees are learning how to benefitfrom the “sharing economy.” The sharing economy is based onthe premise that people can earn mon-ey off of their underutilized assets suchas a spare bedroom or a car. Airbnballows you to rent vacation homes,rooms, apartments, or homes frompeople who aren’t using them at thattime. Owners of these properties canmake additional income by monetizingempty space. For example, perhaps you have avacation property that you use asmuch as you can, but sometimesweeks go by without you there. You

could list your property on a site likeAirbnb for time periods you won’t bethere and make some additional in-come. Uber and its competitor Lyft allow youto provide rides to people in your sparetime for a fee. TaskRabbit allows youto hire yourself out for odd jobs.Skillshare allows you to teach onlineclasses. Many of these services have beencriticized for a lack of benefits (partici-pants are contract workers, not actual-ly employees of these companies) andthe lack of a career path. Those criti-cisms are less of a concern for olderworkers, in particular anyone olderthan 65 who receives Medicare. Also,

retirees tend to have many of theseextra assets or expertise to “share.” According to a report by Pricewater-houseCoopers, approximately 7% ofAmericans provide services in thesharing economy. A quarter of thosepeople are over age 55 and 16% areolder than 65. But those numbers areincreasing quickly – Airbnb said thenumber of hosts over the age of 60increased by 102% over the past year. As a contract worker you will havethe freedom of setting your own sched-ule. So if you are looking for someextra income and have either assets orexpertise to share, it is worth lookinginto the sharing economy.

Retirement and the Sharing Economy - Could it Work for You?

The honeymoon isover, the gifts havebeen opened, andthank-you notes areaddressed. Let’s getdown to business!

1. First, obtain sev-eral certified copiesof your marriagecertificate with the

raised seal. If you are changing yourname, various institutions will ask youto provide the certified copy of yourmarriage certificate along with otherlegal documents. 2. If one or both of you are moving,request a change of address from yourlocal Post Office. 3. For name changes, apply in personfor a corrected Social Security card. Youwill need your original birth certificateor passport, marriage certificate, driv-er’s license and potentially other docu-ments. Visit www.ssa.gov for moreinformation and the location of the clos-est SSA office. 4. Go to the Department of MotorVehicles for a new driver’s license. Dou-ble-check their website for the exactdocuments you’ll need before standingin line. Don’t forget to change youraddress if needed.

5. Visit your bank(s) to put yourmarried name on all your accounts –and strongly consider adding yourspouse for joint ownership purposes.You will also need to order new checksand credit cards. Your bank will want tosee your raised-seal marriage certifi-cate, new Social Security card, new driv-er’s license, etc., in order to makechanges. 6. Update your passport. Manymarried people ignore this step until aninternational trip has been booked.You can renew by mail if you have doc-umentation that you changed yourname legally via marriage. Go totravel.state.gov for more information. 7. Go to Human Resources at yourwork. You’ll need to change your pay-check, pension or 401k savings planname. Your wages and taxes may not bereported properly to the IRS on yourW2 if you skip this step. Revisit yourtax withholdings depending on your ex-pected IRS filing status. 8. Notify all other places that knowwho you are. This includes other creditcard companies, insurance companies(health and property), professionalmemberships, subscriptions, doctor’soffices, car leases, financial offices andinvestment companies. Don’t forget so-cial media sites!

9. Identify ownership and/or benefi-ciary changes on all insurance docu-ments, investment and retirementaccounts, and other titled assets such ashome and car(s). Visit a financial plan-ner for assistance and also get a referralfor an attorney to draw up a simple willto get you started. 10. Consult a tax professional to dis-cuss the IRS filing status for your indi-vidual circumstances. Make sure youfile a change of address form with theIRS if you have moved. 11. Prepare a list of all your assets anddebts to identify your true financial pic-ture. It might be a bit frightening afterthe expenses of your wedding, but beinghonest now will help your future finan-cial situation. Be honest about creditcard and other debt. 12. Make a detailed list of all your jointmonthly expenses – rent, utilities,cable/internet, phones, car payments,gas, groceries, entertainment, automat-ic deductions, etc. Start your new lifetogether with a realistic standard ofliving. Agree together on budget andspending limits. As always, find a wayto pay a little bit to yourselves first byslowly and systematically funding re-tirement vehicles. You will thank youryounger self as you approach retire-ment!

Checklist for Newlyweds - Tackling Name-Change Details and More



Summer 2016

The Broker by John Grisham

Summer to me means books.Through the 90’s I was a Stephen Kingsnob and barely read anything else –partly because of time and partly be-cause I don’t usually follow the herd. Ihad heard of John Grisham but had noidea that he wrote how I like to read. I’m a big movie buff, too, but hadnever seen a Grisham novel adaptedto the screen. Or so I thought. Brows-ing a thrift store last year, I saw a booktitled The Firm. I thought, “That’s fun-ny, that’s the same title of a movie I’veseen.” The entire shelf was dedicatedto Grisham books turned into movieslike The Pelican Brief, The Client, andRunaway Jury. John Grisham wroteall those? I purchased nine books andread two that first week. I’m currently plowing through TheBroker, a 2006 thriller about an unpop-ular out-going president who grants acontroversial last-minute pardon to a

Washington power broker serving along sentence in solitary. This brokermay have secret satellite surveillanceinformation that would hurt the UnitedStates. The plot reveals that the pow-ers behind the president only want thebroker pardoned so he can be assassi-nated by a foreign government such asRussia or China. This one hasn’t been made into amovie (I don’t think!), so I don’t knowhow it ends. I imagine it will be satisfy-ing, as most of his books are. I’mparticularly interested in Grisham’sslant on the political maneuvering be-tween the CIA and other governmentagencies. If you’re looking for a page-turning political thriller, give this Gr-isham guy a chance. - Colette

In A Sunburned Country by Bill Bryson

Since Colette already used up morethan her fair allocation of book review-ing space, I will keep my review brief.While I like to read lots of serious

books, in my mind a good summerread is light and makes you laugh outloud - if you agree, then you shouldread In A Sunburned Country. I hesitated to recommend this bookbecause I already wrote about anotherBryson book. But why should that stopme? This book is supremely entertain-ing, informative, and caused more thana few curious glances when I couldn’tstop giggling as I read. This book tracks Bryson’s travels toAustralia and follows his traditional pat-tern of providing the reader well–re-searched information and stories alongwith his own awkward experiences.While we learn about Australia’s manytreasures, we are also treated to Bry-son’s infatuation with the many waysthat you can die (of the ten deadliestsnakes in the world, all are found inAustralia for example). Read this book. You will learn some-thing new and your abs will get a work-out. That’s a summer read. - Justin

Summer Vacation Ideas - Toronto, Canada and Ocean Isle Beach, NC

Summer Reading Selections by Some Staff Members

Toronto is an excellent destinationfor concerts & festivals, sightseeing,shopping, and other outdoor activities.Sights should include the CN Tower, theRoyal Ontario Museum, the HockeyHall of Fame, Nathan Phillips Square,Kensington Market, St. Lawrence Mar-ket in Old Town, the Toronto Zoo, shop-ping at Yonge-Dundas Square, Brewery& Distillery Tours, and the beachesalong Lake Ontario. One of the most unique features toToronto is its Downtown UndergroundPedestrian Walkway – PATH. Visitorscan walk over 18 miles of safe and cli-mate-controlled routes to 1200 shopsand services, including the most popu-lar tourist destinations. Visitors canaccess PATH at more than 125 street-level locations and follow a color-codeddirectional system to your destination. Toronto is the fourth most populouscity in North America and is known forbeing very cosmopolitan and remark-ably clean. Superior public transporta-tion is an excellent choice for getting

around town. With more than 200 eth-nic groups, Toronto is culturally diversewith fantastic food destinations in manydistinct areas. They boast neighbor-hoods such as Greek Town, Little Italy,Koreatown, 3 Chinatowns, Little Iran,Little Portugal, and Little Polandamong many others. If you’re consider-ing a road trip to Niagara Falls, Torontois 80 miles away and worth the drive.The current exchange rate is $1.29 CDNfor each USD. Bring your passports! Ocean Isle Beach, NC - If you’reventuring south this summer, considera few nights in North Carolina’s Bruns-wick Islands area. These five barrierislands are connected by 45 miles ofbeautiful southern North Carolinacoastline. Each island offers uncrowdedbeaches, warm ocean swimming, andsmall town charm. Ocean Isle Beach ishome to nesting turtles from Maythrough August. Visitors can observethe hatchlings emerge from their nestsand dash to the ocean. There are freesummer concerts, numerous golf cours-

es, campgrounds, the Ingram Planetari-um, lighthouses, the Silver CoastWinery and much more. Accommoda-tions include a full service resort, sever-al inns and lots of vacation rentals suchas cottages and condos. Take a short drive north to Wilming-ton or south to Myrtle Beach and you’llhave even more unique activities foreveryone. In Wilmington, tour the Bat-tleship North Carolina, try the OldWilmington Ghost Walk, visit a railroadmuseum, and stroll the Carolina BeachBoardwalk. In Myrtle Beach, choosefrom Medieval Times Banquet, Ripley’sAquarium, minor league baseball, theSky Wheel, and the South Carolina CivilWar Museum. If you’re traveling later in the year, the36th Annual North Carolina Oyster Fes-tival will be held October 15-16, 2016 inOcean Isle Beach. Come see craft andfood vendors as well as the annualshucking championship and oyster stewcook-off.



Summer 2016

Consider Donating Your 2016RMD to Charity Congress finally made the law thatallows up to $100,000 of IRA money tobe donated directly to a charity tax-freepermanent. While you may not be in aposition to offer such a large gift, donat-ing your Required Minimum Distribu-tion (RMD) tax-free is worthconsidering. Beyond knowing that you helped aworthy cause and reduced your tax bill,an added benefit is that your RMD willnot be included in your adjusted grossincome. That can help avoid the Medi-care high-income surcharge or makeless of your Social Security benefits tax-able. Furthermore, this is an excellentway to make a tax-free charitable con-tribution even if you don’t itemize yourdeductions. To qualify, the RMD must be trans-ferred directly from your IRA to thecharity. Many companies are addingthis capability and procedures will dif-fer from company to company. Also, itis recommended that you reach out thecharity beforehand so that they willknow who the gift is coming from and toensure that they will give you the properdocumentation for your records.

The Rise of Donor-Advised Funds Donor-advised funds (DAFs) allow adonor to give cash, securities, and otherproperty to a charitable fund, take theimmediate deduction, and yet retain theright to “advise” when and where thosefunds will be distributed in the future. For example, you could name youraccount at the sponsor fund the SmithFamily Fund and donate some cash andsome stock that you’ve held for a long

First Financial Associates’

Tax Report

First Financial Associates, Jeff Snyder,and Justin Kelleher do not provide taxadvice and material within this newslet-ter is provided for informational purpos-es only. Please consult a taxprofessional.

time. For the cash you’d instantly get adeduction up to 50% of your AGI) andby directly donating the stock youwould generally avoid capital gains tax-es and gain a deduction based on thestock’s full fair-market value (up to 30%of your AGI). Then you could “advise”how those funds should be invested(sell the stock and invest in various mu-tual funds perhaps?). Then you can“advise” which qualified charitable or-ganizations will receive distributions,and when, while the funds within theaccount potentially grow tax-free. Critics are concerned about the lack ofpayout requirements (currently thereare no requirements that money be dis-tributed from the fund by any particulardate) and the fees paid to sponsoringorganizations to administer the ac-counts (which explains why financialinstitutions are becoming the biggestplayers in the space). But from the do-nor’s perspective, DAFs are cheaperand easier to administer than a privatefoundation, while offering similar flexi-bilities, tax benefits, and legacy bene-fits. No wonder DAFs are thefastest-growing charitable-giving vehi-cle in the US.

Deducting a Working Vacation If you’re taking the family with you ona combination business trip/family va-cation, keep these tax tips in mind:

Transportation - if you are renting acar, the full cost will be deductible. Ifyou are flying, you can only deduct thecost of your own ticket, not other familymembers.

Hotel - If your family is sharing a roomthen the cost is deductible. However, ifyou have more than one room, or if youhad to upgrade your room due to yourfamily, those added costs are not de-ductible.

Meals - You can deduct 50% of yourmeals but not your family’s.

Business Expenses - added businessexpenses like internet at the hotel ordry-cleaning for business purposes aredeductible.

Keep good records and track all yourexpenses. You won’t be able to fullywrite off your trip, but your ability totake these deductions will help reducethe costs of a fun, yet productive, familyvacation.



Summer 2016

We all know that swimming poolsare “expensive,” yet many of us eitherhave one, or (more likely) want one.When trying to figure out if owning aswimming pool is worth it for you, it isimportant to consider all the costs. If you don’t already own a pool thenyou’re likely in for some sticker shock:according to PK Data the average in-ground swimming pool installation cost$39,084 in 2014. Various pool compa-nies online will warn you to expect anin-ground installation to run anywherebetween $30,000 to $70,000 after youinclude the costs of patio/decking,electrical, landscaping and grading,and accessories. Above-ground poolsare considerably less expensive,Fixr.com lists a range of $6,000 -$8,000. At this point it is worth mentioningthat a swimming pool will not usuallyincrease the value of your home any-where near the cost of the pool instal-lation. If you live in a southern climate,pools are far more common and aretypically expected by many buyers, sothe pool will not necessarily add value.In areas like Connecticut, pool sea-sons are far shorter and less predict-

able, and many buyers see a pool asa potential headache rather than afeature. So while your property valuemay increase somewhat from a poolinstallation, you are likely to spend farmore on the installation than any fi-nancial benefit you’ll see when yousell your home. Now that you have a swimming pool,what can you expect for ongoingcosts? Estimates vary quite a bit de-pending on what part of the country,how long the pool is open, and ofcourse electricity costs, but expect topay several hundred dollars a monthin electricity, chemical, and regularmaintenance costs. Things get moreexpensive if you decide to have some-one else clean your pool for you, but agood middle ground is to pay up frontfor a robotic pool cleaner to cut downon the amount of cleaning you have todo yourself. Don’t forget that home insurancecosts will increase. Also consider aliability umbrella policy to increaseyour coverage. Perhaps not too bad? Keep in mindthat those estimates do not includereplacing parts and equipment over

time, which is a certainty. Pumps onlylast a certain number of years, PVCpiping will often need replacing, vinyllinings, thermal covers, etc. While youwon’t have to replace any of theseitems every year, the clock will alwaysbe ticking until the next purchase. From a purely financial perspectivea swimming pool is a hard sell. Theycertainly aren’t a good investment insimple dollars and cents. But thatdoesn’t mean they aren’t worth it. Aswimming pool is more of an invest-ment in a lifestyle. Some familiesspend many summer hours togetherwith the swimming pool as the center-piece of their gatherings. Friends andfamily come by to spend quality timewith you (easy for them, they aren’tpaying for it - so they really like you!),so a swimming pool can be a betterinvestment for some people than trav-eling or eating out. Oftentimes, youcan’t put a price on the social aspect. When evaluating the swimming pooldecision, be honest with yourself, armyourself with knowledge of the truecosts, and make the right decision foryou and your family.

Pool Ownership Pros and Cons

Pet Ownership and Verification of Veterinary Care According to the American Pet Prod-ucts Association (APPA), total pet in-dustry expenditures reached $60.59billion in 2015. Americans might tight-en their belts in a tough economy, butpet care is practically an inflation-proofindustry. In fact, Americans spent anestimated $15.73 billion on veterinarycare alone in 2015. One way to makesure you are getting bang for your buckis to know what services you pay for atthe vet’s office and who is performingexams and procedures. Not everyone wearing a stethoscope atyour doctor’s office is an MD, so makesure you know the credentials of theperson in the white coat at your veteri-narian’s office. As part of a thoroughreview of your chosen animal practice,it is important to double-check with theDepartment of Public Health to makesure the person treating your pet is li-

censed to do what they are doing. Notevery worker in a vet’s office must belicensed, but those who are should havetheir credentials displayed in the officefor your reference and to avoid confu-sion. In Connecticut, go to www.ct.gov/dphand select ‘Verify a License,’ then select‘Healthcare and Environmental HealthPractitioners.’ Click ‘Look up a License’and enter the individual’s name. Thiswill confirm that your veterinarian is ingood standing with the state and has nocomplaints or judgements. Vet practices are hiring Vet Technolo-gists (who have earned a Bachelor’s De-gree) or Vet Technicians (AssociatesDegree) at a high rate. Depending onstate regulations, most routine examsand pet care services can be provided bya qualified technician, but you shouldverify that a licensed DVM is perform-

ing procedures such as diagnosing, solosurgery and prescribing medicine. It’sworth a check, especially at smaller of-fices and older private practices. If you are considering adding a pet toyour family, research several practicesand vets before choosing an office.Don’t make a decision based on examprices only. You’ll want to know howthe practice handles specialist referrals,surgery recommendations, diagnostics(in-house or off-site), and paymentplans. Observe the staff as they interactwith current patients, check the waitingarea for pet safety, tour the kennels andovernight facility (if applicable), and re-quest a meeting with at least one staffveterinarian. Finally, check their policyfor emergency services – do they pro-vide 24-hour coverage and advice orwill you be directed to a vet hospitalwhere services come at a premium price.



Summer 2016

do you want to start your incomestream now or do you want to start itlater? Do you want a fixed rate of returnor do you want to invest the money inequity or bond subaccounts? Do youwant to truly annuitize your funds andgive up control, or would you ratherretain control over your money as youbuild towards a guaranteed withdrawalbenefit? What about death benefits?Each one of these questions can helpidentify the right feature or annuity foryou, but since each answer involves atradeoff or cost, an experienced eye forcost-benefit analysis is imperative.

Our independence empowers us tosurvey the full spectrum of benefits andannuity products in the marketplace tofind the best solution for you. We areproud of our success in identifying best-of-breed annuity solutions and sharingthose results with clients.

Of course, the most important ques-tion is whether or not an annuity makessense for you. If it does, what type ofannuity and how it fits into your overallretirement plan are questions that wewill explore with you. There are manypositive benefits to annuities, but theycan be a bit confusing. Let us be yourguide.

lucky enough to have a team and planon being the primary caregiver, then itis even more important for you to askyourself: 1. Can I manage these services myself? 2. Am I capable of asking for help andtaking breaks? 3. How will caregiving affect both myphysical and mental health? 4. How will caregiving affect my job ortime with my family? Assess needs. At this point it iscrucial to fully assess the caregivingneeds. Part of this process will requireyou to compile all of your parents’ im-portant personal information includingdocuments such as wills, insurance pol-icies, or trusts. Then you should assessand categorize the expected needs like: 1. General home and maintenancetasks such home repairs, housekeeping,grocery shopping, etc. 2. Financial affairs like paying bills,maintaining financial records, and su-pervising benefit programs. 3. Transportation needs. 4. Personal care needs like bathing,coordinating medical visits, and rides tothe hair stylist. Investigate benefits and resourc-es. Look into the many resources andprograms that exist to help meet manyof these needs. There are federal, state,local, and private organizations who canoffer assistance in various ways. Also,work with groups like the AARP andtheir Benefits Outreach Program to en-sure that you aren’t leaving any poten-

tial public benefits on the table.According to the AARP, millions of old-er Americans are eligible for these ben-efits but only about half take advantageof them. Create a plan. Once you have com-piled your parents’ list of needs, whatresources exist to help and how, andwho among your family will help, youare ready to make a plan. You can neverplan for everything, but getting every-one together face-to-face to discuss howto best satisfy your parents’ needs willclear the air and cut down on confusion. Be sure to designate a point person foreach area. Write up a brief summary sothat everyone is on the same page (peo-ple remember conversations different-ly). Inevitably the plan will have to change,but by going through this process youstand the best chance of ensuring yourparents desires and needs are heard andmet. Involving other family membersand loved ones helps ensure that youaren’t taking on more than you have to- even though you love your parents youdon’t need to be a martyr. If your care-giver situation involves a diagnosis ofAlzheimer’s or other progressive de-mentia disease, please read Alzheim-er’s Diagnosis and FinancialPlanning on page 2. Don’t get lost in the process. Take thetime to look for outside resources andprograms. This will help you and yourfamily balance your time and reduce thefinancial impact of caregiving.

Everyone wants to spend their hard-earned money on things they findworthwhile. But what one personfinds worthwhile can differ greatlyfrom the next person. Here are a fewthoughts to consider when attemptingto get the best value for your moneyin any purchase: How often will you use it? Weoften focus on the actual sticker pricerather than the cost per use. Are a$25 pair of sneakers a better valuethan a $100 pair? Not necessarily ifyou wear sneakers often. Converse-ly, why pay more for a “better” item ifyou’re only going to use it once ortwice? On a related note, prioritize quali-ty over price for items you will usemore than a few times. Researchingprices on the Internet has made it veryeasy to find the lowest price for anyparticular item, but sometimes welose sight of the importance of quality.How great of a deal is it if you have tokeep buying replacements? How much of your buying deci-sion is based on “fashion?” If fash-ion is important to you then learn howto limit its impact. Merely recognizingthat fashions come and go and thatoften something will be out of fashionbefore the end of its useful life canhelp you curtail some wasteful spend-ing when evaluating purchases. Look at total cost of ownership.Some purchasing decisions involveproducts that have extra costs like ahome or a car. Instead of focusingpurely on the mortgage or monthly carpayment, take into consideration oth-er costs that will surely affect yourbottom line. Sometimes once youlook at the total cost of ownership,that house or car just doesn’t seem tobe worth it anymore.

Why are you buying this item?Are you trying to keep pace withneighbors and friends? Things don’thave much value if you don’t reallywant them or can live happily withoutthem. Also consider if you are buyingfrom emotion. People often spendmoney to feel better rather than dealwith what isn’t working in their lives.

Determining Value



Summer 2016

It all started withsome free bricks.Technically theywere “pavers,”which I soonlearned look likebricks but are de-signed for walk-ways or patios.Whatever you call

them, they sparkeda multi-year home improvement jour-ney with quite a few lessons learned. One day Devin asked me if I wanted alarge pile of pavers that were left overfrom his own project. I immediatelysaid yes - like many of you I have ahard time turning down somethingthat is both free and useful. Immedi-ately I thought about the patio be-hind my house and how I couldimprove it with these free pavers! Soafter several trips back and forthwith my wife’s SUV, I had a nicestack of pavers sitting at the end ofmy driveway, ready to be installed. As I started to plan out the project,a new idea sprouted: what if I couldbuild a new walkway to my house?The existing walkway was nice tolook at but was horribly impractical.When we bought the house it wasdefinitely part of the curb appeal, butafter years of walking up and down itand shoveling it in the winter, I hadslowly grown to hate it. The patio couldwait. Replacing this walkway with mynew free pavers was more important. Beyond my free pavers and a desire tosolve my “problem,” I really didn’t know

where to start. I had all sorts of ideasrattling around so I started talking tofriends with landscaping experience,reading home improvement books, andthen spending a lot of time researchingonline. Not only that, whenever I trav-eled anywhere I couldn’t stop staring atpeople’s walkways, looking for that littlepiece of inspiration that would make theproject come together how I wanted it.Hopefully I didn’t alarm anyone as Islowed my car to study how their walk-way contoured with the land and atwhat pitch! I won’t bore you with the details, but itis a familiar story: I started out with a

vision of how to tackle the project butafter consulting experts, I discoveredthat I shouldn’t do it that way. Then Icreated another plan, but soon learnedthat I’d have to make further changes.Of course a lot of these changes oc-curred after I had already started theproject. Then I would add something

only to find out that now I needed toadd something else – one thing wouldalways lead to another. If you think about it, this project is justlike so many of our goals and plans. Westart out thinking we have somethingfigured out only to discover out thatreality doesn’t always want to cooper-ate. Like John Lennon said in the song“Beautiful Boy” – life is what happens toyou when you’re busy making otherplans. In our profession we see it all the time:clients will have goals, perhaps they hada recent windfall or inheritance (like myfree bricks), and you start to dream and

plan. But it’s always helpful to havea flexible plan and someone to ad-vise you. Without the guidance of afew friends with landscaping orbuilding expertise, I would havemade some major and expensivemistakes along the way. And that’swith a project that was more for“fun” rather than something trulyimportant to my life. That’s why we encourage everyoneto have a plan, regardless of whatstage you are in your financial life.Newlyweds looking to start a familymight have different circumstancesor goals than the couple nearing re-

tirement, but in either case the essentialpiece is the flexible plan and expertswho help you adapt. If you don’t al-ready have a plan with us, please con-sider one. And if you know someonewho could really use one, regardless ofhow much money they have saved up,send them our way. Just like my free

bricks, it costs nothing to meet. I’m just about done with theproject. The last steps (bad pun)were creating some new flowerbeds and planting grass. Eventhat has been a learning experi-ence – every day I come home toinspect my new grass. Are thereany new shoots? Why it isn’tgrowing in evenly? In all hones-ty this has been the most frus-trating part of the project. Afterall I’ve done, how is it possiblethat I can’t even grow grass cor-rectly? I guess it is time to findsomeone who knows more thanme and adjust the plan…

Plans Change, and There’s No Such Thing as Free Bricks

About First Financial AssociatesFirst Financial Associates is an independent retirement planning firm located in Glastonbury,CT. We help people plan their financial lives and work with them every step of the way. Ifyou are interested in learning more about us or how to set up an appointment, please visitour website.

Jeffrey B. Snyder, CFP® President

Justin Kelleher Financial Advisor Tricia Colleran Receptionist

Rachael Alsdorf Underwriting Devin Buckley Underwriting

Colette Weber Executive Assistant Avis Richardson Office Manager

P: (860) 657-3000 First Financial Associates

F: (860) 659-2956 180 Glastonbury Blvd, Suite 104

http://firstfinancialassociatesllc.com/ Glastonbury, CT 06033

Justin’s Corner

My windfall of free bricks in my driveway.

180 Glastonbury BlvdSuite 104Glastonbury, CT 06033

Documents

Newsletter June - 2016 NEW FORMAT€¦ · Next you need to assemble your “team.” These are the family members who are willing to participate in a caregiving plan. Someone should