Tax Reform Series: Changes to Charitable Giving and Deductions

Contributed by: Nick Defenthaler, CFP®

The Tax Cuts and Jobs Act (TCJA) is now officially law. We at The Center have written a series of blogs addressing some of the most notable changes resulting from this new legislation. Our goal is to be a resource to help you understand these changes and interpret how they may affect your own financial and tax planning efforts.

If you’ve heard the charitable deduction is going away under the Tax Cuts and Jobs Act of 2017, you are certainly not alone – this is a common misconception under our new tax code.  To be perfectly clear, gifts to charity are certainly still deductible!  However, depending on your own tax situation; your deduction may not provide any tax savings due to the dramatic increase in the standard deduction moving into 2018: 

Standard Deduction vs. Itemizing Deductions

Think of the standard deduction as the “freebie deduction” that our tax code provides us, regardless of our situation.  If you add up all of your eligible deductions (state and local tax, property tax, charitable donations, medical expenses, etc.) and the total happens to exceed the standard deduction, you itemize.  If they fall short, then you take the standard deduction.  Pretty simple, right?

With the standard deduction nearly doubling in size this year, many of us who have previously itemized deductions will no longer do so.  Let’s take a look at how this change could impact the tax benefit of your charitable donations:

Example

Below is a summary of Mark and Tina’s 2017 itemized deductions*:

• State and Local Taxes = $6,600

• Property Tax = $6,000

• Charitable Donations = $5,000

• Total = $17,600

Because the standard deduction was only $12,700 for married filers in 2017, Mark and Tina itemized their deductions.  However, the only reason why they were able to itemize was due to the $5,000 gift they made to charity.  If they didn’t proceed with their donation, they simply would have taken the standard deduction because their state and local tax along with property tax ended up being only $12,600 – $100 shy of standard deduction for 2017 ($12,700).  Their gift to charity created a tax savings for them because it went above and beyond the amount they would have received from the standard deduction!

For the sake of our example, let’s assume Mark and Tina had the same exact deductions in 2018.  It will now make more sense for them to take the much larger standard deduction of $24,000 because it exceeds the total of their itemized deductions by $6,400 ($24,000 – $17,600).  In this case, because they are taking the standard deduction, there was no direct “economic benefit” to their $5,000 charitable donation. 

*This is a hypothetical example for illustration purposes only. Actual investor results will vary.

Planning Strategies

Because many clients who previously itemized will now take the larger standard deduction, reaping the tax benefits for giving to charity will now require a higher level of planning.  For clients who are now taking the standard deduction who are charitably inclined, it could make sense to make larger gifts in one particular year to ensure your charitable deduction exceeds the now larger standard deduction. Or, if you’re over the age of 70 ½, the Qualified Charitable Distribution (QCD) could be a gifting strategy to explore. Of course, we would want to dig deeper into this strategy with you and your tax professional before providing any concrete recommendations. 

For most of us, the number one reason we give to charity is to support a cause that is near and dear to our heart.  However, as I always like to say, if we can gift in a tax efficient manner, it just means additional funds are available to share with the organizations you care deeply about instead of donating to Uncle Sam. 

Don’t hesitate to reach out to us for guidance surrounding your gifting strategy, we are here to help!

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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Check out our other Tax Reform articles:

Changes to Federal Income Tax Brackets

Changes to Standard Deduction, Personal Exemption, Misc. Deductions, and the Child Credit

Changes to Investments and the Financial Market

Changes to State and Local Tax Deduction

Changes to Mortgage Interest Deduction (including Home Equity Loans and LOC Implications)

Changes to Estate Tax Planning in 2018 and Beyond

Changes to Medical Deductions

Changes to Business & Corporate Tax, and Pass-Through Entities

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

 

Webinar in Review: Year-End Tax Planning

Contributed by: Nick Defenthaler, CFP®

On November 14th, Melissa Joy, CFP® and I hosted The Center’s annual Year-End Tax Planning Opportunities and Strategies webinar which continues to be one of our best attended discussions throughout the year.  In 2016, Melissa and I hosted the webinar two days after the presidential election and this year, the presentation was held several days after the latest GOP tax reform proposal.  Needless to say, it’s been a great chance for our team to share timely updates with clients and strategic partners! 

If you weren’t able to attend the webinar live, we’d encourage you to check out the recording below.  Here are a few key points and takeaways from our discussion:

Potential Tax Reform Highlights  

• Moving from seven tax brackets down to three or four: 12%, 25%, 35% and 39.6%

• Elimination or caps on popular deductions:  State and local taxes, medical expenses, student loan interest, mortgage deduction cap, property tax cap

• Larger standard deduction (almost doubling from $12,700 for married filers to $24,000)

• Repeal of Alternative Minimum Tax (AMT)

• Corporate tax reduction (moving down to 25%)

• Estate tax exemption (almost doubling from $5.5M to $11M, with the goal of repealing the estate tax completely within 6 years)

2018 Updates

• Social Security Cost of Living Adjustment (COLA), Medicare premium adjustments, retirement plan contribution and income limit adjustments, etc.)

Retirement Planning   

• Evaluate your savings rate moving into the new year and if you’re not maxing out your 401k ($18,500 or $24,500 if over the age of 50), consider increasing your savings percentage by 1% - 2% each year

• Work with your advisor to determine if the Traditional (pre-tax) or Roth (after-tax) retirement vehicles makes sense for your situation given your current and projected future tax bracket  

Charitable Giving

• Consider utilizing a Donor Advised Fund to gift appreciated securities from a brokerage account – allows you to take a tax deduction and also avoid paying capital gains tax

• Consider utilizing the Qualified Charitable Distribution (QCD) if you’re over the age of 70 ½ - allows you to gift funds directly to charity from your IRA

Investment Planning  

• Review your allocation before year end to see if your mix between stocks and bonds is appropriate for your situation

• Consider the asset location of your portfolio to potentially improve after-tax returns

• Consider proactive planning such as tax-loss harvesting

As mentioned during the webinar, don’t forget to check out our Year-End Planning Opportunities guide in the resources portion of our website.  This guide acts as a helpful tool to help organize your financial picture before year and also provides further insight on retirement planning strategies to consider as well as a detailed overview of proposed tax reform.  Please feel free to contact your financial planning team at The Center with any questions or concerns, we’re here to help.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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This information is being provided for educational purposes only and is not intended as specific tax or investment advice. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Our New Financial Planner: Bob Ingram

Contributed by: Nick Defenthaler, CFP®

The Center recently welcomed a new team member: Bob Ingram.  With nearly 15 years of experience in the profession, Bob is thrilled to join a team where he can collaborate with other professionals to further enhance his role as a financial planner. 

Prior to joining The Center, Bob helped clients achieve their financial goals at a large, national investment and financial planning firm. 

In addition to meeting with clients, Bob will be an active member within The Center’s Financial Planning Department.  If Bob looks familiar, it might be because you’ve seen him speak on various personal finance and investment related topics as the “Money Man” for Detroit’s WXYZ Channel 7. 

Bob is not only excited to join our team, but happy to be on yours as well.  Next time you’re in the office, stop by and say hi to our growing team!

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

This Just In: Cost of Living Adjustment

Contributed by: Nick Defenthaler, CFP®

In recent weeks, it was announced that monthly Social Security benefits for more than 66 million Americans will be increasing by 2% starting in January 2018.  Who doesn’t love a pay raise, right?  This cost of living adjustment (COLA for short) is the largest we’ve seen since 2012.  To put the 2% increase in perspective, 2017 benefits crept up by a measly 0.3% and 2016 offered no benefit increase at all. 

Unfortunately, as many can attest to who are still in the work force, your “raise” may be partially or fully wiped away due to the increase in cost for medical insurance through Medicare – enter the "hold harmless" provision.  Medicare premiums for 2018 will be announced later this year. 

If you’re like many, this will probably cause some frustration knowing your increase could very well be going right back out the door in the form of medical premiums.  However, it’s important to remember that Social Security is one of the only forms of guaranteed fixed income that will rise over the course of retirement.  For those lucky enough to still have access to a pension, it’s extremely rare to have a benefit that carries a COLA provision. 

While Social Security checks will be higher in 2018, so will the earnings wage base you pay into if you’re still working.  In 2017, the first $127,000 was subject to Social Security payroll tax (6.2% for employees and 6.2% for employers).  Moving into 2018, the new wage base grows to $128,700 a 1.3% increase.  This translates into an additional $105 in tax each year for those earning north of $128,700. 

Social Security plays a vital role for almost everyone’s financial game plan.  If you have questions about next year’s COLA or anything else related to your Social Security benefit, don’t hesitate to reach out to us.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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This information has been obtained from sources deemed to be reliable but its accuracy and completeness cannot be guaranteed. Opinions expressed are those of Nicholas Defenthaler and are not necessarily those of Raymond James.

Guide to the 2017 Benefits Open Enrollment

Contributed by: Nick Defenthaler, CFP®

As summer winds down and we quickly approach the holiday season, many employees will soon be updating their benefit options at work during open enrollment (click here to check out our webinar from last year on this topic).  It’s extremely easy to procrastinate and set that employer benefit booklet off to the side and put it off until you receive the e-mail from HR reminding you it’s due in a few days.  You scramble to complete the forms and more than likely, not spend as much time as you should on electing the benefits that will impact you for the next 365 days.  We’ve all been there, but it’s important to carve out a few hours several weeks before your benefit elections are due to ensure you put in enough time to thoroughly review your options.

If offered by your employer, below are some benefits that you should have on your radar:

• 401k Contributions

  • Are you maximizing your account? ($18,000 or $24,000 if you’re over 50 in 2017)

  • Traditional vs. Roth – click here to learn more about which option could make sense for you  

• Health Insurance

  • HMO vs. PPO - Click here to learn more about how these plans differ from a cost and functionality standpoint  

• Flex Spending Accounts (FSA)

  • “Use it or lose it” – click here to learn more 

  • Medical FSA maximum annual contribution 2017 is $2,550

  • Dependent care FSA maximum annual contribution for 2017 is $5,000

• Health Savings Accounts (HSA)

  • Can only be used if covered under a high-deductible health care plan

  • Click here to learn more about the basics of utilizing a HSA 

    • $3,400 maximum annual contribution in 2017 if single ($4,400 if over 50)

    • $6,750 maximum annual contribution in 2017 for a family ($7,750 if over 50)

• Life and Disability Insurance

  • Most employers will offer a standard level of coverage that does not carry a cost to you as the employee (example – 1X earnings)

  • If you’re in your 20s, 30s and 40s, in most cases, the base level of coverage is not sufficient, therefore, it’s important to consult with your advisor on the on appropriate amount of coverage given your own unique situation  

As with anything related to financial planning, every situation is different.  The benefits you choose for you and your family more than likely will not make the most sense for your lunch buddy co-worker.  We encourage all clients to loop us in when reviewing their benefit options during open enrollment – don’t hesitate to pass along any questions you might have to ensure you’re making the proper elections that align with your own personal financial goals.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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This information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete.

Qualified Charitable Distributions: Giving Money While Saving It

Contributed by: Nick Defenthaler, CFP®

Late last year, the Qualified Charitable Distribution (QCD) from IRAs for those over the age of 70 ½ was permanently extended through the Protecting Americans from Tax Hikes (PATH) Act of 2015. Previously, the QCD was constantly being renewed at the 11th hour in late December, making it extremely difficult for clients and financial planners to properly plan throughout the year. If you’re over the age of 70 ½ and give to charity each year, the QCD could potentially make sense for you. 

QCD Refresher

The Qualified Charitable Distribution only applies if you’re at least 70 ½ years old. It essentially allows you to donate your entire Required Minimum Distribution (RMD) directly to a charity and avoid taxation on the dollars coming from your IRA. Normally, any distribution from an IRA is considered ordinary income from a tax perspective, however, by utilizing the QCD the distribution from the IRA is not considered taxable if the dollars go directly to a charity or 501(c)(3) organization.    

Let’s look at an example:

Sandy, let’s say, recently turned 70 ½ in July 2016 – this is the first year she has to take a Required Minimum Distribution (RMD) from her IRA which happens to be $25,000. Sandy is very charitably inclined and on average, gifts nearly $30,000/year to her church. Being that she does not really need the proceeds from her RMD, but has to take it out of her IRA this year, she can have the $25,000 directly transferred to her church either by check or electronic deposit. She would then avoid paying tax on the distribution. Since Sandy is in the 28% tax bracket, this will save her approximately $7,000 in federal taxes!

Rules to Consider

As with any strategy such as the QCD, there are rules and nuances that are important to keep in mind to ensure proper execution:

• Only distributions from IRAs are permitted for the QCD. Simple and SEP IRAs must be “inactive.”

  • Employer plans such as a 401k, 403b, 457 do not allow for the QCD.

  • The QCD is permitted within a Roth IRA but this would not make sense from a tax perspective being that Roth IRA withdrawals are tax-free by age 70 ½. *

• Must be 70 ½ at the time the QCD is processed.

• The funds from the QCD must go directly to the charity – the funds cannot go to you as the client first and then out to the charity.

• The most you can give to charity through the QCD in a given year is $100,000, even if this figure exceeds the actual amount of your RMD.

The QCD can be a powerful way to achieve one’s philanthropic goals while also being tax-efficient. The amount of money saved from being intentional with how you gift funds to charity can potentially keep more money in your pocket, which ultimately means there’s more to give to the organizations you are passionate about. Later this month, we will be hosting an educational webinar on philanthropic giving – click here to learn more and register, we hope to “see” you there!

Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Nick Defenthaler and are not necessarily those of Raymond James. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Preparing for Retirement: How Much Fixed Income Should I Have?

Contributed by: Nick Defenthaler, CFP®

How much guaranteed income (i.e., Social Security, pension and annuity income) should I have in retirement? This is a question I hear quite often from clients who are nearing, or entering, retirement and are seeking our guidance on how to create a tax-efficient and well-diversified retirement paycheck. 

“The 50% Rule”

Although every situation is unique, in most cases, we want to see roughly 50% or more of a retiree’s spending needs satisfied by fixed income. For example, if your goal is to spend $140,000 before-tax (gross) in retirement, ideally, we’d want to see roughly $70,000 or more come from a combination of Social Security, pension, or an annuity income stream. 

Below is an illustration we frequently use with clients to help show where their retirement paycheck will be coming from. The chart also displays the portfolio withdrawal rate to give clients an idea if their desired spending level is realistic or not over the long-term.

Cash Targets

Once we have an idea of what is required to come from your actual portfolio to supplement your spending goal, we’ll typically leave 6 – 12 months (or more depending of course on someone’s risk tolerance) of cash on the “sidelines” to help shield these funds from volatility and ensure money available for your short term cash needs. Believe it or not, since 1980, the average intra-year market decline for the S&P 500 has been 14.1%. Over the course of those 37 years, however, 28 of them have ended the year in positive territory (source:  JP Morgan).  We believe market declines are imminent, and we want to plan ahead to help mitigate their potential impact. By having cash available at all times for your spending needs, it allows you to still receive income from your portfolio while giving it time to “heal” and recover – something that typically occurs within a 12 month time frame. 

As you enter the home stretch of your working career, it’s very important to begin dialing in on what you’re actually spending now compared to what you’d like to spend in retirement. Sometimes the numbers are very close but often times, they are quite different.  As clients approach retirement, we work together to help determine this magic number and provide analysis on whether or not the spending goal is sustainable over the long-term. From there, it’s our job to help re-create a retirement paycheck for you that meets your own unique goals. Don’t hesitate to reach out if we can ever offer a first or second opinion on the best way to create your own retirement paycheck.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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Opinions expressed are those of Nick Defenthaler, CFP®, and are not necessarily those of Raymond James. There is no assurance the forecasts provided herein will prove to be correct. This information has been obtained from sources deemed to be reliable but we do not guarantee that it is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Please note direct investment in any index is not possible. Annuity guarantees are subject to the issuing company's ability to pay for them.

Ford Buyout: Knowing your Options

Contributed by: Nick Defenthaler, CFP®

Over the past month, Ford has extended buyout offers to nearly 15,000 of its salaried employees. The offer, in most cases, contains two main components – a severance package or an enhancement of your retirement benefit from Ford.  Below is a high-level breakdown of some of the key points of the offer:

Special Incentive Program (SIP) and Select Retirement Program (SRP)

• Up to 18 months’ severance

• Retirement benefit enhancement

  • Credit for three additional years of age and three years of service for calculating benefits under the General Retirement Plan (GRP), Benefit Equalization Plan (BEP), and Supplemental Executive Retirement Plan (SERP)

  • This can translate into a nearly 15% increase over your normal benefit

• Must retire no later than September 30, 2017

  • This means up to 27 months of income received in 2017 which more than likely means higher tax brackets for those accepting the offer

• Access to reemployment assistance from Ford for six months

• Health insurance – type of coverage will depend on if you were hired before or after 6/1/2001

• Life insurance – eligible to maintain if you were hired on or after 1/1/2004, are age 55 or older with at least ten years of service, or are age 65 with at least five years of service upon termination

• Vacation

  • Regular – accrued through your last day on pay roll, unused accrued vacation is paid out if the last day on pay roll is prior to year-end

  • Purchased – unused days are forfeited

Buyouts from Ford or any of the “Big Three” are nothing new. As always, however, a thoughtful analysis should be completed when ultimately making a decision on whether to stay employed with Ford or to retire early. Many of the offers extended will be virtually the same, but everyone’s situation is different. If you’ve received an offer from Ford and would like our take on how that offer could impact your own long-term financial game plan, don’t hesitate to reach out to us for guidance. 

P.S. I did a webinar on this topic where I dug deep into the nuances of the offer and discussed some planning opportunities you might consider if you decide to retire early. Check out the replay below!

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

Maximizing your 401k Contributions: Nuances to Save you Money

Contributed by: Nick Defenthaler, CFP®

When we’re first starting our careers, we’re always told to at contribute at least the minimum needed to get the full company match in our 401k plans (typically between 4% and 8%, depending on how your plan is structured).  “Never throw away free money!” is a phrase we use quite often with children of clients who are starting their first job out of college. What about, however, those who are well established in their careers, and are fully maximizing 401k contributions ($18,000 for 2017, $24,000 if you’re over the age of 50)? They shouldn’t have to worry about not receiving their full employer match, right? Well, surprisingly, depending on how your 401k plan is structured at work, the answer could actually be yes!  

Let me provide an example to explain what I’m referring to:

Let’s say Heather (age 54) earns a salary of $400,000 and elects to contribute 10% of her salary to her 401k.  Because Heather has elected to contribute a percentage of her salary to her 401k instead of a set dollar figure, she will actually max out her contributions ($24,000) before the end of August each year.  Let’s also assume that Heather receives a 5% employer match on her 401k – this translates into $20,000/yr. ($400,000 x 5%). If Heather does not have what’s known as a “true up” feature within her plan, her employer would stop making matching contributions on her behalf in August – the point at which she maxed out for the year and contributions stopped. In this hypothetical example, not having the “true up” feature would cost Heather nearly $7,500 in matching dollars for the year!

So how can you ensure that you’re receiving the matching dollars you’re fully entitled to within your 401k? 

The first thing I would recommend is reaching out to your benefits director or 401k plan provider and asking them if your plan offers the “true up” feature.  If it does, you’re in the clear – regardless of when you max out for the year with your contributions, you’ll be receiving the full company match you’re entitled to. 

If your plan does not offer the “true up” feature, and you plan on maximizing your 401k contributions for the year, I’d strongly suggest electing to defer a dollar amount instead of a percentage of your salary. For example, if you’re over 50, and you plan on contributing $24,000 to your 401k this year and you’re paid bi-weekly, it might make sense to elect to defer $923.07 every pay period ($923.07 x 26 pay periods = $24,000). By doing so, you’ll ensure you maximize your benefit by the end of December and not end up like Heather, who maxes out before August and potentially loses out on significant employer matching dollars.  

Subtle nuances such as the “true up” 401k feature exist all around us in financial planning and they can potentially have a large impact on the long-term success of your overall financial game plan. If you have questions on how to best utilize your employer’s 401k or retirement savings vehicle, please don’t hesitate to reach out to us for guidance.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

Examples are hypothetical and are not representative of every employer's retirement plan. Not all employers offer matching 401(k) contributions. Please contact your employer's benefits department or retirement plan provider for terms on potential matching contributions.

Saying Goodbye to the Joe Louis Arena is just like Entering Retirement

Contributed by: Nick Defenthaler, CFP®

As most of you are probably aware, the iconic Joe Louis Arena held its final Red Wings game several weeks ago on a gorgeous, 72 degree, sunny April day in Detroit. “The Joe,” as most Wings fans called it, has been a staple in the city of Detroit for the past 38 years since it was completed in 1979. As someone who has played hockey all his life, some of my best memories growing up were either spent at The Joe watching games live or catching them on TV where you could feel the electricity from the rink radiating through the television during certain games. The game of hockey has taught me so much – teamwork, comradery, leadership, service, hard work, just to name a few. I firmly believe the lessons the sport has offered me have made me a better person, both personally and professionally. 

As I watched the final game from my living room that bittersweet Sunday evening, I couldn’t help but see the parallels that existed between phasing into retirement and the new chapter the Red Wings and the City of Detroit are entering as the hockey team moves into Little Caesars Arena. Think about it, most of our working careers are going to last about as long as The Joe. The Red Wings who first played at The Joe when it opened in 1979 struggled for many years. But over time, the team and the organization evolved and came together as players found themselves and fine-tuned their skills, both individually and as a team. This is also very similar to what many of our career paths look like. When we first enter the work force out of school, we’re all pretty green. We may think we have it all figured out early on, but it takes years to get to a level of greatness like the Wings did when they won their first Stanley Cup in 1997. 

As the Joe Louis Arena era ends, a new one begins. Looking back over the course of those nearly four decades the Wings spent at The Joe, they were some of best times the Red Wings organization had, just like the time in our lives throughout our working career. Just think about how much probably occurred during this time frame in your own life. Getting married, having children, traveling, being promoted, earning more money, helping children get through college, and welcoming grandchildren to name a few. As one door closes, however, a new one opens and it can be a pretty amazing one, just like the new stage the Red Wings are stepping into. 

Although The Joe was not a glamourous building, it had so much grit and character. It embodied the hard working attitude our state and area have and I feel very lucky to be able to have experienced so many good times there. I must say, however, I’m anxiously looking forward to attending many games at the new rink. I can only hope Little Caesars Arena will produce as much fun and great memories as The Joe did! For those of you soon entering that new phase in your life, the phase of retirement, this can also be an exciting time. As you gear up for this transition, please reach out to us in order to make this time as smooth and memorable as possible.

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

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Opinions expressed are those of Nick Defenthaler and are not necessarily those of Raymond James. This information has been obtained from sources deemed to be reliable but we cannot guarantee that is accurate or complete.