Part 4 – A Year of Lessons on Money Matters for your Children & Grandchildren

Contributed by: Matthew E. Chope, CFP®

Try it all and be prepared to make some mistakes.

That’s a good reminder to everyone, no matter the generation. But when it comes to passing on lessons about money matters to your kids or grandkids, I say try to keep those mistakes small and learn from them. Many of us like to have firsthand experience (I know I do) rather than just taking someone’s word for it. But if I could offer advice from my own experience, here’s what I’d say:

Start with Diversification

In my opinion, diversification is probably the number one most important rule in investing.  It will not make you rich but it can help keep you from going poor. You want to diversify your experiences greatly in your 20s because it’s easy to invest a lot of time and energy in one area and end up not liking where you get to.  Imagine climbing a ladder for 5-10 years only to find that it was leaning against the wrong wall! Use this time in life to literally and figuratively invest your time and money in anything that you’re curious about. Try things that make you uncomfortable.

Along the meandering path, realize you are going through this learning curve.  Try to take it all in. Notice your senses, your happiness and fulfillment relating to the different activities you invest in.  Most people get to the last quarter of their life seeking greater fulfillment and happiness from their life.  They never paid attention during the first quarter to the path they were on or the wall they were climbing. 

Along your journey consider that data is not information and information is not knowledge and knowledge is not experience and experience is not wisdom (as you’ll see in the diagram below).  Reflect on where you might be in each investment.

Digging Through the Data to Make Decisions

To take this idea a little deeper, we are continually inundated with data; the internet, TV, radio, people -- some with facts and some with opinions.  A key to financial success for many is being able to distinguishing useful data and information from nonsense. Knowing how to gather a collection of measured data that can be extrapolated into information is the cornerstone of constructive decision-making. 

Knowledge requires thoughtful discernment of information, combined with known truths founded on logic based proofs.  Notice I went far with math from the last statement.  So this is how my thoughts are structured and it works for me.  There may be other ways to get to constructive decision making also, but I believe this will determine a great deal of your financial success in life.  

Facts can strengthen beliefs to formulate knowledge, but this is where you will find disagreement.  My experience has been that a combination of well-formulated beliefs with accepted knowledge provides a basis for openness and understanding.

Throughout the coming years you will go through interpretations of knowledge gaining first-hand experience as events almost seem to repeat.  These experiences might not be exact but understanding the patterns over decades can eventually lead to wisdom.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Matthew Chope, CFP® and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Diversification does not ensure a profit or guarantee against a loss.

Three Reasons to Consider a Family Caregiver Contract

Contributed by: Sandra Adams, CFP®

Many family members are drawn into caregiving out of love. Most times, it is the female child that is pulled into the role of caregiver as a parent ages and has increasing needs. The statistics are overwhelming…

• 66 million people in the U.S. provide unpaid care to a relative or friend.*

• 70% of caregivers report making adjustments to work schedules, or quit work altogether, to accommodate caregiving responsibilities.  Caregivers may reduce their hours at work or forfeit promotions and benefits.**

• A 2011 study showed that caregivers lost $303,880 in wages, Social Security benefits, and private pensions over their lifetime as a result of caregiving responsibilities.**

It is important to understand that caregiving and care needs can have serious consequences for the entire family, and that careful planning is important to ensure financial stability for all parties involved. 

When to Officially Hire a Family Member

In many cases, skilled care is needed, and that care needs to be provided by trained and licensed medical professionals.  However, there are other needs (i.e. transportation, housekeeping, etc.) that can be provided by a family member.  In these cases, you can consider officially hiring a family member under a paid family caregiver contract.  A family caregiver contract is a legal employment contract that defines the care and compensation expectations between the aging parent and the family member providing the care.  Here are three reasons for a family to consider using a family caregiver contract:

1. The family member providing the care (the caregiver) can be receiving financial compensation for providing care, especially when they may have had to reduce or give up entirely their paid employment. The caregiver is provided a chance for continued financial stability.

2. It can help avoid misunderstandings and bad feelings with other family members about who is providing care and how much money is changing hands.  The agreement can be very specific and can be tied to the aging parent’s overall estate planning.

3. If the aging parent ever needs to enter a nursing home or needs Medicaid to pay for long term care needs, the agreement can show that payments for the care to the family member were legitimate and were not made in an attempt to “hide” or “gift” funds in order to qualify for Medicaid.

When it comes to planning for aging parents and coordinating the caregiving roles amongst family members, things can get complicated very quickly.  It often comes down to the one who is nearest, not who has the time or the money, that becomes the caregiver.  Making things fair and giving your parent and the sibling(s) who provide care the best chance for financial stability along the way is the best course of action.  Work with your financial planner and a team of experts to come up with a plan for your family that may include an elder law attorney to consider tools like a family caregiver contract.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

*National Alliance for Caregiving and AARP. Caregiving in the U.S., 2009.

**The MetLife Mature Market Institute, MetLife Study of Caregiving Costs to Working Caregivers, June 2011.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Sandra Adams and not necessarily those of Raymond James. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Can You Roll Your 401(k) to an IRA without Leaving Your Job?

Co-Contributed by: Nick Defenthaler, CFP® and Matt Trujillo, CFP®

Typically, when you hear “rollover” you think retirement or changing jobs.  For the vast majority of clients, these two situations will really be the only time they will complete a 401k rollover.  However, you might not know about another type of situation in which you can move funds from your company retirement plan to your IRA.  This is what’s known as the “in-service” rollover and is an often overlooked planning opportunity. 

Rollover Refresher

A rollover is a pretty simple concept.  It is the process of moving your employer retirement account (401k, 403b, 457, etc.) over to an IRA that you have complete control over and is completely separate from your ex-employer.  Most people do this when they retire or switch jobs.  If completed properly, rolling over funds from your company retirement plan to your IRA is a tax and penalty free transaction because the tax characteristics of a 401k and IRA are generally the same.   

What is an “in-service” rollover?

Unlike the “traditional” rollover, an “in-service” rollover is probably something you’ve never heard of and for good reason.  First, not all company retirement plans allow for it, and second, even for those that do, the details can be confusing to employees.  The bottom line: An in-service rollover allows an employee (often at a specified age such as 55) to be able to roll their 401k to an IRA while still employed with the company.  The employee is also still able to contribute to the plan, even after the rollover is complete.  Most plans allow this type of rollover once per year, but depending on the plan, you could potentially complete the rollover more often for different contribution types.

Why complete an “in-service” rollover?

More investment options – With any company retirement plan, you will be limited to the investment options the plan offers.  By having the funds in an IRA, you can invest in just about any mutual fund, ETF, stock, bond, etc.  Having access to more options can potentially improve investment performance, reduce volatility and make your overall portfolio allocation more efficient.

Coordination with your other assets – If you’re working with a financial planner, he or she can coordinate an IRA into your overall plan far more efficiently than a 401k.  How many times has your planner recommended changes in your 401k that simply don’t get completed? (Tisk, tisk!)  If your planner is managing the IRA for you, those recommended changes are going to get completed instead of falling off your personal “to-do” list.     

Additional flexibility – IRAs allow certain penalty-free withdrawals that aren’t available in a 401k or other company retirement plans (certain medical expenses, higher education expenses, first time homebuyer allowance, etc.).  Although using an IRA for these expenses should be a last resort, it’s nice to have the flexibility if needed.

Exploring “in-service” rollovers

So what now?  The first thing is to always keep your financial planner in the loop when you retire or switch jobs to see if a rollover makes sense for your situation.  Second, let’s work together to see if your current company retirement plans allows for an in-service rollover.  It’s typically a 5 minute phone call with us, you and your HR department to find out.  With so many things going on in life, an in-service rollover is probably pretty close to the bottom of your priority list.  This is why you have us on your financial team. We bring these opportunities to your attention and work with you to see if they could benefit your situation! 

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

Matthew Trujillo, CFP®, is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc. Matt currently assists Center planners and clients, and is a contributor to Money Centered.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Nick Defenthaler, CFP® & Matt Trujillo, CFP®, and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. IRA withdrawals may be subject to income taxes, and prior to age 59 1/2 a 10% federal penalty tax may apply. In-Service Rollovers mentioned may not be suitable for all investors. Be sure to contact a qualified professional regarding your particular situation before electing an In-Service Rollover. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss.

Part 3 – A Year of Lessons on Money Matters for Your Children & Grandchildren

Contributed by: Matthew E. Chope, CFP®

Get the big things right!  Don’t miss the forest through the trees.  Some young people can get lost in their 20s choosing to hang around the wrong crowd, not exactly sure what they believe in, ignoring facts or historical truths or getting trapped in a dead end job. I consider these 4 ideas as significant steps toward gaining greater financial security and strength in your future:

1. Know what you believe in (see more about writing a belief statement below).

2. Choose a career you’re passionate about, one that interests and excites you.

3. Keep the right company.  Surround yourself with people who help you grow and encourage your dreams and ongoing success.

4. Read the right books – understand a little about all the main areas of knowledge.

On Understanding your Beliefs 

Differentiate between truth and beliefs and know that knowledge can be found in the overlap.  Many times our beliefs can be unreasonable and sometimes unrealistic.  So, we need to have a good grounding in what is real, true, and factual vs. just belief. To help you summarize your beliefs, consider writing a belief statement. Here’s a sample:

I believe in myself, 
in the pursuit of happiness, 
the rule of law, 
and building moral wealth.

I believe I am only human, in that lies my greatest strength and my greatest weakness. 
I believe in living for and developing an abundance of good physical and mental Health. 
I believe in playing Sand Volleyball for fun, exercise, camaraderie, and as one of my dearest passions in life. 
I believe in good and honest people - who I call my friends. 
I believe in living a life well lived with meaning and intension. 
I believe in all basic freedoms and human rights 
I believe in the 7 UU principles. 
I believe that most people need to believe in fairy tales; that the harsh reality of this world is too flat, monotonous and dreary.
I believe most people are good.

On Choosing the Best Career

Many people choose careers because someone else thought it would be a good idea for you or because it’s connected to a large paycheck or it has prestige.  Instead choose a career that feeds you and your soul.  If you love what you do each and every day – it won’t feel like work and you can figure out how to make a good living from that. And if you want prestige become that best at what you do!

On Keeping the Right Company

Surround yourself with people that share your values and drive you to be the best person you can be. This can be very difficult. People can’t choose their family and many times feel trapped in long-term relationships that have been built up over their lifetime.  This is where we need to stop and reflect.  Take some time to find the new people that you want to surround yourself with.  I typically choose smarter people, selfishly always wanting to be learning from my peers or mentors.  I choose people that have similar beliefs and values, people that are auspicious! It does not mean we agree on everything and that is ok.  We find comfort in people we agree with, but  we find growth in those you don’t.   

On Finding the Right Books

When it comes to reading the right books, I suggest asking people you look up to who seem to know a lot about the big subjects of mathematics, ethics, natural sciences, human sciences, history and the arts.  Ask them how they came to know so much about these subjects and consider learning more about them over your lifetime. I like taking the approach guided by the chart below, created by international teacher of history, theory of knowledge and humanities Edwin M. Van Olst. He suggests that when you encounter what he calls Knowledge Issues, you can use the chart to identify the challenges and guide your way to greater knowing.

Any opinions are those of Matthew Chope and not necessarily those of Raymond James. 

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

3 Steps for Coping with Financial Roadblocks

Contributed by: Laurie Renchik, CFP®, MBA

Going through a divorce or changing jobs can put your life in a spin. That wasn’t in your plan, so what’s next? Getting financial facts together, especially during a significant change in life, can easily get shifted to the back burner. I see these kinds of life events as potential financial roadblocks.  When you begin navigating through a financial roadblock, all of the answers may not be clear upfront.

Undoubtedly there are options and trade-offs involved.   People worry that they lack knowledge on financial topics.  If you find yourself in a position where financial planning in that moment seems overwhelming, intimidating, or you are just plain fearful of making a mistake, I recommend starting with these three steps to simplify, organize, focus and ultimately overcome your financial roadblock:

1. Create a realistic post-financial change budget.  This could be post-retirement, post-divorce or post-career change.  Maybe you haven’t paid enough attention to what you are spending or saving. You need to take into consideration a change in income. This fundamental step will help you understand what you can or need to do.

2. Invest in yourself by putting together a snapshot of your financial health.  This is accomplished with a personal net worth statement. The formula to use is:  Assets – liabilities = net worth.  There are a number of reasons why preparing a net worth statement is a good move.  It gives you a one page reality check to use as a planning tool, you can check progress toward financial objectives and it can help you identify potential red flags like an emergency fund that has dipped too low or debt that is rising faster than anticipated.

3. Address financial decisions proactively.  Instead of guessing or letting things roll along, begin by thinking about financial goals and obligations on a timeline.  This can be as simple as prioritizing in 3 buckets.  What do I have to do now (immediate action)? What can be tackled soon (big picture prep steps)? And what can be done later (accomplished after the priorities are under control)?

You may not know all of the answers today, but this exercise will at least help simplify, organize, and address the financial issues that are weighing on your mind. If you need help navigating through a financial change due to divorce or a career move don’t hesitate to call or email me.    

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Laurie Renchik and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. 

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Health Care Planning and Wealth Planning Go Hand-In-Hand

Contributed by: Sandra Adams, CFP®

If you’re approaching or in retirement, the importance of wealth planning is well known. Working with a professional advisor to plan retirement cash flow, manage investments, review taxes, estate planning and insurance on a regular basis is core to financial success. What might not be so obvious is that managing your health care is another key component to long-term financial success.

According to 2014 statistics reported by Fidelity®, a couple age 65 can expect to spend over $220k on health care during their lifetimes (a chronic illness can add significantly to this cost). The better your health, the lower these costs might be, which can significantly reduce the risks to your financial bottom line.

Working with a financial planner and a full wealth care team (including your CPA and estate planning attorney) is important to manage your wealth. But, what can you do to manage your health when the health care system is changing on a daily basis?

See Your Physician Regularly -- Get regular check-ups, keep up with recommended testing. As you get older, consider having a full geriatric assessment to set a baseline for your physical, cognitive and psychological health. Catching any abnormalities early provides options for treatments and cures.

Exercise Often and Eat Right -- Regular exercise and a healthy diet have been shown to improve physical and cognitive health, reducing costs for doctor visits, medications, and other expenses.

Consider hiring a Health Care Concierge service – A Health Care Concierge is partner in managing your health, similar to the way a financial planner helps you manage your wealth.  Services include health and nutrition coaching, coordination of care (finding you the right doctors, making appointments, storing your medical records and having them reviewed by concierge physicians), and advocating on your behalf for appropriate care and billing. Total Life Concierge in Troy, Michigan, is a local and emerging partner in this field -- check them out at www.myowntlc.com.

Managing your wealth and your health in tandem gives you the best chance of financial success. Talk to your financial advisor today about who you can add to your professional team to make you successful in all aspects of your life.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Getting Financially Fit in 2015

My wife and I are very different (don’t worry, it’s a good thing!), especially when it comes to our careers.  She is a Surgical Technologist at a large local hospital and is the surgeon’s “right hand man” in the operating room.  As much as I love financial planning, I must admit that she has way cooler stories than me when she gets home!  Health care amazes me.  The types of procedures that are available now are incredible and, in my opinion, those in the medical field are heroes. 

In the locker room at my wife’s hospital, it’s common for the ladies to have magnets of pictures of their family, friends or quotes that might get them through a long, hard, stressful day.  Recently she came home and told me, “You’ll love this one!” I asked what she was referring to and she proceeded to tell me that one of her co-workers had a magnet on her locker that read:

Take care of your financial health

Me, being the nerd that I am, said, “No way, that’s awesome!”  The more I thought about that quote, the more it resonated with me.  We always think about taking care of our health, especially this time of year after we’ve made our (hopefully do-able and realistic) new year’s resolutions.  The gym is busier and fruits and veggies are scarce at the grocery store as people try to make a change. Physical health could mean literally thousands of different things for each individual -- from quitting smoking to eating better, working out to sleeping more.

The same goes for financial health.  There is no “one size fits all”.  True financial planning is a PROCESS not a product, just like improving your physical health.  So, with a fresh start to a new year, I encourage each of you to evaluate your life to see if you are “taking care of your financial health.” As you do this, remember:

Set realistic goals that are achievable (just like you should be doing for your physical health)

Work toward your goals, but don’t expect perfection

Over time, creating good habits and taking the time to review your finances will hopefully lead to a happier you.  From everyone at The Center, we wish you and your family a very happy and healthy new year!   

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

Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of RJFS or Raymond James. C15-002022

Part 1: A Year of Lessons on Money Matters for Your Children & Grandchildren

I’m starting this series written for parents and grandparents because I have been hearing from them for over 2 decades about how much more difficult the world may be for their children financially. This is the 1st of 12 blogs offering lessons you can share with your children and grandchildren. I’ll be focused on money matters and general principles about building financial security over a lifetime.  What I hear the most is that clients just want their family’s future generations to be financially secure. Today that means bracing them for a world where there aren’t pensions and where social security will have changed to stay solvent. These are lessons many of our children are just not taught in school.

Lesson #1: It all starts with investing in you

Investing in yourself may seem simple, but it’s not easy to implement for everyone.  How do you invest in you as an 18 year old? Start by investing your time in an education. Investing a reasonable amount of your time and money into a college education will most likely provide the most financial security in a person’s life, not to mention fulfillment.  

Only about 30 percent of Americans have obtained an undergraduate degree or higher according to the U.S. Census Bureau. At the same time an estimated 90% of Center clients’ children and grandchildren obtain an undergraduate degree.  The ability to open opportunities and maintain a steady paycheck is fundamental for financial security. 

The Value of Paid vs. Unpaid Internships

Everyone needs to be able to open the employment door.  To open those doors faster, consider doing a paid internship.  This takes planning at the start of college because many students only have 4 years to line up an internship and some opportunities can be competitive, but as the graph below shows, they can really pay off:

Also acquire an education that is commensurate with your expected pay. Don’t overdo it and go hundreds of thousands of dollars into debt for a job with a salary that will leave you paying off your college loans for 10-20 years.  Figure out how to do it inexpensively.  There are many online tools, including this one from The Chronicle of Higher education that lets you compare earnings, monthly student loan payments, and graduation rates.

Lifetime Earnings Impact of a Degree

There is a lot of research showing that the increase in lifetime earnings, on average, exceeds the cost of an education for people who earn a college degree.  The U.S. Census Bureau reports that a bachelor’s could provide up to $1 million more income over a lifetime than a high school diploma. If you invest $100,000 in college and you make $1,000,000 more over your lifetime, your return on investment is 10 fold or 1,000%.  Over a 30-year period, this is an annual return of more than 10% per year.  Click here to see a list of ROI rankings for various universities.

If you’re a parent or grandparent, start the conversation early. Build college in as a given and develop a way for to pay for it (even if only partially). Setting the expectation that college is ahead lays a foundation for financial security in the future.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The author’s opinions are subject to change without notice. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or a loss. No investment strategy can guarantee success. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. C15-001739

Don’t Let 2015 Goals Become Afterthoughts

New beginnings offer the chance to hit the reset button.  Whether it’s setting personal goals spurred on by the beginning of a New Year or adjusting your financial course to focus on retirement, hitting the reset button is an opportunity to think about your intentions and put a finer point on your action plan.

One challenge that comes into play when setting goals, either personal or financial, is the potential to get distracted along the way.  Day-to-day stuff gets in the way and goals can easily become afterthoughts. How can you avoid falling into the gap trap that exists between expressing a goal (Point A) and crossing the finish line (Point B)? 

Here are three tips to get you started.

1. Commitment is essential.  Commitments have an emotional component attached to our personal values.  If something is truly meaningful, you will automatically do what is necessary to get there, whether you set a goal or not.  I am committed to saving appropriately today, so that when I reach retirement I won’t worry about running out of money.

2. Put more focus on the journey rather than the destination.  Goals focused solely on the destination can be met without enjoyment or personal growth along the way.  To retire at age 65 the savings number I need to hit is 15% per year.  Commitments, on the other hand, allow you to chart a course and keep the ultimate arrival point in clear view.   I am committed to understanding how my rate of savings affects my lifestyle in retirement.

3. Don’t get lost in the details of the planning. Getting caught up in the details is a good way to procrastinate.  Action is a must to move good intentions toward progress.

Throughout our lifetime, there are natural breaks in the journey that offer a chance to hit the reset button.  With your goals in hand and motivation clear, the future is shaped.  What will you commit to in 2015?

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The goals listed are for illustrative purposes only. Individual cases will vary. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of RJFS or Raymond James. C15-000603

Making the Most of Your Empty Nest Years – Part 2

The kids have gone to college or moved away and now you enter the Empty Nest Years. Will your empty nest years resemble “empty nest syndrome” (complete with a sense of loss, perhaps depression, alcoholism, identity crisis and marital conflicts)? Back in July 2014, I shared a conversation with a client in my first Empty Nest blog. They described their empty nest like this: “It’s Like being in college, only with money!” Working with clients whom have transitioned into the empty nest years successfully, the first common thread has been that they make time to plan.

Making time to Plan

It seems like such a simple statement, but it is often overlooked.  Like most successful folks, those empty nesters made a plan to live with intention. They examined their values, decided what was truly important in their lives, and then aligned their decisions with their intentions.

One of the most profound ways to examine values is through the work of George Kinder of the Kinder Institute.  My wife Jen and I have gone through the process with one of our firm’s partners and it has been quite helpful in leading an intentional life.  George Kinder takes a unique approach to financial planning – what he terms “life planning”.  My personal take is that at the core life planning is “financial planning done right”.  Many of life’s most important goals have a financial component. Like life planning, our comprehensive financial planning is designed to move beyond the numbers (not just dollars and cents) and address your goals and values.

3 Steps to Setting Financial Intentions

How can you discover or clarify the deeper values in your life and live with [more] intention? Here are two exercises that you might find helpful.  If they resonate, we’d love to help you.

To help clients discover the deeper values in their lives, Kinder poses three questions:

1. Imagine you are financially secure, that you have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything? Let yourself go. Don’t hold back on your dreams. Describe a life that is complete and richly yours.

2. Now imagine that you visit your doctor, who tells you that you have only 5-10 years to live. You won’t ever feel sick, but you will have no notice of the moment of your death. What will you do in the time you have remaining? Will you change your life and how will you do it? (Note that this question does not assume unlimited funds.)

3. Finally, imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What did you miss? Who did you not get to be? What did you not get to do?

When you understand what you want to do with your life, you can make financial choices that reflect your values as you plan for your empty nest years.

Taking Stock of Life

Here is a second exercise to consider that can help lead to clarity and intention. Take a piece of paper and at the top write “Goals for My Life – Taking stock”. Below that, across the top write “One month, 3 months, one year, 3 years, 5 years, 10 years, 20 years, and lifetime”.  Next, down the left hand side write “Work, Family, Relationships, Spirit, Community, Creativity, Health, Finances” and any other category for your personal circumstances.

Consider each time frame and category and the things you would like to accomplish.  Perhaps in 5 years under Family you would like to take the entire family on a holiday trip.  Or perhaps in 3 months under Work you want to reduce your hours.  Write it down – don’t underestimate the power of the pen or pencil.  Dr. Gail Matthews, a psychology professor at Dominican University in California, found that you are 42 percent more likely to achieve your goals just by writing them down. My experience suggests it’s even higher – write them down!

The empty nest years are an important transition.  I hope yours are “It’s Like being in college, only with money!”

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

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. C15-001184