Strategies for Individuals

Current Finacial Position

Protection Planning

Investment Planning

Tax Planning

Retirement Planning

Estate Planning

Current Financial Position

Understanding your current financial situation is one of the most important aspects of doing financial planning. Your current assets, liabilities, liquidity and cash flow will affect almost every other short or long-term goal that you have.

Many people don’t realize the long-term impact of the financial decisions they make on a day-to-day basis. Your financial needs in the event of a death or disability will be closely related to your current situation, and areas such as income tax liability, asset allocation, estate tax liability, ownership status of assets, and control of assets are all inter-related.

If you already have a good understanding of your current financial situation, congratulations! If you could benefit from a greater understanding of where you stand today, there are numerous ways that you can begin.

Use worksheets to calculate your net worth and track your cash flow. Personal finance programs such as Quicken™ or MS Money™ are also helpful in gaining a better understanding of where you stand today.

For help in identifying strengths and weaknesses in your current financial picture, or for help in developing a comprehensive financial plan, select the "Contact Us" option located in the main site menu at the top of the page. Our Financial Advisors are just a click away!

Protection Planning

Protecting your family from major financial risks is one of the cornerstones of any sound financial program. Life insurance, disability insurance, health coverage and long-term care insurance should all be evaluated to help minimize your exposure to financial risk.

By working with a knowledgeable Financial Advisor, you can develop a comprehensive approach to assessing your need for additional coverage. To help you get started, click on the Financial Calculators link located in the main site menu at the top of the page.

While there are more complicated systems for calculating your insurance needs, this provides you with an indicator of whether you should consider increasing your life insurance coverage.

Investment Planning

Managing risk in your investments

Successful investing is based on managing risk — understanding what risk means and using it to your advantage.

Risk refers to the chance that an investment's value or return will be lower than expected. Investments with potential for greater loss are viewed as riskier than those with a lesser chance of los

However, the risks associated with investments differ in the long-term compared to the short-term. In the long-term, so-called "risky" investments may offer a greater chance of reaching a financial objective.

Risk Levels

For example, a government bond that guarantees a return of principal and $100 interest after 30 days is risk-free in the short term, since the return will always be $100 regardless of events in the financial markets, if held to maturity. In contrast, common stock may have the potential of earning as much as $200 and as little as $0 and offer no protection of principal.

In the long-term, the picture changes. Based on historical stock performance, risk faced by stocks declines over the long-term. The risk faced by government bonds increases, however, since their long-term returns they offer are frequently outperformed by other types of investments and may not always keep up with inflation and taxes.

The risk and return of any one investment should be viewed in relation to your total investment portfolio — the combination of investments you’re making. If you hold just one or two accounts, you are more exposed to risk than if your money is more widely diversified. Diversification means investing in instruments which behave differently during a given economic situation or time period.

A Financial Advisor can help you determine an appropriate level of risk and diversification for your financial goals, profile and time horizon. Talk to an advisor or representative today about developing a customized investment strategy.

Tax Planning

As Ben Franklin aptly pointed out over two centuries ago, taxes are one of the certainties of life. Our challenge is to use the provisions of the tax code to our advantage wherever possible.

For example, income can be from earned (employment) or unearned (investment) sources, and can be taxed today, taxed later (deferred) or not taxed at all (exempt). How we decide to hold our assets and receive our income will have the greatest impact on our income taxes.

Everyone knows that the U. S. tax code is extremely complex. Many types of assets (tax-exempt bonds, IRAs, annuities, and cash-value life insurance to name several) offer significant tax advantages. Working with a financial advisor who understands the tax implications of your financial decisions will help assure that you are making those decisions with all the pertinent information, often resulting in significant tax savings. For help in identifying strategies to reduce your taxes, or for help in developing a comprehensive financial plan, contact one of our knowledgeable Financial Advisors today.

This information is a general discussion of the relevant federal tax laws. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer. Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues applicable to their specific circumstances.

Retirement Planning

Plans help address the changing concept of retirement

The concept of retirement is changing. And so are the ways that people prepare for it. For some, retirement means lots of leisure time to pursue hobbies and interests. For others it means a change to part time work, and still others will spend their new found free time with family members or as a volunteer in the community.

Whatever your plans for retirement may be, you have a valuable tool at your fingertips to help you prepare financially for what could be the most rewarding part of your life. This tool is your retirement plan. Many retirement programs offer investment options to choose from, and contributions can come from your employer, you or both to provide the accumulation you need to save for the future.

Three retirement savers

Sid Saver, 25, has a long way to go before his golden years. With an income of $25,000 in the early stages of his career, Sid's working with an eye to the future. If Sid defers just 4.7 percent of his annual income to his 401(k), he could retire with 80 percent of his annual salary*, adjusted for inflation. And, Sid's tolerance for risk is high, given his long time horizon. He'll allocate his money into an aggressive portfolio made up of equity investments.

Debra Due Diligence, 35, hasn't started contributing to her pension plan, opting instead to save $25,000 in an IRA plan, and that may help offset possible foregone earnings. She'll have to put more than 12.1 percent away in order to enjoy 80 percent* of her $35,000 income at retirement. Deb will put her money into a moderately aggressive portfolio with 20 percent in fixed income and 80 percent in equity.

Pete Procrastinator has waited even longer. At age 48, he's earning $50,000 per year as an editor for a small publishing company. But he has only saved $5,000 in an IRA. Pete would have to save more than 30 percent of his before-tax income in order to retire with just 80 percent* of his current income. That's more than the law allows, so Pete would have to use another savings vehicle, as well. Pete's not too worried, though. He plans to continue working part time after age 65, and will invest 12 percent into a moderate portfolio, with 40 percent of funds going to a fixed income group and 60 percent going to an equity group.

No matter where you are in your career, a retirement program offers a wide range of investment options.

The most important thing you need to do is use it. Here's a review of the three hypothetical retirement examples:

*Assumes a 3.5 percent inflation rate, investment growth of eight percent before and six percent after retirement, no employer-contribution pension plan and standard calculated Social Security income. These are hypothetical examples for illustrative purposes only and are not indicative of any particular investment.

Developing a strategy for a financially secure retirement is no simple task. That's why an experienced professional's knowledge and objectivity can make this important challenge more manageable.

Estate Planning

Helping you protect your legacy

No matter how large your estate is, a sound estate plan remains the best assurance that your assets will be distributed to the heirs you select in the way you choose. It can also help protect your financial security if you become incapacitated.

While reducing taxes can be an important goal, it’s not the only reason to develop an estate plan. Regardless of what happens with tax legislation, an estate plan can be an essential financial planning tool.

As you put together your own estate plan, consider these elements:

• A will can specify who gets what and name guardians for minor children.
• Durable powers of attorney allow whomever you choose to make financial and medical decisions if you become unable to do so yourself.
• Beneficiary designations on retirement accounts, life insurance policies and the like must be coordinated with the rest of your estate plan. Those assets will go to the listed beneficiaries, regardless of your will.
• Titling of assets also should be coordinated with your total estate plan. Property owned jointly with right of survivorship, for instance, typically goes to the survivor, superseding any instructions in a will.
• Trusts are flexible tools that can be used to manage investments during your lifetime and beyond, distribute assets to heirs under circumstances that you spell out, minimize estate taxes, maintain the privacy of your financial affairs and protect assets from lawsuits and seizures.

Estate planning can protect your family's interests and ensure that your wishes are carried out.

What if I don't have a will?

If you die without a will or other testamentary document, the probate court distributes your estate according to state laws. About a third of the states have adopted all or part of the Uniform Probate Code, which provides for the following structure for distributing property if you die without developing an estate plan (intestate):

• If there is a surviving spouse and no surviving children or surviving parent of decedent, all property passes to the spouse.
• If there is no surviving children but decedent is survived by a parent or parents, the first $50,000, plus one-half the balance of the estate passes to the surviving spouse. The remainder passes to the decedent's parents.
• If there is a surviving spouse and surviving children of both, the first $50,000 plus one-half the balance of the estate passes to the surviving spouse. The remainder passes to the surviving children equally.
• If there is no spouse and no children, the property is divided evenly between your parents. If no parents are living, it is evenly divided among the descendants of your parents, namely your siblings.
• If there is no living relative, the property reverts to the state.

In addition, the probate process is time consuming and expensive. Consult one of our financial professionals to learn how to protect your estate.