Volatility can work for you

THERE’S A REASON VOLATILE MARKETS MAKE INVESTORS UNCOMFORTABLE
Wide swings in prices create uncertainty, and uncertainty stirs feelings of doubt and insecurity. But in free markets, where prices are dynamic, not static, volatility is unavoidable. And it is in volatility that investors can find opportunity. How? History tells us down periods usually are followed by up periods (and vice versa); continuing to invest during slumps tends to add to future potential returns; and a portfolio diversified across asset classes can provide the potential for positive returns in any global environment. In sum, long-term diversified investors needn’t fear volatility.

Please follow the link to read more about volatility.

http://www.federatedinvestors.com/FII/volatility/?&mobile=true&utm_source=linkedin&utm_medium=social&utm_campaign=rj

Information provided by Federated Securities Corp

Financial Planning-Helping you see the Big Picture

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached. That's where financial planning comes in. Financial planning is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

WHY IS FINANCIAL PLANNING IMPORTANT?

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related, for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll have the peace of mind that comes from knowing that your financial life is on track.

THE FINANCIAL PLANNING PROCESS

• Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:
• Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
• Establish and prioritize financial goals and time frames for achieving these goals
• Implement strategies that address your current financial weaknesses and build on your financial strengths Choose specific products and services that are tailored to meet your financial objectives
• Monitor your plan, making adjustments as your goals, time frames, or circumstances change

SOME MEMBERS OF THE TEAM

• The financial planning process can involve a number of professionals. Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas. Financial Planners also provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.
•  Accountants or tax attorneys provide advice on federal and state tax issues.
• Estate planning attorneys help you plan your estate and give advice on transferring and managing your    assets before and after your death.
• Insurance professionals evaluate insurance needs and recommend appropriate products and strategies
• The most important member of the team, however, is you. Your needs and objectives drive the team, and once you've carefully considered any recommendations, all decisions lie in your hands

WHY CAN'T I DO IT MYSELF?

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered

STAYING ON TRACK

The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan

• Your goals or time horizons change
•  You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
• You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
• Your income or expenses substantially increase or decrease
• Your portfolio hasn't performed as expected
• You're affected by changes to the economy or tax laws

COMMON QUESTIONS ABOUT FINANCIAL PLANNING:

What if I'm too busy?

•  Don't wait until you're in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

Is the financial planning process complicated?

•  Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, a financial professional will work hard to make the process as easy as possible, and will gladly answer all of your questions.

What if my spouse and I disagree?

• A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground.

Can I still control my own finances

• Financial planning professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them.

SHOULD YOU PAY OFF YOUR MORTGAGE OR INVEST?

Owning a home outright is a dream that many Americans share. Having a mortgage can be a huge burden, and paying it off may be the first item on your financial to-do list. But competing with the desire to own your home free and clear is your need to invest for retirement, your child's college education, or some other goal. Putting extra cash toward one of these goals may mean sacrificing another. So how do you choose?

EVALUATING THE OPPORTUNITY COST:

Deciding between prepaying your mortgage and investing your extra cash isn't easy, because each option has advantages and disadvantages. But you can start by weighing what you'll gain financially by choosing one option against what you'll give up. In economic terms, this is known as evaluating the opportunity cost.

Here's an example. Let's assume that you have a $300,000 balance and 20 years remaining on your 30-year mortgage, and you're paying 6.25% interest. If you were to put an extra $400 toward your mortgage each month, you would save approximately $62,000 in interest, and pay off your loan almost 6 years early.

By making extra payments and saving all of that interest, you'll clearly be gaining a lot of financial ground. But before you opt to prepay your mortgage, you still have to consider what you might be giving up by doing so--the opportunity to potentially profit even more from investing.

To determine if you would come out ahead if you invested your extra cash, start by looking at the after-tax rate of return you can expect from prepaying your mortgage. This is generally less than the interest rate you're paying on your mortgage, once you take into account any tax deduction you receive for mortgage interest. Once you've calculated that figure, compare it to the after-tax return you could receive by investing your extra cash.

For example, the after-tax cost of a 6.25% mortgage would be approximately 4.5% if you were in the 28% tax bracket and were able to deduct mortgage interest on your federal income tax return (the after-tax cost might be even lower if you were also able to deduct mortgage interest on your state income tax return). Could you receive a higher after-tax rate of return if you invested your money instead of prepaying your mortgage?

Keep in mind that the rate of return you'll receive is directly related to the investments you choose. Investments with the potential for higher returns may expose you to more risk, so take this into account when making your decision.

OTHER POINTS TO CONSIDER:

While evaluating the opportunity cost is important, you'll also need to weigh many other factors. The following list of questions may help you decide which option is best for you:

• What's your mortgage interest rate? The lower the rate on your mortgage, the greater the potential to receive a better return through investing.
• Does your mortgage have a prepayment penalty? Most mortgages don't, but check before making extra payments.
• How long do you plan to stay in your home? The main benefit of prepaying your mortgage is the amount of interest you save over the long term; if you plan to move soon, there's less value in putting more money toward your mortgage.
• Will you have the discipline to invest your extra cash rather than spend it? If not, you might be better off making extra mortgage payments.
• · Do you have an emergency account to cover unexpected expenses? It doesn't make sense to make extra mortgage payments now if you'll be forced to borrow money at a higher interest rate later. And keep in mind that if your financial circumstances change, if you lose your job or suffer a disability, for example, you may have more trouble borrowing against your home equity.
• How comfortable are you with debt? If you worry endlessly about it, give the emotional benefits of paying off your mortgage extra consideration.
• Are you saddled with high balances on credit cards or personal loans? If so, it's often better to pay off those debts first. The interest rate on consumer debt isn't tax deductible, and is often far higher than either your mortgage interest rate or the rate of return you're likely to receive on your investments.
•  Are you currently paying mortgage insurance? If you are, putting extra toward your mortgage until you've gained at least 20% equity in your home may make sense.
• How will prepaying your mortgage affect your overall tax situation? For example, prepaying your mortgage (thus reducing your mortgage interest) could affect your ability to itemize deductions (this is especially true in the early years of your mortgage, when you're likely to be paying more in interest).
• Have you saved enough for retirement? If you haven't, consider contributing the maximum allowable each year to tax-advantaged retirement accounts before prepaying your mortgage. This is especially important if you are receiving a generous employer match. For example, if you save 6% of your income, an employer match of 50% of what you contribute (i.e., 3% of your income) could potentially add thousands of extra dollars to your retirement account each year. Prepaying your mortgage may not be the savviest financial move if it means forgoing that match or shortchanging your retirement fund.
• How much time do you have before you reach retirement or until your children go off to college? The longer your time frame, the more time you have to potentially grow your money by investing. Alternatively, if paying off your mortgage before reaching a financial goal will make you feel much more secure, factor that into your decision

THE MIDDLE GROUND

If you need to invest for an important goal, but you also want the satisfaction of paying down your mortgage, there's no reason you can't do both. It's as simple as allocating part of your available cash toward one goal, and putting the rest toward the other. Even small adjustments can make a difference. For example, you could potentially shave years off your mortgage by consistently making biweekly, instead of monthly, mortgage payments, or by putting any year-end bonuses or tax refunds toward your mortgage principal.

And remember, no matter what you decide now, you can always re-prioritize your goals later to keep up with changes to your circumstances, market conditions, and interest rates.

HOW MUCH ANNUAL INCOME CAN YOUR RETIREMENT PORTFOLIO PROVIDE?

Your retirement lifestyle will depend not only on your assets and investment choices, but also on how quickly you draw down your retirement portfolio. The annual percentage that you take out of your portfolio, whether from returns or the principal itself, is known as your withdrawal rate. Figuring out an appropriate initial withdrawal rate is a key issue in retirement planning and presents many challenges.

WHY IS YOUR WITHDRAWAL RATE IMPORTANT?

TAKE OUT TOO MUCH TOO SOON, AND YOU MIGHT RUN OUT OF MONEY IN YOUR LATER YEARS. TAKE OUT TOO LITTLE, AND YOU MIGHT NOT ENJOY YOUR RETIREMENT YEARS AS MUCH AS YOU COULD. YOUR WITHDRAWAL RATE IS ESPECIALLY IMPORTANT IN THE EARLY YEARS OF YOUR RETIREMENT; HOW YOUR PORTFOLIO IS STRUCTURED THEN AND HOW MUCH YOU TAKE OUT CAN HAVE A SIGNIFICANT IMPACT ON HOW LONG YOUR SAVINGS WILL LAST.

Gains in life expectancy have been dramatic. According to the National Center for Health Statistics, people today can expect to live more than 30 years longer than they did a century ago. Individuals who reached age 65 in 1950 could anticipate living an average of 14 years more, to age 79; now a 65-year-old might expect to live for roughly an additional 19 years. Assuming rising inflation, your projected annual income in retirement will need to factor in those cost-of-living increases. That means you'll need to think carefully about how to structure your portfolio to provide an appropriate withdrawal rate, especially in the early years of retirement.

CONVENTIONAL WISDOM

SO WHAT WITHDRAWAL RATE SHOULD YOU EXPECT FROM YOUR RETIREMENT SAVINGS? THE ANSWER: IT ALL DEPENDS. A SEMINAL STUDY ON WITHDRAWAL RATES FOR TAX-DEFERRED RETIREMENT ACCOUNTS (WILLIAM P. BENGEN, "DETERMINING WITHDRAWAL RATES USING HISTORICAL DATA," JOURNAL OF FINANCIAL PLANNING, OCTOBER 1994) LOOKED AT THE ANNUAL PERFORMANCE OF HYPOTHETICAL PORTFOLIOS THAT ARE CONTINUALLY REBALANCED TO ACHIEVE A 50-50 MIX OF LARGE-CAP (S&P 500 INDEX) COMMON STOCKS AND INTERMEDIATE-TERM TREASURY NOTES. THE STUDY TOOK INTO ACCOUNT THE POTENTIAL IMPACT OF MAJOR FINANCIAL EVENTS SUCH AS THE EARLY DEPRESSION YEARS, THE STOCK DECLINE OF 1937-1941, AND THE 1973-1974 RECESSION. IT FOUND THAT A WITHDRAWAL RATE OF SLIGHTLY MORE THAN 4% WOULD HAVE PROVIDED INFLATION-ADJUSTED INCOME FOR AT LEAST 30 YEARS. MORE RECENTLY, BENGEN USED SIMILAR ASSUMPTIONS TO

show that a higher initial withdrawal rate--closer to 5%--might be possible during the early, active years of retirement if withdrawals in later years grow more slowly than inflation.

Other studies have shown that broader portfolio diversification and re-balancing strategies also can have a significant impact on initial withdrawal rates. In an October 2004 study ("Decision Rules and Portfolio Management for Retirees: Is the 'Safe' Initial Withdrawal Rate Too Safe?," Journal of Financial Planning) Jonathan Guyton found that adding asset classes such as international stocks and real estate helped increase portfolio longevity (although these may entail special risks). Another strategy that Guyton used in modeling initial withdrawal rates was to freeze the withdrawal amount during years of poor portfolio performance. By applying so-called decision rules that take into account portfolio performance from year to year, Guyton found it was possible to have "safe" initial withdrawal rates above 5%.

A still more flexible approach to withdrawal rates builds on Guyton's methodology ("Using Decision Rules to Create Retirement Withdrawal Profiles Journal of Financial Planning, August 2007). William J. Klinger suggests that a withdrawal rate can be fine-tuned from year to year, using Guyton's methods but basing the initial rate on one of three retirement profiles. For example, one person might withdraw uniform inflation-adjusted amounts throughout his or her retirement. Another might choose to spend more money early in retirement and less later; still another might plan to increase withdrawals as he or she ages. This model also requires estimating the odds that the portfolio will last throughout retirement. One retiree might be comfortable with a 95% chance that his or her strategy will permit the portfolio to last throughout retirement; another might need assurance that the portfolio has a 99% chance of lifetime success. The study suggests that this more complex model might permit a higher initial withdrawal rate, but also means the annual income provided is likely to vary more over the years.

Don't forget that all these studies were based on historical data about the performance of various types of investments. Given market performance in recent years, many experts are suggesting being more conservative in estimating future returns.

Note: Past results don't guarantee future performance.

INFLATION IS A MAJOR CONSIDERATION

For many people, even a 5% withdrawal rate seems low. To better understand why suggested initial withdrawal rates aren't higher, it's essential to think about how inflation can affect your retirement income.

Here's a hypothetical illustration; to keep it simple, it does not account for the impact of any taxes. If a $1 million portfolio is invested in an account that yields 5%, it provides $50,000 of annual income. But if annual inflation pushes prices up by 3%, more income--$51,500--would be needed next year to preserve purchasing power. Since the account provides only $50,000 income, an additional $1,500 must be withdrawn from the principal to meet expenses. That principal reduction, in turn, reduces the portfolio's ability to produce income the following year. In a straight linear model, principal reductions accelerate, ultimately resulting in a zero portfolio balance after 25 to 27 years, depending on the timing of the withdrawals.

VOLATILITY AND PORTFOLIO LONGEVITY

When setting an initial withdrawal rate, it's important to take a portfolio's ups and downs into account—and the need for a relatively predictable income stream in retirement isn't the only reason. According to several studies in the late 1990s by Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, the more dramatic a portfolio's fluctuations, the greater the odds that the portfolio might not last as long as needed. If it becomes necessary during market downturns to sell some securities in order to continue to meet a fixed withdrawal rate, selling at an inopportune time could affect a portfolio's ability to generate future income.

Making your portfolio either more aggressive or more conservative will affect its lifespan. A more aggressive portfolio may produce higher returns but might also be subject to a higher degree of loss. A more conservative portfolio might produce steadier returns at a lower rate, but could lose purchasing power to inflation.

CALCULATING AN APPROPRIATE WITHDRAWAL RATE

Your withdrawal rate needs to take into account many factors, including (but not limited to) your asset allocation, projected inflation rate, expected rate of return, annual income targets, investment horizon, and comfort with uncertainty. The higher your withdrawal rate, the more you'll have to consider whether it is sustainable over the long term.

If the article resonates with your situation, do not hesitate to call upon us to assist you with applying the subject matter to your personal situation.

You've been hacked, now what?

What to do when you receive the message that your account has been compromised. 

Message: We have detected unusual activity on your account. Did you authorize this transaction?

At first you think the text from your credit card company is a mistake; then reality sets in. You may have been hacked. Your mind reels as you wonder what information the thieves were able to access and if your identity has been stolen. Sadly, this scenario is all too common. The Federal Trade Commission reports that 11.7 million people find themselves as victims of identity theft every year. 

Cyberattacks target individuals and huge corporations alike. While reputable companies take cyber threats seriously and institute multiple layers of protection, hackers relentlessly pursue ways around obstacles between them and your information. Should you get hacked, take action immediately.  

Financial Tips from Mom and Dad

Your children will create many proud parent moments, like entering and completing college and starting their own life. When you think about ways to help celebrate these events, consider bestowing sound financial advice. It may turn out to be the most precious and timeless gift you can give.

To learn more from New York Life on ways to help your children learn valuable financial lessons, please click on the link below.

http://www.nylinvestments.com/polos/RISWM02q-071555094.pdf

The New Disruptors of Old Age

From smart phones to smart homes, emerging technology is changing the way Americans approach aging — and Baby Boomers welcome the advances.

August 15, 2016

The traditional wisdom among Silicon Valley's youthful technorati is to design for what you know—texting your friends in Europe for free (WhatsApp), renting out your bedroom to make extra cash (Airbnb), finding a romantic partner without leaving your house (Tinder). But a handful of entrepreneurs are now looking beyond the millennial market to reach a new demographic with their own needs — baby boomers.

“You’ve got all these 20-something engineering types who are beginning to realize there are older adults who can make use of these products to promote health and well-being,” said Andrew Scharlach, Professor of Aging at the University of California, Berkeley. “What we are beginning to see is the marriage of product developers with the end users that they previously had not been aware of.”

In the United States, 10,000 people will turn 65 every day for the next decade. This demographic controls approximately 75% of the country’s income. They are living longer than ever before and changing what it means to retire — that is, if they decide to retire.

“Retirement is a recent phenomenon,” said David Lindeman, the Director of the Center of Tech and Aging at U.C. Berkeley. “But it is a basic human interest to stay at your highest functioning level, and maintain your independence as long as possible. Technology is a game changer in terms of autonomy and independence.”

In response to the increase in chronic diseases, as well as rising costs of prescription drugs and long-term health care for older adults, more technology companies are developing products designed to keep people healthier longer. Smartphone apps help to manage diabetes and monitor high blood pressure, while other programs promote fitness and long-term wellness.

“When you’re in your sixties you are probably a caregiver,” said Mary Furlong, who organizes the annual Silicon Valley Boomer Venture Summit. “But the goal is to live long enough that one day you’ll need a caregiver. A lot of people are having this wake-up call. The revolution in wellness and self-care is primarily having an impact on the boomer population.”

"Technology is a game changer in terms of autonomy and independence."

Meanwhile, many retirees want to stay in their communities longer and age on their own terms at home. In 2013, 28% of the 65+ population in the United States (8.4 million women and 3.7 million men) lived alone. In the past, technology for this demographic has been limited to emergency response buttons like those made famous on the “I’ve Fallen and I Can’t Get Up,” infomercials for LifeCall.

“For the longest time people thought about technology as a panic device, but it [has] evolved into so much more than that,” said Scott Collins, CEO of LinkAge, a venture capital firm that invests in technology aimed at seniors. “I think what you’re seeing is a recognition that the boomers are a massive cohort that have disrupted the economy at every stage of their life, and entrepreneurs and developers are realizing there is a massive market opportunity.”

The advent of smart homes offers increased autonomy though web cams, remote monitoring, and strategically located sensors. The personal emergency response company Lively was founded in 2012, with an eye toward what seniors would actually use.

“We wanted to do whatever we could to help elders stay independent as long as possible,” said Lively co-founder David Glickman. “But [their] adult children are craving peace of mind. We wanted to reimagine the emergency response experience. ”

"Boomers are a massive cohort that have disrupted the economy at every stage of their life."

The result is a slick-looking, waterproof watch that retails for less than $100, with a monthly fee of $28 dollars a month. Sensors set up around the house can be monitored remotely, and report whether the user’s medication has been taken, or if they have spent too long in the bathroom. In the event of a fall, users can press a large button to call 911.

“[A] smart home for an elder living independently has tremendous power,” Glickman said. “It is a way of including the family without being too intrusive.”

Major companies are also rethinking the role tech can play in health and aging. Intel CEO Eric Dishman has championed the importance of designing technology for older users, and last year, Intel launched the RealPad with AARP. Available for under $200 at Walmart, the device aims to make video calls easy and affordable for seniors. Amazon has launched a 50+ Active and Healthy Living Store, offering everything from vitamins to wearable activity monitors.

“People over 50 are disrupting the traditional historical perception of aging in what they buy, what they do, what they are interested in, but also their adoption of technology,” said Jody Holtzman, Senior Vice President of Thought Leadership at AARP. “But the [actual industry] disruption is being driven by entrepreneurs who are recognizing that the myths of aging are just myths.”

"Entrepreneurs...are recognizing that the myths of aging are just myths."

Meanwhile, Google is hoping to outsmart death with its new biotech company, Calico. This “moonshot” — Google parlance for wacky ideas — is focused on improving lives through long-term solutions like curing cancer and addressing neurodegeneration. Headed up by biotech firm Genentech, few public details are available, and we may not hear about the company’s innovations for another 10 to 20 years.

“I think older people want the same thing as younger people,” says Holtzman. “People want to live active, exciting lives, and that is equally true for boomers, but that universal truth is relevant for everybody. Nobody old wants to buy anything designed for somebody old" — except, maybe, immortality. 

Where Your Retirement Money Goes

As you consider a long, happy retirement, give some thought to the largest aspects of your budget. Where your money actually goes may surprise you.

Wealth alone cannot buy a quality retirement any more than it can buy happiness – but having a solid financial foundation can make those years more enjoyable. As you consider a long, happy retirement, give some thought to the most expensive aspects – housing, transportation, healthcare and food – the effect of inflation and how to budget for it all. Entertainment should be included, too, since social activities enhance your physical and emotional well-being. Keep in mind that these percentages will vary as life changes, so it’s a good idea to account for the biggest line items as you plan for the future. 

10 Symptons of Caregiver Stress

10 Symptoms of Caregiver Stress

It’s important to be aware of caregiver burnout. You cannot provide effective care if you neglect your own physical and mental well-being.

May 11, 2016

Caring for a loved one with dementia can take a physical and emotional toll. As demands grow, caregivers often report feelings of sadness, stress, guilt, anger, isolation, and depression. The Alzheimer’s Association® has prepared a list of ten signs of caregiver stress. A strained caregiver is unlikely to provide quality care to a friend or loved one with dementia. Please see your doctor if you experience any of these symptoms on a regular basis:

1. Denial about the disease and its effect on the person who has been diagnosed. 
   “I know Mom is going to get better.”
2. Anger at the person with Alzheimer’s, the fact there is no cure, or that people don’t understand what’s happening. 
   “If he asks me that one more time, I’ll scream!”
3. Social withdrawal from friends and activities that once brought pleasure. 
   “I don’t care about getting together with friends anymore.”
4. Anxiety about the future. 
   “What happens when he needs more care than I can provide?”
5. Depression* that begins to break your spirit and affects your ability to cope. This can include thoughts of suicide or death. 
   “I don’t care anymore.”
6. Exhaustion that makes it nearly impossible to complete necessary daily tasks. 
   “I’m too tired for this.”
7. Sleeplessness caused by a never-ending list of concerns. 
   “What if she wanders out of the house or falls and hurts herself?”
8. Irritability that leads to moodiness and triggers negative responses and actions. 
   “Leave me alone!”
9. Lack of concentration that makes it difficult to perform familiar tasks. 
   “I was so busy; I forgot we had an appointment.”
10. Health problems that begin to take a mental and physical toll.
    “I can’t remember the last time I felt good.”

Being a caregiver can be overwhelming, and the stress associated with this critical role can make it difficult to take action. Transamerica's Caregiver's Guide to Financial Planning in the Shadow of Dementia, written in collaboration with the Massachusetts Institute of Technology (MIT) AgeLab, was created to help you feel confident when making decisions for, or with, a loved one living with dementia. Work with your financial advisor before taking final action. 

Looking After Your Modern Legacy

For too many, legacy planning focuses solely on the transfer of money and legal documentation, which generally fall under the estate planning umbrella. While all of that is very important, there should be a more personal aspect to the process. After all, we’re talking about your life and how you’ll be remembered.

Your stories, traditions, beliefs and values need not be taken to the grave. These things make you who you are and should be shared with your children and grandchildren. In the past, loved ones might have inherited a shoebox full of letters and photos that helped tell the story of a life well lived. Today, our digital selves – in the form of Facebook pages, Twitter feeds and blog posts – hold the personal details of our lives, so it’s important to have a plan for digital assets and a way to take control of your life story.

There is a practical side to this as well. If heirs don’t have access to your email account, they might never uncover assets not listed in your will, assuming you have one. About 64% of Americans don’t, according to a 2014 survey conducted for website Rocket Lawyer. The survey also showed 51% of Americans age 55 to 64 don’t have wills.

A Basic Plan
Creating an estate plan is particularly important for parents of minor children; property and business owners; those who would prefer to keep money matters private through a revocable trust; and those with a history of poor health. But there are more reasons than ever to have a basic plan in place.

A well-drafted will has a number of purposes, including specifying who is in charge of making decisions; outlining the care of any minor children; and minimizing state and federal estate taxes. The ultimate goal, of course, is to make sure your loved ones receive as much of your wealth as possible and have less to deal with during a time of grief.

A Note from Beyond
To accompany a formal estate plan, you might also consider writing what’s called a family love letter or ethical will. This is the idea of documenting your spiritual and religious beliefs, life philosophy, worldview and wisdom in a video or love letter to your family. Doing so can help you organize your thoughts so you can be sure you’ve communicated everything you want to share.

You might also create a document with instructions related to your online accounts. The American Bar Association recommends naming a digital executor to help sort through your digital life, whether it’s a trusted colleague or your computer-savvy daughter. It’s also a good idea to provide an inventory of accounts and a means of access. This evolving document should be updated regularly, focusing on the most important digital assets.

A Fond Farewell
Creating a lasting legacy is about more than distributing assets to those you love. It’s clearly communicating your thoughts, feelings, traditions and values to the next generation. Working with trusted financial, tax and legal advisors can help you ease any confusion or conflict that may arise for your survivors. After all, we want to leave memories of a life well lived, not a tangle of personal debris to wade through. 

Help kids of all ages develop smart money habits.

We believe that educating your children and grandchildren on the fundamentals of personal finances is extremely important. With that in mind, the following article from Raymond James helps to supply some guidelines for when and what to educate your children on.

April 12, 2016

We all like to think our children or grandchildren are practically geniuses, but some things just don’t come intuitively. Wise money habits, for example. Everyone needs to learn the value of a dollar, how to make money work toward our goals and how to protect our financial legacy, even little kids. In fact, the sooner you start the better. When your little ones aren’t so little anymore, you’ll have the comfort of knowing they understand and appreciate the power of financial planning and the role money plays in their lives. But how do you know what’s appropriate at every age and the best way to impart these important life lessons? Follow along as we walk through the milestones that mark the path to financial literacy and, hopefully, wisdom.

The Early Years: Five - Nine

Lessons: Pre-kindergarten is a great time to start with the basics, including the idea that you must work to earn money in order to pay for items and services, as well as the value of different coins and bills. By age 7, your child should be able to do some chores and earn enough allowance to buy small items. It’s important, too, to discuss needs and wants and why you might have to make choices (e.g., needs come before wants) or wait a little longer (to save for something you want more).

Activities:

·         Get to Work. Brainstorm different ways to earn money, like a lemonade stand, cookie booth or selling used toys and books.

·         Play Games. Role-play using money-based games (e.g., restaurant owner and customer).

·         Start Saving. Explain savings accounts and the concept of earning interest. Visit a bank to open up a savings account in your child’s name.

Tip: Start saving habits early by stashing a percentage of any money received in each of four collection jars: one for saving, growing, spending and giving. The point is to build patience in order to later enjoy the benefits of disciplined saving.

The Teen Years: 10 - 15

Lessons: As your child or grandchild matures, talk about how your family values work and money. Continue to instill work ethics by allowing your preteen or teen to earn money by doing chores or errands, like washing cars, mowing lawns or babysitting. If you haven’t already, open a savings account for your child and explain how interest can compound over time as they save toward midrange goals. Discuss, too, how to balance deposits and expenses to make sure your teen is living within his or her means. Children within this age range also should be able to conduct simple financial transactions, like writing a check, making a deposit, using an ATM and paying a bill.

Activities:

·         Check out Checking. Consider adding checking to your children’s accounts and teaching them how to balance their checkbook.

·         Divide and Conquer. Allocate a percentage of allowance or gift money toward saving, spending, investing and sharing buckets.

·         Chip In. Offer to “match” your child’s savings with a contribution of your own, say a quarter for every dollar saved.

·         Get Defensive. Explain how to safeguard personal and financial information online and how to spot scams aimed at stealing financial information.

Tip: Now’s a good time to discuss credit and its alter ego – debt. Discuss when to use credit cards and how quickly interest adds up. If you get a credit or debit card for your older teen, emphasize responsible use and how to keep personal information secure.

Young Adulthood: 16 - 21

Lessons: Kids this age should start thinking about where to go to college, how to live independently and, yes, even planning for retirement. Start simply by asking your older teen or young adult to participate in household budgeting and talk about paying bills on time. Be sure to discuss line items like insurance and utilities and their costs, as well as the importance of automatically saving for long-term goals, like buying a house, setting up an emergency fund, or saving for retirement (remember how important compounding is!). Cover the basics of putting money to work through investing, smart borrowing and the after-tax effect on take-home pay and investment income.

Activities:

·         Add it Up. Utilize special calculators to estimate college costs and benefits. Discuss how much you’re willing to contribute toward this important expense.

·         Give Credit. Explain how credit history can affect your ability to obtain credit or get a job. Check free credit reports at annualcreditreport.com.

·         Work it Out. Talk about the value of contributing through a part-time job, household chores or an internship.

Invest in the Future. Help your adult children set up their 401(k)s or start a brokerage account or Roth IRA (if they’re working