Veteran’s Day Salute

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Today, I salute my fellow veterans and their families, and thank them for their service to our country.  I attended a Veteran’s Day ceremony at Geneva Middle School North this morning – it was thoughtful and touching, and I appreciate the hard work by everyone involved.  It was a pleasant reminder of the many reasons I love this country and our freedoms.  Despite this unhealthy economy and the barrage of negative news available 24 hours a day, I still believe strongly in our capitalist economic system.  I still believe strongly in a low-cost passive investment strategy.  I still believe strongly in providing hourly, as-needed financial planning and advice to people from all walks of life.

What should you do during this market turbulence?  I can’t stress enough the importance of staying the course and sticking with your long-term objectives.  That said, if you haven’t reviewed your financial goals or rebalanced your investments within the last twelve months, we should schedule some time for a financial review.  We can discuss your concerns, take stock of your finances, rebalance your investments, and hopefully provide a little peace of mind.

Happy Veteran’s Day!

Medicare Open Enrollment: Oct 15 – Dec 7

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Medicare Open Enrollment Period Starts Sooner and Ends Earlier:  In years past, open enrollment ran from November 15th through December 31st.  This year, it begins on October 15th and runs through December 7th.  Changes made during open enrollment are effective as of January 1, 2012.

During open enrollment, people with Medicare can make new choices and pick plans that work best for them. Each year Medicare plans typically change what they cost and cover. In addition, your health-care needs may have changed over the past year. The open enrollment period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.

If you have a Medicare plan, take a few moments to review it.  How is the coverage and level of care you’re receiving with your current plan? Do you see the medical professionals of your choice, or are you restricted as to the staff and facilities you’re able to use?  Are your premium costs or out-of-pocket expenses too high? For example, Medicare Part B and Part D premiums can increase if your income exceeds a certain level. On the other hand, if you have a Medigap or Medicare Supplement plan, you may find that your out-of-pocket costs are increasing due to co-payments and deductibles. If you are enrolled in a Medicare Advantage or Part C plan, those benefits and costs may change as well.  Has your health changed, or do you anticipate needing medical care or treatment? Now is the time to determine if your current plan will cover your treatment and what your potential out-of-pocket costs may be. If your current plan doesn’t meet your health-care needs or fit within your budget, you can switch to a plan that may work better for you.

Where can you get more information?  Take advantage of help available by calling 1-800-MEDICARE or by visiting the Medicare website, http://www.medicare.gov/. We can also help you find the information you need to make decisions about Medicare.

Caring for the Caregiver Conference on Saturday, September 24th

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This one day conference will provide insights and sources of information to help caregivers navigate difficult decisions regarding those they care for, especially aging family members.  Three sessions cover the following topics:  1) Legal & Financial Issues & Family Conflict, 2) Care Receiver Living Options, and 3) Self Care Options for the Caregiver.  During breaks and lunch, more than 30 local service providers will be available to answer questions and provide informative materials related to their organizations.

This free conference  is held at Hosanna! Lutheran Church in St. Charles (36W925 Red Gate Road) from 8:15am to 3pm on Saturday, September 24th, 2011.  Contact Clarus for a brochure, or look for Liane at the conference (I’ll be a panelist at the 9am session on Legal & Financial Issues).

The Dog Days of Summer

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Well, this market brings new meaning to the phrase “Dog Days of Summer.”  Despite the market, please be patient and stay the course with your investment allocation.  This is not the time to shift investment dollars to cash/emergency funds.

For all clients, I recommend you have an investment “bucket” and a ready cash/emergency reserve “bucket.”  For most people that are more than three years from retirement, their ready cash/emergency reserve equals about a year of living expenses.  For most people that are within a few years of retirement, and for those that are retired, the ready cash/emergency reserve should be closer to three years of living expense needs that are not met by Social Security, pensions, etc.  The large cash reserve for retirees and near-retirees allows you to withstand market turbulence.

Please avoid the urge to shift your investment dollars to your emergency reserve bucket.  People who sell out of the market at a low point will invariably re-enter the market at a much higher level.  It is a losing endeavor.  If this market is making you rethink your risk tolerance and asset allocation, please contact me so we can discuss your situation personally.

Parents of College-Bound Kids: Read Debt-Free U

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I recently read Zac Bissonnette’s book Debt-Free U.  In his words, this book details “How I paid for an outstanding college education without loans, scholarships, or mooching off my parents.”  He is funny, irreverent at times, and spot-on in his advice.   The introduction summarizes the growing problem with the availability of student loans and focuses on the people you meet during the college application process – and the lies they tell you.

Did you know that student loan debt totals about $600 billion dollars (compared to credit card debt at $850 billion dollars)?  Thirty years ago, there wasn’t any student loan debt.  One third of all borrowers will end in default.  And unlike credit cards, student loan debt has no consumer protection, cannot be discharged in bankruptcy, and Social Security payments can be garnished to pay off delinquent student loan debt.  For the 90% of the public who don’t have the resources to easily pay for college, this is a must read!  I’ll highlight more from this book in future posts.

Strohschein Law – Free Wills in February

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I recently caught up with Linda Strohschein, an estate planning/elder law attorney in St. Charles.  We were discussing the importance of Healthcare Powers of Attorney for young adults (especially college age and college-bound kids), and she mentioned two POA workshops they’ll be providing in the coming months (April and June 2011).  This is a great opportunity to become knowledgeable on this important planning document – please contact her law firm for details (www.strohscheinlaw.com).

She also mentioned their February Free Will promotion.  For those of you who don’t have a current will (and for those few clients of mine who don’t have a will at all!), if you schedule an appointment this month, the will is free.  This is a tremendous savings and a great incentive to update your estate plan.

Happy New Year! Now Ignore the Noise.

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Read Morgan House’s article on tuning out the daily market news.   Stick with your low-cost diversified portfolio, review periodically, and in the meantime – enjoy life!

Overview of the Tax Provisions in the 2010 Tax Relief Act

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The newly enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” signed into law on December 17, 2010 is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year “patch” of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here’s a look at some of the key elements of the package: Read more

Year-End Tax Planning

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The midterm elections have changed the Congressional landscape, with Republicans winning control of the House of Representatives and picking up seats in the Senate. Even so, it’s too early to know exactly how this will affect open tax issues for 2010 and 2011.

Specifically, when the “lame-duck” Congress returns this month, it must decide whether to “patch” the alternative minimum tax (AMT) for 2010 (increase exemption amounts, and allow personal credits to offset the AMT), as it has done in past years. It also must decide whether to retroactively extend a number of tax provisions that expired at the end of 2009. Read more

Clarus Moved!

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If we’ve not spoken in the last few months, then you may not know that Clarus Financial Planning moved into permanent office space in downtown Geneva.  Rather than make it simple, I decided to renovate a very old space into something with a bit more character.  It’s a work in progress, but is coming along nicely.  Here are the details:

  • Clarus Financial Planning is now located at 312 W. State Street, Suite 106.  This is a block east of my old conference facility, near the light at Third Street.  For those of you familiar with downtown Geneva, the new office is almost directly above Stockholms.
  • The new phone number is 630-492-1244.  The fax is the same: 214-445-0788.
  • Email and website information are the same.

I hope to have an open house in early 2011.  In the meantime, it’s business as usual with planning sessions and annual reviews.  Please let me know if you need to schedule a review.

With Thanksgiving just around the corner, I am reminded of all the blessings in my life.  I have the wonderful job of working with some of the smartest individual investors I’ve met, and I treasure working with each of you.  Thank you!