A Tribute to a Special Person

Art Sweet, who was one of the nicest people I have had the privilege of knowing and working with, died last week at the age of 93. We worked together as partners at a prior CPA firm for 18 years, from 1990 until 2008. 

Art had merged his two person CPA and bookkeeping practice into this other CPA firm a number of years before I joined that firm in 1990. Originally, Art intended to gradually transition his clients and retire a few years later. Art exceeded the firm’s “mandatory” retirement age of 65 or 70 by quite a bit, as he continued working until last December….finally retiring at age 93.

I really mean it when I say I had the privilege of working with Art. At a funeral or when someone dies, you sometimes hear people say that everyone liked him or her, or they never heard a bad word about that person. Art Sweet was truly one of these people. He was kind. He was liked by everyone he came in contact with. Although I’m sure he had his private moments, I cannot remember him ever getting angry or raising his voice at anyone.

Art and his wife Gladys, when they were both younger and healthy, were world travelers. They loved music and dancing, as well as their many friends and family. We would frequently drive to one of his favorite lunch places, the former Georgio’s on Greenfield Road, always splitting a Caesar salad and huge bowl of pasta. We would have great conversations about his travels, his last trip or the one he was planning, as well as all types of cultural activities, such as a concert he attended, a movie he had seen or a book he was reading. I felt like I was living vicariously through him. Now, I am able to do some of the things we had talked about at those lunches.

Decades ago, I was in awe of Art for his ability to adapt to all the technology changes he encountered. He started as an accountant and CPA way before personal computers. He did tax returns by hand in pencil. He learned how to use computers, as well as handle the continuous avalanche of tax changes that a CPA faces. It is one thing for someone in their 30s or 40s to learn new technology, but imagine the challenges he faced and overcame to keep current with technology in his 70s, 80s and even in his 90s.

People leave a legacy. Art left me a huge legacy. Many years ago, I read a concept by a consultant, Alan Weiss, that when you look back on your career or firm, you will find that it is very likely that a handful of key people will have had a huge impact on your business.

I am very fortunate that Art had many wonderful clients, as many of Art’s clients transitioned through the years at the CPA firm to become my clients. As I transitioned from a full-time CPA to a financial advisor, many of these clients, and their families, became clients of our financial advisory firm, and are still valued clients and cherished friends.

Art had a love of life and a passion for culture and travel. Art cherished his family, his children, grandchildren and numerous great-grandchildren. For many years, he cared for his wife as she had Alzheimer’s.

Arthur M. Sweet was a special person. The world lost a very kind and gentle person last week.

I am grateful that he was a part of my life.

Have you checked these recently?

The following are some ideas and reminders of things you should consider, which may prompt some good next steps.

Beneficiaries for your retirement accounts and life insurance policies: Are the actual designations on the forms what you intend? Have you reviewed them recently?

  • It is a good idea to review your beneficiary designation forms every few years, to ensure they reflect your current intent.
  • If you want to provide for charitable bequests upon your death and you have retirement accounts, these gifts should be reflected on retirement account designations, not as part of your will/estate planning documents.

Have you enabled the emergency function on iPhones and other devices?

  • For iPhone users, if you enable the emergency function within the Health app (which comes with the iPhone) and you are in an accident or incapacitated, a first responder can access critical information from your phone, even if your phone has security codes or Touch ID.
  • After going into the Health app, continue to “Medical ID.” Input your name, emergency contacts, and basic health information.
  • The Medical ID feature can be accessed without unlocking any other information on your phone. (Thanks to my kids for this recommendation, which I just did).

Do you know whether your financial advisor is a fiduciary?

  • We highly recommend that your financial advisor be a fiduciary, which means that all of their advice and recommendations must be in your best interest (even if it is not in theirs or their company’s best interest).
  • We are fiduciaries. Most brokers or financial consultants with major brokerage firms and banks are not fiduciaries. The interest of their company can come before your interests. For more information, see this blog post.

Passwords:

  • Are you using complex and different passwords?
  • Have you recently changed the passwords for some of the websites you use most and for banks and credit cards?
  • We highly recommend using an application like 1Password or a comparable password manager, which stores passwords and can automatically enter your passwords and user names for you. For more information, see this blog post, How to Securely and Efficiently Manage Your Passwords.

What is one thing which you are procrastinating on, that if you dealt with it, would enable you to move forward?

  • Think about this. We hope this helps you resolve something or move an issue forward. Procrastination can mean it’s important, but you just need to focus on it and determine the next step.

Have you checked your FICO score or your Social Security information?

  • FICO scores are important for interest rates on loans and applying for credit. You can get this for free from many credit cards. Email me for more information.
  • If you are not yet receiving Social Security, you should go to ssa.gov at least every few years, review your earnings history for accuracy and see a projection of your future benefits. Their website is quite secure and they have now added a second level of verifying your identification.

 

We hope these are helpful and practical for you and your family.

Better than

Over the long term…..

Being optimistic is better than being pessimistic.

Being patient is better than reacting quickly.

Staying in the market is better than getting in and out of the market because you are worried.

Small company stocks do better than large company stocks.

Value company stocks do better than growth company stocks.

Globally diversified portfolios of index-like funds do better than concentrated holdings of US individual stocks.

Using complex computer passwords is better than using a few simple passwords.

Avoiding annuities and hedge funds is better than using them.

Lower mutual fund fees are better than higher fees.

Using a password manager program is better than keeping your passwords on a piece of paper.

Having a financial advisor who monitors the tax management of your portfolio throughout the year is better than an advisor that only does it at year end.

Making a financial decision after consulting with your financial advisor is better than making a decision without talking to your advisor.

These should help you to be better.

12 Travel and Credit Card Tips for Greater Value and Enjoyment (Part 1)

We advise you on your finances and investments.

But we all spend money. I want to provide tips which can save you money and time, create greater value and help you and your family to have better experiences as you shop, fly, travel and eat out.

Today in Part 1, are 6 tips that you should consider and implement, if they make sense with your lifestyle.

Within the next few weeks, I will post Part 2, with more tips.

1. Get TSA PreCheck, or Global Entry, to save you time and energy every time you fly. These are both valid for 5 years.

  • Global Entry, geared toward international travel, requires an interview and provides for expedited processing through customs at airports and land borders when you arrive back in the US. If you apply for this, TSA PreCheck is included in the $100 cost.
  • TSA PreCheck is only for domestic air travel and costs $85. For more information, go to www.tsa.gov/tsa-precheck .
  • The cost for either is reimbursable if you have one of the following premium credit cards: Citi Prestige, Platinum Card from American Express or Ritz-Carlton Rewards Card, through Chase.
  • Even if you don’t have these credit cards, the average cost of $20-$25 per year is very well worth it. I recommend that your entire family get at least TSA PreCheck. I did this, the process is quick and easy…and you will appreciate it every time you fly.

2. Don’t spend time waiting in car rental lines by signing up for car rental rewards programs, which are free. You can register online. By doing this, you can bypass the long lines at the rental car counters and go right to your car each time you rent. You can do this quickly online, prior to the next time you rent a car.

3. Learn more about maximizing credit card and loyalty strategies. Over the past few years, and especially in recent months, I have read and learned more about the many perks and variety of benefits which are available. A great place to start is www.thepointsguy.com. If you spend the time, you will be amazed at the benefits you can accumulate.

  • If you are loyal to a certain hotel chain, then get their branded credit card. Just getting the credit card will usually get you some free nights. If you use that card for spending or travel, you may move up to elite status, which will get you many perks. I have been loyal to various Marriott brand hotels and now regularly get upgrades, my paid stays and purchases with their credit card rapidly multiply (which can be used for future free nights), special offers, and you get better service from their staff.
  • The Points Guy website recommends SPG (Starwood), which is expected to merge with Marriott, as having the greatest value for their reward program.

4. Consider spending money to get a premium credit card. I once thought it did not make much sense to pay for a premium credit card. However, this can be a wise investment if you will use the benefits.

  • The Citi Prestige Card, which costs $450 per year, provides a 4th night free on any hotel stay of 4 nights or longer (must book through their service), comes with a $250 airline credit which can be used to pay for airfare, baggage fees, in-flight wifi and other items, charges on this card earn 3X for airfare and hotels, can get three free rounds of golf and Admiral Club lounge membership (related to American Airlines). The huge benefit is the 4th night free, if you are planning an extended stay and the hotel is expensive. I may get this card and use it on the second part of a trip next fall.
  • Other cards in this category are Amex Platinum and the Ritz-Carlton Rewards card.
    • The Ritz card offers many perks, such as $300 of travel incidentals (which includes TSA reimbursement), 3 hotel club lounge upgrades per year (hugely valuable if you enjoy the free breakfasts, food and drinks throughout the day), Gold level status, $100 credit on stays of 2 or more nights and much more. The annual fee can easily pay for itself many times over, depending on which perks you use.
    • The Amex Platinum also provides significant hotel savings on bookings through Amex FHR (which may include room upgrades, daily free breakfast, free 3rd or 4th nights), airline incidental reimbursement, Delta club lounge access for card holders and authorized users, Gold status with SPG (Starwood Hotels) and Hilton Hotels, free Boingo wifi and ShopRunner two day delivery service.

5. Monitor your FICO score and use your credit cards wisely. Many credit cards now provide your FICO score monthly or online. This is important, as the better your FICO score, the more accessible various credit cards are. Discover It Card, US Bank, and certain American Express, Citi and Capital One credit cards now provide FICO scores.

  • Do not apply for too many cards at once. Do not cancel older cards, as that will negatively impact your credit score. Make sure you can afford to pay what you charge and pay it off every month. Don’t pay interest on a credit card. If this is an issue, we need to talk about it.

6. Use the points you have already earned! Many people have hundred of thousands of points in many different programs. Do you have tons of Delta or other airline miles? Do you have American Express reward points? Citi Thank you points or Chase Ultimate Reward points? Hotel reward points at many different chains?

  • When are you going to use them? When you plan your next trip, consider redeeming these points. Don’t just continue to accumulate them for tomorrow….enjoy them now, unless you are saving them for a specific trip or purpose.

I truly hope these ideas get you thinking about how you spend and travel, as well as how you can maximize the benefits which are available, if you know and use the right strategies. Just as investing can be complicated, we try to simplify that for you.

If you have other tips and thoughts or opinions about this blog post, I would love to hear them. Please let me know what you think, at bwasserman@wassermanwealth.com.

 

Disclosure: I use some of the above credit cards, airline programs, and hotel loyalty programs mentioned above. I have not been compensated for any of these comments. They are based on my own experiences, opinions and research, with special credit to www.thepointsguy.com, which I highly recommend. There are many credit cards, hotel chains and airline reward programs, all with varying benefits. The purpose of this post is to make you aware of the potential uses and benefits, not to recommend any specific product or company.

 

Purely Personal…In Memory of my father-in-law

Silver Family 2
The world changed on Saturday, as my father-in-law, Alan Silver, suddenly passed away.

For the many people who knew Alan, the world became a little less bright. A little less fun.

Alan was not a famous person. There will be no long obituaries written about him citing tremendous business or philanthropic accomplishments.

But to those who knew him, there is a great loss, a missing puzzle piece in their life now. He was a good person, who was a very devoted husband, father, grandfather (“Papa”) and friend to so many people. He loved life and sharing it with the people he knew.

Alan had the right priorities. He lived the American Dream in his 73 years, as he provided a better life for his family than how he grew up. He cherished his daughters, his grandchildren, his wife and extended family. He spent nearly every Sunday in recent years with his two young grandchildren. As his older grandson, now 10, has learned and began to excel at golf, they became close golf buddies.

He was a devoted husband and cared for his wife Susan. While they lived a middle to upper-middle class life style, they made important decisions and sacrifices, to benefit their children. When my wife Felicia was in her teens and began to develop creative interests, they enrolled her at Cranbrook, a private high school with an excellent fine arts curriculum. When Felicia wanted to pursue a career in commercial interior design, they helped her to attend Pratt Institute in New York City for college.

Alan had an incredible and large group of close friends, many of whom he has known and maintained from grade or high school. Keeping relationships like that takes work and effort. To him, it came naturally. As I have gotten to know these friends over the past years, and even more this week, I am amazed at their warmth, caring and intellect. Just good quality people, who treat me like family. They know who they are and how much they mean to me.

When anyone needed help or something fixed, Alan was always willing. When close friends needed something fixed, they would call and say “Service.” And he would be there, tools in hand, day or night. On Sunday’s however, he said his fee was double. With a smile.

Alan loved food. Sunday dinners and barbecues were memorable. He was a master at the grill. He would not hesitate to drive miles with family or friends to try a new restaurant, visit a great bakery or search for the perfect slice of pizza. Even if meant getting lost or going into a dangerous neighborhood, the venture was worth it. Distance was no issue when it came to finding good food. That is a family tradition that will surely continue.

Alan loved gadgets and the latest technology. He was not always good at it, but he tried. Apple has lost one of their best customers. Alan recently bought his grandson a small drone with a camera, but he was just as likely interested to use it himself.

Alan was often impatient, frequently changing TV channels and driving others in the room crazy. He was an avid golfer and sports enthusiast. He loved good music and Detroit’s annual Dream Cruise. He had a passion for doing huge puzzles, which he framed after completion. This was his way of relaxing after his hours in the property management business.

When I entered their family a number of years ago, Alan welcomed me warmly. He was not a deep conversationalist, as his phone would constantly be beeping, ringing or buzzing. He didn’t actively engage in all matters, as the iPhone or TV were usually of more interest to him. But we all knew that he cared, and cared deeply, about those in his life.

Unlike others who suffer for months or years with an illness, Alan’s death came quickly and without much warning.  Unfortunately there was not the opportunity for a final “I love you” for those closest to him.  His vast circle did not get the chance to tell him how much he meant to them.  There will not be another round of golf, another vacation with friends or family or steak to grill.  There will be no 50th wedding anniversary celebration for him and his wife Susan, a few weeks from now.

So as cliche as this sounds as I write this….please take time today or this weekend and tell those you love and appreciate….that you do.  Do it often.  You will not regret it.

Professionally, we are financial advisors. Our business relationships focus on money. But the relationships become deeper and much more personal than just about investments. They are about people, their children, their grandchildren and their legacy.

Alan Silver is a reminder that there is far more to life than money and work. Alan worked hard, but enjoyed his life. He knew how to have fun, smile, share good times with people, enjoy food and the importance of family.

That doesn’t mean that you should not plan and save and consider the long term. It is hard for me this week to balance the many seminars and discussions I have about planning for 90-100 year life expectancies, after an event like this. But I know that good planning and longer life expectancies are also an important reality.

So please, tell the people you are closest to how much you really care about them. It may be the most important habit you develop.

Consider Refinancing Your Mortgage Now

Mortgage rates have dropped significantly in the past few months, and especially this week.  You should immediately see if refinancing your mortgage makes sense.

Mortgage rates are closely tied to the 10 year US Treasury note yield, which has declMortgage rate picined from 2.27% on December 1, 2015 to around 1.6% over the past few days. This is a 3 year low.  Mortgage rates have dropped as well.  For 30 year mortgages, rates are now well below 4%, even in the 3.7% range, depending on the amount you want to borrow, points (if any, that you want to pay) and other factors.

Who do you know who…….has a mortgage with an interest rate above 4%, or even above 4.5%?  If so, this could be a great opportunity to refinance their existing mortgage and save money every month.

Does this apply to you?  Does this apply to your children or grandchildren?  To a frient, co-worker or other relative?  You can do yourself and others close to you a great favor by promptly acting on this information.  Make a phone call or send an e-mail.  Forward them this blog post.

Interest rate are very volatile.  If you think this applies to you, we encourage you to act promptly.  While rates may remain at these levels, or even go lower, they are unpredictable and could change directions quickly.

We feel it is our obligation to provide you with this information, as part of the comprehensive financial
planning services that we provide.  One of the reasons we write this weekly blog is to point out or explain significant financial matters in a very timely manner.houseonmoney2

If you think you may benefit from refinancing, you should contact a mortgage lender, your bank or our firm.  We are not in the mortgage business, but we can assist you in analyzing this type of financial decision.

We want to assist you, your family and friends, so each of you can make the best financial decisions possible.  So who do you know who can benefit from this type of information?

Are the rough times behind us?

This was not supposed to be this week’s essay topic. As I finished my lunch in which I was outlining about a different topic, the waitress at the Chinese restaurant put a fortune cookie on my table. It read:

any rough times are behind you 2

“Any rough times are behind you.”

Yea right. This would be great if it could be true, but I know it can’t be. Life just does not work that way.

I know that I will face more challenges in the future, both personally and professionally. Unfortunately, one day my parents will age. I will face conflicts with my children, spouse or family members.

We will each face challenges in the future that will cause certain periods of “rough times” to deal with. One of the keys to our future is how we handle these difficult periods or the issues we will confront.

Will you handle it alone? Or will you choose to benefit from the support and guidance of friends, family and advisors? Will you talk and openly share with others? Will you be vulnerable, so others can try to provide you with guidance, strength and clarity?

During the past 5 weeks, investors have had to face another period of “rough times.” A few of our clients have called or come in for meetings, to talk through their concerns. This is our opportunity to add real value to their life, as we listened to their concerns and worries. During thes e conversations, we exchanged thoughts and ideas.

We were able to give them confidence that our underlying investment philosophy isPresentFuture still valid. Through this process, the calls and meetings ended with each person or couple feeling better about their investment plan and strategy.

In a different respect, some of the investment sectors or asset classes that we invest in may underperform other asset classes (they are facing a “rough time.”) This asset class or style underperformance may occur for a short time or a number of years. We don’t know in advance, as we can’t predict the future.

We continually monitor and evaluate the mutual funds that we recommend based on how well they do compared to their respective peers. We compare the apples to the apples, and the blueberries to the blueberries. Based on this criteria, the type of apples we recommend (the mutual funds we have selected) compare very favorably to other types of apples over the long term, based on their 3-5-10-15 year track records.

While the apples (mutual funds that we have selected) may underperform some other fruit for a period of time, we are confident that our overall investment strategy will continue to perform well over the long term. The blueberries may outperform the apples for a year or three years, but we are confident that our basket of fruit (mutual funds we select) will outperform the vast majority of other fruit (other actively managed mutual funds) over the next 3-5-10 years.

And maybe even more important, we are confident that the asset allocation and investment plan we structure for you will provide for your ongoing standard of living and financial objectives. The goal is not always about outperforming a certain market sector, it is about your future cash flow in retirement and your ability to sleep well at night.

tough times ahead
No, not all the rough times are behind us.
There will be more drops in the stock market. There will be times when we each face personal crisis and problems. There will be times when some of our investment recommendations underperform certain sectors of the market.

 

But in the long run, working closely with us as your financial advisor when you do face personal, financial, estate planning issues or challenges will lead to a better outcome and help you to overcome these “rough times.”

 

We are here for you. Contact us when you need us. Or when you just want to talk something over.

Do you have this?

“How easily do you bounce back from a disappointment?  What is your reaction to change?  As an investor, or a board member or an employee, are you seeking stability or impact?

“Resilience is a skill, one that’s probably more valuable than most.”

~ Excerpt from blog post by Set Godin, “Resilience, ” January 13, 2016

 

I can write about market forecasts, long term trends and all of those things, but when it comes down to it, Seth Godin’s message is critically important.

To be a successful investor, you need to be resilient.  Do you have this?

Being resilient means that you can overcome and bounce back after something bad has occurred. Resiliency means that you have the capacity to handle adversity, then recover, move forward and be more successful in the future.

While we provide you with investment advice, we can carl richards things matter mosthelp you be more resilient, especially during volatile times when stock markets are dropping.

Many times during the market downturn of 2008-2009, clients found that talking with us was helpful. These conversations made them more resilient.  And in the long run, this helped them to be more successful.

If you want to talk about what is going on in the world, or how it impacts you personally, please call us. That’s why we are here.

For more specific thoughts on recent stock market activity, please read our blog post “Our perspective on 2016, week 1,” dated January 8, 2016.

For a broader view, please read “Our most important advice, “ dated December 23, 2015.

 

What is Your One Thing?

As fall begins and we approach the last three months of 2015, what deserves your attention before December 31, 2015?

Take a step back. What is one thing, which if you focus on, will make a difference in your life, or the life of your family?

As Stephen Covey said, what is something that is important, but not necessarily urgent, that needs to be done?

What comes to mind? What can you be pro-active about? What have you been procrastinating or avoiding?

If you are young, are you saving enough? Are you participating in your company’s 401(k) program? Are you properly allocating your investments within your 401(k)? We can help you with this.

If you have children who are young, have you prepared a will and designated guardians for them? Do you have adequate life insurance? Have you started to properly save for their college education? We can help you with these.

If you are older than 50, have you started to plan how much income you will need for your retirement? Have you checked your social security benefits online? Have you developed a financial plan for a 30 year retirement span? With longer life expectancies, a 30 year retirement will become the norm for many. We can help you with these.

Is there a medical test that you should have done, which you have been putting off? Are you getting regular physicals? We can’t help you with these, but hopefully this gentle reminder will encourage someone to make an important appointment or phone call. I will make the appointment that I have been putting off.

Is there an important conversation that you need to have with someone, or a group of people, which you have been putting off? Please take the initiative and have the conversation. Some of the most important things are accomplished by having what appear to be, in advance, uncomfortable conversations. They may be uncomfortable, but they are usually very worthwhile. We can help you with these.

If you don’t have an idea yet, are you using a password management program, like 1Password or Last Pass? If not, please read these blog posts: How to Securely and Efficiently Manage Your Passwords, Practical Tips for Online Security and 5 Password Security Tips. Password management may not be as important as many of the topics above, but it should be on your list to get updated. We can help you with this.

We view our roles as financial advisors very broadly. We provide our clients with investment management, tax and estate planning advice. We counsel families, individuals and people who are going through life transitions regarding numerous topics, both financial and non-financially related.

We hope this essay helps you to improve some facet of your life. If we can assist you to do this in any way, please contact us.

Social Security Benefits, Medicare Premiums and Payroll Taxes: 2016 Projections

Social Security recipients are projected not to receive a benefit increase for 2016. However, for high income individuals and couples, they may actually face a net benefit decrease, due to a huge potential increase in Medicare premiums. The projected Social Security wage base for 2016 would remain the same, at $118,500, but the Medicare portion of payroll taxes would continue to apply to all wages. The .9% Medicare surtax would apply to wages over $200,000 for single files and $250,000 for joint returns.

The Social Security Administration will officially announce the changes for 2016 in October. Early projections indicate that there will be no Social Security COLA (cost of living adjustment) increase for 2016. COLA changes are based on Consumer Price Index (CPI) data. CPI, or the inflation rate, is negative for the first two quarters of 2015, mostly due to the huge decline in gasoline prices. Since COLA changes to Social Security benefits were introduced in 1975, only in 2010 and 2011 has there not been a COLA Social Security benefit increase.

Social Security trustees project a 3.1% COLA benefit increase for 2017. We are not sure how this can be predicted at this point, so we are not sure how reliable this projection is.

Of significant importance to high income retirees, individuals with Modified Adjusted Gross Income (MAGI) over $170,000 for couples and over $85,000 for individuals, are potentially facing a 52% increase in their Medicare Part B premiums for 2016. MAGI is your annual gross income plus municipal bond interest.

There are 5 Medicare premium brackets, based on your income level. The top premium surcharge is $230.80 per month, per person, in addition to the standard of $104.90. A high income couple would currently be paying $671.40 per month, as a monthly deduction from their 2016 Social Security benefits. If the projected increase is approved by Department of Health and Human Services in October, their Social Security benefits would remain the same but their net deposit would decline by over $100 per month due to the Medicare premium increase.

The reason for this huge Medicare premium increase is that the Social Security Act protects about 70+% of the people considered lower income Social Security recipients from Medicare increases when there are no offsetting COLA increases. For these people, their net benefits (Social Security benefits and Medicare deductions) are not allowed to decline.

Thus, for the approximately 25-30% of the Social Security recipients who earn the most, they will be absorbing the increased Medicare burden for all Medicare beneficiaries. The Secretary of Health and Human Services Department may possibly intervene and set a lower Medicare premium, to be announced in October.

These premium increases do not impact those who begin to collect Social Security in 2016 or those who have enrolled in Medicare, but who have not yet started to collect Social Security benefits.

There is not any planning which can be done to avoid the impact of the Medicare premium increase, as it is based on past income tax returns. If you have not yet begun to collect Social Security and are nearing the age which you can begin to collect Social Security (62-70), you may want to contact us to discuss this important decision.

 

 

Sources:
Mary Beth Franklin, Investment News, August 3, 2015
Michael Kitces, kitces.com, blog post dated August 19, 2015