Aging and the changes it brings are often regarded with apprehension. We know in many ways it can be good to get older, and enjoy the fruits of a life well lived.  However, we often fear the changes to our body and mind that may cause us to lose independence and control. Discussing these possibilities is not always comfortable for the aging person or the people who may have to care for them.

When to delegate financial decision-making, change living situations, quit driving, and seek assistance with health care decisions are difficult topics. They can be emotionally and financially very costly if plans are not put in place. People are forced to make decisions under duress, elders may often be neglected or abused, and family fights ensue.

I am excited to announce that I am now able to provide planning services that address many of the financial and related concerns that people often have around aging.  I am using tools developed to prepare families for the challenges associated with aging.  My approach is to help plan for aging-related transitions well in advance. This will reduce the likelihood of reactive decisions and the subsequent unnecessary costs that result from lack of preparation. My goal is to provide people with peace of mind at all stages of the aging process.

I pleased to be able to offer this service to both new and existing financial planning clients. The approach starts with three online questionnaires.  Each one takes about 15-20 minutes to complete.

• The “Financial Caretaking Plan” outlines steps you may have taken to prepare for transferring bill paying, investment management, and estate planning, and the tasks you need to complete to get ready for the day you can no longer manage finances on your own. This module collects trusted contact information specific to the person answering the questions, and generates a customized financial decision-making transition plan
• The “Risk Profile” is designed to identify traits that could place a person at risk for bad financial decision-making and financial exploitation. The questionnaire is based on a study conducted by geriatric psychiatrists.
• The “Proactive Aging Plan” addresses a person’s living situation, transportation needs, and health care preferences. The program generates health care and long-term care cost estimates based on a person’s own situation, and provides a customized plan for managing life transitions.  Recommendations include ways to reduce unnecessary costs and age successfully in the living situation a person desires.

After a client fills out each questionnaire, the software will provide me as planner with a report indicating what the client is doing now and what they need to do to optimize their situation. It will contain a personalized list of to-do items, and information a client can give to their family to inform them of the client’s desires as they age. The reports also include links to a wealth of educational materials to help clients complete the recommended tasks. I send the reports to clients, answer any questions and provide any additional clarification, and I assist in implementing the tasks where appropriate.

Please contact me if you would any additional information about this valuable service.  I hope to have the opportunity to work with many of you to build a successful aging plan!

For many people in the middle years of life, the prospect of parents getting older and being less able to do as much for themselves is scary.  And when there is a life changing health diagnosis or other health event and suddenly that time is much closer, people experience many emotions and a slew of questions are often raised.  Questions are often wide ranging – how can I best help my parent or other family member?  Does this mean a change in living situation?  How much time do we have?  What can we do now to prepare for what we can expect to happen?  What are the financial considerations?

My own experience with this subject began when my dad was diagnosed with Parkinson’s when he was in his early 70s.  We soon realized that the trajectory of his life had changed, as Parkinson’s is a progressive and degenerative disease with no cure, and with treatment aimed mostly at providing some relief from symptoms.  Once the initial shock of the diagnosis lessened, my dad resolved that one of his highest priorities was to get his financial and legal affairs in order, and he asked me to help him.

Over the next several months we set out on a planning journey, and Dad structured his affairs in a way that considered his current health and how it was likely to change over time.  Our planning yielded a  financial care plan, which outlined how Dad’s day to day financial affairs, such bill paying and money management, would be handled when he could no longer manage these tasks himself.  The plan also addressed bigger picture considerations such as investment management, estate planning, and risk management/insurance.  We also developed a financial plan that addressed how to handle Dad’s health care and long-term care costs in the context of his overall financial picture, as these costs would likely be much higher now with the Parkinson’s diagnosis.

The result of our planning, and the implementation of the action steps identified, brought some measure of peace of mind and confidence that we were doing what we could to prepare for an ever- changing situation.  We couldn’t change the course of the disease, but at least we could plan for how to navigate through the many changes to come in Dad’s life.

The months and years that followed were often very difficult as Dad’s health declined.  He accepted what was happening to him, but at the same time pushed back against it and handled his situation with grace and humility until the end.  I am so grateful for having had the opportunity to help him in his time of need.

I am also grateful for this incredible real-life learning experience that has provided me with an opportunity to build on what I have learned and help others who are facing, or who may face similar situations.  Over time, I have been able to channel the deep and strong emotions I experienced through this journey into inspiration to help others.  So now I have found myself on a mission to work in this space, doing what I can to help people prepare to navigate through similarly choppy waters.  I am finding this work to be extraordinarily rewarding and meaningful.

I am in the middle of reading Atul Gwande’s book “Being Mortal”, which takes on the topics of aging, decline and death, and how our society has turned these into medical problems rather than human ones.  Gwande reminds us that American medicine has prepared itself for life but not for death, and we treat aging, frailty, and death as just another set of clinical challenges to overcome.  As a society, we are so focused on medical treatment for every ailment at every stage of life, and we often fail to recognize, especially as people age and decline, the importance of a life as meaningful and rich as possible under the circumstances.  Gwande discovers how we can do better, as he profiles reformers in the medical profession who illustrate how the ultimate goal for many people – a good life all the way to the very end – can be achieved.

Reading this book has inspired me to further the development of my own ideas around financial planning for the later years of life.  Most conventional financial planning doesn’t adequately address the financial implications of declining health in the later stages of life.  At the very least, a good financial plan should consider the possibility and financial impact of long-term care events and high medical costs.  But even if someone has a well-constructed plan, what happens when there is a life-changing medical diagnosis?  Suddenly, the trajectory of a person’s life, and finances, changes.  When this happens, many questions are raised – how much will my health care cost?  Can I expect to need long-term care services, and what will that cost?  Do I have enough money to pay for what I need?  What if I don’t?  What changes do I need to make to my finances to manage?  Where can I turn for help?

In future posts, I will address these questions and others in this critically important, and often overlooked, aspect of financial planning.  One initial tidbit of advice – wherever you are in life, there is no better time than now to start planning for life’s uncertainties.  Of course we can’t predict what may happen to our health – and what our health care will cost, especially as we get older – but there are some tools and techniques everyone can use to prepare as much as possible before a major health event occurs.

2015 Year-End Tax Planning Basics
December 14, 2015

The window of opportunity for many tax-saving moves closes on December 31, so it’s important to evaluate your tax situation now, while there’s still time to affect your bottom line for the 2015 tax year.

Timing is everything

Consider any opportunities you have to defer income to 2016. For example, you may be able to defer a year-end bonus, or delay the collection of business debts, rents, and payments for services. Doing so may allow you to postpone paying tax on the income until next year. If there’s a chance that you’ll be in a lower income tax bracket next year, deferring income could mean paying less tax on the income as well.

Similarly, consider ways to accelerate deductions into 2015. If you itemize deductions, you might accelerate some deductible expenses like medical expenses, qualifying interest, or state and local taxes by making payments before year-end. Or you might consider making next year’s charitable contribution this year instead.

Sometimes, however, it may make sense to take the opposite approach–accelerating income into 2015 and postponing deductible expenses to 2016. That might be the case, for example, if you can project that you’ll be in a higher tax bracket in 2016; paying taxes this year instead of next might be outweighed by the fact that the income would be taxed at a higher rate next year.

Factor in the AMT

Make sure that you factor in the alternative minimum tax (AMT). If you’re subject to the AMT, traditional year-end maneuvers, like deferring income and accelerating deductions, can have a negative effect. That’s because the AMT–essentially a separate, parallel income tax with its own rates and rules–effectively disallows a number of itemized deductions. For example, if you’re subject to the AMT in 2015, prepaying 2016 state and local taxes won’t help your 2015 tax situation, but could hurt your 2016 bottom line.

Special concerns for higher-income individuals

The top marginal tax rate (39.6%) applies if your taxable income exceeds $413,200 in 2015 ($464,850 if married filing jointly, $232,425 if married filing separately, $439,000 if head of household). And if your taxable income places you in the top 39.6% tax bracket, a maximum 20% tax rate on long-term capital gains and qualifying dividends also generally applies (individuals with lower taxable incomes are generally subject to a top rate of 15%).

If your adjusted gross income (AGI) is more than $258,250 ($309,900 if married filing jointly, $154,950 if married filing separately, $284,050 if head of household), your personal and dependency exemptions may be phased out for 2015 and your itemized deductions may be limited. If your AGI is above this threshold, be sure you understand the impact before accelerating or deferring deductible expenses.

Additionally, a 3.8% net investment income tax (unearned income Medicare contribution tax) may apply to some or all of your net investment income if your modified AGI exceeds $200,000 ($250,000 if married filing jointly, $125,000 if married filing separately, $200,000 if head of household).
Note: High-income individuals are also subject to an additional 0.9% Medicare (hospital insurance) payroll tax on wages exceeding $200,000 ($250,000 if married filing jointly or $125,000 if married filing separately).

AMT triggers

You’re more likely to be subject to the AMT if you claim a large number of personal exemptions, deductible medical expenses, state and local taxes, and miscellaneous itemized deductions. Other common triggers include home equity loan interest when proceeds aren’t used to buy, build, or improve your home, and the exercise of incentive stock options.

IRAs and retirement plans

Take full advantage of tax-advantaged retirement savings vehicles. Traditional IRAs and employer-sponsored retirement plans such as 401(k) plans allow you to contribute funds on a deductible (if you qualify) or pretax basis, reducing your 2015 taxable income. Contributions to a Roth IRA (assuming you meet the income requirements) or a Roth 401(k) aren’t deductible or made with pretax dollars, so there’s no tax benefit for 2015, but qualified Roth distributions are completely free from federal income tax, which can make these retirement savings vehicles appealing.

For 2015, you can contribute up to $18,000 to a 401(k) plan ($24,000 if you’re age 50 or older) and up to $5,500 to a traditional IRA or Roth IRA ($6,500 if you’re age 50 or older). The window to make 2015 contributions to an employer plan typically closes at the end of the year, while you generally have until the April tax filing deadline for your 2015 federal income tax return to make 2015 IRA contributions.

Roth conversions

Year-end is a good time to evaluate whether it makes sense to convert a tax-deferred savings vehicle like a traditional IRA or a 401(k) account to a Roth account. When you convert a traditional IRA to a Roth IRA, or a traditional 401(k) account to a Roth 401(k) account, the converted funds are generally subject to federal income tax in the year that you make the conversion (except to the extent that the funds represent nondeductible after-tax contributions). If a Roth conversion does make sense , you’ll want to give some thought to the timing of the conversion. (Whether a Roth conversion is right for you depends on many factors, including your current and projected future income tax rates.) For example, if you believe that you’ll be in a better tax situation this year than next (e.g., you would pay tax on the converted funds at a lower rate this year), you might want to think about acting now rather than waiting.

If you convert a traditional IRA to a Roth IRA and it turns out to be the wrong decision (things don’t go the way you planned and you realize that you would have been better off waiting to convert), you can recharacterize (i.e., “undo”) the conversion. You’ll generally have until October 15, 2016, to recharacterize a 2015 Roth IRA conversion–effectively treating the conversion as if it never happened for federal income tax purposes. You can’t undo an in-plan Roth 401(k) conversion, however.

Required minimum distributions

Once you reach age 70½, you’re generally required to start taking required minimum distributions (RMDs) from traditional IRAs and employer-sponsored retirement plans (special rules apply if you’re still working and participating in your employer’s retirement plan). You have to make the withdrawals by the date required–the end of the year for most individuals–or a 50% tax penalty applies.

Changes to note

· Generally, the maximum “individual shared responsibility payment” (the amount owed if you don’t have qualifying health coverage for each month of the year, or otherwise qualify for an exemption) increased to 2% of household income with a family maximum of $975 for 2015; in 2016 the maximum amount owed jumps to 2.5% of household income, with a family maximum of $2,085.

· In June, the U.S. Supreme Court ruled 5-4 that same-sex couples in the United States have a constitutional right to marry, regardless of the state in which they live. This significantly simplifies the federal and state income tax filing requirements for same-sex married couples living in states that did not previously recognize their marriage.

Tax extenders

Once again, the status of a number of serially extended, popular tax breaks remains uncertain as the end of the year approaches.. These “tax extenders” last expired at the end of 2014. It’s likely that some or all of these provisions will be retroactively extended, but there’s no guarantee. You’ll want to consider carefully the potential effect of these provisions on your 2015 tax situation and stay alert for late-breaking changes. Tax-extender provisions include:

· The ability to make qualified charitable contributions (QCDs) of up to $100,000 from an IRA directly to a qualified charity if you are 70½ or older. Such distributions are excluded from income but counted toward satisfying any RMDs you would otherwise have to receive from your IRA.

· Increased Internal Revenue Code (IRC) Section 179 expense limits and “bonus” depreciation provisions.

· Above-the-line deductions for qualified higher-education expenses, and for up to $250 of out-of-pocket classroom expenses paid by education professionals.

· For those who itemize deductions, the ability to deduct state and local sales taxes in lieu of state and local income taxes.

· The ability to deduct premiums paid for qualified mortgage insurance as deductible interest on IRS Form 1040, Schedule A.

Talk to a professional

When it comes to year-end tax planning, there’s always a lot to think about. A tax professional can help you evaluate your situation, keep you apprised of any legislative changes, and determine whether any year-end moves make sense for you.
IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015.

To opt-out of future emails, please click here.

February 02, 2015
Record Retention: Deciding Which Financial Records to Keep
Keep critical documents and records safe and secure but accessible in a time of need
Certain documents and records are too important to retain in an ordinary file drawer. Fortunately, they are also the ones you tend to need least frequently. If they are stolen or destroyed by a catastrophe such as flood or fire, replacing them could be extraordinarily difficult, if not impossible. One of the best places to retain such items is a safety deposit box. These can be rented for a small monthly fee at many banks. The boxes are actually locked drawers within the bank’s vault. Various sizes are often available to meet individual needs. A home safe is another option, provided that it is adequately rated to protect contents from fire, water, explosions (gas leaks), and other calamities. Documents deserving extra protection include:
• Property deeds
• Trust documents
• Insurance policies
• Automobile titles
• Stock and bond certificates
• Wills and estate plans
• Personal property inventory
• Marriage and birth certificates
• Military discharge papers
• Passports

Keeping copies of vital records can save time, money, and headaches

There may be times when you need to know certain information contained on documents you’ve placed in safekeeping but don’t need the actual document. Avoid the inconvenience of obtaining the original documents by making copies of them for your file.
Tip: Create one file that includes copies of all documents you’ve placed in safekeeping (e.g., a “Safety Deposit Box” file). Then, you not only can turn to it for vital facts, but if you are incapacitated, whoever handles your important affairs will be able to locate key documents quickly.
Caution: The specific contents of some documents, such as wills and trusts, may be inappropriate to keep in more highly accessible home files. Instead of a photocopy, you might simply file a page containing those key facts that are less confidential in nature or obliterate very sensitive items on the copy.
Make backup copies of all computerized records
These days, many people keep important records on their personal computer. This can be an easy way to keep your records organized and updated, but it is important to keep a backup copy of these records in a safe place. If your hard drive has a meltdown, you’ll need to be able to recreate the important financial information that was lost.
Financial management software can be beneficial in tracking your finances, but it will take some time to learn how to use it properly. Don’t forget that you must still retain original documents as evidence of past transactions.
Save all essential records, receipts, and documents that your budgeting system requires
There are many reasons to save important records. If you apply for a loan (such as a mortgage, auto loan, or education loan), you will have to provide proof of your income. If you notice that money is disappearing out of your checking account, you’ll need your bank statements to back up your claim of unauthorized transactions. If you own financial securities, capital gains taxes are based on the price you paid for them on the date purchased. You’ll be required to verify this information. Potential tax audits will be far less intimidating if you have kept records to substantiate your tax return claims. An unsubstantiated claim will cost you not only the unpaid tax but interest charges and possibly, a hefty penalty.
Tip: Most of us realize it’s important to keep expense records, but for those with income sources other than employers, a cash receipts log can be invaluable. A small notebook or a few sheets in a separate file folder will do for recording income as it arrives. If you don’t recall later whether you received a particular dividend or rent payment, the log provides a quick answer.
Caution: Certain items, such as tips or business-related use of a car, require special tax treatment and records. Therefore, your record-keeping system must track these and retain any related documents.
Keep records as long as appropriate
Different records need to be saved for different periods of time. Divide your records into categories, such as short-term, medium-term, and long-term. There are no concrete rules about how long records must be saved, so you will often have to use your own judgment. The following guidelines may help:
Short-term (1-3 years)

• Household bills, except those that support tax deductions (items such as heat, water, and electricity are generally short-term unless you deduct them for home office use or a rental)
• Expired insurance policies
Medium-term (6-7 years)

• Tax returns and supporting information
• Income and expense records (including lottery tickets and winnings)
• Bank and credit union statements
• Brokerage house statements
• Canceled checks and check registers (checks for major purchases may be kept longer)
• Paid-off loan documents
• Personal property sales receipts
Long-term (indefinitely)

• Tax dispute records
• Evidence of retirement plan contributions
• Investment records
• Medical history information
• Pension/retirement plan documents
• Social Security information
Other (as noted)

• Home ownership/sale documents: 7 years after sale or indefinitely
• Home improvement records: 7 years after sale
Caution: The IRS typically has three years after a return is filed to audit a return, or two years after you’ve paid the tax, whichever is later. However, if income was underreported by at least 25 percent, the IRS can look back six years after the return is filed, and there is no time limit for fraudulent tax returns. An audit requires that you provide documentation to substantiate the return being audited.
Tip: Canceled checks do not necessarily prove why a given payment was made, only that the payment was made. Having dated receipts, invoices, sales slips, credit card statements, and bank statements can provide valuable proof if needed, whether for an IRS auditor or an insurance claims adjuster.
Save space: Annually review retained records and discard those no longer needed

Some records and documents can be discarded after all potential usefulness has passed. Depending on circumstances, records can accumulate quickly and require extensive storage space. Discarding records that are no longer necessary saves space and makes finding a record you need easier.
Tip: Expired product warranties and insurance policies are excellent candidates for the trash can.
Tip: For easier future access, retain records for each year in separate files.
Caution: Keep your important records and financial files separate from information you might want to retain for other purposes. If you clip articles, jot notes, and save information you receive on items of potential interest, create a separate set of information files for them. These might contain vacation ideas, recipes, home improvement items, personal letters, or the kids’ school papers. Keeping them apart from vital records and financial files makes both easier to find and manage.

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015.
To opt-out of future emails, please click here.

New Legislation Extends
Popular Tax Provisions

In one of its final actions, the 113th Congress passed the Tax Increase Prevention Act of 2014. This
legislation extends for one year a host of popular tax provisions (commonly referred to as “tax extenders”)
that had expired at the end of 2013. All of the following provisions were among those retroactively
extended, and are now effective through the end of 2014.

Deduction for qualified higher-education expenses

You may be entitled to a deduction if you paid qualified higher-education expenses during the year–this
includes tuition and fees (for yourself, your spouse, or a dependent) for enrollment in a degree or certificate
program at an accredited post-secondary educational institution. The deduction doesn’t include payments
for meals, lodging, insurance, transportation, or other living expenses. The maximum deduction is generally
$4,000. However, if your adjusted gross income (AGI) exceeds $65,000 ($130,000 if married filing jointly),
your maximum deduction is limited to $2,000; if your AGI is greater than $80,000 ($160,000 if married filing
jointly), you can’t claim the deduction at all.

Deduction for classroom expenses paid by educators

If you’re an educator, you may be able to claim up to $250 of unreimbursed qualified classroom expenses
you paid during the year as an “above-the line” deduction. Qualifying expenses can include the cost of
books, most supplies, computer equipment, and supplementary materials used in the classroom. Teachers,
instructors, counselors, principals, and aides for kindergarten through grade 12 are eligible, provided a
minimum number of hours are worked during the school year.

Deduction for state and local general sales tax

If you itemize deductions on Schedule A of IRS Form 1040, you can elect to deduct state and local general
sales taxes in lieu of the deduction for state and local income taxes. You can calculate the total amount of
state and local sales taxes paid by accumulating receipts showing general sales taxes paid, or you can use
IRS tables. If you use IRS tables to determine your deduction, in addition to the table amounts you can
deduct eligible general sales taxes paid on cars, boats, and other specified items.

Tax-free charitable donations from IRAs

If you’re age 70½ or older, you can make a qualified charitable distribution (QCD) of up to $100,000 from
your IRA and exclude the distribution from your gross income. The distribution must be made directly to a
qualified charity by December 31, 2014, and must be a distribution that would otherwise be taxable to you.
QCDs count toward satisfying any required minimum distributions (RMDs) that you would otherwise have to
receive from your IRA, just as if you had received an actual distribution from the plan. You aren’t able to
claim a charitable deduction for the QCD on your federal income tax return.

Deduction for mortgage insurance premiums

Premiums paid or accrued for qualified mortgage insurance associated with the acquisition of your main or
second home may be treated as deductible qualified residence interest on Schedule A of IRS Form 1040.
The amount that would otherwise be allowed as a deduction is reduced if your AGI exceeds $100,000
($50,000 if married filing separately), and no deduction is allowed if your AGI exceeds $109,000 ($54,500 if
married filing separately).

Bonus depreciation

You may be able to claim an additional first-year “bonus” depreciation deduction, equal to 50% of the
adjusted basis of qualified property placed in service during the year. The additional first-year depreciation
deduction is allowed for both regular tax and the alternative minimum tax. The basis of the property and the
regular depreciation allowances in the year the property is placed in service (and later years) are adjusted
accordingly.

Expanded IRC Section 179 expensing limits

Under IRC Section 179, if you’re a small-business owner you can generally elect to expense the cost of
qualifying property, rather than to recover such costs through depreciation deductions. The maximum
amount that can be expensed for 2014 now remains at $500,000 (the same limit that applied in 2013),
rather than dropping to $25,000 had the legislation not passed. The $500,000 limit is reduced by the
amount by which the cost of qualifying property placed in service during the taxable year exceeds
$2,000,000.

Exclusion of gain–qualified small-business stock

Generally, you’re able to exclude 50% of any capital gain from the sale or exchange of qualified
small-business stock provided that certain requirements, including a five-year holding period, are met.
However, the temporary increase of the exclusion percentage to 100% that applied in 2013 is now
extended to qualified small-business stock issued and acquired in 2014.

Other provisions extended

Other provisions extended by the legislation include:
• The ability to exclude from income the discharge of debt associated with a qualified principal residence
• Provisions related to employer-provided mass-transit benefits
• Special rules for qualified conservation contributions of capital gain real property
• Provisions relating to business tax credits, including the research credit and the work opportunity tax
credit

IMPORTANT DISCLOSURES
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The
information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be
used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer
should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly
available information from sources believed to be reliable—we cannot assure the accuracy or completeness
of these materials. The information in these materials may change at any time and without notice.