NEWSLETTERWith Knowledge Comes Condence
SECOND QUARTER 2019
Upcoming Workshop: Travel Education
Preparing to travel somewhere you have never been before can be a daunting
task, but don’t let that stop you from crossing travel destinations off your
Join us as we hear from our guest speaker Dave Bunn, the owner of
Experience Travel. He helps people plan international travel and avoid
common travel pitfalls to ensure everything goes smoothly.
Dave’s presentation will cover:
• Tips and tricks to plan for an international vacation
• How to avoid travel scams
• Do you need travel insurance?
• How to prepare for long-term travel, i.e. becoming a snowbird
DAVE BUNN, OWNER OF EXPERIENCE TRAVEL: “After traveling the world for many
years with various jobs in the travel industry…I decided to launch my own
business. The main reason was to help travelers avoid the same mistakes
I made when I traveled on my own. We specialize in international travel
itineraries based on personal experiences. Traveling internationally can be
quite challenging and rarely does everything go smoothly…my goal is to help
you avoid those travel pitfalls. I’ve learned a lot traveling the world, and I
incorporate those experiences into your vacation.”
WORKSHOP DETAILS: WHO: Anyone! Whether you’re a client of the firm or
not, we encourage you to attend and bring a friend.
RSVP: By Wednesday, July 17 by calling
317-872-5090 or emailing WHEN: Wednesday, July 24, 6-7:30 p.m.
WHERE: The Pyramids, Pyramid Three,
COST: None, but space is limited. Lower Level, Conference Room A & B
(3500 DePauw Blvd, Indianapolis, IN 46268)
Worley Erhart-Graves Financial Advisors is a Registered Investment Advisor. Registration as an investment advisor is not an endorsement of the firm by
securities regulators and does not mean the advisor has attained a particular level of skill or ability. All expressions of opinion reflect the judgment of
the authors as of the date of publication and should not be construed as personalized investment advice. Different types of investments involve varying
degrees of risk, and there can be no assurance that any investment will either be suitable or profitable for a client’s portfolio. Worley Erhart-Graves Financial
Advisors is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Worley Erhart-Graves Financial Advisors, Inc., is affiliated with Smitson Erhart-Graves Tax Advisors, LLC, through common control and ownership. Smitson
Erhart-Graves Tax Advisors provides accounting and tax preparation services. If you require such services, we may recommend you use Smitson Erhart-
Graves Tax Advisors, although you are under no obligation to do so. Fees for financial planning and investment advisory services are separate and distinct
from the fees Smitson Erhart-Graves Tax Advisors charges for their services.
Consulting an Expert or Hiring it Out
Juli Erhart-Graves, CFP®
I took a week off in May for a staycation. Of course, I had a list challenge, so we started with an expert – a call to my dad. As a
of things to do that week, with the biggest project being to woodworker and someone who has been in the construction
tend to the craftsman-style columns on our front and back industry all his life, he came over and patiently showed me the
porches. We built our house about five years ago, so some of pattern I needed to follow when cutting the boards. Once I got
the wood trim was starting to rot and the paint was looking that down, we had the trim replaced in a relatively short time.
thin. My husband and I wanted to replace the rotting trim
and repaint the columns, but as with most projects, things Our financial planning and investment management services
snowballed. We decided we should replace the trim around work very much like this experience. My husband and I had the
ALL the columns with the durable PVC trim boards, so we time and desire to do the work ourselves; we simply needed to
wouldn’t have to replace rotting wood again in another five consult with an expert—someone to tell us what to do. With
years. What we didn’t count on was the compound miter cuts. our hourly financial planning services, our experts are here
Not only did we need to cut the trim boards to surround the to tell you what you need to do and when you need to do it.
base of each column; the columns flared outward, so the cuts Sometimes, though, you don’t have the time or inclination to
needed to slope as well. do the work yourself. That’s when you need to hire the job out.
With our investment management services, we manage your
Given my husband’s past project with crown molding in our investments for you, providing all service for the accounts. If
first home (all I can say is, it was a starter home, so I think the you need anything, you call us and we take care of it for you.
next buyer had low standards), I took on the task of cutting the
trim. I gave it my best shot, but eventually threw in the towel. I Now that the columns have new trim and are freshly painted, I
came to the realization that we either needed to consult with know we are well-positioned for the long term. With financial
an expert or hire the job out. I really wanted to conquer this planning and investment management, you can be well-
positioned for the long term, too.
When is a Recession Declared a Recession?
Gail Gill, CFP®
There have been a lot of discussions lately on whether or not we The first two definitions state that even if GDP is positive, you can
are headed for another recession. There has also been a lot of still have a recession if GDP is declining. The last definition states
controversy over what defines a recession. that you must have a negative GDP for two consecutive quarters
to define a recession. This is a huge difference and contributes to
• The National Bureau of Economic Research defines a why this subject can be confusing.
recession as “a significant decline in economic activity spread
across the economy, lasting more than a few months.” The last time the U.S. had a negative GDP for two consecutive
quarters was in 2009. We did have a couple of scares in 2011 and
• A common rule of thumb is that a recession involves two 2014 when one negative GDP quarter hit, but the second quarter
consecutive quarters of economic contraction, although returned positive.
that isn’t part of the National Bureau of Economic Research’s
official definition and not all officially recognized recessions Another scare came after a rough 4th quarter in 2018. GDP came
have met that test. in below 2nd quarter’s GDP of 4.20% and 3rd quarter’s GDP of
3.4%. It came in at 2.2%. This alerted the economists, who saw
• The technical definition of a recession is two consecutive this as a pattern. Therefore, they revised the estimated GDP
quarters of “negative” economic growth as measured by growth for the 1st quarter down to 0.3%. The actual GDP for the
a country’s Gross Domestic Product (GDP), although the 1st quarter ended up at 3.2%. This is good news.
National Bureau of Economic Research does not necessarily
need to see this occur to call a recession. CONTINUED ON NEXT PAGE
Qualified Charitable Distribution for
Taxpayers Over 70 ½ Pam Smitson, CPA, CGMA
A Qualified Charitable Distribution (QCD) is a direct transfer RMDs issued to the taxpayer, then donated, do not qualify as a QCD
from your retirement account to a qualified charity. The since it was not a direct transfer to the charity. Checks written from
benefit is that the distribution is not added to your taxable an IRA account made payable to the qualified charity do qualify as
income. Since you have to be 70 ½ to make a QCD, it’s most a QCD. It is best to check with your investment manager and your
often used by retirees that wish to donate their Required tax preparer to be sure you are following the appropriate guidelines
Minimum Distribution (RMD) – either whole or partial - to a before making the donation.
qualified charity. You can donate more than your RMD as a
QCD, but only up to $100,000 will count toward the QCD. The 1099-R issued will not distinguish that you made a QCD, leaving
no reason for the tax preparer to exclude the income. Therefore,
The QCD satisfies the RMD by reporting the full amount of the when you file your income tax return, it is important that you
charitable distribution on your tax return on the line for the provide your tax preparer with the QCD information, including the
IRA distribution and then entering $0 for the taxable amount. written acknowledgement from the charitable organization.
By not having to pay income tax on the RMD, your Modified
Adjusted Gross Income is lower. A lower MAGI is beneficial Ongoing Communication
because: with Your Planner
• Your monthly Medicare premium is based on your MAGI Bonnie Struck, CMFC®
• Deductible passive real estate losses are based on your MAGI I began traveling in my early twenties and had
no need for travel insurance. I thought, “Why
• Medical expense deductions are based on your MAGI add the extra expense since I am invincible?” Fast forward several
decades and my view has changed, and so has my appetite for risk.
As long as you’re 70 ½ you can make a QCD from Traditional, Just like my opinion has matured about travel insurance, so have
Rollover, and Inherited IRAs, as well as inactive SEP and SIMPLE my financial goals. My goals have evolved with my life changes,
plans held for two years or more. QCDs are allowed, but are and this necessitates portfolio adjustments to meet where I am
not tax opportunities for Roth IRAs, as these distributions are now.
not subject to RMDs during the taxpayer’s lifetime.
Having said that, this is an opportune time for investors to re-
To be considered a qualified charity, the charity must be a evaluate their risk tolerance. Even though the stock market has
501(c)(3) organization that is eligible to receive tax-deductible recovered from the steep decline experienced in the 4th quarter
contributions. A QCD must be completed by the RMD of 2018, this continues to be a challenging phase of the current
deadline (usually December 31). economic cycle. Due to geopolitical, economic, and monetary
uncertainties, consumer confidence is starting to wane, and all
CONTINUED FROM PREVIOUS PAGE signs indicate a recession is on the horizon (but when it happens is
Just to give you some perspective of GDP numbers, at the end
of World War II, when our country was booming, U.S. Real GDP When you first met with your advisor, they gathered a tremendous
grew as high as 12.8% in a year. But as of the late 20th century, amount of information. Well, that was just the beginning. Ongoing
the norm for GDP became 0-5% with a focus on 2-3% to keep client input is essential, even after we implement your investment
the economy strong and steady. plan. What keeps you up at night? Are you saving enough for
retirement? Can you pay for your children’s college?
The stock market has been building since 2009 and we
continue to hit all-time highs. No one knows how long it will If we are not aware of your current financial challenges or
last before we move into a recession. But we do know that concerns, we cannot effectively keep you on track or address
occasional recessions are part of a normal economic cycle, so changes in your risk tolerance. Ongoing client input is essential to
we should get prepared, both financially and psychologically, our process to keep your plan current and robust. Give us a call
for one in the future. today.
PERMIT NO. 937
3500 DePauw Blvd. | Suite 1035
Pyramid One, Third Floor
Indianapolis, IN 46268
855.872.5090 Toll Free
INDY WOMEN’S HALF MARATHON
Worley Erhart-Graves is a proud sponsor of the Indy Women’s Half Marathon. On Saturday, September 28 you can find us at
the Results Tent, where we’ll be passing out race times to the 5k and half marathon participants. We’ll also be at the finish line
after the race, handing out awards to the category winners.
If you are interested in participating in the Indy Women’s Half Marathon this fall, contact email@example.com
or call 317-872-5090. We have ten entries to give away! Your choice of the 5K or half marathon.
Whether you’re cheering on the runners or participating yourself, be sure to stop by the Results Tent and say hello!