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Published by Worley Erhart-Graves Financial Advisors, 2015-09-09 09:32:05

2015 3rd Qtr Newsletter

2015 3rd Qtr Newsletter

A PIECE OF MIND

Third Quarter 2015

Upcoming Workshop: How to Maximize Your 401k Plan

Over our working careers, most of us have access to a company retirement plan and we all know we should
be saving for our retirement through our 401k plans. But several questions arise along the way of our careers:
How much may I contribute each year? Does my employer also contribute to my 401k? What are my
investment options within the plan? What is a Roth 401k? What should I do with my 401k from a previous
employer? These questions and more will be answered in a workshop hosted by Elizabeth Braden, CFP®.
This workshop is appropriate for young adults just getting their career started through those considering
retirement in the near future.

When: Monday, October 26, 2015 from 6:00 – 7:30 pm
Where: The Pyramids (near 86th and Michigan Road)
RSVP: Pyramid Three, Lower Level, conference room B

Cost: Call 317-872-5090 or email
[email protected] by Wednesday,
October 21, 2015

None, but space is limited

This workshop is open to anyone, so feel free to pass this along or invite
a friend who is interested in this topic. Light refreshments will be served.

Advice on Passwords From an Expert

Schwab’s recent password policy change marks an enormous improvement in clients’
ability to secure their accounts. Selecting and securely managing strong passwords is
one step that all consumers can and should take to protect their assets and information
online. Until recently, Schwab customers could not select passwords greater than 8
characters in length. Now, we can and should take advantage of a new opportunity.

Generate strong passwords. Given the myriad of ways criminals can attack online accounts, the new,
more open-ended policy gives Schwab customers the ability to create much more secure passwords. Strong
passwords are long, non-memorable, non-guessable, and are only used in one place. (Never reuse a
password. If someone gets ahold of your favorite online vendor’s password database, you don’t want them to
*also* have your Schwab password!)

I like passwords that look like this: QKi@MxXg@9%*@!3fAAvn#7&&gLY#jCw@

...continued on back

Worley Erhart-Graves Financial Advisors is a Registered Investment Advisor. Registration as an investment advisor is not an endorsement of the firm by securi-
ties 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 Advi-
sors, 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.

A PIECE OF MIND

Making Plans

Juli Erhart-Graves, CFP®

When visiting my grandparents as a girl, my cousins and I would ask our grandpa for 26¢ each so we could
walk to the corner store for a candy bar. Every time, and I mean every time, we did this, grandpa would feign
shock at the cost of a candy bar. Then he would follow that up with talk about how candy bars used to cost a
nickel. As children, we didn’t pay much attention to the cost of items; inflation had no meaning to us. Like my
grandpa, however, we appreciate the nasty effects of inflation as adults. Having said that, there’s an
interesting inflation issue on the horizon.

The cost of Medicare Part B is expected to rise in 2016, with current predictions estimating a 15% hike in the
base premium. If that happens, participants could see their monthly premiums rise to $120.64 from the
current base premium of $104.90. Here’s where the interesting part comes in…as we get closer to year-end,
based on the calculation Social Security uses for determining inflation, it’s becoming apparent Social Security
recipients will not receive a cost-of-living increase in 2016. However, due to a “hold harmless” provision,
Social Security checks can’t go down due to negative inflation or when base Part B premiums rise faster than
an inflation increase. Therefore, those recipients having Part B premiums deducted from their Social Security

checks will have a year’s reprieve from increased Part B
premiums. If your Part B premiums aren’t deducted from your
check, or if you are subject to higher Part B premiums because of
your income, unfortunately you’ll see the increase in 2016. Those
already planning to start Social Security within the first couple of
months of 2016 should consider whether an earlier application
makes sense.

Now, I’m off to go tell some young’uns how I remember when gas
was 95¢ a gallon and a postage stamp was 20¢! My grandpa
would be proud.

Message to the Millennials

Elizabeth Braden, CFP®

What is a target-date mutual fund?

One investment option commonly offered in a company 401k plan is the target-date fund. Also called age-
based funds or lifecycle funds, target-date funds invest in a mix of stocks and bonds and the allocation of
each depends on the length of time until your retirement. Typically each fund has a year in its name and are
usually in five-year intervals. For example, a 2045 target-date fund would be allocated in a way assuming
retirement in or around year 2045. Because this is 30 years away, this fund is going to be invested more
heavily in stocks for potentially better long-term returns versus a fund invested more heavily in bonds. As the
investor nears retirement the fund automatically rebalances the allocation of stocks and bonds to become
more conservative. This adjusting over time is known as the fund’s glide path.

Not all target-date funds are the same. Research the target-date funds offered in your 401k plan to determine
if one is an appropriate investment for your risk tolerance and time horizon. A 2025 fund offered by one
company may be invested differently than a 2025 fund managed by a different mutual fund company.
Understand the fund’s glide path, because each fund is different. As with all types of investments, it is
important to do your homework and understand what you’re investing in.

Page 2

Investing for the Ages

Bonnie Struck, CMFC®

As hard is it may be to believe, volatility in the market is not always a negative thing. As we weather the
recent and “ongoing” market swings, we have also experienced an increase in phone calls and not for the
reasons you may think. We have clients looking at this as a buying opportunity.

Market corrections are necessary to bring pricing back to a level of sanity. As the market “heats up”, investors
are more likely to pay higher prices for securities they “feel” are the ones to own when in reality the
fundamentals of those companies may not justify such high prices. Everyone wants to buy something when it
is on sale and this recent market correction, which by the way has been a long time coming, was a perfect
time to do just that.

Volatility is the “nature of the beast” during these times of price One of the funny
adjustments, but how you tame it requires an understanding of your own things about the stock
risk tolerance. If you are feeling overly anxious with the constant market is that every
movement of your portfolio, then maybe we need to discuss possible time one person buys,
adjustments in your portfolio. No amount of growth potential in your another sells, and
portfolio is worth being uncomfortable with your allocation. Contact us if both think they are
you want to re-evaluate your risk tolerance. astute.

Tax Corner William Feather,
American author
Pam Smitson, CPA

For some, the beginning of fall equinox makes us look forward to the
upcoming holiday festivities that seem too far off. After all, between
Labor Day and Thanksgiving is a long span of eleven weeks without
celebration. Take heart! There are still some offbeat holidays coming up,
and I have some suggestions on how to celebrate a few of them!

For instance, “Grandparents’ Day” has been held annually on the first Sunday after Labor Day since 1978. If
you are a grandparent, what better way to celebrate than to open or contribute to your grandchild’s Section

529 Plan! If you live in Indiana and contribute to the state’s College Choice plan, you are giving yourself a gift
at the same time! Indiana residents receive a 20% credit on their state income tax return up to $1,000.

Then we celebrate “Evaluate Your Life Day” on October 19th. We all know in life there are two guarantees.
Need I say more? So use this day to prepare for your 2015 tax filing! Today is the day to get a tax plan in
place and start making changes. (Or, use it as an excuse to procrastinate introspection the other 364 days.)

On November 13th, just before Thanksgiving, we celebrate “World Kindness Day”. This is an admirably self-
explanatory holiday encouraging you to overlook boundaries and do random acts of kindness. You could
send your CPA a card of encouragement for the upcoming tax season. Instead, I suggest you use this day to
clean out your garage or write those donation checks and maybe include a new organization to your mix! Just
be sure to retain documentation for all donations and receive acknowledgements for those over $250.

Page 3

3500 DePauw Boulevard
Suite 1035
Pyramid One, Third Floor
Indianapolis, IN 46268

317.872.5090 Phone
855.872.5090 Toll Free
317.872.5095 Fax
www.wefinancialadvisors.com

Find us on Facebook

You can now find us on Facebook at
facebook.com/wefinancialadvisors.

Password Advice, continued from front

How do I remember that?! The answer is, you don’t. Because of the need to manage so many
accounts and passwords, so-called password managers are becoming the go-to solution for conveniently and
securely storing your passwords, as well as generating strong passwords for you. Check out affordable
products like LastPass, 1Password, KeePass, and PasswordSafe.

If you use a password manager, one of the only passwords you need to remember is the password to access
your password manager account. For that, I recommend a long, non-guessable passphrase like this: almost
canine arctic realism 4z.

Add a second secret. Schwab offers the ability to add a second “ factor” to your authentication
process, at no additional charge to you. For accounts that really matter, I always recommend adding a
second factor if you can. In Schwab’s case, you’ll receive a small physical “token” that fits on a key
ring. When you log into Schwab, you’ll use your (new, stronger) password, and enter a number that is
displayed on your token. Adding a second factor dramatically increases the security of your account against a
range of criminal attacks. Criminals can and regularly do find ways around even very strong passwords.

Unfortunately, we live in a world where everyday people need to take steps like these to secure their assets
and personal information. The risks are very real. However, things like strong passwords, password
managers, and multi-factor authentication really do make a meaningful difference.

Craig Jackson, Senior Policy Analyst, Center for Applied Cybersecurity Research, Indiana University-
Bloomington

Do you know someone who will be retiring soon? We can help!
Have them check out our website, www.wefinancialadvisors.com, or call us at 317-872-5090.


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