2019 Fourth Quarter Newsletter

NEWSLETTERWith Knowledge Comes Condence
FOURTH QUARTER 2019

Upcoming Workshop: Retirement Planning

You’re in the homestretch! The 5 to 10
years before you retire is a critical time
for planning to meet your goal.

We know there are a lot of details to keep track of when
managing your retirement plan. Perhaps you have questions,
such as: How do I make my portfolio last my lifetime? How
do I take money out of my retirement accounts? What do I
need to know about Social Security? What taxes do I need to
know about in retirement? We will address these, and more,
at our upcoming Retirement Planning workshop. Juli Erhart-
Graves, CFP®, is hosting this workshop designed for those
who want to prepare for retirement.

We want to educate you about retirement planning, so
please know this workshop is solely educational—we do not
sell any products. This workshop is open to everyone, so feel
free to pass this information along or invite a friend. Light
refreshments will be served.

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 Friday, January 17, 2020 by emailing
[email protected], by calling WHEN: Wednesday, January 22, 2020, 6-7:30 p.m.
317-872-5090, or via Eventbrite
WHERE: The Pyramids, Pyramid Three,
COST: None, but space is limited. Lower Level, Conference Room A & B
(3500 DePauw Blvd, Indianapolis, IN 46268)

Stay Worley Erhart-Graves provides solutions—giving you peace of mind in your /wefinancialadvisors @worleyEG
Connected! financial life. We are here to help you reach your financial goals, and part of @worleyerhartgraves
that includes educational opportunities. So, connect with us on social media. Worley Erhart-Graves
Tag a friend who may enjoy or relate to the content we provide. Bring a friend Financial Advisors, Inc.
to our quarterly workshops. Follow us to see what we are up to!

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.

Change

Juli Erhart-Graves, CFP®

We’re coming to the end of yet another insightful year. Another change I have seen this year is in how we reach our
As the new year quickly approaches, we tend to focus on clients through social media and our blogs. The internet and
what’s next (especially as financial planners). While planning social media networks allow us the opportunity to share
for the future is always a good move, I can’t help but reflect valuable information that affects our clients’ lives—now and
on the previous 11 months. So, the theme of our fourth in the future.
quarter newsletter is change.
You will also see in this edition of the newsletter a change
To start, I would like to thank Bonnie Struck for 19 years of in personnel. We were sad to say goodbye to Paige, but we
collaboration and contribution to this newsletter. She has also know how important it is to raise healthy and happy
diligently provided quality content to share with our clients children in this ever-challenging world. With Paige leaving,
and readers. Moving forward, Margaret Gooley will take we welcomed our new Marketing Coordinator, Christina
Bonnie’s place in writing for the newsletter. Margaret joined Kane. You may have already had an opportunity to speak
the firm two years ago and currently writes for our weekly with her on the phone. Christina has seamlessly picked up
Millennial Monday blog posted on our various social media where Paige left, and we look forward to her new ideas for
platforms. Bonnie isn’t going anywhere; she’s just stepping the coming year.
away from our newsletter.

Holiday Pets

Margaret Gooley, CFP®

Anyone that knows the ladies of Worley Erhart-Graves knows months old. Instead, we were able to focus on Winston and make
we love our pets, me included. My husband and I don’t have sure he received the best possible care.
human children; instead, we have our two fur kids, Winston
the goldendoodle and Ella the bernedoodle. Having these two If you’re planning to bring a new pet into your home during the
sweet, silly pups in our lives has brought us so much joy. It’s holidays, make sure you’re ready for the financial commitment
exciting to come home each night to our two fur kiddos that are required to keep them healthy, happy, and well-fed. Consider
always happy to see us. Despite his 65-pound frame, Winston a pet insurance plan that will cover you if you find yourself in a
thinks of himself as a lap dog. Snuggling with him on my lap, similar unexpected and unfortunate situation. Our policy has
while I hold the bone he’s chewing, is one of his favorite things to been worth every penny.
do. Ella isn’t so much a lap dog, but if you aren’t paying enough
attention to her, she’ll happily let you know by reaching out to This year, Winston is running around like a happy, healthy puppy.
tap you with one of her human hand-sized paws. If you can’t tell, I’ve already purchased both dogs’ Christmas presents and have
they’re both incredibly spoiled. them stored away
in a cabinet with
Like most Americans, we spend more on our dogs than we ever their adorable (I can
expected to. Pets are a big financial commitment, and ours feel my husband’s
even have their own health insurance policy! This time last year, eyes rolling as I
around Winston’s first birthday, we found out he had a terrible write this) Santa
case of bilateral hip dysplasia. He needed a hip replacement at hats from last year.
only 12 months old. The surgery alone was over $5,000. This After all, I wouldn’t
didn’t include all of the x-rays and initial exam fees. We were want them to feel
so thankful this wasn’t a financial event for us due to the pet left out of the
insurance policy we had purchased when he was just a few holiday celebration!

In the Spirit of Giving

Pam Smitson, CPA, CGMA

The higher standard deduction introduced last year left available without selling stock, it could be most beneficial
many charitable organizations with looming questions: to donate appreciated stock (direct transfer to the qualified
would 2018 charitable contributions decrease? Is John charity or DAF) rather than selling it to donate cash. Because
Q. Public donating for the purpose of tax deductions or the stock is donated, it is reported at the fair market value as
in the spirit of giving? After all, it is estimated over 30% of an itemized deduction. However, the gain on the stock is not
annual giving occurs during the month of December, when taxed to the taxpayer nor the charitable organization. It’s a
taxpayers are scurrying to reduce their tax liability. win-win!

Before you make your list and check it twice, think about A valuable opportunity for those over age 70 ½ is the
the best method to give, especially if you are at or near the Qualified Charitable Distribution (QCD), where those subject
standard deduction ($12,200 single and $24,400 married to take Required Minimum Distributions may make direct
filing jointly in 2019). One opportunity is to “lump” donations contributions from their traditional IRA up to $100,000.
in alternating tax years. A taxpayer may increase their When a direct transfer occurs, the donation is excluded from
donation in one year (up to 60% of their Adjusted Gross the Adjusted Gross Income, rather than being reported as
Income, subject to the type of property donated), to exceed an itemized deduction. Be sure to notify your tax preparer
the standard deduction, rather than making donations each to ensure the tax return is prepared correctly, because the
year. In the alternating year, when donations are not made, end-of-year tax reporting document will report it as a normal
the standard deduction would be taken. taxable distribution.

Another way of lumping donations while continuing to Statistics from the National Philanthropic Trust organization
give to the charity on an annual basis is gifting up front into say charitable giving accounted for 2.1% of the gross domestic
a donor advised fund (DAF). The taxpayer will receive the product in 2018; 68% of total giving came from individuals;
deduction all at once when the donation is made to the DAF, and, historically, charitable giving rises about one-third as fast
then they can give the money out incrementally over time. as the stock market. So, did John Q. Public donate as much
This method is more complicated for the taxpayer but allows last year, given the higher standard deduction? For 2018,
them to donate annually. at least, philanthropy was still alive! American individuals,
corporations, and foundations all increased their 2018 giving,
If lumping gifts to exceed the standard deduction is much in the spirit of giving.
beneficial for the taxpayer but accessible cash is not

Uncertainty Gail Gill, CFP®

One of the biggest drags on GDP and consumer confidence is the rocket lost its booster. In October,
due to the uncertainty created when the Trump Administration corporations and investors realized the
kicked off the trade war with China. trade wars (which began in June 2018)
were not going away soon.
When uncertainty rears its ugly head, it is not uncommon for
individuals, our government, and corporations to stop spending By the end of 2018, the stock market was stripped of all the gains
until they see a better—clearer—path ahead. So, what happened made from the beginning of 2017. In other words, the trade
to make us feel so uncertain? wars took away all the market gains that the corporate tax cuts
and reduced regulations gave us. The uncertainty of the trade
To help answer this question, let’s look back at the stock market wars caused spending to falter and Gross Domestic Product,
performance over the last three years. our national output, to drop. Corporations decided to stay in a
holding pattern until they could see a clearer sign of how the
In 2017, soon after President Trump was inaugurated, he reduced trade wars would affect them.
government regulations and announced his tax reform plan. This
resulted in an influx of corporate spending on capital improvements Well the good news is that, recently, the U.S.-China trade talks
and employee wages. The stock market loved the idea, and the have turned a corner, and this has helped the stock market hit
market soared like a rocket, straight up, throughout 2017. record highs. The trade wars aren’t over, but hopefully we’ll have
a trade agreement soon. Then we can go back to worrying about
In 2018, the stock market continued its upward trend, albeit at the weather.
a slower pace, until the trade wars got underway. That’s when

STANDARD PRESORT
US POSTAGE
PAID

INDIANAPOLIS, IN
PERMIT NO. 937

3500 DePauw Blvd. | Suite 1035
Pyramid One, Third Floor
Indianapolis, IN 46268

317.872.5090 Phone
855.872.5090 Toll Free
317.872.5095 Fax

wefinancialadvisors.com

CH. . .CH. . .CH. . . 2020 2019 GOODBYES AND HELLOS. . .
CHANGES 2.8%
Social Security Recipients 1.6% $17,640 Paige Adkins, our former
The IRS has announced Cost-of-living $18,240 $6,000 Marketing Coordinator, gave
2020 limits on retirement- $6,000 $1,000 birth to her first child in June
related items. Social Security Recipients $1,000 $19,000 and decided to stay home
still working earnings limit $19,500 $6,000 with her baby girl, Quinn.
2020: The maximum $6,500 $13,000 Congratulations, Paige, and
Modified Adjusted Gross IRA and Roth IRA $13,500 $56,000 enjoy all the new adventures
Income (MAGI) for making Contribution Limit $57,000 $15,000 of motherhood!
Roth IRA contributions will $3,500
increase from $203,000 IRA Catch-Up Contribution $7,000 A warm welcome to Christina
to $206,000 for married (age 50 and older) $1,000 Kane, our new Marketing
couples filing jointly, with Coordinator. Christina
phase-out limits beginning 401k, 403b, 457 graduated from Ball State
at $196,000 MAGI. For Contribution Limit University with a degree in
single and head-of- political science. She later
household taxpayers, Roth 401k, 403b, 457 Catch-Up graduated from Indiana
IRA contribution limitations Contribution University with a degree in
begin at $124,000 instead event management. She
of $122,000, with total SIMPLE IRA comes to Worley Erhart-Graves with experience
phase-out at $139,000. Contribution Limit in event planning, sponsorship management,
marketing, and business development. Also, she
SEP-IRA Contribution Limit is a graduate of Dave Ramsey’s “Financial Peace
University” and understands the importance of
Annual Gift Tax Exclusion $15,000 money’s role in people’s lives.

Health Savings Account $3,550
(HSA)-Individual $7,100
$1,000
Health Savings Account
(HSA)-Family

HSA Catch-Up Contribution
(age 55 and older)