life planning, 2012

lifeplanningGUIDE 2012

What Next? Rethinking How We Save

Care and Feeding of a College Fund

Seniors and Fraud

Beginner's Guide to

Building a Budget

Countdown to Retirement:Smart Ways to Plan in Your 20s, 30s, 40s and 50s

5 Tips for Cutting

Debt

Pop Quiz:Time to

Crunch the Numbers!

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How to Build a College FundSaving for college? Find-ing courage to take the first step may be the big-gest hurdle

Credit unions:Power to tHePeoPleCredit unions are low-cost, low-profile alterna-tives to commercial banks and high banking fees

5 tiPs For Cutting deBtPutting household finances on a firmer foot-ing calls for deeper changes and fresh think-ing

as For Fido and FluFFy…Pets are full-fledged members of many fami-lies and increasingly part of mom and dad’s estate plan

on tHe way to a FinanCial PlanOdds are, you say you have one – but you don’t. Why your family needs a financial plan

PoP Quiz: time to run tHe numBersIncreasing your financial security calls for clear thinking and focus. Take a minute and test your savvy

saving ForretirementHow to think smarter and plan better for retire-ment at every stage of life

saving and investingTough economic times left many families with a fearful question: Have the old rules of saving and investing changed forever?

Beginner’s guideto Building a BudgetA budget is the founda-tion of a solid financial plan. Here’s a real-world guide to setting one up

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How to Build a College FundSaving for college? Finding courage to take the first step may be the biggest hurdle

5 Tips for Cutting DebtPutting household finances on a firmer footing calls for deeper changes and fresh thinking

On the Way to a Financial PlanOdds are, you say you have one – but you don’t. Why your family needs a financial plan

Pop Quiz: Time to Run the NumbersIncreasing your financial se-curity calls for clear thinking and focus. Take a minute and test your savvy

Saving for RetirementHow to think smarter and plan better for retirement at every stage of life

Saving and InvestingTough economic times left many families with a fear-ful question: Have the old rules of saving and investing changed forever?

Beginner’s Guide to Building a BudgetA budget is the foundation of a solid financial plan. Here’s a real-world guide to setting one up

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Delaying Retirement Has Financial, Social BenefitsThe need to save for retirement is something professionals start hearing about from the moment they begin their careers. Whether it’s parents extolling the virtues of retire-ment plans or employers who encourage their employees to take advantage of their retirement programs, saving for retirement is never far from the minds of professionals.As important as such savings can be, many workers are deciding to delay their retire-ments. As much as men and women envision retiring to a faraway seaside villa for their golden years, such retirements are not terribly common, and many older workers have begun to recognize the economic and social benefits of delaying retirement. Those undecided about when they want to say goodbye to the office should consider the fol-lowing benefits to delaying retirement.• Fewer years to worry about financing your lifestyle - Thanks to advancements in medicine and more and more people living healthier lifestyles, men and women are now living longer than in years past.• More chances to save money - It might be your dream to retire early, but you could be doing yourself a great disservice by ending your career prematurely.• Stay socially active - In addition to economic benefits, delaying retirement has social benefits as well. Many people get the bulk of their social interaction with colleagues and coworkers.• The chance to give back - Individuals who delay retirement can use their extra years around the office as an opportunity to leave a legacy for the next generation.Delaying retirement is growing increasingly popular. Men and women often see it as a chance to build a bigger nest egg and leave a more lasting legacy within their company and community.

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Sometimes the market reacts poorly to world events, butjust because the market reacts doesn’t mean you should.Still, if current events are making you feel uncertainabout your finances, you should schedule a complimen-tary portfolio review. That way, you can make sureyou’re in control of where you want to go and how youget there.

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percent,” Sandberg says. “Let’s say you bring home $2,000. Everybody who is past fifth grade math knows that 10 percent of that is $200 a month. Try to set that aside. Most people can do it if they try hard enough.”

Sandberg suggests people who have credit card balances should try to think of them as loans and attempt to pay them off in six months. Take care of the balances with the highest interest rates first, a tactic that will help save money in the long run.

Budgeting can be painful at first, but Sandberg reminds people that it does get easier. It’s like changing eat-ing habits, she says. “At first, you pay really close attention to calorie counts and statistics. But later, it becomes pretty natural. It’s the same with a budget. Once you get used to living within your prescribed num-bers, it becomes a part of you.”

Here, tips for budgeting, from both finance expert Sandberg and the Federal Trade Commission:

you bring home each month. Include all income – from your job, gifts, tax refunds, unemployment or other gov-ernment assistance, alimony or child support, pensions, Social Security and profits from sales of used goods.

your finances. You can choose from phone apps, computer software or good old-fashioned paper and pencil.

-ings account each month. The easiest to remember: 10 percent of your take-home income.

expenses – those that tend not to change, including rent or mortgage, a car payment, telephone, cable and Internet.

vary – utilities, personal grooming, property taxes, insurance, gas and groceries.

things like manicures, getting your eyebrows waxed, office supplies, hol-iday gifts or entertainment.

expenses and divide by 12 for a monthly estimate.

carry it over in a savings account for the next month. If you have credit card balances, pay them first instead of building a savings account. Having a savings balance and a credit bal-ance can give you a false sense of financial security.

-pected comes up, such as un-reim-bursed medical bills, take care of them by finding other places you can cut.

to budgeting, it will become second nature.

© CTW Features

Beginner’s Guide to Building a Budget

A budget is the foundation of a solid financial plan. Here’s an easy, real-world guide to setting one up | by Deb Acord

Erica Sandberg has this simple advice for consumers thinking about creating a

manicure, the special holiday bottle of wine, the extra $20 on a birthday lunch for your best friend and that concert you’ve been dying to see. And don’t for-get to consider what might happen: a flat tire, a broken tooth or a speeding ticket. Not figuring in life’s many little – and sometimes large – expenses can derail a budget.

Sandberg, a personal finance expert and author of “Expecting Money: The Essential Financial Plan for New and Growing Families” (Kaplan, 2008), says the key to a savvy budget is accounting for everything.

“Be extremely comprehensive,” she says. “So many people tend to truncate their budgets. They divide their expenses into house, groceries, entertainment. That’s not enough categories. That’s not realistic.”

Sandberg believes many consumers overthink a budget. “A budget is just cash flow – money coming in, money going out. If you think of it that way, it’s not so overwhelming.”

Consumers who believe that a household budget boxes them in might have designed a plan that’s too inflexible, Sandberg says. “If they feel like they can only spend $300 a month on movies and theater, for example, it makes

-tainment area for, say, new tires for the car, it makes it more flexible.”

The key to a successful budget is “a matter of manipulating it so you have money for necessities and things that are important to you,” Sandberg says.

Knowing how much money you need and how much you have is para-mount for successful budgeting. “Everyone should know off the top of their heads how much they net in a month after taxes. Then, think in terms of 10

Learn more about…Managing your money at ftc.gov (select Consumer Protection and look for Money Matters, under What’s New)Making smart money decisions at extension.org/personal_financeSetting up a template for your budget office.microsoft.com/en-us/templates(search “home budgets”)Managing money online at mint.com

© CTW Features

6 | JANUARY 21, 2012

Mutual fund fees quietly add up. The difference of half a percentage point – a fund that charges 0.75 percent vs.

a fund that charges 0.25 percent – costs an investor with $100,000 invest-ed in mutual funds in a 401(k) account how much more per year?a. $50 c. $250b. $100 d. $500

What percentage of mid-dle class Americans have no written financial plan?a. 19 c. 59b. 39 d. 69

What’s the best strategy for paying off debts:a. Pay off smallest debts with a low APR first, in order to reduce

your overall number of loansb. Concentrate on paying off the

biggest debt with the highest APR first

The graduates of 2011 are the most indebted class in history, with an average student loan debt load of:

a. 7,300 c. $27,300b. 17,300 d. $37,300

Are the following state-ments about credit unions True or False?a. Credit unions are nonprofit financial insti-

tutions.b. Credit unions are owned and

controlled by members, not prof-it-seeking shareholders

c. Credit unions offer fewer services than regular banks

d. Credit unions are restricted to employees of certain companies or organizations

e. Profits at a credit union go back to members in the form of lower fees

Postponing retirement until age 70, rather than claiming Social Security at age 62, results in a benefit that is:

a. 75 percent higherb. 55 percent higherc. 35 percent higherd. 15 percent higher

Average life expectancy of a U.S. citizen:a. 68 c. 88b. 78 d. 90

In the wake of the great recession, what propor-tion of parents provide grown children financial assistance?a. 25 percent

b. 33 percent c. 50 percent

d. 66 percent

What’s the average wage for U.S. workers?a. $33,000 c. $53,000b. $43,000 d. $57,000

What is the annual per-centage rate on a new credit card?a. 12.99 percentb. 13.99 percent

c. 14.99 percent d. 15.99 percent

© CTW Features

Pop Quiz: Time to Run the Numbers

Don’t tell us you’re no good at math. Or, you forgot your calculator. Or, you have to get back to Angry Birds.Increasing your financial security calls for clear thinking and focus.Take a minute and test your savvy

How do you rate?10 correct:Warren Buffet wants to friend you!9 correct:Close… less Angry Birds, more Suze Orman!8 or less correct:It’s time to do some homework!

1. d: $500 per year2. d: 69 percent3. b: Although many people choose to eliminate small debts first, which makes them feel they are making progress, they’d save more money long-term if they paid off larger, higher-interest debt first4. c: $27,300 5. a: T b: T c: F d: F e: T6. a: 75 percent higher7. b: 78 years8. d: More than two-thirds, or 66 per-cent, double the rate of 20 years ago9. b: $43,00010. c: 14.99 percent as of Nov. 2011

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JANUARY 21, 2012 | 7

Track whaT you spendYou’ve probably heard the conven-tional wisdom: Just give up your morning latte and you’ll find financial security.

It’s more complicated than that, of course, but insignificant purchases can gobble big sums. Michael Collins, director of the Center for Financial Security at the University of Wisconsin, suggests keeping a list of everything you spend for at least a few weeks. By tracking every purchase, you discover what discretionary purchases can go; devote that sum to debt reduction.

Make a budgeTEven for those who are discouraged by debt, the word “budget” can spark even more disheartening visions of

denial.But budgets have the big benefit

of ensuring that necessities are paid. Moreover, there are ways to budget to allow a "yes" to some purchases, says Stuart Vyse, a psychology profes-sor at Connecticut College in New London, Conn., and author of “Going Broke: Why Americans Can’t Hold On To Their Money” (Oxford University Press, 2008).

Vyse keeps two checking accounts. One is dedicated to neces-sary expenses; a monthly automatic deposit guarantees that money is there to pay the essentials.

Experts advise choosing any sys-tem that allows you to separate money for necessities. Of course, it’s important to pay more than mini-

mums due on credit card debt.Additionally, Ithaca College (Ithaca,

N.Y.) consumer psychology expert Michael McCall recommends that you designate some cash for splurges. Paying for the fun stuff in cash is important, he says, since studies show that we’re more reluctant to spend when we must fork over actu-al dollars.

seT goals and work Toward TheMOnce you’re on a budget, you’re like-ly to replace the pleasure that once came with spending with the gratifi-cation of seeing debt disappear.

“Specific short-term goals help keep people motivated,” Collins says.

While it may be tempting to pay off debt with the smallest balance first – rewarding, because you see “progress” quickly – focus instead on paying off debt that carries the big-gest APR. You’ll save more money in the long term by working down larg-er, higher-interest debts first.

don’T grow old wiTh debTUnfortunately, there is no standard

guideline on how much mortgage or credit card debt is dangerous, Collins says. But it's not smart to continue to rack up high-interest debt now, intend-ing to pay it off sometime down the road. Older people who carry debt face a daunting challenge simply because they have a shorter time hori-zon to clear the slate before they retire.

“Your income is going to shrink [in retirement], and if you’re still car-rying credit card debt, then you could actually have negative cash flow each month,” warns John Ulzheimer of SmartCredit.com.

While they may plan to extend work, debt-burdened pre-retirees usual-ly must cut spending to the bone. “Educate yourself,” suggests Barbara Whitehead, co-author of “For A New Thrift: Confronting The Debt Culture” (Broadway Publications, 2008). Research ways to work down debt and learn how to allocate dollars between savings and debt reduction, she says.

becoMe a relucTanT spenderHow much of your debt is due to spending on things you thought you must have and now hardly care about?

Instant gratification is responsible for a lot of the debt burden, Vyse says. Moreover, we’re subject to con-stant temptations. “The world has changed dramatically, “ he says. “In the 1970s, when we went home at night we were out of the market-place. Now you can go online or shop anytime.”

Before handing off your credit card, ask: “What harm would there be if I don’t buy this right now?” Wait a day and it’s likely you will have for-gotten the item that would only add to your debt woes, Vyse says.

© cTw Features

5 Tips for cutting debtBrown-bagging will get you only so far. Putting household finances on a firmer footing calls for deeper changes and fresh thinking | by Marilyn kennedy Melia

Thirteen-point-eight trillion dollars is a mighty big sum. Yet, for years, we hardly noticed it. Now it’s command-ing our attention.

From 2000 to 2008, Americans dou-bled the amount of mortgage and con-sumer debt they held, until it came to $13.8 trillion, according to the U.S. Federal Reserve. You know the rest of the story: The financial world col-lapsed and frightened consumers got out their calculators to total up their tabs. From the $13.8 trillion peak, households have reduced that debt by half a trillion dollars and counting.

There’s still a long way to go, econ-omists believe, before Americans achieve healthy balance sheets. Consumers have “learned the hard way that being approved for a loan and being able to afford that loan are two very differ-ent things,” says Kim McGrigg, community relations manager for nonprofit coun-seling agency Money Management International, based in Sugar Land, Texas. Even when the economy is back on track, households should abandon the “everyone is doing it, so it must be OK” spending mentality, McGrigg says. Instead, families and individuals should focus on their own personal financial security. Does a pile of bills stand between you and financial peace? Here are some new ways to approach making a dent in debt:

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With the economy in turmoil, there’s rarely been a more important time for families to draft a detailed financial plan. Such a plan, including strategies for achieving big life milestones (edu-cation, buying a home and retire-ment), saving, investing and dealing with inevitable setbacks, can help steer families through challenging times.

Few of us are prepared. Some 79 percent of people claim to have a financial plan, according to a 2011 survey by the Certified Financial Planner Board of Standards, but this number is misleading. Nearly half of those with a plan, 46 percent, say that it exists only in their heads; 11 per-cent say they only have written down some notes or ideas, not a complete plan.

Financial planner Simon Singer says too many families spend more time planning a vacation than they do making decisions about their life’s finances. A financial plan, like a vaca-tion, requires setting a destination and establishing an itinerary. “You need to know where you are going and how you’re going to get there,” says Singer, founder of Advisor Consulting Group, Los Angeles.

Families need to know where they stand financially, even if their finances

are in disarray. Doug Hendee, certified financial planner for Brighton Securities, Rochester, N.Y., sees many families who ignore financial troubles in hopes they’ll simply disappear.

“So many people are embarrassed to look at their finances,” Hendee says. “But ignorance in this case is not bliss. How will you know what you need to do if you don’t take a look at your financial situation to figure out where you stand?

The good news is that crafting a financial plan doesn’t have to be an unpleasant chore.

The most important part of any financial plan also is the simplest: a budget.

A budget should take into account the money a family brings into the household each month. It also should list all of a family’s expenses. These should be divided into two main cate-gories. Fixed expenses are those that don’t change from month to month: insurance payments, mortgage pay-ments, student loans. Then there are discretionary or charges that fluctuate month to month, including utility bills, gas, entertainment spending and groceries.

“Families need to know where their money is coming from and where it is going,” says Nancy Skeans, partner with Schneider Downs Wealth Management Advisors in Pittsburgh. “If they don’t understand that, it’s almost impossible for them to under-stand how much they can save and where they can cut expenses.”

Families shouldn’t focus too much on the small details of a financial plan, Hendee says. What’s most important is that they start putting together a financial plan as soon as possible, even if it’s not yet complete.

© CTW Features

On the Way to a Financial PlanOdds are, you say you have one, but you don’t. Why your family needs a financial plan | by Dan Rafter

Learn more about…Investing and consumer protection at investor.govThe basics of investing at investoreducation.orgEffective ways to save at consumerfed.org (click on Financial Services)

© CTW Features

In Search of a Financial AdviserThe key to finding the right investment services provider is asking the right questions – both of yourself and of prospective providers. Following are some questions from the Coalition for Investor Education, a group of state securi-ties regulators, consumer advocates and financial planning and investment advisers, to help you identify the right provider for you.Remember, there are no foolish questions. Any reputable provider should be

happy to discuss these issues with you and answer any questions you may have.

Do you need help developing strategies to reach your financial goals or do you simply want suggestions on appropriateinvestment products to implement your goals?

Do you prefer working with someone who is primarily considered a salesperson, an adviser or a combination of the two?

Do you prefer paying for investment services through a fee, commissions, a percentage of assets in your account or a combination of these?

How important is it to you that your provider have a legal obligation to act in your best interests and disclose potential conflicts of interest?

© CTW Features

How involved do you want to be in decisions about your specific investments?

Do you want assistance with a few targeted areas, or do you need a comprehensive plan for your finances?Do you already have a portfolio of investments you would like help managing?

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expenses will come from savings, a third from future income (such as loans) and the last third from current income, employment and scholar-ships or aid. Use the cost of tuition the day your child was born as a point of reference.

Start with as little as $100 a month, or whatever is feasible.

“Once you’re in the habit of sav-ing, it’s easier to save more,” Kantrowitz says.

Here are some key ways to invest college funds wisely.

Coverdell Education Savings Account allows families to contribute up to $2,000 per child per year. There are income limits. Like an individual retirement account, a Coverdell account can be invested in stocks, bonds, mutual funds, certificates of deposit or money market funds.

As the money grows, you are allowed to defer paying federal income taxes. In many states you will

not have to pay state taxes, either. You can withdraw the money tax-free for educational expenses at any time. This program, however, is best for individuals with modified adjust-ed gross income of less than $95,000, if single, or $190,000 for those who are married and who file taxes jointly.

State-sponsored 529 college savings plans, available to families of all income levels, offer much higher con-tribution limits. Investors select from a platter of mutual funds and other investments. Earnings are tax-free as long as the money is used for quali-fied education expenses.

“Unlike the Coverdell, the money that you invest into a 529 plan must be used for college-related expenses,” Tanabe explains.

While 529 plans have proved pop-ular, returns are not guaranteed. Declines in the value of 529 plans are unsettling to families, especially when students are nearing college age. States have added more conser-vative options to the plans, adding FDIC-insured certificates of deposits, savings accounts and age-based accounts that trim back stock invest-ments in favor of less volatile options

How to Build a College Fund

Saving for college? Finding courage to take the first step may be the biggest hurdle | by Patricia Rivera

Parents looking to salt away money for both college and retirement can find themselves caught in a giant tug-of-war.

Do you make the sacrifice to fund a child’s college education and worry about retirement later? Or do you assume that you’ll find a way to cover college costs with loans or scholarships and focus on your own future instead?

Gen Tanabe votes for retirement savings first. “The reality is, there is no financial aid for retirement. If you haven’t saved enough, your children may be left to shoulder the cost of your expenses,” says Tanabe, co-author of “1001 Ways to Pay for College: Practical Strategies to Make Any College Affordable” (SuperCollege, 2011). Students will find a way with aid, jobs and loans, he says.

Others believe maximizing savings now, for both retirement and college, is far preferable to planning a future built on student loans.

“Every dollar [you borrow] will cost you two, on average, by the time you finish paying off a loan,” says Mark Kantrowitz, founder of college-cost resourc-es Finaid.org and Fastweb.com. “When you’re saving, you’re keeping the inter-est. When you’re borrowing, you’re paying the interest.”

Most experts agree that, if possible, you should save for both, early and often, particularly given the rising cost of tuition. The College Board found that college costs increased 26 percent in the past five years, an average that includes both four-year public and private schools. Parents have not been able to keep up. They were projected to meet just 16 percent of college costs in 2011, down from 24 percent in 2007, according to Fidelity Investments’ fifth annual College Savings Indicator Study, released in August 2011.

But the Fidelity study also found that parents are changing their savings behavior. Some 40 percent of parents with children under age 5 started saving for college costs in a dedicated account, up from 27 percent in 2007. More of them are using a dedicated college savings account like a 529 plan. “Families are planning earlier and saving more efficiently, yet saving for college will con-tinue to be a challenge,” says Joseph Ciccariello, a Fidelity vice president.

Kantrowitz says college savings should begin before or immediately after the birth of a child. But he points out that it is never too late to start saving.

For those who want to figure out how much they might need, Kantrowitz suggests setting a goal of one-third of expected college costs.

“If you focus on the full amount, you’ll feel overwhelmed and you may not even get started,” he says. You should assume that a third of your college

Learn more about…Federal student loans at studentaid.ed.gov529 plans at savingforcollege.comYour financial aid application at fafsa.ed.govInspiration for college at college.gov

© CTW Features

12 | JANUARY 21, 2012

as children age.Investors can change asset alloca-

tion in 529 plans just once a year.You can participate in any state’s

529 savings plan regardless of where you live, although your state’s plan may offer state-tax breaks or other discounts. Buy a 529 either through a financial adviser or directly. Look for:

Low expense ratio and other fees.Determine the annual account maintenance fees, transfer fees and commissions. Investments that are actively managed, such as mutual funds, carry higher fees than index funds.State benefits. Some plans include state-tax breaks. Others offer matching contributions. Study the options.Investment options. Look for a plan that gives you a good mix of investment tracks.Ease of changing account benefi-ciary. Should your child decide not to attend college, make sure you can change the beneficiary.Whatever you decide, select an option to automatically transfer money from your checking or sav-ings account to your 529 college savings plan account, Kantrowitz says.

Prepaid 529 college savings plans are the first cousins of 529 plans, Tanabe says. They allow state residents to pay now to lock in prices at a state uni-versity. A premium over the current tuition rate is factored in to cover future tuition inflation. Some states have programs that allow families to buy a fixed number of tuition credits at today’s prices.

It’s important to read the fine print on prepaid 529 plans to under-

stand how or if your state will handle a shortfall in the event the plan’s investments do not deliver expected returns. Some states have suspended or closed their plans after financial difficulties.

Rebate programs such as Upromise or Babymint provide those who sign up with rebates that go into a 529 savings plan when you buy certain products – gasoline, clothing, food – from participating companies.

“Again, the most important thing is to start saving, no matter how much it is," says Kantrowitz. “Every little bit helps.”

© CTW Features

Top 529 plansState-sponsored college plans in six states received the highest rat-ing in 2011 from analysts at Morningstar, the Chicago-based investment research firm.

Alaska’s T. Rowe Price CollegeSavings planThe Maryland College Investment Plan, managed by T. Rowe PriceNevada’s Vanguard 529 Savings Plan, managed by UpromiseOhio’s CollegeAdvantage 529 Savings Plan, managed by the Ohio Tuition Trust AuthorityThe Utah Educational Savings PlanVirginia’s CollegeAmerica, managed by American Funds

© CTW Features

JANUARY 21, 2012 | 13

Paul SchretteFinancial Consultant

Joseph LeeFinancial Consultant

1407 16th Avenue, Lewiston, Idaho 83501

(208) 743-1943or 1-888-743-1943

www.schretteandlee.com

Securities and Investment Advisory Services off ered through ING Financial Partners, Member SIPC.

Schrette & Lee Financial Services is not a subsidiary of nor controlled by ING Financial Partners.

Why Should You be doing Business with Us?

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We understand you have options when it comes to choosing a fi nancial advisor or an insurance professional to help

you meet your goals and objectives.

Why should you trust Schrette & Lee to help you with your investments and insurance needs? We believe it goes beyond our experience and is

rooted in the foundation makeup of our fi rm.

From the beginning, we set out to create a business model that allowed us to be fl exible in the product solutions we recommend to our clients and to

be unbiased in those recommendations.

In today’s complex world of investment and insurance products, we believe working with an independent fi nancial services fi rm that is committed to

putting their clients’ needs ahead of their own is critical. Th at’s what we do.

We chose our broker-dealer affi liation carefully, choosing ING Financial Partners. Th rough this relationship, we are able to research and access a broad and diverse range of investment and insurance solutions for our

clients through a robust and state of the art technology platform.

Perhaps more importantly, ING Financial Partners requires no production commitments from our fi rm on any proprietary products or from

preferred product partners thereby allowing Schrette & Lee to remain independent and fl exible in our choice of product solutions for our clients.

A very diff erent approach from some other fi rms.

So, whether you are in the wealth accumulation phase of your life, looking to generate income from your investments, or thinking about

the wealth transfer phase of your life, Schrette & Lee has the knowledge, experience and resources to research and access investment and insurance

solutions to help you achieve your goals.

mean that your risk vanishes in the long run, no matter how long you hold onto a stock, warns Zvi Bodie, co-author of “Risk Less and Prosper: Your Guide to Safer Investing” (Wiley, 2011).

EmbracE your risk tolErancEIn the wake of the market crisis, “A lot of people realized they don’t have as much tolerance for risk as they thought and are making adjustments,” Potts says. Assessing risk tolerance used to be hypothetical: How will you sleep if your investments drop in value by 10 percent or 50 percent? Now, it’s real and observable: When the markets crashed, did you buy, hold or sell your stocks?

Because you lock in losses if you unload stocks during a market slump, Potts recommends that risk-averse individuals not make adjustments to investments already tied up in a

401(k) account. “Focus on where you put new contributions,” she says. Funnel new contributions and invest-ments “into vehicles you’re more com-fortable with.”

considEr safEr invEstmEntsBodie believes that the riskiness of stocks is understated and that many investors have too much allocated to stocks and not enough allocated to safer, inflation-indexed investments. Risk-averse investors in particular should see how far a low-risk invest-ment strategy will take them, and then make adjustments to meet savings and retirement goals. “For safety and pro-tection against inflation, Treasury Inflation-Protected Securities and U.S. savings bonds called I Savings Bonds are unsurpassed,” says Bodie, a profes-sor of management at Boston University. “Initial investment is guar-anteed, and return is paid in inflation-adjusted dollars.”

don’t ovErcorrEct orundEr prEparEEconomic collapse made a big impres-sion on young investors. “This painful economic environment has affected the risk appetite of the 20- and

saving and investing: What next? Tough economic times pushed many families to the brink and left others with a fearful question: Have the old rules of saving and investing changed forever? | by dawn klingensmith

Feeling distrustful of the stock market and insecure about your finances and investments? Financial adviser David Gottlieb sits down with people like you almost every day. Into his Pepper Pike, Ohio, office he welcomes an all-American parade of average savers and investors – newlyweds, single moms, families with kids to put through college, couples about to retire – most with a single uneasy question: Has the mortgage industry meltdown, the housing collapse and the rickety economy changed the rules of personal finances and invest-ing? His short answer: No.

Gottlieb does suggest that his cli-ents make one radical change: Tune out the headlines.

“I hear the same rant all the time about the president, the economy, the global economy, Greece. People are making decisions based on headlines and emotions,” which costs them in the end, says Gottlieb, a financial adviser for Edward Jones.

Investors were clobbered with massive investment declines in 2008; howev-er, the recession officially ended more than two years ago. Those who stayed the course have done well since 2009, compared with those who yanked money out of the stock market in a panic.

“If anything, the economic climate reinforces basic financial principles,” says Ruth Ann Potts, manager of advanced planning at Country Financial in Bloomington, Ill.

The aftermath of the great recession is a good time to review those basics and consider some new approaches, based not on doomsday newscasts but on your individual circumstances and goals. What have we learned since the great fall? A lot.

takE a dEEp brEath and stay thE coursEThe market crisis of 2008 proved that diversification offers no guarantee against losses; however, it tends to reduce the damage. Maintain a diversified, balanced portfolio, Potts advises, and don’t let a market slump change your long-term investment plan. Historically, the market consistently and reliably recovers. A down market may even present an opportunity to add holdings and accelerate your recovery.

But keep in mind that stocks are risky by definition; that’s why they have high expected returns. Just because the market historically recovers does not

learn more about…Financial planning at every stage of life at mymoney.govBuying U.S. treasury securities online at treasurydirect.govUsing credit wisely at federalreserve.gov/consumer-info/default.htm

© ctW features

14 | JANUARY 21, 2012

30-something set. At a stage in life where they can most afford to take on additional risk with their retirement savings, huge numbers of young folks are not,” says former portfolio manager and financial literacy advocate Manisha Thakor, of Santa Fe, N.M. “The problem with this is that it sets them on a path to be under-saved for retire-ment when they hit their 50s and 60s, and thus they may end up taking on too much risk when they can least afford to, where there are fewer years on their side.”

don’t bE rEtirEmEnt-rich and cash-poor“People are putting money in 401(k)s but not in the bank,” Gottlieb says, adding that investors have somehow gotten the impression they need to retire with a million dollars.

Consumers also have been advised that anytime they come by extra cash, such as a bonus, they should use it all to pay down credit card debt. Gottlieb says to use some or most of it to chip away at your balance, but to keep the rest “just for the sake of having cash again and paying for things in cash instead of feeling broke all the time and charging things.”

Beef up your emergency funds, too. Having the equivalent of three to six months’ salary or living expenses set aside is still the recommended mini-mum, Potts says, but high unemploy-ment rates and the struggling econo-my suggest six to 12 months’ worth might be more prudent.

In addition to an emergency reserve fund, have a “put-and-take” sav-ings account for unexpected day-to-day expenses like home appliance repairs or occasional splurges, Potts

recommends.If you are saving for a particular

item or event, consider opening a separate “earmarked and untouch-able” account just for that: “You almost need to open up different accounts for different savings goals so you won’t touch it. When you put everything in a general account, it gets spent,” says Gottlieb, who has an account designated for his daughter’s bat mitzvah. “I understand people will fight me on this and say [the money] is not making interest. But cash gives you the ability to buy things, not borrow things.

“The rate of return is not the issue," he says. "It’s having money on hand when you need it.”

trEat Education as an invEstmEntStudent-loan debt now eclipses credit card debt. “As the price of education has risen and wages have stagnated, it’s no longer a no-brainer that any educational debt is good debt,” Thakor says. “In the current environment, it is essential to step back and think strate-gically about how much you are pay-ing for an education relative to the earnings you expect as a result. When the return on investment isn’t as high as you’d like, it’s time to think cre-atively. That may mean living at home while going to school or taking a year or two off before even starting school to live at home, work and save. Or, start at a community college and then transfer to a state school.

“The point is to view education as any other valuable asset and make sure the return justifies the up-front investment.”

© ctW Features

30-something set. At a stage in life where they can most afford to take on additional risk with their retirement savings, huge numbers of young folks are not,” says former portfolio manager and financial literacy advocate Manisha Thakor, of Santa Fe, N.M. “The problem with this is that it sets them on a path to be under-saved for retire-ment when they hit their 50s and 60s, and thus they may end up taking on too much risk when they can least afford to, where there are fewer years on their side.”

don’t bE rEtirEmEnt-rich and cash-poor“People are putting money in 401(k)s but not in the bank,” Gottlieb says, adding that investors have somehow gotten the impression they need to retire with a million dollars.

Consumers also have been advised that anytime they come by extra cash, such as a bonus, they should use it all to pay down credit card debt. Gottlieb says to use some or most of it to chip away at your balance, but to keep the rest “just for the sake of having cash again and paying for things in cash instead of feeling broke all the time and charging things.”

Beef up your emergency funds, too. Having the equivalent of three to six months’ salary or living expenses set aside is still the recommended mini-mum, Potts says, but high unemploy-ment rates and the struggling econo-my suggest six to 12 months’ worth might be more prudent.

In addition to an emergency reserve fund, have a “put-and-take” sav-ings account for unexpected day-to-day expenses like home appliance repairs or occasional splurges, Potts

recommends.If you are saving for a particular

item or event, consider opening a separate “earmarked and untouch-able” account just for that: “You almost need to open up different accounts for different savings goals so you won’t touch it. When you put everything in a general account, it gets spent,” says Gottlieb, who has an account designated for his daughter’s bat mitzvah. “I understand people will fight me on this and say [the money] is not making interest. But cash gives you the ability to buy things, not borrow things.

“The rate of return is not the issue," he says. "It’s having money on hand when you need it.”

trEat Education as an invEstmEntStudent-loan debt now eclipses credit card debt. “As the price of education has risen and wages have stagnated, it’s no longer a no-brainer that any educational debt is good debt,” Thakor says. “In the current environment, it is essential to step back and think strate-gically about how much you are pay-ing for an education relative to the earnings you expect as a result. When the return on investment isn’t as high as you’d like, it’s time to think cre-atively. That may mean living at home while going to school or taking a year or two off before even starting school to live at home, work and save. Or, start at a community college and then transfer to a state school.

“The point is to view education as any other valuable asset and make sure the return justifies the up-front investment.”

© ctW Features

JANUARY 21, 2012 | 15

30-something set. At a stage in life where they can most afford to take on additional risk with their retirement savings, huge numbers of young folks are not,” says former portfolio man-ager and financial literacy advocate Manisha Thakor, of Santa Fe, N.M. “The problem with this is that it sets them on a path to be under-saved for retirement when they hit their 50s and 60s, and thus they may end up taking on too much risk when they can least afford to, where there are fewer years on their side.”

Don’t be retirement-rich anD cash-poor“People are putting money in 401(k)s but not in the bank,” Gottlieb says, adding that investors have somehow gotten the impression they need to retire with a million dollars.

Consumers also have been advised that anytime they come by extra cash, such as a bonus, they should use it all to pay down credit card debt. Gottlieb says to use some or most of it to chip away at your balance, but to keep the rest “just for the sake of having cash again and paying for things in cash instead of feeling broke all the time and charging things.”Beef up your emergency funds, too. Having the equivalent of three to six months’ salary or living expenses set aside is still the recommended mini-mum, Potts says, but high unemploy-ment rates and the struggling economy suggest six to 12 months’ worth might be more prudent.In addition to an emergency reserve fund, have a “put-and-take” savings account for unexpected day-to-day expenses like home appliance repairs or occasional splurges, Potts recommends.

If you are saving for a particular item or event, consider opening a separate “earmarked and untouchable” account just for that: “You almost need to open up different accounts for differ-ent savings goals so you won’t touch it. When you put everything in a general account, it gets spent,” says Gottlieb, who has an account designated for his daughter’s bat mitzvah. “I understand people will fight me on this and say [the money] is not making interest. But cash gives you the ability to buy things, not borrow things.“The rate of return is not the issue," he says. "It’s having money on hand when you need it.”

treat eDucation as an investmentStudent-loan debt now eclipses credit card debt. “As the price of education

has risen and wages have stagnated, it’s no longer a no-brainer that any educational debt is good debt,” Tha-kor says. “In the current environment, it is essential to step back and think strategically about how much you are paying for an education relative to the earnings you expect as a result. When the return on investment isn’t as high as you’d like, it’s time to think cre-atively. That may mean living at home while going to school or taking a year or two off before even starting school to live at home, work and save. Or, start at a community college and then transfer to a state school.“The point is to view education as any other valuable asset and make sure the return justifies the up-front invest-ment.”© ctW Features

The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Smith Barney Financial Advisors do not provide tax or legal advice. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, not a bank. Where appropriate, Morgan Stanley Smith Barney has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services. Banking and credit products and services are provided by Morgan Stanley Private Bank, National Association, Morgan Stanley Bank, N.A. or other affiliates. Investment services are offered through Morgan Stanley Smith Barney, LLC, member SIPC. Unless specifically disclosed in writing, investments and services offered trough Morgan Stanley Smith Barney are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, the Bank and involve investment risks, including possible loss of principal amount invested.

© 2012 Morgan Stanley Smith Barney LLC. Member SIPC. NY CS 7028076 01/12

The Clearwater Group atMorgan Stanley Smith Barney

Left to Right: Craig Conklin, Financial Advisor, Timothy Lynch, Financial Advisor, Kenneth Maestas, Financial Advisor, Eric Justis, Financial Advisor, Peggy Byers, Client Service Associate

The Clearwater Group atMorgan Stanley Smith Barney518 Diagonal StreetClarkston, WA 99403509-295-5175www.fa.smithbarney.com/clearwatergroup

backed by other financial advisers. If they are able, Sewell and Schaeffer recommend those in their 20s save up to 20 percent of income, which they say is ideal.

In your 30sThis is the time to eliminate debt and be smart about a home purchase. “Hopefully, college debt is behind them and the only loans in place are well-managed, auto- and housing-relat-ed loans,” says Schaeffer. If your employer does not match a portion of your contributions to a company 401(k) plan, Schaeffer says, it could be worth seeking out one who does.

Job changes and even career changes are common at this stage. “If you enter a defined contribution plan and if you have good savings levels at

every job, career changes are fine,” Rappaport says.

This may be the time a young cou-ple welcomes their first child. When women take a break from work for childbirth and child-rearing they lose immediate income and also lower their lifetime earnings, reducing retirement benefits. Sewell says the wife should propose that half her hus-band’s savings during that time fund the retirement accounts.

Continue to save in a disciplined fashion, even if investments are grow-

ing steadily. Back in the day, an investor could simply pick a sound allocation of funds within a 401(k) and “everything would be fine,”

Schaeffer says. This is no longer true.Individuals who begin their retire-

ment savings in their 30s should save around 13 percent of their income, according to The Actuarial Foundation.

In your 40s“You should be approaching peak earning years," Schaeffer says. “College may be competing with retirement for your savings dollars. If your life-style will allow, save aggressively.”

Home and auto loans, bills and retirement savings alone can cause financial strain during this life stage. But the addition of college tuition payments can make it unbearable, even for families that have made all the right financial steps thus far.

According to a 2008 study from

Saving for retirement: The Timeline How to think smarter and plan better for retirement at every stage of life | by Taniesha robinson

Funding retirement is easy. Just ask planner David Schaeffer. “Make all you possibly can. Save all you possibly can.” And, start early. Often, the people asking him for help on the eve of retirement didn’t screw up their investments. “It’s not that they did something wrong. It’s that they never did something,” says the Schaeffer, , a retirement planner with Futurity First Insurance Group in Phoenix. There’s something for folks at every age to learn about saving and investing for retirement. Start here.

In your 20sSaving for retirement savings isn’t a hot topic among 20-somethings. But young people develop financial hab-its and make life decisions that can have lifelong consequences.

“The kind of job you get when you’re young, in your 20s, can have a big impact on your lifetime security,” says Anna Rappaport, a consultant for the Women’s Institute for a Secure Retirement, Washington D.C. “A teacher or a policeman gets into a public pen-sion plan. That’s a lot different from getting into an occupation where there’s likely to not be much benefit.”

Today, expected retirement income from pensions or 401(k) accounts must be coupled with disciplined lifelong personal savings, says Bonnie Sewell, prin-cipal financial planner at American Capital Planning, Washington, D.C. “This is

the easiest time in your life to save if you don’t buy into an expensive lifestyle,” Sewell says. “Regardless of your age, your focus should be on disciplined saving and less on investments.”

It can be difficult for someone who just entered the labor force to think about saving for retirement. “If it feels better to call it ‘choices savings’ rather than retirement, do that,” Sewell says. Early savings allows more “choices” later on: career changes, marriage, divorce, health issues and more.

The Schaumburg, Ill.-based Actuarial Foundation rec-ommends people who begin saving in their 20s to put away about 10 percent of their income, a common rule

Tip

Tip

Start early. A 25-year-old who saves 15 percent a year is likely to be able to afford to retire at 62. “If you start later, you need to save more,” Rappaport says.

Because women tend to live longer, they need to save more aggressively.

16 | JANUARY 21, 2012

Funding retirement is easy. Just ask planner David Schaeffer. “Make all you possibly can. Save all you possi-bly can.” And, start early. Often, the people asking him for help on the eve of retirement didn’t screw up their invest-ments. “It’s not that they did something wrong. It’s that they never did something,” says the Schaeffer, , a retire-ment planner with Futurity First Insurance Group in Phoenix. There’s something for folks at every age to learn about saving and investing for retirement. Start here.

In your 20sSaving for retirement savings isn’t a hot topic among 20-somethings. But young people develop financial habits and make life decisions that can have lifelong consequenc-es.

“The kind of job you get when you’re young, in your 20s, can have a big impact on your lifetime security,” says Anna Rappaport, a consultant for the Women’s Institute for a Secure Retirement, Washington D.C. “A teacher or a policeman gets into a public pension plan. That’s a lot dif-ferent from getting into an occupation where there’s likely to not be much benefit.”

Today, expected retirement income from pensions or 401(k) accounts must be coupled with disciplined lifelong personal savings, says Bonnie Sewell, principal financial planner at American Capital Planning, Washington, D.C. “This is the easiest time in your life to save if you don’t buy into an expensive lifestyle,” Sewell says. “Regardless of your age, your focus should be on disciplined saving and less on investments.”

Securities are offered through LPL Financial, member FINRA/SIPC.

OKAYNOW WHAT?Have recent market events left you uncertain about your financial future? Investing shouldn’t be fraught with confusion; I can help clear things up. I will address your short-term and long-term strategies, help you select the best investment vehicles for your needs and help guide you toward financial well-being.

Call today for more information or to schedule a consultation.

Teri BollingFinancial Advisor, LPL Financial230 Johnson Ave.,Orofino, ID 83544(208) 476-7100 toll-free (877) [email protected]

www. camasfs.comwww.disciplinediq.com

Indepence Powered by

the National Center on Higher Education and Public Policy, col-lege costs are roughly a third of the median fami-ly income for lower-middle-class Americans. The Actuarial Foundation advises parents to ask children to help pay for

their education with earnings from summer and part-time jobs, scholar-ships and loans.

“If you make bad decisions on cars and mortgages and college, you’ve shot yourself in the foot,” says finan-cial planner Sewell.

The Actuarial Foundation recom-mends those who begin saving in their 40s to put away 20 percent of income.

In your 50sIt’s time to sock away every nickel. Ideally, for savers of this age, mortgage costs should be in the range of 10

percent of income, Schaeffer says, and auto costs should be low. “College costs are behind you and you are in the 20-year home stretch to retire-ment,” he says.

Make “catch-up” contributions

to retirement savings now, if neces-sary. Resist any permanent withdrawal of retirement funds, especially before age 59.5, when early-withdrawal pen-alties disappear. Most account with-drawals will be taxed.

Individuals who’ve just begun their retirement savings during this life stage need to save around 40 per-cent of their income, according to the Actuarial Foundation.

AT Age 65Full Social Security benefits kick in at this time, but it’s not going to be the reward that past generations saw. If retirement savings have been lacklus-ter over the years, there are some res-cue options. “There’s no reason that people who haven’t saved enough are doomed to a spartan existence, unless they insist on living in a high-class area or continue to spend at a level

that is unsustain-able,” Sewell says.

She suggests taking on an extra job – part-time may be enough – and perhaps creating a stream of income on the side from selling something you make or provid-

ing a service, from building websites to de-cluttering homes.

Retirees can expect to spend 4 percent of retirement assets annually to stretch savings over their remain-ing years, Schaeffer says. More than that is a problem.

© CTW Features

Tip

Tip

Tip

To determine whether you’re on track in your sav-ings try the AOL’s "Am I Saving Enough? What Can I Change?" calculator at calculators.aol.com/tools/aol/retire02a/tool.fcs

Learn what your estimated social security benefit will be at retire-ment by using the retirement estima-tor at www.ssa.gov/estimator or call 800.772.1213.

Sell assets that are not producing much income or growth, such as undeveloped land or a vacation home, and invest in income-produc-ing assets.

the National Center on Higher Education and Public Policy, col-lege costs are roughly a third of the median fami-ly income for lower-middle-class Americans. The Actuarial Foundation advises parents to ask children to help pay for

their education with earnings from summer and part-time jobs, scholar-ships and loans.

“If you make bad decisions on cars and mortgages and college, you’ve shot yourself in the foot,” says finan-cial planner Sewell.

The Actuarial Foundation recom-mends those who begin saving in their 40s to put away 20 percent of income.

In your 50sIt’s time to sock away every nickel. Ideally, for savers of this age, mortgage costs should be in the range of 10

percent of income, Schaeffer says, and auto costs should be low. “College costs are behind you and you are in the 20-year home stretch to retire-ment,” he says.

Make “catch-up” contributions

to retirement savings now, if neces-sary. Resist any permanent withdrawal of retirement funds, especially before age 59.5, when early-withdrawal pen-alties disappear. Most account with-drawals will be taxed.

Individuals who’ve just begun their retirement savings during this life stage need to save around 40 per-cent of their income, according to the Actuarial Foundation.

AT Age 65Full Social Security benefits kick in at this time, but it’s not going to be the reward that past generations saw. If retirement savings have been lacklus-ter over the years, there are some res-cue options. “There’s no reason that people who haven’t saved enough are doomed to a spartan existence, unless they insist on living in a high-class area or continue to spend at a level

that is unsustain-able,” Sewell says.

She suggests taking on an extra job – part-time may be enough – and perhaps creating a stream of income on the side from selling something you make or provid-

ing a service, from building websites to de-cluttering homes.

Retirees can expect to spend 4 percent of retirement assets annually to stretch savings over their remain-ing years, Schaeffer says. More than that is a problem.

© CTW Features

Tip

Tip

Tip

To determine whether you’re on track in your sav-ings try the AOL’s "Am I Saving Enough? What Can I Change?" calculator at calculators.aol.com/tools/aol/retire02a/tool.fcs

Learn what your estimated social security benefit will be at retire-ment by using the retirement estima-tor at www.ssa.gov/estimator or call 800.772.1213.

Sell assets that are not producing much income or growth, such as undeveloped land or a vacation home, and invest in income-produc-ing assets.

JANUARY 21, 2012 | 17

It can be difficult for someone who just entered the labor force to think about sav-ing for retirement. “If it feels better to call it ‘choices savings’ rather than retirement, do that,” Sewell says. Early savings allows more “choices” later on: career changes, marriage, divorce, health issues and more.

The Schaumburg, Ill.-based Actuarial Foundation recommends people who begin saving in their 20s to put away about 10 percent of their income, a common rule backed by other financial advisers. If they are able, Sewell and Schaeffer recommend those in their 20s save up to 20 percent of income, which they say is ideal.

In your 30sThis is the time to eliminate debt and be smart about a home purchase. “Hopefully, college debt is behind them and the only loans in place are well-managed, auto- and housing-related loans,” says Schaeffer. If your employer does not match a portion of your contributions to a company 401(k) plan, Schaeffer says, it could be worth seeking out one who does.

Job changes and even career changes are common at this stage. “If you enter a defined contribution plan and if you have good savings levels at every job, career changes are fine,” Rappaport says.

This may be the time a young couple welcomes their first child. When women take a break from work for childbirth and child-rearing they lose immediate income and also lower their lifetime earnings, reducing retirement benefits. Sewell says the wife should propose that half her hus-band’s savings during that time fund the retirement accounts.

Continue to save in a disciplined fash-ion, even if investments are growing steadi-ly. Back in the day, an investor could sim-ply pick a sound allocation of funds within a 401(k) and “everything would be fine,” Schaeffer says. This is no longer true.

Individuals who begin their retirement savings in their 30s should save around 13 percent of their income, according to The Actuarial Foundation.

In your 40s“You should be approaching peak earning

years," Schaeffer says. “College may be competing with retirement for your savings dollars. If your lifestyle will allow, save aggressively.”

Home and auto loans, bills and retire-ment savings alone can cause financial strain during this life stage. But the addi-tion of college tuition payments can make it unbearable, even for families that have made all the right financial steps thus far.

According to a 2008 study from the National Center on Higher Education and Public Policy, college costs are roughly a third of the median family income for lower-middle-class Americans. The Actuarial Foundation advises parents to ask children to help pay for their education with earnings from summer and part-time jobs, scholarships and loans.

“If you make bad decisions on cars and mortgages and college, you’ve shot yourself in the foot,” says financial planner Sewell.

The Actuarial Foundation recommends those who begin saving in their 40s to put away 20 percent of income.

In your 50sIt’s time to sock away every nickel. Ideally, for savers of this age, mortgage costs should be in the range of 10 percent of income, Schaeffer says, and auto costs should be low. “College costs are behind you and you are in the 20-year home stretch to retirement,” he says.

Make “catchup” contributions to retire-ment savings now, if necessary. Resist any permanent withdrawal of retirement funds, especially before age 59.5, when early-withdrawal penalties disappear. Most account withdrawals will be taxed.

Individuals who’ve just begun their retirement savings during this life stage need to save around 40 percent of their income, according to the Actuarial Foundation.

At Age 65Full Social Security benefits kick in at this time, but it’s not going to be the reward that past generations saw. If retirement sav-ings have been lackluster over the years, there are some rescue options. “There’s no reason that people who haven’t saved

enough are doomed to a spartan existence, unless they insist on living in a high-class area or continue to spend at a level that is unsustainable,” Sewell says.

She suggests taking on an extra job – part-time may be enough – and perhaps creating a stream of income on the side from selling something you make or pro-

viding a service, from building websites to de-cluttering homes.

Retirees can expect to spend 4 percent of retirement assets annually to stretch sav-ings over their remaining years, Schaeffer says. More than that is a problem.© CtW Features

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As for Fido and Fluffy…

Pets are full-fledged members of many families – and, more often these days, part of mom and dad’s estate plan | by Lindsey Romain

When Mommy and Daddy Divorce

The death of an owner isn’t the only legal hurdle for pets. Divorce also can make things ugly. David Pisarra, a child custody lawyer and co-author of “What About Wally? Co-Parenting With Your Ex” (Libero Media, 2011), sug-gests that pet owners who divorce should be mature and concise about pet parenting, should both owners choose to stay in the life of the pet.“In my experience, having a thor-

oughly drafted plan that you can each refer to reduces confusion over who is responsible and what you have agreed to,” Pisarra says. “That takes away the friction of miscommunication so you can just relax and enjoy your pet’s love.”He notes that courts are often

reluctant to recognize pet-sharing plans, which makes these self-developed plans even more worthy.If a co-parenting arrangement

promises to be too stressful for a high-strung pet, Pisarra says own-ers should try to recognize the harm it may cause and work together to establish a different plan.“There are always situations

where one parent needs to let go,” he says. “But even in those cases, a parenting plan can still allow for occasional visits and time-sharing. Dogs are generally more OK with travel than cats, so the type of pet is also a factor.”

© CTW Features

Pets in the family financial plan? It’s not as far-fetched as it sounds.More pet owners are seeking ways to care for their animals should they die

unexpectedly before their pet.Sensational celebrity pet tales are one reason for the uptick; Leona Helmsly,

the controversial New York real estate investor, notoriously left $12 million to her dog, Trouble, in 2007. “There were a couple of big, notorious cases, with people leaving millions of dollars to their pets,” says Danny Meek, a financial consultant who runs Pet Trust Law Blog, a website that helps pet owners incor-porate pets into estate planning. “The public took notice and thought, ‘Maybe this is something I can do for my pet.’”

The instinct to plan for Fido’s or Fluffy’s extended care parallels the rise in the notion that pets are full-fledged family members. In a May 2011 survey of 1,500 pet owners by PetMD, the majority of respondents (73 percent) said if they could only have one friend, they would choose their dogs over a human. More than 8 in 10 surveyed by dog-treat company Milo’s Kitchen said dogs are an equal member of their families. Fifty-eight percent said they are comfortable calling themselves “mommy” and “daddy” when referencing their dogs, and 35 percent refer to their dog as “son” or “daughter.”

By 2013, the American Pet Products Association predicts that the pet insur-ance market will reach $400 million. “As people grow older, they lose their fam-

20 | JANUARY 21, 2012

As for Mom and Dad…

What to look for in an assisted living facility | Metro

As men and women enter their golden years, many decide they can no longer maintain their homes and choose to down-grade to something smaller, be it an apart-ment or a condominium.

For millions of others, health plays a significant role when deciding where to move when it’s time to sell their homes.

According to the AARP, slightly more than 5 percent of people 65 years and older reside in nursing homes, congregate care, assisted living, and board-and-care homes. Though no one plans to live in a nursing home, seniors and their families should at least know what to look for just in case.

Determine individual needs: Men and women researching potential living facili-ties might find it difficult to determine their specific needs. Unforeseen health conditions, for instance, might dictate which option is the best fit. Men and women who have a medical condition that requires routine monitoring will almost certainly want a skilled nursing facility. But those without medical conditions who need help with simpler tasks of everyday life are likely to have those needs met by an intermediate facility. Some facilities provide both types of care, which can make transitioning from one to another much easier if or when that need arises. Facilities typically have intake planners on staff who evaluate each individual and determine which level of care is the best fit.

Research policies and procedures: Each facility should be ready and willing to share and discuss its policies and proce-dures with regards to residents. What is the procedure when a resident has a medical emergency? What if a resident finds a liv-ing situation unpleasant? What is the facil-ity’s philosophy regarding staff and resi-dent interaction? What are the facility’s hiring practices, including certification requirements, for its personnel? What is the ratio of staff to residents? Each facility

should be able to answer these questions promptly and adequately. Those who can’t should be checked off the list of residences to consider.

Facility ratings: According to the AARP, recent research has shown that nonprofit nursing homes offer higher-quality care, better staff-resident ratios, and have fewer health violations than facilities managed by for-profit companies. Men and women researching facilities can visit Caring.com , an online resource for men and women caring for aging relatives. The website enables adults to compare nursing homes in their areas, including if a home is for profit or nonprofit, and the home’s capaci-ty. U.S. residents can even learn each facili-ty’s Medicare ratings, which are deter-mined by examining the safety of the facil-ity and its overall quality of care and a host of other factors.

Get a firsthand account of the facility: Before choosing a facility for themselves or an elderly relative, individuals should spend some time at the facilities they’re considering to get a firsthand account of what life at that facility is like. Observe the staff interactions with residents, including if they address residents with respect and patience. How do the current residents look? Are they unkempt and left to their own devices, or do they appear well groomed and are they encouraged to inter-act with other residents? Does the facility seem warm and welcoming, or is it anti-septic? The move to an assisted living facil-ity is often difficult and sometimes depressing, so each of the above conditions can carry significant weight when choosing a facility.

Finding a nursing home or a similar facility for yourself or an aging relative is not necessarily easy. Men and women fac-ing such a difficult decision should begin the process as early as possible to ensure they find the facility that is the best fit.










JANUARY 21, 2012 | 21

Seniors and Fraud…

Seniors are targets of charitable fraud | Metro

Donating money to charity is one of the most selfless things a person can do. Unfortunately, criminals can easily prey on these selfless acts, using a person’s desire to help the less fortunate for their own personal gain.

According to the Federal Bureau of Investigation, seniors should be especially mindful of fraud schemes. That’s because seniors are considered easy targets for criminals for a number of reasons. The FBI notes that seniors are most likely to have a nest egg and an exceptional credit rating, making them very attractive to criminals. What’s more, seniors are more likely to be ashamed if they feel they have been victimized and therefore are less prone to report the fraud.

But seniors should know that con artists don’t discriminate when it comes to their vic-tims, and people of all ages are victimized each and every year, particularly during the holiday season when men and women most commonly donate. Before donating to charity this year, older donors should take the following precau-tions to reduce their risk of being victimized by con artists posing as charities.

• Get off the phone. Seniors are com-monly victimized by con artists over the phone. No reputable charity will want you to donate over the telephone. Instead, the charity will want you to familiarize yourself with their mis-sion and history and then make a donation based on your research. If a caller wants you to donate over the phone, simply request they mail you information about the charity and then hang up. If they’re a reputable charity, this should not be a problem. If the caller continues to pressure you for a donation over the phone, just hang up. A caller soliciting a donation might be a con artist, an employee of a for-profit fundraiser or an employee of the charity itself. Ultimately, if you decide to make a dona-tion, don’t do so over the phone. Instead, send that donation directly to the charity to ensure the charity receives the entire donation, instead of a portion going toward a fundraiser.

• Don’t feel pressured. No reputable char-ity pressures prospective donors into making

contributions. That’s because they don’t need to. A reputable charity can afford to keep its lights on and its programs running with or without your donation. If a caller or a letter is pressuring you to donate, don’t succumb to that pressure and kindly decline to donate.

• Don’t let “gifts” pressure you. Another tool employed by con artists or even less repu-table charities is to send “gifts” to prospective donors. These can include mailing labels or cards. The hope is that recipients will feel pres-sured into donating once they receive a gift. However, a charity that is worth a donation does not need to resort to such tactics, which are a waste of resources as well as a dishonest way to solicit donations. Seniors should not feel compelled to donate because they received free mailing labels.

• Verify all information. Con artists are especially good at impersonating a reputable charity, sending emails with a well known char-ity’s logo but a link that directs donors to a dif-ferent website entirely. Never make a donation without first verifying a charity’s information, including how your donation will be used and how much of the charity’s budget goes toward the services and programs it provides. Charity Navigator, a nonprofit organization dedicated to helping givers make smart donating deci-sions, recommends donors give to charities that direct at least 75 percent of their budget on programs and services related to their mission. To avoid donating to a fraudulent or unworthy charity, research the charity and make sure your money will be going where you intend it to go.

• Save all records of donations. It’s important to save records of any donations for tax purposes, but it’s also important for seniors to keep records to avoid fraud. Many con art-ists prey on seniors by pretending to represent charities seniors have donated to in the past. By keeping records of all past donations, seniors can easily verify if they have donated to a spe-cific charity in the past and whether or not the person on the phone or the author of an email or letter is telling the truth.

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movement has helped business, saying consumer accounts typically cost them more money than they make. And with new government regulations limiting surcharges, banks are refocusing their sights on business.Though short-term effects may not be significant, some believe the popularity of credit unions will continue to grow. “Last year, we saw 1 million new credit union members. We will see more than that in 2012,” predicts CUNA President and CEO Bill Cheney.Consumers are rediscovering the services offered by local credit unions, which are nonprofit, member-owned alternatives to banks that provide all of the same services, according to Cheney.“By moving to credit unions, con-sumers will save about $70 a year, on average,” he says. Studies have shown people living paycheck to paycheck save even more at a credit union than the average customer because they use more credit union services.Because they are member-owned, credit unions are able to offer better rates and lower fees, virtu-ally across the board, Cheney says. This includes higher savings rates and lower interest rates compared to banks, even in this low-interest environment.“It’s an entirely different philoso-phy,” he says. “Banks use people

to make money; credit unions use money to help people. Credit unions truly are groups of people coming together to help each other, versus doing business with banks, which ultimately answer to their shareholders.”Small-business owner Matt D’Arcy, a financial planner who owns Greybridge Financial Group and is vice president and co-owner of Hupp Tax in Willowick, Ohio, says perhaps because of the nonprofit status of credit unions, their man-agement often has more longevity, allowing them to develop rapport with members.“When I deal with a bank – and, as a small-business owner, I deal them a lot – there seems to be a revolv-ing door for management types,” D’Arcy says. “With a credit union, you may encounter the same manager for 30 years, and you can really develop a time-trusted rela-tionship and know that they will go to bat for you.”

Consumers are rediscovering the services offered by local credit unions, which are nonprofit, member-owned alternatives to banks that pro-vide all of the same services, accord-ing to Cheney.

“By moving to credit unions, con-sumers will save about $70 a year, on average,” he says. Studies have shown people living paycheck to paycheck save even more at a credit union than the average customer because they use more credit union services.

Because they are member-owned, credit unions are able to offer better rates and lower fees, virtually across the board, Cheney says. This includes higher savings rates and lower inter-est rates compared to banks, even in this low-interest environment.

“It’s an entirely different philoso-phy,” he says. “Banks use people to make money; credit unions use money to help people. Credit unions truly are groups of people coming together to help each other, versus doing business with banks, which ultimately answer to their sharehold-ers.”

Small-business owner Matt D’Arcy, a financial planner who owns Greybridge Financial Group and is vice president and co-owner of Hupp Tax in Willowick, Ohio, says perhaps because of the nonprofit status of credit unions, their management often has more longevity, allowing them to develop rapport with mem-bers.

“When I deal with a bank – and, as a small-business owner, I deal them a lot – there seems to be a revolving door for management types,” D’Arcy says. “With a credit union, you may encounter the same manager for 30 years, and you can really develop a time-trusted relationship and know

that they will go to bat for you.”Whereas anyone can walk into any

bank and open an account, credit unions are slightly different, with fields of membership eligibility. Nearly everyone has a credit union they can join, but they have to find one they qualify to join first. For example, Michigan State University Federal Credit Union (MSUFCU), based in East Lansing, Mich., is owned by 162,000 members in the Michigan State University and Oakland University communities, including students, alumni, faculty and employees, local schools and businesses. Tucson Old City Pueblo Credit Union in Tucson, Ariz., is limit-ed to city employees and select groups.

As a student at Michigan State University, Michelle Gutierrez belonged to MSUFCU. Now an alum-nus living in Kerrville, Texas more than 15 years later, she says she has remained a credit union customer.

“We never changed,” Gutierrez says. “We have just always made the conscious decision to go with local federal credit unions first. They have always had their members in mind.”

© CTW Features

Credit Unions: Power to the People Credit unions are low-cost, low-profile alternatives to commercial banks. As consum-ers balk at high banking fees, the low profile thing may be history | by Laura Drotleff

The nation’s biggest commercial banks received a clear message last fall when an estimated 650,000 consumers withdrew some $4.5 billion and transferred the funds to new accounts in the nation’s 7,200 credit unions. The problem: High fees for working-class account holders and small businesses and poor customer service. The message: Enough is enough.

The movement stemmed from already-rampant public distaste for the gov-ernment bailout of large banks coupled with a social media call for a “National Bank Transfer Day” on Nov. 5, 2011. That Saturday alone brought 40,000 new members and their $80 million to credit unions nationwide, according to the Credit Union National Association.

The Sept. 29 unveiling of Bank of America’s now-rescinded $5 monthly debit card fee sparked the mass exodus, which occurred throughout the month of October. In a CUNA survey of 5,000 credit unions, a majority attrib-uted their new membership growth since that date to consumer reaction to newly imposed bank fees and the Bank Transfer Day idea. Since then, the idea has grown. Some 61,000 people have liked the cause on Facebook, where the new slogan is, “Every Day is Bank Transfer Day.”

While credit unions enjoyed the influx of new business and began lobby-ing for the ability to make more business loans, big banks claim the move-ment has helped business, saying consumer accounts typically cost them more money than they make. And with new government regulations limiting surcharges, banks are refocusing their sights on business.

Though short-term effects may not be significant, some believe the popu-larity of credit unions will continue to grow. “Last year, we saw 1 million new credit union members. We will see more than that in 2012,” predicts CUNA President and CEO Bill Cheney.

Learn more about…Joining a credit union at asmarterchoice.orgComparing credit union rates versus bank rates at ncua.gov(look under Resources and Information)Making smart financial decisions at mycreditunion.gov

© CTW Features

22 | JANUARY 21, 2012

The nation’s biggest commercial banks received a clear message last fall when an estimated 650,000 consumers withdrew some $4.5 billion and transferred the funds to new accounts in the nation’s 7,200 credit unions. The problem: High fees for working-class account holders and small businesses and poor customer service. The message: Enough is enough.The movement stemmed from already-rampant public distaste for the government bailout of large banks coupled with a social media call for a “National Bank Transfer Day” on Nov. 5, 2011. That Saturday alone brought 40,000 new members and their $80 million to credit unions nationwide, according to the Credit Union National Association.The Sept. 29 unveiling of Bank of America’s now-rescinded $5 monthly debit card fee sparked the mass exodus, which occurred throughout the month of October. In a CUNA survey of 5,000 credit unions, a major-ity attributed their new membership growth since that date to consumer reaction to newly imposed bank fees and the Bank Transfer Day idea. Since then, the idea has grown. Some 61,000 people have liked the cause on Facebook, where the new slogan is, “Every Day is Bank Trans-fer Day.”While credit unions enjoyed the influx of new business and began lob-bying for the ability to make more business loans, big banks claim the

Consumers are rediscovering the services offered by local credit unions, which are nonprofit, member-owned alternatives to banks that pro-vide all of the same services, accord-ing to Cheney.

“By moving to credit unions, con-sumers will save about $70 a year, on average,” he says. Studies have shown people living paycheck to paycheck save even more at a credit union than the average customer because they use more credit union services.

Because they are member-owned, credit unions are able to offer better rates and lower fees, virtually across the board, Cheney says. This includes higher savings rates and lower inter-est rates compared to banks, even in this low-interest environment.

“It’s an entirely different philoso-phy,” he says. “Banks use people to make money; credit unions use money to help people. Credit unions truly are groups of people coming together to help each other, versus doing business with banks, which ultimately answer to their sharehold-ers.”

Small-business owner Matt D’Arcy, a financial planner who owns Greybridge Financial Group and is vice president and co-owner of Hupp Tax in Willowick, Ohio, says perhaps because of the nonprofit status of credit unions, their management often has more longevity, allowing them to develop rapport with mem-bers.

“When I deal with a bank – and, as a small-business owner, I deal them a lot – there seems to be a revolving door for management types,” D’Arcy says. “With a credit union, you may encounter the same manager for 30 years, and you can really develop a time-trusted relationship and know

that they will go to bat for you.”Whereas anyone can walk into any

bank and open an account, credit unions are slightly different, with fields of membership eligibility. Nearly everyone has a credit union they can join, but they have to find one they qualify to join first. For example, Michigan State University Federal Credit Union (MSUFCU), based in East Lansing, Mich., is owned by 162,000 members in the Michigan State University and Oakland University communities, including students, alumni, faculty and employees, local schools and businesses. Tucson Old City Pueblo Credit Union in Tucson, Ariz., is limit-ed to city employees and select groups.

As a student at Michigan State University, Michelle Gutierrez belonged to MSUFCU. Now an alum-nus living in Kerrville, Texas more than 15 years later, she says she has remained a credit union customer.

“We never changed,” Gutierrez says. “We have just always made the conscious decision to go with local federal credit unions first. They have always had their members in mind.”

© CTW Features

Credit Unions: Power to the People Credit unions are low-cost, low-profile alternatives to commercial banks. As consum-ers balk at high banking fees, the low profile thing may be history | by Laura Drotleff

The nation’s biggest commercial banks received a clear message last fall when an estimated 650,000 consumers withdrew some $4.5 billion and transferred the funds to new accounts in the nation’s 7,200 credit unions. The problem: High fees for working-class account holders and small businesses and poor customer service. The message: Enough is enough.

The movement stemmed from already-rampant public distaste for the gov-ernment bailout of large banks coupled with a social media call for a “National Bank Transfer Day” on Nov. 5, 2011. That Saturday alone brought 40,000 new members and their $80 million to credit unions nationwide, according to the Credit Union National Association.

The Sept. 29 unveiling of Bank of America’s now-rescinded $5 monthly debit card fee sparked the mass exodus, which occurred throughout the month of October. In a CUNA survey of 5,000 credit unions, a majority attrib-uted their new membership growth since that date to consumer reaction to newly imposed bank fees and the Bank Transfer Day idea. Since then, the idea has grown. Some 61,000 people have liked the cause on Facebook, where the new slogan is, “Every Day is Bank Transfer Day.”

While credit unions enjoyed the influx of new business and began lobby-ing for the ability to make more business loans, big banks claim the move-ment has helped business, saying consumer accounts typically cost them more money than they make. And with new government regulations limiting surcharges, banks are refocusing their sights on business.

Though short-term effects may not be significant, some believe the popu-larity of credit unions will continue to grow. “Last year, we saw 1 million new credit union members. We will see more than that in 2012,” predicts CUNA President and CEO Bill Cheney.

Learn more about…Joining a credit union at asmarterchoice.orgComparing credit union rates versus bank rates at ncua.gov(look under Resources and Information)Making smart financial decisions at mycreditunion.gov

© CTW Features










JANUARY 21, 2012 | 23

Whereas anyone can walk into any bank and open an account, credit unions are slightly diff erent, with fi elds of membership eligibility. Nearly everyone has a credit union they can join, but they have to fi nd one they qualify to join fi rst. For example, Michigan State Univer-sity Federal Credit Union (MSUF-CU), based in East Lansing, Mich., is owned by 162,000 members in the Michigan State University and Oakland University communities, including students, alumni, fac-ulty and employees, local schools and businesses. Tucson Old City Pueblo Credit Union in Tucson, Ariz., is limited to city employees

and select groups.As a student at Michigan State University, Michelle Gutierrez belonged to MSUFCU. Now an alumnus living in Kerrville, Texas more than 15 years later, she says she has remained a credit union customer. “We never changed,” Gutierrez says. “We have just always made the conscious decision to go with local federal credit unions fi rst. � ey have always had their mem-bers in mind.”

© CTW Features

S S and YourRetirement

Regardless of when you plan to re re, Social Security will likely be an important part of theroad ahead. How can you get the most out of your bene ts? Join us for an informa onalseminar that can help you set your nancialdirec onand answermore of your ques ons:

What are the rules for star ng Social Security bene ts?How do spouses coordinate their bene ts?Are there di erent routes to take that could poten ally increase your bene ts?How do you decide where Social Security ts within your re rement plans?

February 16, 2012 at 5:30 p.m.Potlatch No.1 Federal Credit Union1015 Warner Ave Lewiston Orchards

Hosted by: Jerry Eikum & Dustin ZagerFinancial Advisors

RSVP to Vanessa at 208.746.8900 x2124

Refreshments will be served.Space is limited, so call today!

Insurance products are issued by CUNA Mutual Insurance Society. Representatives are registered, securities are sold and investment advisory services offered through CUNA

Brokerage Services, Inc. (CBSI), Member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, IA 50677, 866.512.6109. Nondeposit

investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under

contract with the financial institution, through the financial services program, to make securities available to members. B2MM-0911-9008SS

Life PlanningResource Directory

Attorney-at-LawAherin, Rice & Anegon

1212 Idaho StreetLewiston, ID 83501

(208) 746-0344Honest, dedicated, successful legal representation since 1974.

Financial PlanningJames D. Broemmeling, CFP

831 6th StreetClarkston, WA 99403

(509) 751-8607Certified financial client.

Financial ServicesWaddell & Reed, Inc.

Donald T. Montgomery132 Thain Road • Suite 101

Lewiston, ID 83501(208) 746-4366

HospitalsGarfield County Hospital District

66 North 6th StreetPomeroy, WA 99347

(509) 843-1591“Caring for generations.”

Tax PreparationTaxMaster Income Tax, Inc.

Craig Bruns701 Bryden Ave. • Lewiston, ID 83501

(208) 743-7136Relax! We’ll figure the tax! Locally owned since 1987.

331939AU-12

InsuranceKimberling Insurance Agency

Jon Kimberling, CPCU, CLU205 S. Main • Moscow, ID 83843

208-882-4414Providing over 30 years of service to our clients.

YOU’VE SPENT ALIFETIME

PREPARING FOR

RETIREMENT.

NOW WHAT?

www.edwardjones.com Member SIPC

If you’re recently retired or planning to retire, you’re probably concerned about making the right nancial decisions. Together, we can nd the answers.We’ll sit down, face to face, to develop a strategy designed to help your nances meet your needs over the long haul.

To learn how to make the most of your retirement strategy, call today.

Stephanie JohnsonFinancial Advisor

2501 17th StreetLewiston, ID 83501

(208) 798-47321-866-798-4732

Larry KopczynskiFinancial Advisor

2501 17th StreetLewiston, ID 83501

(208) 798-47321-866-798-4732

Brian Bailey, AAMSFinancial Advisor

303 Bridge Street, Ste.3Clarkston, WA 99403

(509) 758-87311-866-758-9595

Christian Leer, AAMSFinancial Advisor

740 5th StreetClarkston, WA 99403

(509) 751-16101-877-751-1610

Jim KubiakFinancial Advisor 1366 Bridge Street

Clarkston, WA 99403(509) 758-83531-800-787-8353

Scott ArnoneFinancial Advisor

1455 G StreetLewiston, ID 83501

(208) 746-23081-800-441-2308

Brad Melton, AAMSFinancial Advisor

1702 G StreetLewiston, ID 83501

(208) 746-11141-888-746-1123

Dean E. Roy, AAMSFinancial Advisor1024 16th AvenueLewiston, ID 83501

(208) 798-47421-877-798-4770

Sherrie Beckman, AAMSFinancial Advisor 940 Bryden AvenueLewiston, ID 83501

(208) 746-38751-800-646-8316

Matt SartiniFinancial Advisor

106 Michigan AvenueOrofino, ID 83544(208) 476-32711-866-904-3271

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life planning, 2012

Documents

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